J. Kerrey

Mr. KERREY

Mr. KERREY. Mr. President, I ask unanimous consent the Senate proceed immediately to H.R. 2767, the IRS Restructuring Act of 1997, just received yesterday from the House, that the bill be read three times and passed, and the motion to reconsider laid on the table.

Mr. KERREY

Mr. KERREY. Mr. President, I rise in my capacity as vice chairman of the Intelligence Committee to urge passage of the intelligence authorization conference report. The House and Senate both produced good bills this year, they fit together quite well, and the conference committee under Chairman Shelby's leadership worked out a compromise which I recommend to my colleagues. The outcome of the conference favors new technology, focuses on today's and tomorrow's hardest targets, and increases the usefulness of U.S. intelligence to its Government customers and to the public. The legislation coming out of conference is not perfect, because it drops a provision which the Senate had strongly favored, the provision guaranteeing the right of public employees to share classified information about wrongdoing directly with the appropriate congressional committee. I will return in a moment to the failure to include this provision, and I will have more to say in the future about the necessity of such a provision. Last month, while the conferees were meeting, the CIA was publicly celebrating the 50th anniversary of its creation. I salute its employees and I join President Clinton in praising their generous patriotism, their willingness to take risks for America, and their great professional skill. Their successes during the cold war, be they in space and airborne reconnaissance, human intelligence, covert operations, or intelligence analysis, were key to our eventual victory. In the years since the cold war the people of the CIA have continued to make a huge difference in warning our military, helping our leaders make the right policy choices, and keeping the American people safe. It shouldn't be surprising that the CIA is a misunderstood organization, because it is mostly a secret organization. Its employees are secretive about their duties, their budget is secret, their operations are secret. Further, while the CIA's failures, both real and apparent, will probably find their way into the press, the successes will not--and should not. Add the general disinclination these days to think deeply about foreign threats and you see the problem. But it is in the national interest to confront this problem, and to demonstrate to the public the necessity and the necessary uniqueness of the CIA. The necessity should be clear. Most countries need an organization, a dedicated service, to collect and analyze information so policymakers can make good decisions and military forces can be warned and prepared. Such a service might also be called upon occasionally to act in a clandestine or covert manner, in a way that the Nation's leaders could plausibly deny. A great nation with global responsibilities requires a highly capable global service. Because the information collection is secret--no reason to use an intelligence service to collect what is publicly available--and because the resulting analysis may also have to be kept secret to protect the secret sources, much of this intelligence service's activity should be secret. The necessity for secrecy seems self-evident, but in a period like present, when the threats to our national life seem remote, it bears repeating. It also bears watching. Secrecy, while necessary in intelligence, conflicts with the openness required of government operations in a democracy. The oversight roles performed by an attentive public and alert media, oversight roles which would quickly find wrongdoing in a Government agriculture program, are usually unavailable to probe secret intelligence operations. Congress has to take up the slack. For the first 28 years of CIA's existence, Congress's oversight of secret intelligence was benign, distant, and superficial. For the most part, Congress trusted the CIA and the other agencies to do the right thing. But when we ask Government agencies to operate in secret, to take the most serious risks, to conduct operations which the Government will publicly deny, vigorous congressional oversight is required. In creating the Intelligence Committees of the two Houses in the mid- 1970's, Congress devised a method for legislative oversight of secret operations which works well and which has excited the curiosity and imitation of many other countries. It is a system which works hard to insure U.S. intelligence activities are conducted in accordance with U.S. law and American values. It protects the right of Americans not to be spied on by their own Government, it protects the taxpayer's dollars spent on intelligence, and it protects the employees of intelligence agencies from having to carry out an operation which has not been approved by the people's representatives. Despite the nostalgic complaints from those who never served under the current oversight system, congressional oversight has made U.S. intelligence much stronger. Congressional oversight depends on information. That elementary fact is enshrined in the Lloyd-LaFollette Act of 1912, which makes explicit the right of employees of the executive branch to directly provide information to Congress, and in the more recent Whistleblower Protection Act. Particularly in the murky and potentially lethal world of intelligence, it seems self-evident that an employee who knew of serious wrongdoing might not want to clear with her boss or with her agency's inspector general or even with the Justice Department the fact that she was going to the Intelligence Committee or the Armed Services Committee or another appropriate committee with information about the wrongdoing. The administration sees it differently. They state the President's control of national security information is vested in him by the Constitution, specifically by his powers in foreign affairs and as commander in chief, and that the provision in the Senate intelligence bill authorizing employees to bring classified reports directly to Congress violates the Constitution. The administration is also concerned that to weaken the President's control of secret information is to increase the chance of security leaks--even though Congress has a much better record than the executive branch in keeping classified information secure. Since a President has the sole authority to classify any information he wants, it is possible that some future administration could classify a report on sexual harassment or bribery or any topic. Congress will be a supplicant for information identifying wrongdoing, not an authorizer and overseer of Government activity. I must stress that the Clinton administration has given no hint it would ever behave in such a fashion; in fact, the intelligence committees get more information from this administration than from any other in our history. In addition to its many classified notifications to the oversight committees, this administration is declassifying data from earlier eras and also recently announced the dollar amount of the total intelligence budget for the last fiscal year. But ours is a government of laws, not individuals, and we must be prepared for more contentious relations between the branches, and less principled administrations, than we have now. The Senate provision was, very simply, about Congress' right to Government information and the right of citizens to inform Congress. I am disappointed this provision was removed in conference, but I will join Chairman Shelby in introducing this provision as separate legislation and I am confident we will prevail. The American system of Government depends on it. I said congressional oversight has made U.S. intelligence better. It has also made Congress more informed about the intelligence agencies, just as any oversight committee comes to know its agencies well. From my vantage point, these agencies are national treasures, but they have a potentially fatal defect: they are not effectively portraying to the American people the crucial necessity of their work. I know, and my colleagues know, how relevant the intelligence community's work is to America. But the American people, by and large, do not know. The task for the intelligence community is to inform them, to make sure the American people know the role of intelligence in protecting their freedom and their safety. A second task is for the intelligence agencies to treat the American people as their customers. In other words, the agencies must put priority and resources on their declassification efforts, they must respond faster to freedom of information requests, and they must use and disseminate open source information the public can use to understand their world better and make better decisions. The days when intelligence was exclusively a secret activity for an elite inside the beltway are over, and if intelligence is to retain its claim on the public's resources and rebuild the public's full respect, they ought to be over. Over the past half-century, our leaders and our military used the best intelligence to keep us free and to help us prevail in the global struggle with communism. The CIA and its sister agencies went to the ends of the earth, the depths of space, and the inner reaches of the human personality, to find that intelligence. We all owe them a great debt. But this is a new, and far more open, world. The intelligence authorization bill provides the resources and the direction for success in that new world. But the enthusiastic support of the American people is not something Congress can authorize--if we could, we would authorize some for ourselves. Only the agencies themselves can accept this challenge, and earn the respectful, even admiring and grateful support of the great majority of its 260 million customers. In my view, Director Tenet and his colleagues are up to the challenge. I yield the floor.

Mr. KERREY. Mr. President, I ask unanimous consent that when Senator Torricelli of New Jersey is finished all time be yielded.

Mr. KERREY

Mr. KERREY. Mr. President, I appreciate very much the bipartisan work to come up with a 6-month extension of the highway bill. It is terribly important for all of our States and terribly important that we have some certainty out there. I appreciate the fact that all of us have kept our voices down for the moment.

