J. Kerrey

Mr. KERREY

Mr. KERREY. Mr. President, there is a national health epidemic in America that does not receive the attention it deserves. This epidemic is responsible for the loss of 1.2 million pre-retirement 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 alone, the epidemic claimed 293 lives in 1996 up from 254 the year before. The only good news has been that in Nebraska, during the first 6 months of this year, the death rate has slowed slightly. Most tragic, is the fact that this epidemic is almost 100 percent preventable. This epidemic I am talking about is death and injuries related to driving. While America has made significant progress in reducing traffic accident rates, deaths, and injuries have trended upward in the 1990's. Traffic accidents impose extraordinary costs on our health care system. About $14 billion a year in health care costs are attributable to traffic accidents. Taxpayers bear $11.4 billion of that cost. In terms of lost productivity, property damage and health care costs, these accidents extracted $150 billion out of the economy for the last year that statistics are available. The most important point is that traffic accidents are almost completely preventable. The smallest actions of a driver can make the difference between life and death. One lapse in judgment, one moment of inattention can end in tragedy. As drivers, too often, we take for granted the immense power and responsibility we possess when behind the wheel. As public officials we need to be constantly attentive to the need to make our transportation system safer. The Congress is working on legislation to reauthorize the Nation's basic highway law. It is one of the most important bills the Senate will consider. I strongly believe that we should use this opportunity to commit ourselves to enhancing safety on America's highways and byways. In that spirit, I introduce the Highway Safety Priority Act. This legislation systematically makes clear that safety is a priority in highway construction and maintenance programs. It sends a strong message to Federal, State, and local transportation planners that they should focus on enhancing safety. I encourage my colleagues to study and support the Highway Safety Priority Act which I introduce today. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. KERREY

Mr. KERREY. Mr. President, there is a national health epidemic in America that does not receive the attention it deserves. This epidemic is responsible for the loss of 1.2 million pre-retirement 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 alone, the epidemic claimed 293 lives in 1996 up from 254 the year before. The only good news has been that in Nebraska, during the first 6 months of this year, the death rate has slowed slightly. Most tragic, is the fact that this epidemic is almost 100 percent preventable. This epidemic I am talking about is death and injuries related to driving. While America has made significant progress in reducing traffic accident rates, deaths, and injuries have trended upward in the 1990's. Traffic accidents impose extraordinary costs on our health care system. About $14 billion a year in health care costs are attributable to traffic accidents. Taxpayers bear $11.4 billion of that cost. In terms of lost productivity, property damage and health care costs, these accidents extracted $150 billion out of the economy for the last year that statistics are available. The most important point is that traffic accidents are almost completely preventable. The smallest actions of a driver can make the difference between life and death. One lapse in judgment, one moment of inattention can end in tragedy. As drivers, too often, we take for granted the immense power and responsibility we possess when behind the wheel. As public officials we need to be constantly attentive to the need to make our transportation system safer. The Congress is working on legislation to reauthorize the Nation's basic highway law. It is one of the most important bills the Senate will consider. I strongly believe that we should use this opportunity to commit ourselves to enhancing safety on America's highways and byways. In that spirit, I introduce the Highway Safety Priority Act. This legislation systematically makes clear that safety is a priority in highway construction and maintenance programs. It sends a strong message to Federal, State, and local transportation planners that they should focus on enhancing safety. I encourage my colleagues to study and support the Highway Safety Priority Act which I introduce today. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. KERREY

Mr. KERREY. Mr. President, I believe that in order to achieve a goal, we must set the goal, commit the necessary resources to reaching the goal, and establish a method for measuring our progress toward that goal. Voluntary national testing would enable us to reach our goal of raising the achievement levels of America's children. I oppose the Coats Amendment because it deprives parents, school administrators, teachers, and students of the information needed to continue the work of constructive education reform. Funding for the development, planning, implementation, and administration of voluntary national testing for individual students in mathematics and reading is important for several reasons. Requiring a Federal statute would impede cooperative efforts to ensure that children in every State have the necessary knowledge and skills to be competitive in today's highly mobile and globally conscious society. Put simply, we need voluntary testing because we cannot ascertain where we are going if we do not know where we are. Parents need to know how their child's educational achievement level in reading and mathematics compares with that of other children nationwide. Because families are relocating with increasing frequency these days, children need to feel confident that they can perform at a consistent level of achievement even though they may change school districts. These tests would empower parents by providing them with the same information that Members of Congress receive from National Assessment of Educational Progress. Parents deserve to know this information so that they can make the best decisions regarding their child's well-being. Also, there is considerable public support for national testing. A recent Phi Delta Kappa/Gallup poll showed that 67 percent of Americans favored using standardized national tests to measure the academic achievement of students. Furthermore, there is a demand for the tests among teachers, principals, State school officials, and school boards. States and school districts with over 20 percent of fourth- and eighth-graders in the Nation have committed to using the tests. Let me stress that committing to voluntary national testing does not mean committing to a national curriculum. Local education authorities will determine how to use the results. The tests simply give them the tools to do their jobs better. Mr. President, we in Congress should be doing all that we possibly can to ensure that America's children have the very best opportunity to excel in a technologically advanced 21st century. But we have to know where our children stand so that we can move forward. Research has shown that high academic standards generate high academic performance. Our children deserve no less.