Mr. KERREY

Mr. KERREY. Mr. President, I ask unanimous consent that the Senate proceed immediately to H.R. 2676, the IRS Restructuring Act of 1997, just received from the House, that the bill be read a third time, and passed, and the motion to reconsider be laid upon the table.

Mr. KERREY. Mr. President, I yield to the distinguished Senator from Delaware.

Mr. KERREY. Mr. President, as long as we are in session, I will come to the floor, and I hope those on the other side of the aisle will look at this bill. The Senate did confirm Charles Rossotti to be the new Commissioner of the IRS. There is a lot in this bill. If you look at it, you would say, my gosh, I'm surprised that we don't already do this. It gives the Commissioner the authority to hire, fire, move people around, and to provide marketplace incentives. It has a public oversight board, as well as increased oversight on our side. It has significant changes in here that give the public more information on the basis of audits. I appreciate very much the fine work that Chairman Roth has done in the 3 days of hearings. We took a look at some additional things. But this Commissioner is going to be expected to manage a 110,000-person agency through a very difficult filing season this year, next year, and the year after. This bill addresses many, if not most, of the problems that have been identified by your citizens at home. I hope that during the next couple of days--this bill began as bipartisan. Congressman Portman, Representative from Ohio, and I; chief sponsors on this side in the Senate, Senator Grassley, and I--I hope my Republican colleagues will take a look at this bill. There is a lot more that can be done. There is no question about that. But there is also no question that when we give Mr. Rossotti this authority you are going to get a dramatic improvement in the efficiency of the operation of the IRS. Hundreds of collection notices are going to go out every day; over 1 million additional notices for audits; and other contacts the IRS is going to make per month with taxpayers. For every day we wait you are going to have to answer citizens at home. ``Why didn't you give the Commissioner the authority? Why didn't you provide the kind of authority needed to be able to manage the agency on behalf of taxpayers?'' I believe delay will cost taxpayers. They are not going to be happy about this delay. Several Senators addressed the Chair.

Mr. KERREY

Mr. KERREY. Mr. President, under current law, personal property damage is tax-deductible only to the extent that each loss is more than $100 and the total losses exceed 10 percent of income. Today, I am introducing legislation which would eliminate the 10-percent test for unreimbursed casualty losses resulting from a Presidentially declared disaster that occurs in 1997. Just over a week ago, Nebraska was hit by a massive winter storm that dumped up to 20 inches of snow and 2\1/2\ inches of rain on our State unusually early in the season. As a result, Nebraskans have suffered massive damages, the extent of which we are only beginning to discover as the process of digging out begins. More than 175,000 lost electrical power, and many of them are still waiting for it to be restored. Thousands still lack phone service. About 85 percent of trees--still heavy with fall leaves--were damaged in Omaha alone. Mr. President, changing this tax law won't shovel the snow, or restore all the phone and electrical service. But for the homeowner whose property was damaged by felled trees, or thousands of other Nebraskans who suffered losses in this storm, allowing them to deduct the full amount of those losses will provide a little breathing room as the long process of digging out--and rebuilding--begins. I hope we act on it soon. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. KERREY

Mr. KERREY. Mr. President, under current law, personal property damage is tax-deductible only to the extent that each loss is more than $100 and the total losses exceed 10 percent of income. Today, I am introducing legislation which would eliminate the 10-percent test for unreimbursed casualty losses resulting from a Presidentially declared disaster that occurs in 1997. Just over a week ago, Nebraska was hit by a massive winter storm that dumped up to 20 inches of snow and 2\1/2\ inches of rain on our State unusually early in the season. As a result, Nebraskans have suffered massive damages, the extent of which we are only beginning to discover as the process of digging out begins. More than 175,000 lost electrical power, and many of them are still waiting for it to be restored. Thousands still lack phone service. About 85 percent of trees--still heavy with fall leaves--were damaged in Omaha alone. Mr. President, changing this tax law won't shovel the snow, or restore all the phone and electrical service. But for the homeowner whose property was damaged by felled trees, or thousands of other Nebraskans who suffered losses in this storm, allowing them to deduct the full amount of those losses will provide a little breathing room as the long process of digging out--and rebuilding--begins. I hope we act on it soon. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. KERREY

Mr. KERREY. Mr. President, I was very encouraged to read in this morning's newspaper the majority leader's comments about the agenda for the rest of the session. An agreement has been reached on bringing up campaign finance reform next year. On the list of things that the majority leader had was taking action to restructure the Internal Revenue Service. It was a very controversial debate over one proposal that Congressman Portman, Senator Grassley, Congressman Cardin, and I introduced a couple of months ago dealing with a proposed public board of directors. A lot of attention was paid to that. Unfortunately, in the process of paying attention to that, we lost sight and a lot of people lost sight of some of the other things that we are going to legislate on that are terribly important. I was pleased to see, since the House has passed it, that the majority leader indicated that is one of the things he is going to try to get done sometime during the rest of the year. There is broad consensus on some of the things which we know will improve the operational efficiency of the Internal Revenue Service. Chairman Roth's Finance Committee had 3 days of hearings on a separate set of issues dealing with privacy, dealing with the power of the Internal Revenue Service to demand action on the part of taxpayers. These are very important issues, and the chairman has indicated his desire to take up next year the consideration of those issues. I have great respect for Chairman Roth and his desire to bring attention to the Internal Revenue Service. His intent and his sincerity lead to, I believe, the citizens of the United States seeing that change is needed. However, I believe action is needed yet this year in order to give the new IRS Commissioner, Mr. Rossotti, the authority he needs to be able to manage this agency. One of the things we found in our restructuring commission when we began in 1995 was that the General Accounting Office disclosed that nearly $4 billion worth of modernization and purchase of computers and software had not produced the desired result and had essentially been wasted. We began our effort in 1995. We held hearings in 1996 and 1997--12 public hearings, thousands of interviews with current employees and taxpayers and professionals that help and assist taxpayers. We reached our decision in our restructuring commission that the current law was unacceptable, that it would not allow us to go from where we are today to where citizens need to have us go. Today, 85 percent of Americans voluntarily comply with the Tax Code. That is down from 95 percent 30 years ago. The real test is what does the taxpaying citizen think of the existing system? Their confidence is deteriorating rapidly, and it is deteriorating as a consequence of the law. The law makes it impossible for the Commissioner to manage that agency the way we all want the Commissioner to be able to manage the agency. We proposed legislation. The legislation has now been passed by the House and has the full support of the President. The President is now calling upon us to take action. As I said, I am hopeful that the majority leader's comments in this morning's paper are an indication that there is still a chance that we can get this done. We found in our commission deliberations a number of problems that are addressed in this legislation. First, as I said, the Commissioner can't manage the agency. He can't make decisions to fire. He can't make decisions to reward based upon performance. He can't make decisions to reorganize. He can't make decisions to run the Agency. The law doesn't allow it. You can get whoever you want to come in--and I think the President has found an exceptional individual from the private sector who understands technology and who understands how to manage an organization--but the law does not give Mr. Rossotti the authority that Mr. Rossotti is going to need to manage the Agency. We also found that there is inconsistent oversight both from the executive branch and from the legislative branch. So we propose not only a public board of citizens that would have responsibility for developing a strategic plan, but we also propose to create twice a year a joint hearing of appropriations and authorizers and government operations people to give not just the oversight but give us an opportunity to achieve consensus on what the strategic plan is going to be. Twice a year that would be required in order to achieve consensus and, most importantly, achieve consensus for the purpose of being able to make the right investments in technology, being able to sustain the effort over a period of time to do the improvement of operations that are necessary. It is very difficult to operate the IRS with 200 million tax returns a year. We are heading into the filing season right now. It is an unimaginable problem to try to manage this Agency and satisfy all of the various demands and answer all of the various questions that taxpaying customers have as well as being able to go out and enforce the law against a relatively small percentage of people who are not willing to voluntarily comply with the law; not to mention as well the difficult challenge of adjusting the software and rewriting software for the millennium problem that needs to be solved in the next 18 months in order to be prepared on December 1, 1999, for what will occur, which is the computers will no longer recognize 99 as being 1999--a very big problem for a small agency, and an enormous problem for an agency like the IRS that will be in the middle of a filing season, if their computers go down and they are unable to recognize that number. So there is an urgency to get this law changed so that this Commissioner can have the authority to manage, the authority that is needed so the Commissioner has the kind of oversight that is needed, and in order to have any chance at all of being able to manage this Agency, to reduce the current problems and avoid future problems as well. The legislation provides incentives for electronic filing. We found in our examination of the Internal Revenue Service that there was a 25-percent rate of error in the paperwork. In electronic filing the rate of error was less than 1 percent. Errors mean dollars both to the filers as well as the organization that is being operated. There is a tremendous opportunity for saving money both from standpoint of the taxpayer in what it costs to comply with the code as well as the taxpayer from the standpoint of operating the IRS. We believe, and everybody who has looked at it believes, that electronic filing is a tremendous way to save money and satisfy the demand of the customer to close this breathtaking gap that currently exists between what a private sector financial service agency can do and what the IRS can do. All of us understand what an ATM card is. All of us have seen what the private sector has done to reduce the amount of time needed to do a transaction with a financial institution. The IRS has been unable to keep pace with what the private sector is doing, and we think that electronic filing is not only likely to save money but will also increase people's confidence that the IRS is closing the gap between what the private sector is able to do and what they are able to do. We have a section in there on taxpayer rights. We do not address the so-called 6103, the privacy issues, that Chairman Roth and Senator Moynihan did with the Finance Committee, but there are a number of things where we are absolutely certain that, if we make some changes, the taxpayer will have increased authority. We give the taxpayer advocate more independence, moving them outside the IRS; it is very difficult to imagine that person doing the job they need to do if, after they criticize the IRS, they then depend on the IRS personnel system in order to be advanced. We make some additional changes on the burden of proof. We think having modified it slightly does not produce a situation that will result in a deterioration of our ability to get voluntary compliance or impose a burden upon individuals who are willing to comply in a voluntary fashion. We provide as well, Mr. President, some changes that will I think address the problem of a complex Code, not by reforming the Tax Code but by putting the Commissioner at the table and giving the Commissioner the authority to comment either on proposals made by the President or by the Congress as to the cost of compliance and putting in a complexity index that would give us some kind of idea of cost anytime we have some new change we want to make. Over and over and over we heard from witnesses coming before the Commission who said to us almost nothing is going to work if Congress continues to make the Code complex. If we continue to add provisions that add to the already estimated $200 billion that the private sector taxpayer pays in order to complete their forms, if we continue to make the Tax Code more and more complicated, it is going to be very difficult to manage the Agency for the purpose of reducing the customer dissatisfaction and increasing the voluntary compliance with the system. Mr. President, I am very encouraged, and I hope we are able, in fact--there is now 13 of the 20 members of the Finance Committee who are supportive of this legislation. My guess is it will pass the Senate with a very large number. I have heard very few people raise objections now that we have reached agreement with the administration. I have heard very few people say this legislation would not help an awful lot. There will be 200 or more collections notices a day going out between now and the time that we act, 800,000 notices of either audits or other kinds of requirements sent to the taxpayers every single month. There is an urgency to act on this. Are there other things that need to be done? The answer is yes. Will it solve every problem? The answer is no. But it will give the Commission the tools the Commissioner needs to manage the agency. It will change the oversight and make it possible for us to get shared and agreed consensus on where it is we are going to go. It will give the taxpayer more authority and more power than they currently have. And it will enable us to assess whether or not some new tax idea that we have is going to cost us more to implement than we are going to generate in revenue as a result of the change in the Code. So I am very encouraged by the majority leader's comments in the paper this morning, and I am hopeful in that bipartisan way, in a big bipartisan way we can pass in the Senate, conference with the House, and send to the President for his signature a change in the law that would give taxpaying citizens increased confidence not only that they are going to get a fair shake but that Government of, for, and by the people works. Mr. President, I yield the floor and I suggest the absence of a quorum.

Mr. KERREY

Mr. KERREY. Mr. President, I am introducing legislation today to ensure that families are not denied the tax relief we promised them under the Taxpayer Relief Act of 1997. What we promised under the Taxpayer Relief Act was a child credit to help families raise their kids and an education credit to help make higher education more affordable. As it turns out, the reality may be far different. What we may be doing is throwing middle-class families into the alternative minimum tax [AMT] simply because they take advantage of the new child and education credits. This will happen because under current law, individuals pay the greater of their regular tax owed minus nonrefundable tax credits or the AMT which cannot be reduced by these nonrefundable credits. Under current law, the child credit and the education credit won't be allowed under the AMT. As a result, average-sized families with children are more likely to be thrown into the AMT simply by using these credits. Believe me, this is not the place we want to be sending them. The bill I am introducing today is identical to one that was introduced last week by Congresswoman Kennelly of Connecticut. By her calculations, in 2002, a full 2 million families will be in the AMT because of the family credit alone. For illustrative purposes, I will give you just one example of the kinds of people who will get hurt: A two-parent family with a gross income of $67,700 and three children, including one in college, would fall into the AMT and lose nearly $1,500 of the $2,500 in combined child and education credits that we promised them. The legislation I am introducing today is simple. It would allow taxpayers to take the nonrefundable personal credits--the dependent care credit, the child credit, and the education credit under the AMT. It would also make the standard deduction and the personal exemptions deductible under the AMT. As Congresswoman Kennelly has noted, ``The AMT was meant to ensure that sophisticated taxpayers couldn't zero out their taxes. It was never intended that your children would throw you into the AMT.'' We need to deliver on the family tax relief promises we made in the Taxpayer Relief Act. I urge my colleagues to join me in support of this legislation.