Mr. KERREY

Mr. KERREY. Mr. President, I support this tax bill as a way to give working families tax relief and continue our economic growth. I'm delighted that the tax cuts for working families in this agreement were made more progressive by Democrats. I support estate tax relief targeted at family farms and small businesses as well as a phase-up in the self-employed health deduction to 100 percent. And I am pleased this agreement left out attempts by the other body to raise taxes on ethanol and make it too easy for employers to reclassify their employees as independent contractors. I would have been hard-pressed to support this agreement had the language on independent contractors survived knowing that having this provision in law would have had significant and harmful effects on the health and financial well-being of American workers. Consider that under current law, only 2 percent of independent contractors have health and retirement benefits, while 50 percent of private employees have those benefits--adopting the language proposed by the other body would surely have had harmful health and financial consequences for the American worker. Mr. President, I am pleased that a number of savings and investment incentives like expanded IRA's and education IRA's are included in this agreement. These provisions are good for what they are. However, I fear that the people who most need to generate wealth for their families-- middle- and lower-income people--will have the toughest time taking advantage of these provisions. That is why I am so sorely disappointed that the conferees chose not to include a robust form of KidSave in their final agreement. Indeed, given the option I would go further than KidSave by allowing taxpayers to keep a portion of their payroll taxes in personal savings. And I support the emphasis on education contained in this bill although I am not convinced the money we will spend on some of these initiatives is the most efficient or effective way to make sure more kids have access to higher education. Mr. President, in many ways voting for this bill is a close call for me. Much of what was good in the Senate Finance bill has been thrown overboard. And that bill, while complex, pales in comparison to the complexity of this bill. Still, I believe this bill will provide tax relief that working families need. I am especially pleased with the improvements Democrats secured to make this bill more progressive and in making this bill reach more working families. I'm also pleased by the emphasis on education in this agreement, if not by the details of that emphasis. So, Mr. President, while I intend to vote for this tax package, I am decidedly unenthusiastic about what we have not done in this tax package and in this balanced budget package overall: we have not taken the first steps toward long-term entitlement reform that recognizes the seismic impact the retirement of the Baby Boom generation will have on the budget, both in terms of its fiscal balance, the solvency of the programs that comprise our retirement safety net and the balance between mandatory and discretionary spending. Specifically, I am disappointed in two aspects of the tax bill. First, I am disappointed that the bill does not address what I believe is the most pressing challenge families face in a global economy: the need to build wealth. Mr. President, I ask my colleagues to take a step back from the rhetoric on this issue and consider the fact that increased income-- which is the object of these tax cuts--and increased wealth are very different things, and they are particularly different today because, in my analysis, the global economy is devaluing one--income--while enhancing the value of the other: wealth. Let me start with a set of definitions: Income is the regular inflow of resources on which we depend to pay our bills and live our lives. Wealth is the ownership of assets that gain in value. Anyone who's played the old board game Monopoly knows this difference. Most 10-year-old children who have played this game will tell you that you don't win by going around and around the board, collecting $200 every time you pass Go.'' You win by carving out some of that income to buy properties that grow in value. It seems to me, Mr. President, that focusing on working families' income--which is certainly important--while ignoring whether they have wealth is like trapping them in a game of Monopoly in which all we care about is sending them around and around the board, passing Go'' and collecting $200, while ignoring the fact that they don't have enough income left over to build a stake of ownership and get ahead. The difference may be best illustrated by the recent stock market boom and, just as important, who has benefited from it. Let me open with the simple proposition that those who own wealth in the stock market own more than a few shares in a mutual fund--they own a piece of our economy. They own a stake in it. When the economy succeeds, they succeed. And what they own--capital, and a stake of ownership in the means of production--is the asset that this economy is rewarding. Families need a stake of ownership, Mr. President, because I believe it is the principal factor that will determine whether the global economy works for them--because it rewards ownership of capital, the scarce factor of production that is in wide demand all over the globe-- or against them, because the expanding global labor pool means those who earn their income exclusively from work are facing more and more competition that is bidding the value of their services down. Wealth is also important in a global economy because it provides the security--for rainy days, for retirement--that a global economy requires. I do not believe that ownership of the means of production and ownership of a stake in our economy should be limited to the privileged few. I want every American to have access to it. I must say that therein lies my ambivalence toward the capital gains and estate tax provisions of this bill. I supported both, but I note for my colleagues' consideration that the estate tax only impacts 2 percent of Americans who die each year. The other 98 percent do not have estates worth $600,000. I'd be willing to bet that a lot people in this country have only a fuzzy notion of what a capital gain is because they do not own capital. And I fear that we may have gone too far in rewarding people who generate income from capital to the detriment of those who generate income from getting up at 6 every morning and putting in an 8 or 10 hour day. And while I supported both of these provisions, I deeply regret that this budget does not address the ability of the other 98 percent of Americans to build estates and ownership of capital. Even as the importance of wealth is growing, the gap in who owns it and who does not is growing too. The question, Mr. President, is: Where does wealth come from and why do working families not have it? The answer is that wealth is built by saving and investing over a long period of time, which requires disposable income that many families lack. I had hoped we would target tax relief toward freeing the disposable income that working families need. I have proposed doing so by cutting the biggest tax working families face: the payroll tax. I call this tax ``The Forgotten Tax.'' I had lobbyists knocking on my door to discuss every arcana of tax law, but not once did someone knock on my door to talk about this tax. I hope we'll take a close look at it and talk about how this tax can be cut to give the working families on whom it imposes its greatest burden a way to generate wealth through personal savings. We missed another important opportunity to help families build wealth. KidSave, a term that is being bandied about to describe policies that are foreign to its purpose, would have converted the $500-per-child tax credit from one that increases consumption by $10 a week to one that allowed families to build a stake of ownership in the economy, which, as I have said, I believe is more important than increasing their income, as much as I support that goal. I believe this one provision, which was dropped, could have laid down the savings infrastructure that our children will need in the 21st century to build a stake of ownership in the economy. I am pleased that this bill would expand IRA's and allow parents to open higher education IRA for their children which would become IRAs in the child's name at age 30 if the child did not use them for higher education. However, the savings initiatives contained in this bill are voluntary and for most people they will probably not be ``sweet'' enough get the people who most need to build wealth, to do so. Second, I also fear this bill will come to be known as the Tax Complication Act of 1997. This tax bill is going to be a bear to administer and a bear for taxpayers to understand. As the Washington Post noted earlier this week, Conceivably an individual reaching retirement age could have an IRA with deductible contributions, nondeductible contributions, one rolled over from an employer plan and one of the new backloaded ones. As the Post dryly notes, calculating the required withdrawals and taxes would be ``an adventure.'' As I am sure everyone in this chamber knows, not only are there different income phaseouts for the front and back-loaded IRA's in this bill, there is still yet another phaseout for rollovers from front to back loaded IRAs. I don't mean to single out any one provision for its complexity factor. Here is yet another: Your capital gains rate. Just what is the rate under this bill you might ask? That seems like a pretty straightforward question but not so fast. Assets held for zero to twelve months will be taxed under this bill at ordinary income rates--a top rate of 39.6 in other words. Assets held for 12-18 months and sold will be taxed at the current maximum capital gains rate of 28 percent. Assets held for eighteen months or more will get either a 20 percent, or ten percent rate. Assets disposed of between May 7 and July 29 and held for 12 months will get a 20 percent rate. But wait, there is more. We have a new 5 year holding period rate. People paying taxes at the 15 percent rate would get an 8 percent capital gains rate on assets held for 5 years beginning now. People above the 15 percent rate would have to wait until the year 2001 to get the 5 year holding period going, could even take old assets and bring them up to current value without disposing of them, hold them for 5 years, and get an 18 percent rate in the year 2006. Oh, and if you own commercial real estate, the rules are different as well. Under this bill, the depreciated portion of your real estate is taxed at 25 percent, the amount above that amount is at 20. If you are working, but not wealthy, and you have more than two children, you'll probably need to spend some of your child credit hiring someone to figure out your child credit. Under this bill, someone with one or two kids would get the child credit before their earned income tax credit. But if you have three or more kids, you would have the option of figuring your tax two ways: either take the credit before the EITC or take the credit up to your employee FICA and income taxes minus your EITC. At this point, as I understand it, you are no longer even receiving a child credit. If you get the child credit this way, you are getting a supplemental child credit, not, presumably and actual child credit. Just one more example. The education initiatives. Believe me, in order to figure them out, you are going to need a degree in accounting before you are able to do your own taxes. Under this agreement, the HOPE credit gives you a 100 percent credit up to $1,000 the first 2 years, and 50 percent of $1,000 the second 2 years for ``eligible expenses.'' That is on a per student basis and it begins in January of 1998. In addition, this agreement has a lifetime learning component which provides a 20 percent credit for up to $5,000 in expenses on a per family basis which in 2002 becomes a 20 percent credit against $10,000. That provision begins on July 1, 1998. The HOPE credit is indexed in 2001, the lifetime learning piece is not. Income limits for both are indexed in 2001. Having expressed those concerns, I do not want to underestimate the magnitude of the achievement. Continuing the job of balancing the budget will advance the goal of economic growth. The expanded reach of the $500-per-child tax credit means real relief for real families. The great American institution called the family farm will have a greater opportunity to stay in families. I repeat: I vote yes for what we have done here, for what we achieved, but with regret for the challenges we chose not to tackle. We have thrown a first down pass, and the cheers from the crowd are deserved. But a long distance remains to the goal line: a federal budget that can cope with the demographic challenges we face while still preserving our priorities as Americans.

Mr. KERREY

Mr. KERREY. Madam President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. KERREY

Mr. KERREY. Madam President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. KERREY

Mr. KERREY. Mr. President, I share Senator Hollings' concern that the provisions in the reconciliation bill on the duopoly and newspaper-TV cross ownership rules which affect television broadcast license ownership violate the Byrd rule. The duopoly rule limits the number of television stations a single person can own in a market and the newspaper/broadcast cross ownership rule makes it difficult for newspapers to own a television station in the same market where it publishes a paper to assure that there is not a monopoly on information. The conference provisions violate the Byrd rule because they make substantive changes in policy which have no budgetary effect. At a time when the Congress and the American people are concerned about the growing concentration in the broadcast industry, this is not the time or place to consider these changes. The Congress ordered the Federal Communications Commission to review the duopoly rule in 1996. The budget agreement should not pre-empt that review. I join my colleagues in observing that a point of order would lie on the broadcast provisions of this bill.

Mr. KERREY

Mr. KERREY. I yield myself such time from the Democratic side.

Mr. KERREY. Mr. President, I support the Dorgan point of order against the provisions in the reconciliation bill which manipulate the universal service support system to create a book-keeping gimmick which is disguised to look like deficit reduction. Universal service support is the complex system of intercompany payments between phone companies designed to ensure that telephone rates are reasonable and affordable. The universal service support system assures that phone rates and services are comparable in rural and urban areas. This system of payments and shared costs does not touch the U.S. Treasury. For the first time, the reconciliation conference agreement would manipulate the universal service support system for budgetary gains. This is a terrible precedent which if abused will drive up phone rates, especially for rural Americans. The idea of universal service is profound. It is one of the most fundamental principles of telecommunications law and economics. The concept was introduced in the original Communications Act of 1934 which promised ``to make available to all Americans a rapid, efficient, nationwide and world-wide wire and radio communications service * * *'' From 1934 to 1996, regulation and monopoly were the primary means of ensuring telephone services to all Americans. In 1996, the Congress embraced the idea that competition would best deliver telecommunications services to all Americans at affordable rates. The Congress also recognized that there were some markets which competitive companies would not serve and some areas where costs are so high that rates would drive citizens off of the phone network. In those markets, universal service support would keep rates affordable and comparable to urban areas. The principle of universal service is that all Americans should have modern, efficient, and affordable communications services available to them regardless of where they live. Universal service support is not a subsidy, and it is not a tax. It is a shared cost of a national telecommunications network. What makes the American phone network valuable is that almost anyone can be reached. Affordable phone service is not just important to the citizens of Valentine, NE or Regent, ND, it is of value to the citizens who live in New York, Chicago, and other urban areas who need to reach Americans in all 50 states. The basic bargain of the Telecommunications Act of 1996 was that the gates of competition would open, provided all telecommunications carriers contribute to the support of universal service. Under the act, support would be sufficient, predictable, and the burdens would be shared in a nondiscriminatory manner. To assure that all Americans shared in the benefits of the information revolution, the Congress also adopted the Snowe- Rockefeller-Exon-Kerrey amendment which provided for discounts to schools, libraries, and rural health care facilities. The bottom line was that no American would be left behind. The precedent that the reconciliation conferees have set is dangerous. It threatens to undermine the promise of sufficient and predictable support for universal service. It does so to gain a smoke and mirrors bookkeeping advantage in the budget. If the universal service support system is manipulated for this purpose, consumers will lose. The very system which assures affordability should not be jeopardized by an attempt to avoid the real choices necessary to produce a balanced budget.