Mr. KERREY. Mr. President, I recently introduced the Highway Safety Priority Act which proposed to make safety a primary consideration in highway investments. Traffic accidents are part of a national health epidemic responsible for the loss of 1.2 million preretirement years of life a year; more than is lost to cancer or heart disease. It is the leading cause of death for Americans between the ages of 15 and 24. Last year, more than 41,900 Americans died from this epidemic and more than 3 million suffered serious injury. In Nebraska traffic accidents claimed 293 lives in 1996 up from 254 the year before. Most tragic, is the fact that this epidemic is almost 100 percent preventable. To address this problem, the Congress must focus resources where they will do the most good. Throughout America there are two lane, two way roads which expose drivers to an unacceptably high level of risk. These high risk ``killer roads'' suffer from poor engineering, poor pavement, narrow shoulders and increasing levels of traffic. Because these roads are often in rural areas, feeding into the larger arteries, they are frequently overlooked by State and local roads departments in favor of the larger more modern and inherently safe portions of the National Highway System. If we are to be serious about reducing death and accidents on America's roads, we need to pay greater attention to the roads which feed into the National Highway System. The Lincoln Journal Star reported in May that 70 percent of all Nebraska accidents occur on rural roads. Today, I introduce legislation which proposes an aggressive efforts to make killer roads safer. This legislation, like the Highway Safety Priority Act was prepared with significant assistance of Dr. Jerry Donaldson, of Advocates for Highway Safety. Dr. Donaldson is one of the Nation's pre- eminent highway safety experts. As the Senate prepares to consider the new highway bill, I urge my colleagues to consider and support the Rural Road Safety Act. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. KERREY

Mr. KERREY. Mr. President, I recently introduced the Highway Safety Priority Act which proposed to make safety a primary consideration in highway investments. Traffic accidents are part of a national health epidemic responsible for the loss of 1.2 million preretirement years of life a year; more than is lost to cancer or heart disease. It is the leading cause of death for Americans between the ages of 15 and 24. Last year, more than 41,900 Americans died from this epidemic and more than 3 million suffered serious injury. In Nebraska traffic accidents claimed 293 lives in 1996 up from 254 the year before. Most tragic, is the fact that this epidemic is almost 100 percent preventable. To address this problem, the Congress must focus resources where they will do the most good. Throughout America there are two lane, two way roads which expose drivers to an unacceptably high level of risk. These high risk ``killer roads'' suffer from poor engineering, poor pavement, narrow shoulders and increasing levels of traffic. Because these roads are often in rural areas, feeding into the larger arteries, they are frequently overlooked by State and local roads departments in favor of the larger more modern and inherently safe portions of the National Highway System. If we are to be serious about reducing death and accidents on America's roads, we need to pay greater attention to the roads which feed into the National Highway System. The Lincoln Journal Star reported in May that 70 percent of all Nebraska accidents occur on rural roads. Today, I introduce legislation which proposes an aggressive efforts to make killer roads safer. This legislation, like the Highway Safety Priority Act was prepared with significant assistance of Dr. Jerry Donaldson, of Advocates for Highway Safety. Dr. Donaldson is one of the Nation's pre- eminent highway safety experts. As the Senate prepares to consider the new highway bill, I urge my colleagues to consider and support the Rural Road Safety Act. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. KERREY

Mr. KERREY. Mr. President, I am introducing legislation today to ensure that families are not denied the tax relief we promised them under the Taxpayer Relief Act of 1997. What we promised under the Taxpayer Relief Act was a child credit to help families raise their kids and an education credit to help make higher education more affordable. As it turns out, the reality may be far different. What we may be doing is throwing middle-class families into the alternative minimum tax [AMT] simply because they take advantage of the new child and education credits. This will happen because under current law, individuals pay the greater of their regular tax owed minus nonrefundable tax credits or the AMT which cannot be reduced by these nonrefundable credits. Under current law, the child credit and the education credit won't be allowed under the AMT. As a result, average-sized families with children are more likely to be thrown into the AMT simply by using these credits. Believe me, this is not the place we want to be sending them. The bill I am introducing today is identical to one that was introduced last week by Congresswoman Kennelly of Connecticut. By her calculations, in 2002, a full 2 million families will be in the AMT because of the family credit alone. For illustrative purposes, I will give you just one example of the kinds of people who will get hurt: A two-parent family with a gross income of $67,700 and three children, including one in college, would fall into the AMT and lose nearly $1,500 of the $2,500 in combined child and education credits that we promised them. The legislation I am introducing today is simple. It would allow taxpayers to take the nonrefundable personal credits--the dependent care credit, the child credit, and the education credit under the AMT. It would also make the standard deduction and the personal exemptions deductible under the AMT. As Congresswoman Kennelly has noted, ``The AMT was meant to ensure that sophisticated taxpayers couldn't zero out their taxes. It was never intended that your children would throw you into the AMT.'' We need to deliver on the family tax relief promises we made in the Taxpayer Relief Act. I urge my colleagues to join me in support of this legislation.

Mr. KERREY

Mr. KERREY. Mr. President, I come to the floor today to speak about bipartisan efforts to reform the Internal Revenue Service because these efforts are being publicly challenged and criticized, I regret to say, inaccurately by the administration. It is perplexing to me personally why this administration would send a message to the American taxpayer that despite what they have been hearing the Internal Revenue Service does not need comprehensive reform. During 3 days of hearings of the Senate Finance Committee last week, taxpayers and employees of the Internal Revenue Service testified under oath that the legal power to collect taxes has been and continues to be abused. Combined with 12 days of public hearings held by the congressionally mandated Commission on Restructuring the IRS, which conducted thousands of hours of interviews with IRS investigators, professional preparers, private sector experts, and taxpayers, a clear and convincing conclusion has been reached. The law which creates and governs the actions of the IRS needs to be changed. Mr. President, if lawmakers in the Senate and the House consider that hundreds of new collection notices will be sent to taxpayers every working day and that 800,000 monthly contacts in its notices of audit or taxes owed will be made, then there is an urgency for us to act quickly. If we can prevent any of the suffering disclosed in these hearings with a change in the law, why would we hesitate to act? Of equal importance is the need to increase confidence in this unique Federal agency. More Americans pay taxes than vote. Remember, America's tax system depends upon our voluntary declaration of taxes owed and a patriotic willingness to pay our fair share. If citizens believe there is a chance that voluntary compliance will result in their privacy being violated, their return unfairly audited, or their lives made miserable, all of which we now know is a possibility, then the percentage of citizen participation could fall even further. It is safe to say that the faith of the American people in our ability to govern is linked to the ability of the IRS to function properly. The House leadership has declared its intent to pass a new law and to pass a law this year--a law which was created in a bipartisan and bicameral atmosphere--which would solve many of the problems highlighted by the Senate Finance Committee hearings last week. The House intends to enact comprehensive reform, similar to that recommended by the congressionally mandated National Commission on Restructuring the IRS. And the Senate, in my judgment, Mr. President, should do the same. As cochair of the commission, along with Congressman Rob Portman of Ohio, I would like to share with my colleagues the problems that were uncovered by our deliberation. To be clear, at no time during these deliberations did Congressman Portman and I resort to bashing the IRS. Indeed, a former Commissioner of the IRS, Peggy Richardson, was an ex officio member of our commission. We gained unprecedented access and a window into the operations of the IRS. We visited service centers, we worked and talked with employees. It is significant to note that our legislation has the endorsement of the National Treasury Employees Union. We found that the IRS has a law enforcement mentality, but that the vast majority of its employees perform functions including tracking finances, sending out notices, and assisting taxpayers. We find as well the IRS has a general attitude that taxpayers are guilty, even though close to 90 percent of taxpayers are compliant. We found that taxpayers have a low opinion of service levels provided by the IRS and do not believe the IRS is trying to help make paying taxes easier. Indeed, in today's USA Today, a poll shows that 70 percent of Americans think that the IRS abuses their power. We found that training is not a priority, and employees do not have the skills of their private sector counterparts. We found that the IRS uses employee evaluation measures that do not encourage employees to provide quality service to taxpayers. We found IRS management and governance structure makes strategic planning impossible and has caused a massive failure of the IRS's $3.4 billion computer modernization program. Mr. President, this conclusion has been supported by a GAO report that was issued in 1996. We found the IRS computer systems were developed during the 1960's and 1970's and lacked the capability to provide taxpayers with quality service. We found wasteful inefficiencies and high error rates existing in the processing of paper forms. We found that the Treasury Department has done little to correct IRS management problems, and lacks the expertise and continuity to do so effectively. In fact, Treasury officials were noticeably absent at last week's Finance Committee hearings. We found as well the congressional oversight of the IRS is scattered and can send confusing signals to the IRS that can be manipulated by the IRS to avoid accountability. Indeed, witness after witness came before our committee, knowledgeable witnesses who assist taxpayers in preparing their returns, and laid equal blame upon the executive and the legislative branches. We found as well that complexity and constant changing of the Tax Code is a major obstacle that intensifies all of these problems. The administration continues to criticize the legislation introduced by Senator Grassley and I on this floor on the 23d of July, and Congressman Portman and Congressman Cardin in the House in the same week. They continue to criticize our legislation unfairly and, most important, inaccurately. In order to perhaps clear up some of the differences between what we are proposing and what the administration would like to see happen, I would like to review the complaints made against the IRS in last week's hearings and show how the law as proposed by Senator Grassley and I, the IRS Restructuring Reform Act of 1997, would change things. Criticism No. 1. Citizens have no power in a dispute with the IRS. Our law would create in law new protections for the taxpayer and new rights if a taxpayer dispute arises. At a minimum, the law should, one, expand authority of the taxpayer advocate to issue taxpayer assistance orders; two, to expand the authority of the taxpayer to recover costs and fees by permitting awards relating back to the 30- day notice letter, allowing awards for pro bono services, increasing net worth limitations, and allowing recovery for IRS negligence up to $100,000; third, require the IRS to provide more information to taxpayers, such as making public their general audit selection criteria and explaining certain rights to taxpayers before audits such as joint and several liability and extensions of statutes of limitations. The question of fairness of audits can be solved by requiring the IRS to provide general audit selection criteria. Remarkably, the only information we currently have about how the IRS audits comes from a researcher who used the Freedom of Information Act to force the IRS to surrender some data. There simply is no good reason for us not to write a law requiring an annual disclosure. Fourth, force the IRS to resolve its dispute with the National Archives in which allegations have been made that historical records have been mishandled or destroyed. Fifth, help taxpayers pay their fair share of taxes by establishing national and local allowances for offers-in-compromise; eliminating the interest differential; dropping tolling penalties during installment agreements; and providing safe harbors to qualify for installment agreements. Sixth, open low-income taxpayer clinics with matching grants up to $100,000 a year for up to 3 years to help low-income taxpayers and especially small business. No. 7, expand the jurisdiction of the tax court to allow more taxpayers to take advantage of the simplified small case procedures. And, eighth, require a study of the administration of penalties, especially penalties that will fall heavier on married filers and the burden of proof needed before penalties are determined valid. These are eight suggested changes in the law that would give taxpayers more power, more authority. They are not made as a consequence of receiving a number of complaints. They are made as a consequence of thoughtful deliberation between Republicans and Democrats, trying to figure out what the payers themselves say need to be done. We examined it in a bipartisan and bicameral fashion with the full cooperation and participation of former Commissioner Richardson who says today that she would support these provisions. These changes in the law, all by themselves, would solve many of the problems that we heard before the Senate Finance Committee last week. And all by themselves, would go a long ways toward increasing citizen confidence that they are going to be able to get a fair deal from the IRS. The administration's bill, which they introduced--had Members introduce for them--has no taxpayer protections or rights provisions. I want to underline that. One of the things the administration has been saying is we like the Portman-Kerrey bill but we don't like the board. We like everything in it. If they like everything in it, the question is why don't they have taxpayer protections or rights provisions? I believe the reason is they introduced their bill, had their bill introduced, just so they could say we want to change the IRS as well. A second criticism we heard was that the IRS is isolated from the taxpayer. Anybody who does not think the IRS is isolated has not examined the structure. It is buried in Treasury. The Secretary of Treasury is in charge of oversight, not just of the IRS, the 115,000- person organization, but the Secretary of the Treasury obviously has lots of other things on his mind--whoever the Secretary is. It does not have to be Secretary Rubin--any Secretary faced this. They also have to manage Secret Service, Customs, the Bureau of Alcohol, Tobacco and Firearms. Keeping the operational side inside Treasury buried as it is, makes it difficult to achieve accountability. This, in my judgment, may be the most common thread that ran through the decisions, the criticisms that we heard, not only last week but for the entire last year. Tax Code complexity, outdated technology, a primitive management structure contributed to the problem, but these factors alone did not explain a bureaucratic culture that produced allegations of taxpayers being hounded based on their vulnerability; confidential returns being snooped; or records being altered to reflect the IRS's point of view. Those flaws are the symptom of an agency isolated from the customers it is supposed to be serving. The IRS is languishing under a suffocating bureaucracy from which it is getting inadequate oversight and far too little input from the taxpayer. Our new law would do a number of things. First, it would create a Presidentially appointed citizens oversight board that would oversee the operation of the IRS. The members of this board, for example, could have expertise in the operation of large service organizations or in other areas. What we tried to do was give the President maximum flexibility, so he could make selection of individuals who had expertise--the Secretary of Treasury is on the board, the head of the National Treasury Employees Union is on the board--because we believe that there are going to be significant personnel decisions that have to be made. We believe it is important to have a representative on the board, making those decisions and getting support as a consequence. The board would be responsible for oversight, approval of strategic plans and review of operational plans. The President would appoint board members for 5-year terms and would have the authority to remove any of these members at will. The board would approve an advisory budget of IRS, prepared in conjunction with the commissioner. It would have no access to taxpayer return information and it would not participate in law enforcement. This is what has drawn the most heat from the administration, and leads me to suspect that their principal concern is relinquishing any authority to a board that would have any authority over the decisions that are being made. They have misrepresented and said that the board is going to be composed of chief executive officers--not mentioned in the law. They have suggested of these board members, as recently as yesterday, there were going to be significant conflicts of interest. If that be the case, how could the Secretary of Treasury sit on the board? How could anybody from the private sector sit on any advisory board that we have in all of Government? We understand conflicts of interest and we deal with them. It is not accurate to say that we cannot protect ourselves, especially when this statute says that this board will have no access to taxpayer return information and it will not participate in law enforcement. Equally important, and oftentimes lost in the debate over this board, is that our law would create a requirement for two annual joint hearings of tax writing, appropriating, and oversight committees. It would also expand the duties and reporting requirements of the joint committee on taxation. The Finance Committee hearings last week were the first oversight hearings in 21 years. It is the inconsistent oversight that we are trying to deal with, with this provision. But, in addition, we heard from individual after individual, the restructuring commission did, that one of the most important things you have to do before you make a technology decision or other allocation decision, you have to get a shared agreement on what the mission