Mr. KERREY. Mr. President, I come to the floor and offer what I would call my reluctant support for this budget agreement. Today, the subject at hand is the spending portion of this bill. And I wish it was completely different, I must say, than what is in here. Yesterday, I spent most of the day in mourning for the loss of the provisions relating to structural changes in Medicare that would have added $8 billion to the HI hospitalization trust fund by imposing very reasonable and progressive change in the premium--it would have added $40 billion a year in spending relief in the year 2030 by accommodating this tremendous change in the baby-boom generation between 2010 and 2030--and other provisions. I spent the day grieving those. I have overcome my grief, and I am prepared to support this because I believe it does balance the budget by the year 2002. I believe it finishes the job that we started in 1990 and 1993. I voted for both of those bills, and I find myself compelled once again to come and vote for a bill that I am not altogether pleased with. In this morning's New York Times there was an op-ed piece written by William Safire talking about an age-old problem in the West where cattlemen, because they had an interest in keeping the range open, and sheepherders, because they had an interest in keeping the range fenced in, were at constant odds and warring with one another. Their animals had different needs. They, as the guardians of those animals, went to war in order to protect the needs of those animals. It was not until just recently that the people who manage these range animals have come together. They came together as a consequence of a common enemy, in this case, a rather pesky weed called leafy spurge that has roots that can go down as deep as 150 feet, impossible to, by any reasonable estimate, get rid of once it is in the grassland. It will spread and take over the entire prairie. So the cattlemen are out there saying the leafy spurge will eliminate the grass. ``I'll have nothing for my cattle to graze on. What am I going to do? No herbicide is effective. No burning is effective. Nothing seems to work.'' Until one day they discover that what works is to put a few hundred sheep out on the grassland. As a consequence of the sheep's appetite for the leafy spurge, the sheep eliminates the weed, and thus is joined a battle between the cattlemen and the sheepherders. Suddenly they come together as a consequence of the common enemy. I am impressed that Republicans and Democrats have come together with this bill to address a common enemy--the deficit. I wish that the 1993 bill had been bipartisan. I believe that if we had a few more spending cuts in 1993, that might have been possible. We missed an opportunity. It was bipartisan in 1990. It was not in 1993. And it is today. I am impressed with it. I believe the Nation wants us to be bipartisan. I believe the Nation makes our greatest progress when we set aside not only our partisan differences, but we are able to find a common opponent, in this case, the deficit, a common objective, and we say that we are willing to risk a bit--in some cases, risk it all--for the larger goal. I must say, after having made that observation, and to be specific, praising the distinguished chairman of the Budget Committee, Senator Domenici, the ranking Democrat, Senator Lautenberg, and on our Finance Committee, Senator Roth of Delaware, Senator Moynihan of New York, they have worked hard to say we have a common enemy--in this case, the deficit. We see the connection between deficit reduction and jobs. We believe that jobs, and good jobs, can solve almost any problem that we have. And thus, we are willing to join forces against a common enemy. I am reluctant to become enormously enthusiastic about this, as I say, because I do not believe it is asking of Americans the sort of tough decisions and choices that would enable us to say that we are tasking the American people to do something that is truly great. We will balance the budget. It is true, we are reforming Medicare to give seniors more choice. I think the Federal Employee Health Benefit provisions in this bill will have long-lasting impact, give seniors more comfort as they make a choice to buy alternative care. The provisions for increased coverage for children, the provisions having to do with welfare reform, all these are good provisions and deserve attention. We have, in addition, a lot of provisions--and I thank all four of the Members who have been involved with this for their assistance in making sure that rural America has an adequate reimbursement rate under managed care, that we are able to take advantage of managed care and see increased penetration in rural America. I appreciate, as well, the change to increase budget enforcement to tighten some of the loopholes that were in law. There are a lot of things in this bill, in short, that are good. It does, it seems to me, represent a successful compromise between Republicans and Democrats, and we have produced a piece of legislation that all of us, or most of us, anyway, are going to be able to come down and be enthusiastic about. There are four things, Mr. President, that I would like to discuss which I would put in the category of unfinished business. First is entitlements. I appreciate that there is a commission in this bill. I believe it is 20 months that they have. I can save them a lot of time. We had a bipartisan entitlement commission, Senator Danforth and I. The distinguished occupant of the chair was on that commission as well. There are a limited number of choices that one can make. There are roughly 10 or 15 choices you can make. They are all ugly. They are all difficult. And they all accommodate a demographic problem, not a problem caused by secular humanists or by Phyllis Schlafly or Ronald Reagan or George McGovern. This is not an ideological problem. It is a problem of birthrates during the period of time 1945 to 1965, and the birthrates following that. It is called the baby-boom generation. Seventy-seven million Americans will begin to retire in 2010. And what we attempted to do, with what I consider to be a relatively modest change in the law with eligibility age and means testing and a copayment on home health care, was to accommodate that large generation of people. The sooner you do it, the better. You do not do them any favors by saying, we will do a commission for 2 years and perhaps do something in 1999. Then you have a Presidential campaign going. You will probably have to wait until 2001. The longer you wait, the harder the choices are. As I said, the choices are fairly limited. If you do not like moving the eligibility age, if you do not like doing some means testing, the only thing you can hope to do is get some increases in the revenue stream, proposing to increase taxes or increase the premium. If that is your choice, make it now, because the longer you wait, the more likely it is that the people you are trying to help are going to pay a lot more. They are going to pay a bigger price. They have not been warned. We missed an opportunity, and I am hopeful that by surfacing this in the debate and getting strong support, bipartisan support here in the Senate, we can keep these issues alive. In addition to the long-term problem of entitlements is another problem with entitlements inside of our budget. Yes, it is true, we will have taken the final step to balance the budget with this bill, although I note parenthetically that one of the curious things about this particular proposal is we are going to balance the budget by rather substantially increasing spending in some areas and lowering taxes in others. It is an exciting proposition. We are going to balance the budget, it is true, but the budget has another big problem, and that is the growing percent of that budget that goes for mandatory programs. Many of my colleagues have come down to give great, impassioned speeches about why we should not do all of these things. But the question that needs to be asked in a very calm environment is, what are you going to do about these numbers? In this budget agreement, the amount of money we allocate for mandatory, plus interest, will go from entitlements, plus interest, the mandatory portion from about 66 percent, as I understand it--I haven't seen the final numbers--to about 70 percent in 2002. The Senator from New Mexico is shaking his head, but it does unquestionably increase. I do not know if it goes to 70 percent, but it increases, and it continues to increase. And it will increase even more when the baby boomers retire. It is not a flat number. The head of the Congressional Budget Office, June O'Neill, prepared a report some time ago that shows how the cost of these programs continues to go up as a percent of our overall budget, and they are squeezing out our capacity to keep our defenses strong, our capacity to invest in education or infrastructure, or research, and all the other sorts of things that are being done in the other part of the budget. One of the reasons it was made easier to do our appropriation this year is, we put a little more money in the appropriated accounts in this fiscal year than you are going to see in the outyears. So I alert Members that see the appropriations bills sailing through this year and are wondering why, there is more money this year than there will be next year and the year after that and the year after that. In years 4 and 5, we will have very tough decisions to make in discretionary spending--far tougher than I believe people realize. Thus, there is the second problem of the growing cost of entitlements inside of the budget. It sets up tough choices. It doesn't set up easy choices. It sets up very difficult choices that we have to make. The second big area for me is, I must say, with the economy growing the way it is--and one of the great pieces of news for me in this budget debate is that as a result of the growth in the economy, I think there are very few people left that don't understand that, in addition to defending the Nation as the first order of business, whatever we do with our taxes, regulatory policy, and spending policy, we do need to ask ourselves: will this create jobs? Because if the economy is growing, it is producing jobs, and there is a demand for labor as a consequence of a growing economy. Lots of things get solved in a hurry. Not only does the Treasury have lots of revenue that makes our job easier, but the gap between rich and poor narrows, the number of people on welfare is reduced. A lot of problems we have get solved quickly if our economy is growing. If we recall from the recession of 1991, the problems are made a lot worse if you have the opposite in place. So this growth we have out there in the economy is exciting. My view is that this is the time when we need to be investing in that public infrastructure--research, the transportation base, education, and all those things that will produce increased productivity and increased economic growth sometime out in the future. We may not get an immediate benefit from it, but we will benefit somewhere out in the future. It connects with this entitlement problem. For my friends on this side of the aisle who love to get up and get fired up and tell me why we can't do anything about entitlements, the question occurs: If you don't want to do that, Senator, where are you going to get the money to make these public investments? I haven't heard many people that are enthusiastic about a tax increase. I have heard them being enthusiastic about going in the other direction. The only way you can find the resources to invest in the long-term growth of this country is by containing and controlling the pace of growth of entitlements. It is a question of whether or not we are going to endow the future, or are we going to convert the Federal Government into an ATM machine, entitling the present solving of the problems of me, me, me, now, now, now, but not solving the problems of future generations. The third issue I speak of today is health coverage. I am of the opinion that the additional $24 billion that is in this particular budget is going to cover a lot fewer people than leading advocates predict. I don't believe that it is going to be a terribly efficient way to increase coverage. Again, I don't think you are going to be able to get the kind of increased coverage that is necessary, unless you come to grips with the rising costs of these mandated programs. For all the terrible things that were forecast and said about the proposal to add a $5 fee for home health, to add a means-tested and an income- related premium on Part B and increase the eligibility age, you thought we were not spending any money at all on Medicare. No account in our budget grows as fast as Medicare. It will go up, on average, $24.5 billion per year for 10 years. Nothing grows that fast. We are allocating more and more of our gross domestic product into Medicare and other entitlements. Now, I am prepared to do more for low- income seniors, and help people who are in serious trouble out there, having a tough time paying the bills. But the choice that we have to make, not only when it comes to investing in our future, but also being able to provide additional coverage, is between one group of Americans and another, or allocating $24.5 billion of additional money for children over 5 years and $24.5 billion per year for 37 million people over the age of 65. Now, I think that is the kind of debate we need to have on this floor. It is a tough debate, and it involves telling the American people and, very often, giving them the facts. And the facts may be painful and difficult for us to face, but they are the facts. I, for one, as I said, am skeptical that $24 billion over 5 years is going to result in the kind of increased coverage projected for children. I must say again that I think the only way we are honestly going to be able to increase the coverage for Americans is to get after entitlements. There is a question of the legitimacy not only of the means test, but we must ask ourselves fundamental questions about requiring an eligibility test on age, another program based upon poverty, the veterans' programs, saying if you get blown up in a war, we have a good program for you. The final one, of course, is the income tax deduction. The fourth problem that I think this country faces, which is not in this bill, but it will be taken up in the tax bill and I will talk about it later, but I think it's a big problem. We have a window into the problem of looking at the estate tax issue, and that is the difficulty Americans are having generating wealth. I will talk about it at greater length when we get on the tax bill. But income and wealth are not the same thing. It is not uncommon to pick up a newspaper and hear a story talking about this tax bill does this or that for the wealthy, and what they are talking about is income. They are not the same thing. I can have a half a million dollars a year in income and have no wealth, just as I can have $20,000 in income a year and if I save a little bit, I can get wealth. The estate tax debate is focused on about 2 percent of Americans who have estates at $600,000 or over. I believe estate tax relief is reasonable. I support doing that in the tax bill. But there are 98 percent of the American people that do not have wealth in excess of $600,000. It would not take much of a change in the Social Security program to enable somebody in the work force, indeed from the moment they were born, to have a savings account that enables them to say that when it comes time for me to retire, as I look forward to growing old, I know that in addition to some kind of an income transfer I am also going to have the opportunity to have security as a result of wealth. I think wealth distribution, identified as a problem repeatedly, cannot be solved by simply transferring income. It can only be solved by establishing that we are going to try to help working Americans acquire the wealth and use the principal retirement program, Social Security, that we have in place to get that done. Mr. President, I close by saying that I intend to vote ``yes'' on this bill, and I intend to vote ``yes'' on the tax relief bill that follows. I wish it had done considerably more. I have great praise and great appreciation for the work done by the chairman of the Budget Committee, by the ranking Democrat, the chairman of the Finance Committee and the ranking Democrat on that committee as well. They set the tone of bipartisanship, which must be set if you are going to deal with these controversial issues, if we are going to be able to go after the common enemy, not just of deficit spending but other tempting, irresponsible things that might produce a round of applause, but might not be good for the United States of America.

Mr. KERREY. I am pleased to yield.

Mr. KERREY. Mr. President, first of all, I say that the man who taught me about entitlements is the distinguished Senator from New Mexico. I recall coming to the floor, I believe it was on a budget resolution that the distinguished Senator from New Mexico and the now- departed Senator from Georgia, Senator Nunn, when they had the famous Nunn-Domenici amendment that controlled the growth of entitlements. The first time he proposed it, I voted against it. I listened to the opponents of it and said, ``That makes sense to me; this is not a good amendment, so I will vote no.'' Then I started looking at the facts, and I was very uncomfortable to have to conclude that I voted wrong. The next time the Senator brought it up, I voted for it and I became interested in this issue as a result of both you and Senator Nunn and your elaborations and your education that you did 3 or 4 years ago. The point that I am trying to make, which I am afraid is sometimes lost, is that the longer you wait, the harder the choice is. This is not a problem that you can avoid forever. The more time you let expire, the more difficult the choice is--that is, on Medicare. The same is true on the budget item when it comes to Social Security. We have people under the age of 40 who will be beneficiaries out in the future, 26 and 27 years from now, under current law, for whom we have to say, are we going to be able to keep the promise that's on the table? We have to say no. Social Security Commissioner designate Shirley Chater, in 1996, when asked about it, said, ``You can expect Social Security to have to be reduced by 30 or 40 percent in benefits, unless some change occurs.'' Well, there is a presumption that those of us who proposed altering these programs today are proposing cuts. But the truth is, if you do nothing, that is what is going to happen; only the cut isn't going to occur to a future beneficiary, it will occur to a current beneficiary. Long after the time has passed when you can plan and make adjustments, suddenly the Congress is going to pop up and say, ``Sorry, folks, we have to cut the programs big time,'' in order to be able, as the Senator said, to save either the fiscal health or the program itself. So my fear is that we missed an opportunity when the distinguished Senators from New Mexico and Georgia were down here. I recall people coming in the one year and pulling off veterans first, and once the floodgates were open, it was ``Katie bar the door,'' everybody got down here and got exempt and there was nothing left. There was no group that is entitled to payment left, and they were all exempted and there was no real reform that occurred. So I am not going to give up on the issue. I am not going to stop talking about the need for these long-term changes. But I am just saying to the American people, especially those who understand the importance of Medicare and these entitlement programs, who consider it a victory that the conferees were unable--and I know the Senator from New Mexico fought for these things, but the conferees were unable to hold these provisions. There are many people who are advocates of these programs that consider that a victory. It is not a victory. It weakens the program long term. And some beneficiary out in the future is not going to thank us for this action. Maybe it gains a few votes in elections. I doubt it. I believe the American people once they hear the facts of the matter will be persuaded. Anyway, it is a much longer answer. I know the Senator from Texas is not very appreciative of the fact that the Senator caused me to talk longer than I intended to. But I want to underscore in closing that I do appreciate the fact that the Senator from New Mexico, Senator Nunn, and others led on this thing. It probably torments the Senator now to see his student come back here speaking in this fashion. I just close by saying that I am prepared to vote for this agreement on the balanced budget. I believe that is good for the economy. I wish and hope that we are able in a bipartisan spirit to do much more, if not this year sometime relatively soon.