is going to be. Having a new oversight board for the IRS, working with a new oversight committee on the congressional side, would give us the possibility of achieving this common and shared mission. In our deliberations, we found that congressional oversight of the IRS had no coordination. This provision will allow the IRS Citizens Oversight Board and Congress to reach agreement on regulations, goals, and objectives. It will enable the authorization of new initiatives after IRS satisfies rigorous contingencies to assure financial accountability, subject, of course, as always to the approval of the appropriating committees. For example, decisions about the design and purchase of computer systems will be made after the legislative and executive branches have agreed on a plan. The strategy is to collect taxes owed from those Americans unwilling to pay their fair share, must also be jointly approved in order to survive congressional funding cycles. Finally, we must provide funding for the century date change. As all of us have looked at that particular problem know, if you think the IRS computer system is a mess now, it could get a heck of a lot worse if the date change problem is not fixed and not fixed at 100 percent. The administration proposal would codify the status quo. Treasury proposes the creation of an IRS management board made up of 20 Government officials, mainly political appointees from departments including OMB, OPM, and the Vice President's office. I urge colleagues who are concerned about this board that Senator Grassley, Congressman Portman and Congressman Cardin and I are proposing, who are critical of that, compare it to what the administration is proposing. To repeat, the administration wants a 20-person board composed entirely of Government officials, political appointees, including people from OMB, OPM, and the Vice President's office. They also propose an advisory board of citizens. For decades there has been a commissioner's advisory group to the IRS, and we were told that it was ineffectual and the bureaucracy ignored their advice. The reason they ignored their advice, Mr. President, is an advisory board has no authority, no power, and no one, to my knowledge, pays a lot of attention to advisory boards that lack either authority or power. Fourteen expert witnesses testified before the Ways and Means Committee on September 16. All but two or three testified in favor of the bill that Congressmen Portman and Cardin introduced, and all testified against the administration's proposal. I would like to read the names of some of the experts who testified: Eugene Steuerle, senior fellow of the Urban Institute, against; Donald F. Kettl, director, Brookings Institution, against; Robert B. Stobaugh, Harvard Business School, against; Phillip Mann, section of taxation, American Bar Association, against. And on and on, Mr. President. The administration's proposal has been opposed by all the people that they cite, or some of the people they cite at least as reasons not to support the newly constructed oversight board that Senator Grassley and I have proposed. Again, I have regrettably reached the conclusion that this really is not about what is going to work as it is about making certain that no power and authority is relinquished by the Secretary of the Treasury over the 115,000 people who work for the IRS. The third criticism that we heard not only last week, but all year long, was that the IRS management structure does not allow for the removal of bad apples. Our law, Mr. President, would create a 5-year term for the IRS Commissioner. In current form, our legislation says that the board appoints the Commissioner. I would be willing to consider having the President appoint the Commissioner with formal input from the board and continuing to allow the board to evaluate and recommend removal for cause. This law would give this Commissioner increased legal authority to manage the IRS. Consistent with merit system principles, veterans preferences and established labor/management rules, the Commission would be given a new rating system to hire qualified applicants and flexibility to hire a senior team of managers. Remarkably, the IRS Commissioner has very little flexibility in managing this agency, and one of the difficulties that he or she is going to have, regardless of who they have, in managing with zero tolerance is the sort of things we saw last week: the absence of the power and authority to be able to manage as I think most of us in Congress and most of the American taxpaying citizens would like to see done. The administration's proposal would create a 5-year term for the Commissioner. That is true; that is the same as ours. But it stops there. It would not have board members with 5-year terms to provide the needed continuity and support to the Commissioner. All the political appointees could come and go in the same year. One of the biggest problems we have with the IRS is lack of continuity, particularly continuity of management oversight. One of the defects of a board being all political appointees inside the Government is that they tend to turn over more. It is this turnover that makes it difficult for us to get the kind of continuity this agency demands. The fourth criticism we have heard is it is difficult to file a tax return and there is a breathtaking gap between the service taxpayers get from the IRS and the service they get in the private sector. Our new law would create goals and due dates for electronic filing. At the heart of comprehensive reform must be a vision of an IRS that operates in the new paradigm of electronic commerce. One of the most telling comparisons made by taxpayers who appeared before us was the comparison given between an ATM card that is provided by their commercial banks and the lack of similar conveniences from the IRS. Potential savings to the taxpayers are large: The error rate for electronic filers was less than 1 percent, compared with 20 percent for a paper file. While we will never have a paperless IRS, Congress must change the law to provide incentives and assistance to a new IRS which gives its customers services comparable to the private sector. The administration proposal would allow the IRS to spend more money on marketing electronic filing, but would not include any specific goals or requirements for the IRS to take immediate action to increase electronic filing. The fifth criticism we heard is that Congress has created a monster of a Tax Code that is too complex to administer. Under our new law, Mr. President, we would create a process for evaluating the cost to the taxpayer of tax law complexity by giving the Commissioner, for the first time, an advisory role when new tax laws are being considered; requiring, as well, a tax complexity analysis during legislative deliberations; increasing Federal-State cooperation; and requiring the Joint Committee on Taxation to study feasibility of estimating taxpayers' compliance burdens. We just made the Social Security Administration independent. The President's nominee was confirmed by the Senate. When the President's nominee came before the Senate Finance Committee, we were able to ask the question: If you reach a conclusion that the President doesn't like or that we don't like up here, are you going to be able to express that conclusion publicly? And the answer is yes. That is what comes with independence. We need an IRS Commissioner that is able to, while we are debating taxes, say, ``Great idea, Mr. President, I saw everybody gave you a standing ovation.'' ``Great speech, Senator Blowhard, I see you got a standing ovation as well, but guess what it is going to cost the taxpayer to comply with your idea? They may give you a standing ovation, but if it becomes law, this is what it is going to create as far as the taxpayer is concerned.'' Under the current law, the IRS Commissioner will never come before the American people and make that kind of statement. Under our law, they would be required to do so. The complexity of the Code may require comprehensive reform of our tax law, but in the meantime, why not give the Commissioner authority to advise Congress of the potential problems of our ideas, and why not require a tax complexity analysis? At least we could then evaluate these potential new costs before proceeding. The administration's proposal would not do anything to encourage simplification of the tax law, although it would allow the IRS to enter into cooperative agreements with State tax administrators. Mr. President, let me add a closing note about the administration's handling of this bill. Honest people can have honest disagreements. For that reason, I tried to be restrained in my criticism of the administration's proposal. But the ongoing public relations battle they are waging requires me to respond. First, my broad critique is that the administration's proposal is both timid and hollow. We started our proposal with the belief that the law needed to be changed. Laws, Mr. President, have teeth. They must be enforced. They make a difference. The administration's proposal is more a set of suggestions than a set of laws--false substitutes. They become dentures rather than teeth. Second, the administration has leveled its strongest complaints against our proposal for an oversight board comprised of taxpayers. We made this proposal because we thought the IRS was culturally isolated from the taxpayer, because we believe the IRS lacked the independence from the bureaucracy it needs to fix the problems, and because we believe the agency needs input from outside its own headquarters. I assume the administration agrees with this observation, because it, too, has proposed an oversight board. The problem with the administration's board is that its members would come from the same bureaucracies that created the problem we heard about last week. Taxpayers would have no input except through an advisory panel, and the board they propose would have little real power. In fact, all 14 expert witnesses, as I said earlier, testifying before the Ways and Means Committee said they do not support the administration's IRS governance proposals. The administration contends our oversight board would consist of self-interested CEO's. This is quite simply, and quite directly, false, and the administration knows it. They have read our bill. They know what is in it. And they continue to describe it inaccurately in order to get people to presume they should oppose it. Our proposal is for a nine-member board, two of whom will be the Secretary of the Treasury and a representative of Treasury employees. The other seven could be anyone who the President appoints and the Senate confirms--anyone. A small business owner in Lincoln, NE, can be on this board, as a taxpayer advocate from anywhere in America. ``CEO'' does not appear in our bill. I do not know where the administration has concocted this ruse, unless they fear that CEO's are who this administration will appoint. The administration also claims a board run by taxpayers is a recipe for conflicts of interest. At root, this is an argument that the vast majority of taxpayers who do not work for the Government lack the necessary moral rectitude to participate in reforming the Government that belongs to them, and I strongly disagree. Americans who work and pay taxes in the private sector contribute to Government all the time. In fact, one of them is the Secretary of the Treasury today. He ran one of Wall Street's most elite firms. I presume that whatever mechanism has been sufficient to protect him against conflicts of interest would also be sufficient to guard against conflicts of interest by members of this board. Finally, it seems to me the administration is intent, perhaps determined, on preserving the basic structure of the status quo. They wish to strand the IRS in the labyrinth that is the Treasury Department's bureaucracy and is the same bureaucracy that has failed to run the IRS in a manner that gives citizens confidence. The problems at the IRS are not this administration's fault alone, but I cannot help but observe that if the Treasury Department had done a great job running the IRS the last 5 years, I might be more convinced that they ought to keep running it. But the simple truth is, they haven't. Perhaps the best summary of the administration's proposal is this: If you like the service you get from the IRS now, you'll love the administration's IRS protection bill. Having responded in kind, Mr. President, I still hope the administration will start participating in this debate constructively. I still believe we can work out our differences, which are not great, as long as they begin to tell the truth about Senator Grassley's and my plan. Regardless, Congress needs to proceed as quickly as possible to enact changes in the law which will result in the best practices being applied to the operations of the IRS. Americans want an IRS that can quickly answer the question, How much do I owe; an IRS that is customer oriented to those payers willing to voluntarily comply as is a commercial bank to its customers; an IRS that knows it had better be right when it comes after a taxpayer for collection, otherwise it will pay for wrongly accusing a taxpayer of being delinquent. In the interest of those Americans who voluntarily comply but who struggle with a complicated code, a confusing service policy, incompatible information systems, and the fear that they could be the next in line for harassment, the time has come for Congress to act. Mr. President, it is time the IRS starts working for the American taxpayer. To further delay is to ask millions to suffer unnecessarily. I yield the floor.