Mr. KERREY

Mr. KERREY. Mr. President, I am pleased to announce my intention to introduce the IRS Reform and Restructuring Act of 1997 with the senior Senator from Iowa, Senator Grassley, who also was a day-to-day participant in this effort and gave it a great deal of energy and expertise. As one can tell from listening to him, he has offered a tremendous amount of enthusiasm and orientation to the taxpayers concerned, the customers themselves, as well as the need to open the IRS up. He cited the example of Shelly Davis, who brought to the attention of the public, the taxpayers, the significant problems the IRS is having and found that, as her reward for doing that, she lost her job. I very much appreciate Senator Grassley's leadership. I look forward to working with him on the Finance Committee to try to get this piece of legislation heard and marked up and, hopefully, on to final passage yet this year. This legislation reflects the recommendations of the National Commission on Restructuring the Internal Revenue Service. My co- sponsor, Senator Grassley, and I have been the Senate members of the National Commission for the last year, and have been part of the most unprecedented review of a government agency that an independent commission has ever conducted. Senator Grassley and I will shortly introduce legislation based on this commission's work. The goal of this legislation is to make the IRS work for the American taxpayer. This legislation is so important because there are twice as many people who pay taxes as vote. Citizens' faith that their government can be fair and efficient is dependent on a well functioning IRS. The days of the old-fashioned tax collector are over--the core of this legislation is based on a vision for a new IRS. We believe, in today's world, the job of the IRS is to operate as an efficient financial management organization. It is a myth that the bulk of the Federal revenue is generated through heavy enforcement. While the IRS must maintain a strong enforcement presence, its core and the core of the Federal revenue stream lie in a revamped, modern organization that can assist taxpayers promptly and efficiently, track account information, and send out clear notices. There is a breathtaking gap between the service levels of the IRS and those of the private sector. The IRS has a 20-percent error rate for processing paper returns and expends an incredible amount of resources and focus to correct these errors. It captures only 40 percent of the data from returns and is still drowning in a sea of paper. It is typically 18 months before a return can be matched against 1099s. A private sector business that took on average 18 months to send someone a bill, certainly wouldn't stay in business very long. This legislation offers both a realistic goal for those who will take charge of the agency and a credible plan for reaching that goal. We spent the last year studying the problems and solutions for the IRS. Clearly, our access to the IRS's operations and employees was unprecedented. We spent 12 days in public hearings, interviewed 300 IRS employees in field offices, and interviewed over 500 current and former officials from the IRS, the Treasury Department, congressional committees that oversee the IRS, and other IRS experts. We also commissioned consulting reports and internal reviews of IRS management, governance, work force, compliance, and customer service. Finally, we heard directly from citizens through town meetings and surveys. During all of this work, we continually asked the question: How can we make the IRS serve the American people? There are many visible problems at the IRS that should be noted by all colleagues, especially those who take the view that perhaps we don't need to change. All of these visible problems dictate that we act and that we change the law. The IRS has a law enforcement mentality, but the vast majority of its employees perform service functions including tracking finances, sending out notices, and assisting taxpayers. In addition, the IRS has the general attitude that taxpayers are guilty, even though 90 percent of taxpayers are compliant. Taxpayers also 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. Next, training is not a priority, and employees do not have the skills of their private sector counterparts. Fifth, the IRS uses employee evaluation measures that do not encourage employees to provide quality service to taxpayers. Next, the IRS management and governance structure makes strategic planning impossible and has caused a massive failure of the IRS' $3.4 billion computer modernization program. Further, IRS computer systems were developed during the 1960's and 1970's and lack the capability to provide taxpayers with quality service. Wasteful inefficiencies and high error rates exist in the processing of paper forms. The Treasury Department has basically left the IRS to its own devices, leaving a vacuum in executive branch oversight of the agency. Congressional oversight of IRS is scattered and can send confusing signals to IRS that can be manipulated by the IRS to avoid accountability. Last, complexity and constant changing of the tax code is a major obstacle that intensifies all of these problems. We heard from witnesses who estimate that the American taxpayers spend nearly $200 billion a year just to comply with the Tax Code. Complexity is a problem, not only in giving customer service, but as far as a drain on the U.S. economy. A key problem identified by the Commission was a lack of a coherent, accountable structure to implement a long-term vision and goals. At the top levels of the IRS and at Treasury there are murky lines of accountability, a lack of necessary expertise to operate in the new information age, and no people of authority with significant tenure to get the job done. The officials at the Treasury Department have expertise in tax law, but do not have the expertise in areas of customer service, technology, and management to oversee the IRS. Worse, they are not around long enough to ensure focus on multi-year projects like the tax system modernization [TSM] or changing the culture of the agency to be more responsive to taxpayers. Additionally, Treasury does not coordinate its own oversight: The Commissioner of the IRS must deal with various assistant secretaries on budget, operations, computers, and others. At the end of the day, the IRS Commissioner really reports to the Deputy Secretary who also manages 11 other agencies--not to mention the economy. The recently retired Commissioner of the IRS, Margaret Richardson, told us that she reported to three different Deputy Secretarys during her 4-year tenure as IRS Commissioner. Aware of these glaring problems, the Restructuring Commission began developing ideas for a new governance structure. Our criteria for success were: First, clear accountability, second, expertise in running a modern customer-oriented organization, and third, continuity. To provide for accountability, expertise, and continuity the legislation we will introduce will include: First, an Internal Revenue Service Oversight Board, appointed by the President for staggered 5-year terms. The board will: Approve the mission, objectives, and annual strategic plans of the IRS; oversee the IRS management; have significant tenure to force change throughout the organization; and have unique public and private sector expertise in managing large service organizations. Second, the Commissioner will be appointed for a 5-year term, so he or she will be around long enough to achieve real change. Third, the Commissioner will be given greater flexibility to hire or fire his or her own team of executives, who will bring new expertise into the IRS. While the board will keep an eye on long-range strategic issues, the Commissioner will run the organization and be given greater authority to do so. Fourth, congressional oversight will be coordinated among the authorizing committees, the appropriating committees, and the Government oversight committees. Our legislation codifies coordinated oversight, stating that committee leaders, majority and minority, meet regularly to ensure that the IRS receives clear guidance from Congress, and that Congress is given the proper information to oversee the IRS. This legislation draws clear lines of accountability between tax policy and tax administration, leaving all tax policy matters to the Secretary of the Treasury. The legislation makes the Secretary of the Treasury a member of this new board, recognizing the link between tax policy and tax administration. Additionally, the Secretary of the Treasury would continue to have final say over the IRS budget before it is sent to Congress. Under this legislation, the board would send Congress a copy of their budget at the same time they send it to the Secretary, giving Congress an independent view of how much money to appropriate. In short, our new structure will bring heightened accountability to the IRS and tax administration. Mr. President, the American people know that the status quo is no longer tolerable and that the IRS needs fixing; $3.4 billion was wasted on a failed modernization project. IRS operations are antiquated and outdated, and taxpayers--close to 90 percent of whom voluntarily pay their taxes--are generally, and unfairly, treated as if they are guilty of something when they contact the IRS. The IRS's problems are rooted in the lack of strategic vision and focus, measures that do not encourage employees to treat taxpayers well, operational units that do not communicate with each other, and a systemic lack of expertise and continuity in management and governance. The legislation Senator Grassley and I will introduce will put the IRS on the road to recovery with a reasoned, comprehensive approach to fixing these problems. When implemented into law, I am confident the result will be: Restored public confidence in the IRS; increased focus on customer service; cohesive oversight and governance; efficiency gains in IRS operations; and innovative compliance and customer service programs. We hope for expedited action on our legislation so that the American people have the IRS they expect and deserve. Our work to restructure the IRS will go a long way toward restoring taxpayers' faith not only in our tax system, but in our Government, as well. Mr. President, again, I congratulate and applaud and appreciate the dedicated service and expertise and leadership of the distinguished Senator from Iowa, Senator Grassley. Mr. FEINGOLD addressed the Chair.

Mr. KERREY

Mr. KERREY. Mr. President, I rise in support of the Dorgan Amendment, which expresses the view of the Senate that the universal service support system which keeps telephone service affordable; should not be turned into a piggy bank which can be raided to produce an illusory deficit reduction. The Conferees working on the Reconciliation Conference report are considering legislation which for the first time would manipulate the universal service support system for budgetary gains. This would be a terrible precedent which could drive up phone rates, especially for rural Americans. In 1996, the Congress enacted dramatic reform in the laws which govern the organization of America's telecommunications markets. The law was intended to introduce competition into all telecomm markets and preserve universal service. The bargain was that competition would replace regulation but that all carriers would share the responsibility for providing universal service. The idea of Universal Service is profound. It is one of the most fundamental principles of telecommunications law and economics. The concept was introduced in the original Communications Act of 1934 which promised ``to make available to all Americans a rapid, efficient, nationwide and world-wide wire and radio communications service . . .'' From 1934 to 1996, regulation and monopoly were the primary means of ensuring telephone services to all Americans. In 1996, the Congress embraced the idea that competition would best deliver telecommunications services to all Americans at affordable rates. The Congress also recognized that there were some markets which competitive companies would not serve and some areas where costs are so high that rates would drive citizens off of the phone network. In those markets, universal service support would keep comparable services and comparable rates available in rural and urban areas. The principle of universal service is that all Americans should have modern, efficient and affordable communications services available to them regardless of where they live. In the aftermath of the break-up of AT&T, a system of intercompany payments were established to assure that competition in long distance services did not drive prices for local phone service through the roof, especially in rural areas. Universal service support is not a subsidy, and it is not a tax. It is a shared cost of a national telecommunications network. What makes the American phone network valuable is that almost anyone can be reached. Affordable phone service is not just important to the citizens of rural America, it is of value to the citizens who live in urban areas who need and want to reach Americans in rural areas. The basic bargain of the Telecommunications Act of 1996 was that the gates of competition would open, provided all telecommunications carriers contribute to the support of universal service. Under the act, support would be sufficient, predictable, and the burdens would be shared in a nondiscriminatory manner. To assure that all Americans shared in the benefits of the information revolution, the Congress also adopted the Snowe- Rockefeller-Exon-Kerrey amendment which provided for discounts to schools, libraries, and rural health care facilities. The bottom line, Mr. President was that no American would be left behind. If certain budget negotiators have their way, many Americans will be left behind. The precedent that the reconciliation conferees have under consideration is dangerous because it attempts to undermine the promise of sufficient and predictable support for universal service. It does so to gain a mere bookkeeping advantage in the effort to reach a balanced budget by 2002. If the universal service support system is manipulated for this purpose, consumers lose. They will get higher rates and lower service. By adopting the Dorgan amendment, the Senate can send a clear message to conferees that affordable phone service is important to all Americas. The very system which assures affordability should not be jeopardized by an attempt to avoid the real choices necessary to produce a balanced budget by the year 2002. Thank you, Mr. President. amendment no. 1028 (Purpose: To improve the bill) At the end of the section in title I regarding the ``WAIVER OF CERTAIN VACCINATION REQUIREMENTS'', insert the following new subsection: ``(b) Report.--The Attorney General, in conjunction with the Secretaries of Health and Human Services and State, shall report to Congress within 6 months of the date of enactment of this Act on how to establish an enforcement program to ensure that immigrants who receive waivers from the immunization requirement pursuant to section 212 of the Immigration and Nationality Act comply with the requirement of that section after the immigrants enter the United States, except when such immunizations would not be medically appropriate in the United States or would be contrary to the alien's religious or moral convictions.''

Mr. KERREY

Mr. KERREY. Mr. President, I am pleased to note that Senate appropriators have restored $10.5 million to the Telecommunications Information Infrastructure Assistance Program [TIIAP]. TIIAP is a highly competitive, merit-based, grant program that provides seed money for innovative, practical technology projects across the United States. TIIAP grants help our communities utilize the information technologies that play an increasingly important role in the world economy. Without access to advanced telecommunications services that deliver education, healthcare, social services, and news, individuals and sometimes entire communities are relegated to second-class economic status. Rural and low income regions that already face difficult economic hurdles are pushed even farther behind because they lack the resources to join the information revolution. The Federal assistance provided by TIIAP has already helped many of these areas transition into the information economy. In my home State of Nebraska, TIIAP has helped the city of Crete purchase computers to build an access center where adults are taught computer skills and are given assistance to apply those skills to new jobs. Through the Nebraska Network for Children and Families, a TIIAP grant provides funding for the Ideas Network. The Ideas Network is an interactive place where Nebraska families and professionals involved in the human services system may find information, dialog opportunities, education resources, advocacy information, and supportive relationships. Specifically, this valuable network is devoted to Nebraska's foster families, subsidized adoptive families, families of children with special needs, and human service professionals. TIIAP is a matching grant program. Since 1994, $79 million in Federal grant funds generated investment of $133 million of local funds. Underfunding this productive program would have been a tremendous mistake. Without the seed money provided by TIIAP, valuable community building projects such as the Ideas Network would not be possible. This innovative program is an important component of better education, health care and improved community relations. Jacob Wetterling Act

Mr. KERREY

Mr. KERREY. Mr. President, I rise today to voice my support for Senate Resolution 98 regarding the U.N. Framework Convention on Climate Change. Like my colleagues in the Senate, I too am concerned about the effects on the economy of any national or international agreements that the United States enters into. I am particularly concerned with any agreement that may impact the well-being of the American public and the ecological balance of this Nation. The U.N. Framework Convention on Climate Change has the potential to do both. The United States is scheduled to join with leaders of 160 nations in Kyoto, Japan in December of this year to conclude negotiations on a global climate change treaty. The Kyoto summit is the latest in a series of meetings that have been held since this body ratified the U.N. Framework Convention on Climate Change in 1992. At Kyoto, the United States and other countries hope to adopt a protocol or legal instrument to deal with the threat of climate change in the post 2000 period. It is my belief that the United States must take the leadership role in these negotiations, and steer the course to achieve an equitable, reasoned approach to global climate change mitigation, an approach that seeks inclusion of all countries and that offers a solution to the issue. While I believe the resolution before us will allow such an approach, I want to emphasize to the administration the essential nature of a negotiated framework to which all countries can accede. Before I summarize my analysis of the need for global action, let me review the facts. First, global climate change is real. If it were not, 160 countries would not be meeting to address it. However, there are uncertainties about the effects of global climate change--uncertainties relative to the timing, the magnitude, and regional patterns of climate change. We must acknowledge these uncertainties, but acknowledge also that they do not justify inaction. As stated recently by Dr. William Nordhaus of Yale University: ``The results (of studies) definitely reject inaction; uncertainty alone cannot justify waiting for the revealed truth to act, particularly when the revealed truth, if it ever comes, is probably going to arrive at the point where the effects are irreversible.'' Second, a leading indicator of climate change is increased emissions of global greenhouse gases. Concentrations of atmospheric carbon dioxide--the largest component of greenhouse gas emissions--are about 26 percent higher now than they were 100 years ago. Also, globally averaged air temperatures at the Earth's surface have warmed by nearly 1 degree Fahrenheit over the last 100 years. Increased emissions of greenhouse gases are virtually entirely due to the activities of man. As a general rule, a country's greenhouse gas emissions rise in concert with increased industrialization. It is no surprise, then, that the United States is the greatest emitter of greenhouse gases, both in terms of gross and per capita emissions. However, the emissions of some developing countries are rapidly escalating, and the emissions of some are expected to surpass that of this country in the first quarter of the next century. Which takes me back to my call for U.S. leadership. As the world's industrial leader, the United States should take a clear lead in negotiating a framework for all countries to participate in global climate change abatement. A global approach, and global participation, is requisite to a successful outcome. This approach may require a new framework and a fresh look at timetables and current directions. My understanding of the data is that we have time to do this--we have time to assess where we are and how best to craft equitable policies. But inaction is not appropriate. The resolution before us requires commitments of developing countries to mitigate greenhouse gas emissions in the same timeframes as developed countries. This may resonate as promoting a policy that discourages the participation of many developing countries. However, the resolution will allow developing countries appropriate flexibilities in commitments to address global climate change abatement. The United States and other developed countries must accord newly developed and developing countries flexibilities and incentives to participate, and these need not create economic disadvantages to the United States or any other developed country. I cannot emphasize enough the importance of this point. Without all countries on board, inaction becomes inevitable, because emission reductions achieved by one country will soon be offset by increased emissions from another. An equitable approach that encourages commitments by all parties and that offers incentives to developing countries is needed. Market-based solutions to curb emissions will allow continued economic growth with minimal impacts. Developed countries are in a better position to implement emissions-curbing activities and technologies at low cost and impact, and to also transfer these abilities and technologies to developing countries and to aid in their economic advancement in a way that tempers emissions growth. While measures to stabilize greenhouse gases at a certain level will inevitably lead to some energy price increases, an international emissions-trading scheme could substantially reduce the potential costs. What is needed, however, is a policy to ensure that incremental costs of reducing or stabilizing emissions are equalized across firms, across sectors, and across countries. This can only occur if we take into account the economies, emissions and abilities of countries to participate, and if we assign actions accordingly and in appropriate timeframes. Market mechanisms can reduce cost impacts of emissions reductions agreements. A preferable policy would be to set short- and long-term goals to stabilize greenhouse gas emissions, and to set quantity limits on emissions that are linked to prices. Targets and timetables for emission limitations cannot operate independently of market prices. An international tradeable emissions permits system, with price caps and floors, would have revenue potential and would be cost-efficient. Technology transfer and development is an important policy aspect for the abatement of global climate change. The United States and other developing countries have within our current capabilities technologies which can lead to dramatic reductions in greenhouse gas emissions. We can increase the efficiencies of industry, of transportation, of many energy-intensive activities, all with what we already know. By implementing these capabilities and by transferring these technologies to developing countries we can curb emissions significantly. Continued technology development is also necessary. Lastly, and perhaps most importantly, we must continue to advance the science related to these policies, and to allow policy changes as the data warrant. Mr. President, I conclude my remarks by repeating that I, too, am concerned about any agreements or policies that effect the well being of this country. However, I believe it is in our best interests and that of the world community to approach global climate change in an inclusive, proactive manner that seeks continued economic growth. That approach demands action, and global coalition building, and it is incumbent upon the United States to steer that course.