Mr. KERREY

Mr. KERREY. I ask unanimous consent to be able to speak as if in morning business.

Mr. KERREY

Mr. KERREY. Mr. President, one of the challenges of the 21st century is already upon us. It is commonly known as the year 2000 computer problem or the millennium bug. At issue is a programming technique that could lead to the malfunction of computer systems worldwide on January 1, 2000. It is essential that government, business, and personal computer users take adequate steps to fix this problem in advance of December 31, 1999, to ensure that cyberspace enters the next millennium without a hitch. During the early years of computing, computer storage space was incredibly expensive. Storage space that costs only 10 cents per megabyte today, cost $36 per megabyte in 1972. In an effort to reduce storage costs, computer programmers commonly programmed date information using only two digits to indicate the year. For example, 1999 would be programmed as 99. This clever space saving trick saved computer users millions of dollars and became industry practice because programmers believed that by the time the year 2000 arrived any code they were working on would be obsolete and out of service. Unfortunately, the conventional wisdom was wrong and many computer systems still use these programs. Computers and computer software programmed in this fashion may misinterpret the year 2000 as 1900. This electronic confusion could lead to serious malfunction or collapse of computers and computer networks around the world. Date information plays a significant role in almost all computer applications developed over the last 30 years. The year 2000 problem has many practical implications from the relatively benign to the very serious. Credit cards may be read as invalid, traffic lights may not operate, 99 years of bank records could be destroyed or the Nation's air traffic control systems could fail. The list of possible failures is nearly endless and can be found in systems used by the government, the business community, and personal computer users worldwide. Personal computers are less susceptible to the problem and in most cases can be quickly fixed. However, business and government leaders should be working night and day to ensure that the computer systems the country depends on are reprogrammed to correctly recognize the date in time for the arrival of New Year's Day 2000. The time and financial commitment necessary to replace the problematic date code is stunning. The Gartner Group estimates that costs could exceed $600 billion. Newsweek magazine points out that this sum is enough to fund a year's worth of education costs, preschool through graduate school. Correcting the problem is technically simple, however in order to find the date information the entire program must be manually scanned line for line. Often, the programs are written in the outdated COBAL programming language and finding programmers skilled in older languages to solve the problem is very difficult because the demand for their services is sky rocketing. After a competent technician is hired and they have analyzed the code and made the necessary changes, the programs must go through a time consuming testing phase. In sum, it is a very complex task and it is quickly becoming too late to begin the reprogramming process. Many companies and government offices have already taken steps to avert this problem and are well on their way to making their systems year 2000 compliant. Unfortunately, many others have not addressed the problem and the time needed to analyze, modify, and test the code used by these entities is quickly slipping away. I am very concerned that further delays will leave the government and many private companies unprepared to carry out normal transactions in the early days of the next century. In order to address this problem, I have joined Senator Moynihan as a cosponsor of S. 22. S. 22 would create a commission that would be required to report to the President, by July 3, 1997, with proposals for new procedures or regulations to address the year 2000 computer problem for systems of Federal, State, and local governments and would make recommendations for funding levels that might be needed to address this problem. In addition I am introducing a bill today that would instruct the Federal Communications Commission to initiate a proceeding to determine the integrity of the telecommunications networks as the year 2000 arrives. It also requires the National Institute of Standards and Technology to review the risks to personal computers and requires the Department of Transportation to assure that transportation safety is not compromised. Inconvenience can be tolerated, but every effort must be taken to assure that the health and safety of humans and the security and integrity of networks and data are not compromised by what we know to be a significant weakness in our computer networks and software. In conclusion, I am also very concerned by reports that small and midsize businesses are experiencing difficulty in determining if their computer systems are year 2000 compliant because some third-party systems vendors are not forthcoming with information about their products. An already difficult task is further complicated by uncooperative third party vendors who fail to help these companies understand how the year 2000 problem could affect their businesses. These companies have a responsibility to provide their customers with the information they need to make their systems year 2000 compliant. There is still time to act and prevent dangerous disruptions in computer, transportation and computer networks and the loss of valuable data. If the private and public sector does that, then Americans can party, and not panic when the clock strikes midnight on New Year's eve 1999. Mr. President I ask unanimous consent that the text of my bill be printed in the Record.