Mr. KERREY

Mr. KERREY. Mr. President, I rise today to offer my support for the pending amendment. I have long been a supporter of the National Endowment for Democracy because I believe that it serves to promote U.S. interests by fostering democracy throughout the world. NED was established by Congress in 1983 as a nonprofit, bipartisan organization designed to promote democratic values by encouraging the development of democracy in a manner consistent with U.S. interests, assisting pro-democracy groups abroad, and strengthening electoral processes and democratic institutions. NED accomplishes these goals by providing funding to a wide variety of grantees that operate programs in more than 90 countries throughout the world. Mr. President, many of my colleagues may be aware of the work that NED-funded grantees have done in Eastern Europe and the countries of the former Soviet Union. These Newly Independent States have benefited immensely from programs designed to help develop the rule of law, grassroots campaigns, party organization, and private sector enterprise. And while the development of truly democratic institutions is a slow process, I believe that over the long run it remains in the interest of the United States to continue our commitment to those who are struggling to build stable, democratic governments. While NED's work in the newly independent states is commendable, of equal importance--and often with less publicity--NED grantees are also hard at work in countries like Nigeria, Burma, Cuba, and Mongolia where pro-democracy forces are most in need of assistance, and where the ability of the United States to make a positive impact is at its greatest. Mr. President, even though in the past decade the world has witnessed a remarkable transformation, and the forces of democracy are on an upswing throughout the world, it remains a fact that approximately two- fifths of the world's population continues to live under authoritarian rule. There clearly remains a need for continued vigilance and support of those groups still striving to achieve democratic reforms. While Congress may have created the National Endowment for Democracy during the cold war, I firmly believe that fostering democracy remains as important today as it was 14 years ago. Because of the continued need for U.S. assistance to pro-democracy forces, I was disappointed that the Senate subcommittee did not fund the President's request of $30 million for NED. It is for this reason that I fully support the amendment before the Senate that will fund the National Endowment for Democracy for fiscal year 1998. Mr. President, there is a reason that four former National Security Advisers to the President have said that the elimination of NED funding would signal America's disengagement from the vital policy of supporting democracy. There is a reason that seven former Secretaries of State from both Republican and Democratic administrations have voiced their belief that NED funding is as vital today as when the program was created. And finally, there is a reason that brave, pro- democracy activists like Harry Wu and Vaclav Havel tell us that NED funding is essential to advancing the cause of democracy. Mr. President, the reason is that they, like many of my colleagues here today, realize that America must maintain its commitment to the ideals and principles of democracy.

Mr. KERREY

Mr. KERREY. Mr. President, during the last several weeks, I have taken the floor to discuss my concerns about the approach the Department of Justice has taken on mergers among and between large telecommunications companies. I was particularly disappointed with the decision of the Department of Justice to approve the Bell Atlantic/NYNEX merger without any conditions. Today, I take the floor to congratulate the Federal Communications Commission for doing what the Department of Justice was unwilling to do. This weekend the FCC announced that it had concluded an 11-page letter of agreement with Bell Atlantic and NYNEX on pro-competitive conditions for its merger. While I continue to question the underlying competitive merit of the Bell Atlantic/NYNEX combination, the efforts of the FCC certainly mitigate the decision of the Department of Justice to approve the merger. It is only unfortunate that the Department of Justice had not demonstrated the same commitment to competition. The FCC negotiated a 4 year pro-competitive agreement with Bell Atlantic and NYNEX which includes the use of forward looking costs for competitive interconnection agreements, the use of uniform interfaces for interconnection, greater reporting requirements, access for competitors to efficient operating support systems, and performance guarantees. These commitments hold the promise of giving competition a chance to take root. The use of forward looking costs within the 13 States which make up the Bell Atlantic/NYNEX region is especially significant in light of the Friday decision of the Eighth Circuit Court of Appeals to bar the FCC from setting interconnection prices. A nation grew from 13 colonies, perhaps a telecommunications revolution can grow from 13 States. I applaud the FCC and Chairman Hundt for showing independence and a commitment to competition. The course of action chosen by the Commission highlights the importance of the FCC's political independence. As an independent regulatory body, the Commission was able to use its authority to protect the public interest to win pro- competitive concessions from Bell Atlantic and NYNEX, notwithstanding the failure of the Department of Justice to do so. I urge my colleagues to give this case careful study as the Congress considers telecommunications policy. In the coming weeks and months, the Congress will consider confirming four new members of the Federal Communications Commission. At stake is whether the Congressional vision of competition and universal service which brings more choice, more investment, more jobs, and lower prices to the telecommunications market is fulfilled or not. The success or failure of the Telecommunications Act of 1996 depends almost entirely on a new team of regulators at the Department of Justice and the FCC. To succeed, they must have an unrelenting commitment to competition and universal service. Without that commitment, the act is doomed to failure. The result will be higher prices, greater consolidation and fewer choices. Mr. President, I applaud the FCC for its action in this case. The Congress must assure that the new members of the FCC have the same courage to exercise their independence, as this Commission has done to protect the public interest. Thank you, Mr. President. Mr. GRAMS addressed the Chair.

Mr. KERREY

Mr. KERREY. Mr. President, I rise today to support the National Science Foundation plant genome initiative that is funded in the VA/ HUD, Independent Agencies appropriations bill. I want to commend Senator Bond, chairman of the appropriations subcommittee, for his leadership in developing this initiative. This project will be funded with new money and will not affect current NSF programs. The plant genome initiative, as included in the bill, is an expansion of the current, NSF Arabidopsis genome project to map and sequence the Arabidopsis genome. The plant genome initiative will advance the current Arabidopsis project and will move us beyond the current programs to more economically significant crops, such as corn, soybeans, wheat, and rice. To compete in the global market, U.S. agriculture must continually strive to efficiently and economically improve production capabilities--such as combating serious threats from disease, pests, and climate changes--without harming the environment. The plant genome initiative will provide us the information necessary to significantly improve the environment and reduce crop and livestock production costs at the same time. It is a win-win project for producers, for consumers, and for the environment. This project will give us the basic, fundamental knowledge necessary to ensure that our consumers continue to receive an abundant supply of high quality, wholesome food at reasonable prices. To meet the growing demand for U.S. agricultural products, we will need to increase production approximately three-fold in the next 50 years. The plant genome initiative will set us on the right path toward meeting that goal without harming the environment. The plant genome initiative will have other far-reaching benefits, as well. It may lead to significant reductions in crop losses while also reducing our reliance on pesticides. It will allow us to improve animal nutrition to increase meat productivity. It will, also, allow us to meet consumer demands for higher quality food at reasonable prices. These are just a few of the benefits that are possible with the plant genome initiative. I, again, want to commend Senator Bond for his foresight in providing funding for the building of a foundation that will allow us to meet the challenges of the 21st Century. Mr. President, this initiative is critically important to U.S. consumers and to U.S. agriculture. I urge my colleagues to support the NSF plant genome initiative as included in the VA/HUD appropriations bill.

Mr. KERREY

Mr. KERREY. Mr. President, I rise today to talk briefly about the recent consolidation of administrative functions at the U.S. Department of Agriculture, recently announced by Secretary Dan Glickman. In my contact with Secretary Glickman he has said that the changes are being aimed at the national headquarters and State offices, but that there will be no additional field office closings or cut in services as a result of this directive. Secretary Glickman has also informed me that an outside study is being commissioned to assess the workload of parts of the agency, in light of current and anticipated program activity, and will report on recommendations on the county delivery systems. The recent administrative convergence by the Secretary is an effort to make the USDA a more efficient and cost-effective agency. No doubt, to streamline the agency and improve efficiency, there is a need to eliminate any duplication of administrative services. However, there is also a need to maintain a vital local field staff with the necessary resources available to them so that they can deliver services to our producers. As the USDA continues to make adjustments to its operations, I will continue to work with the Secretary and solicit feedback from our local Nebraska offices. The Freedom to Farm Act of 1996, for better or worse, has brought us into a new era of our farm program. To some extent producers, Members of Congress, and USDA staff are entering unchartered waters. I will be diligent in my efforts in making sure the USDA, and Congress, is up to the navigational task.