Mr. KERREY

Mr. KERREY. Mr. President, one of the challenges of the 21st century is already upon us. It is commonly known as the year 2000 computer problem or the millennium bug. At issue is a programming technique that could lead to the malfunction of computer systems worldwide on January 1, 2000. It is essential that government, business, and personal computer users take adequate steps to fix this problem in advance of December 31, 1999, to ensure that cyberspace enters the next millennium without a hitch. During the early years of computing, computer storage space was incredibly expensive. Storage space that costs only 10 cents per megabyte today, cost $36 per megabyte in 1972. In an effort to reduce storage costs, computer programmers commonly programmed date information using only two digits to indicate the year. For example, 1999 would be programmed as 99. This clever space saving trick saved computer users millions of dollars and became industry practice because programmers believed that by the time the year 2000 arrived any code they were working on would be obsolete and out of service. Unfortunately, the conventional wisdom was wrong and many computer systems still use these programs. Computers and computer software programmed in this fashion may misinterpret the year 2000 as 1900. This electronic confusion could lead to serious malfunction or collapse of computers and computer networks around the world. Date information plays a significant role in almost all computer applications developed over the last 30 years. The year 2000 problem has many practical implications from the relatively benign to the very serious. Credit cards may be read as invalid, traffic lights may not operate, 99 years of bank records could be destroyed or the Nation's air traffic control systems could fail. The list of possible failures is nearly endless and can be found in systems used by the government, the business community, and personal computer users worldwide. Personal computers are less susceptible to the problem and in most cases can be quickly fixed. However, business and government leaders should be working night and day to ensure that the computer systems the country depends on are reprogrammed to correctly recognize the date in time for the arrival of New Year's Day 2000. The time and financial commitment necessary to replace the problematic date code is stunning. The Gartner Group estimates that costs could exceed $600 billion. Newsweek magazine points out that this sum is enough to fund a year's worth of education costs, preschool through graduate school. Correcting the problem is technically simple, however in order to find the date information the entire program must be manually scanned line for line. Often, the programs are written in the outdated COBAL programming language and finding programmers skilled in older languages to solve the problem is very difficult because the demand for their services is sky rocketing. After a competent technician is hired and they have analyzed the code and made the necessary changes, the programs must go through a time consuming testing phase. In sum, it is a very complex task and it is quickly becoming too late to begin the reprogramming process. Many companies and government offices have already taken steps to avert this problem and are well on their way to making their systems year 2000 compliant. Unfortunately, many others have not addressed the problem and the time needed to analyze, modify, and test the code used by these entities is quickly slipping away. I am very concerned that further delays will leave the government and many private companies unprepared to carry out normal transactions in the early days of the next century. In order to address this problem, I have joined Senator Moynihan as a cosponsor of S. 22. S. 22 would create a commission that would be required to report to the President, by July 3, 1997, with proposals for new procedures or regulations to address the year 2000 computer problem for systems of Federal, State, and local governments and would make recommendations for funding levels that might be needed to address this problem. In addition I am introducing a bill today that would instruct the Federal Communications Commission to initiate a proceeding to determine the integrity of the telecommunications networks as the year 2000 arrives. It also requires the National Institute of Standards and Technology to review the risks to personal computers and requires the Department of Transportation to assure that transportation safety is not compromised. Inconvenience can be tolerated, but every effort must be taken to assure that the health and safety of humans and the security and integrity of networks and data are not compromised by what we know to be a significant weakness in our computer networks and software. In conclusion, I am also very concerned by reports that small and midsize businesses are experiencing difficulty in determining if their computer systems are year 2000 compliant because some third-party systems vendors are not forthcoming with information about their products. An already difficult task is further complicated by uncooperative third party vendors who fail to help these companies understand how the year 2000 problem could affect their businesses. These companies have a responsibility to provide their customers with the information they need to make their systems year 2000 compliant. There is still time to act and prevent dangerous disruptions in computer, transportation and computer networks and the loss of valuable data. If the private and public sector does that, then Americans can party, and not panic when the clock strikes midnight on New Year's eve 1999. Mr. President I ask unanimous consent that the text of my bill be printed in the Record.

Mr. KERREY

Mr. KERREY. I thank Senator Gorton for bringing this matter to the attention of the Senate. It is an incredible slip on the part of the IHS to have neglected to request these needed funds. It appears that in previous years the IHS seriously underestimated the amount of funding that would be required to complete the design phase of this facility. This is why it is so puzzling that there was no request for additional funding in this budget year. Every delay in funding means increased project costs. My question to Senator Gorton and to Ranking Member Byrd is whether it is still possible for the Congress to find some funds in this appropriations measure to be sure these projects stay on track?

Mr. KERREY. I am very pleased that my colleagues are as concerned as I am about meeting the health needs of our native American people. As I mentioned earlier, the existing IHS facility at Winnebago is over 70 years old and I would venture to comment that there are probably not very many full-service hospitals in this country serving non-Indians that have reached that not-so-venerable age. It is a shame and the shame rests mostly with the failure of the United States to fulfill its obligations to this country's first Americans. the land and water conservation fund

Mr. KERREY. Mr. President, I wish to inquire of my colleague from Washington State, Senator Gorton, chairman of the Interior Appropriations Subcommittee, on the funding status of health facility construction projects within the Indian Health Service that are in the design and engineering phase. Prior to the 1998 appropriations process, the Congress had funded about two-thirds of the design and engineering work that is necessary prior to begin construction of the new Winnebago Hospital. This hospital, now over 70 years old, serves the Indian people in northeast Nebraska and northwest Iowa. The Indian Health Service has indicated that another $650,000 will be needed to complete the design phase. Does Senator Gorton share my understanding of this situation?

Mr. KERREY

Mr. KERREY. Mr. President, I am deeply concerned about the passage of the Gorton amendment today. This amendment, which gives approximately $12 billion directly to local school districts in the form of a block grant, threatens to undermine some of the most valuable educational programs in existence. I am a strong supporter of creative school reform, and I believe in getting rid of programs that do not work. But this amendment is an attack on programs that do work. I have worked with these programs firsthand, and I know they work. Through my extensive involvement in Nebraska with early-childhood programs such as Head Start and school- to-work programs such as Careers 2000, I have seen effective programs in action. Many of us in Congress have worked hard over the years to help build and sustain programs such as vocational education, education technology, Goals 2000, adult literacy, and safe and drug-free schools. As a result, millions of students have benefited from the opportunity to improve their achievement levels and enhance their skills portfolios. With the concerted effort of teachers, school administrators, parents, State governments, and Congress, we have been able to ensure that these opportunities remain available to all students, regardless of their particular school district. Under the Gorton amendment, only the lucky would benefit. For example, under this provision, money that once would have been designated for technological training in an inner-city high school could be used instead to build a new basketball court if local administrators saw fit. As we move toward the 21st century, the demand for technological skills in the marketplace is increasing rapidly. Therefore, it is crucial that all students have the skills necessary to compete for jobs once they leave school. In bypassing the State entirely and giving funds directly to local school districts, the Gorton amendment is analagous to amputating the whole head in order to cure a headache. In doing so, it harms the very people it claims to help, America's children. Federal taxpayers deserve to know that a sufficient portion of their tax dollars is being used to support effective educational programs. State governments are equipped to make sure this happens. Mr. President, I voted for passage of this bill today because, for the most part, it represents a good bipartisan effort to ensure the well-being of American citizens. But because I believe strongly that we must continue the work of education reform in an effective and measurable way, I will strongly oppose the bill if it comes back from conference with this provision intact. I will not stand by and watch American children suffer the consequences of poor legislation. I move to table the amendment.

Mr. KERREY. I thank my colleague from Georgia for both his interest in ensuring and improving the safety of our food and for agreeing that the two Departments should work together in implementing the provisions of his amendment.

Mr. KERREY. Mr. President, I share the interest of my colleague from Georgia in enhancing food safety not only for children but for all consumers. I note that several provisions in my colleague's amendment appear to be related to the types of research efforts that are undertaken by the U.S. Department of Agriculture. Based on those ongoing efforts, I suggest that the Secretary of Health and Human Services should consult and coordinate with the Secretary of Agriculture in carrying out the provisions of this amendment. I ask my colleague from Georgia if this is his expectation as well.

Mr. KERREY

Mr. KERREY. Mr. President, I just rise to offer my strong support for Joe Bataillon, a man who I have known for a number of years, and the Chair does as well. He served in the Judge Advocate Corps. He has been a lawyer in Omaha. He has gotten high marks from anybody who has interviewed him, on both sides of the aisle. The judges like him. He is a crucial appointment. I appreciate very much the majority leader scheduling this vote. I encourage my colleagues to vote for him.