Mr. KERREY

Mr. KERREY. Madam President, I had a conversation with the distinguished Senator from Utah who encouraged me to throw my entire prepared remarks away and take a gentlemanly course and support the nomination of Joel Klein. I have chosen not to do that. I have great respect for the Senator from Utah, and I have chosen to continue to offer to my colleagues reasons why I have chosen to vote against Joel Klein, why I have chosen to oppose the nomination. I like the man, I respect him, I believe he is a good individual, and I don't like coming here opposing a nominee that President Clinton sent to the Congress for confirmation. I would like very much to give him my unqualified support, but I simply, Madam President, cannot. About a year and a half ago, many of us in this Chamber who participated in this debate over the Telecommunications Act--and I must say, Madam President, one of the reasons I found myself in opposition to Mr. Klein is I led him to get the Department a role in the Telecommunications Act so that they would have some voice in determining whether or not there could be competition prior to approving the moving of entry from one sector to another. I fought for that, and many opposed that. We ended the day and prevailed here on the floor, prevailed in conference, and prevailed for final passage. It was signed and made a part of the law. Mr. Klein, in response to a question raised by a Member of this body who actually opposed that, it seems to me in a letter gives away Justice's role. Now the Attorney General, Janet Reno, has written in response to our asking her if she thinks Justice has a role, has written a letter saying, indeed, she believes Justice does have a role, and she intends to exercise the authority the law gives her. Indeed, Madam President, Mr. Klein, in meetings with me and with others who were concerned about the remarks he made in this letter, has given me assurance and pointed to several cases where his actions seem to be very, very much procompetitor--my hope is that Mr. Klein is. As the head of the Antitrust Division of Justice--I can read the tea leaves earlier on the cloture vote and would expect he will receive a fairly substantial vote, a resounding vote of support. My hope is I am wrong. This morning in the Omaha World Herald this article appeared. The headline says, ``So Far, Consumers the Losers in Battle for Dial-Tone Dollars.'' Madam President, this is what Members should be concerned about, not just the Antitrust Division of Justice but they should also be concerned about the nominees for the Federal Communications Commission and what they intend to do, how they intend to vote, how they intend to make certain that we have competition, because unless we get competition at the local level, unless there is competition at that local level for that local dial tone, indeed for all information and services at the local level, it is not likely the consumers will benefit in the same ways that consumers benefited after divestiture in 1982. Divestiture produced competition in long distance. That competition resulted in a reduction of price to the consumer and an improvement of quality, as competition almost always does. Without precedent, this legislation proposes to move us from a monopoly at the local level--which we still have for most residential customers--from a monopoly to a competitive environment. We are not there yet. We still have a monopoly. That monopoly can always, if there is only one choice that the consumer has, can always basically charge whatever they want to charge. This new legislation preempts States authorities from being able to do many of the things they had done in the past. There are 358,000 residential lines in the regional Bell company serving Omaha, NE. The present rate for that local residential service is proposed to be $16.35, from a current rate of $14.90, a 9.7-percent increase, almost a 10-percent increase from another local company that is also being proposed. They have that authority, now Madam President, to be able to come and raise these residential rates. It is going to be a problem for all of us if we do not get, in as expeditious a way as possible, competition down to the local level. What will happen, all of us will have to be explaining why it was, in 1996 when we debated this bill, why it was that we all promised this would be great for the consumers--reduction in price, improvement in quality of service--why it is that they are not seeing this reduction in price, why it is they are seeing an increase in price instead of a promised reduction. The answer will be, we don't have competition yet. My belief is that the Congress is going to have to think in a very hard and clear fashion what it is we have to do in order to make certain that we have competition. I remember the distinguished Senator from Arizona, Senator McCain, as he debated this bill, and I believe he ended up voting against it for precisely the same reasons I am talking about now. He actually talked about lots of regulatory requirements that didn't necessarily mean that we would get competition. He favored, as I heard him at the time, something that actually had great appeal to me, which is forget all the regulatory requirements, let's have almost a Le Mans racing start. Set a time certain when everybody can compete, regardless of who they were, in everybody else's market--let's have that. As my colleagues will probably recall in 1996 when we were having our debate, the prediction was that what we would have is the regional Bell companies competing against one another in individual markets, that we would have the cable companies then competing. Since that time, what we have seen is a significant amount of mergers, and I don't believe the kind of movement needed, with the single exception of a few companies. We have seen Ameritech moving aggressively to open their market and try to get approval, as well to get into long distance. That is the transaction that the law provides for--open up your local market and then you can go into long distance service. That is the idea of the law. But it isn't happening very fast. As a consequence, I don't think I will be the only Member who opens up their hometown newspaper and looks at the headline and sees, ``So far consumers the losers in battle for dial-tone dollars.'' The reason the consumers will be the losers is that the consumers in Omaha, NE, the residential consumers, when it comes to dial tone, they have two choices--take it or leave it. If you don't like the increase you can buy your local service from nobody else. You really only have one choice. I say, Madam President, I will not be supporting the nomination of Mr. Klein. I will be voting against Mr. Klein. I hope that other Members who are wondering what this debate is about will give it some very serious thought. They will, as well, be hearing from consumers in the not-too-distant future, if they haven't already, ``I remember, Senator, when you were debating this. Didn't I recall you issued a press release saying that this legislation was going to produce lots of new competition and reduction in price, and improvement and quality of service? Where is the competition? I still don't see it. Where is the promised price reduction? Where is the promised benefits to the consumers that were supposed to be coming our way at a theater near you?'' Instead, what we have is price increases. Mr. Klein, in his rather unfortunate, as he describes it, letter in response to a question by a Member who opposed giving the Justice Department authority over antitrust matters when it came to telecommunications, Mr. Klein says today, ``Well, I didn't really mean all those things. I intend to be a very forceful advocate for competition.'' Madam President, I don't believe that is likely to happen. Mr. Klein approved the Bell Atlantic NYNEX merger. There were a lot of people, when this bill was being debated, that would not have stood up and said, ``The reason I am supporting this is because I hope what we get is the regional Bell operating companies merging with one another. I hope that happens. I hope we get mergers because that is exactly what we need in order to get more choice.'' I don't know how that produces more choice for the residential consumers in this new expanded area that now a single company will have. I see decreased choice. I heard a lot of people coming down and saying in fact what we are likely to see is the large local monopolies competing with one another for service. Though we are seeing some of it, I don't believe we are seeing anywhere near what we promised we were going to see, and unless we get a vigorous advocate for competition in the Department of Justice, unless we get, as well, on the Federal Communications Commission, appointees who will do the same, as I said, Madam President, there will be a lot of people in this Senate as well as in the House of Representatives having to explain to their consumers, to their residential consumers, just what exactly did you think was going to happen back in 1996? So I hope that my colleagues, when they come down here to make a decision about whether or not they will vote yes or no for the man who will have a very significant role in determining whether or not we were right or wrong in 1996, I hope they give very serious consideration to whether or not they believe that this individual is going to be able to do what we all promised we were going to try to do when we voted for and took credit for this very significant piece of legislation in 1996. I yield the floor.

Mr. KERREY

Mr. KERREY. Madam President, I am pleased to be a cosponsor along with Senator McConnell and Senator Leahy of amendments numbered 886 and 887 to S. 955, the foreign operations appropriations bill for fiscal year 1998. These amendments will prohibit the Government of Cambodia from receiving financial assistance from the United States until the political violence is ended, the human rights of Cambodians are respected, and either the former coalition government is restored or free and fair democratic elections take place. These amendments will also ensure that the United States will oppose aid offered by multilateral financial institutions to Cambodia until those same conditions are met. The events of the past week in Cambodia have focused our attention again on a nation that has experienced tremendous suffering in the last 30 years. Twenty years ago, the murderous reign of Pol Pot and his Khmer Rouge began in Cambodia. The genocidal Khmer Rouge regime imprisoned thousands of its citizens and executed an estimated one million people or 20 to 30 percent of the populace. I had hoped that such horrors had ended for Cambodia. Unfortunately, last week political intimidation and violence again erupted in the capital of Phnom Penh, ending the rule of law and bringing chaos and uncertainty to the nation. Recent press stories detailing the forced emigration and extrajudicial executions of opposition leaders highlight the gravity of the situation. It would be easy to turn our backs to a nation with such a dark past. But the poor and terrifying history of Cambodia should not influence our decision on whether to stay involved in Cambodia. The nation and the people of Cambodia are important to our national interests. The United States must stay engaged and continue to work for democracy and the rule of law in Cambodia. In 1991 a significant agreement was signed in Paris between the political factions in Cambodia which brought the promise of elected government and democratic institutions. Under the auspices of the United Nations and observer nations, elections were held in Cambodia in 1993. The clear desire of the Cambodian people for democracy was shown by the participation of ninety percent of the population in those elections. In the four years since those elections, the people of Cambodia have worked to preserve their fragile democracy and the rule of law. Cambodia may have suffered a setback in its efforts to build strong democratic institutions. But it is not without hope. The United States should not abandon a people committed to the ideals of democracy and the rule of law. These amendments hold out the promise of renewed United States assistance to Cambodia once the political violence ends and an elected government takes power in Cambodia. Until these conditions are met, this legislation allows humanitarian assistance to be sent to Cambodia, but only if it is administered through non-governmental organizations and not the Government of Cambodia. It is my hope that the situation in Cambodia improves and our two nations can again work together to build a democratic Cambodia. If the coalition government is restored, these amendments permit the resumption of assistance to the Government of Cambodia. If elections are held in 1998 as planned, the United States may again provide assistance to a democratically elected government in Cambodia. While we can play a major role, the United States alone cannot help bring democracy and the rule of law in Cambodia. I fully expect the Administration to continue to work with the Association of Southeast Asian Nations [ASEAN], the United Nations, and donor nations to improve the situation in Cambodia. Other nations such as Thailand and Japan have played a major role in promoting democratic ideals in that nation. The United States needs to work with these nations to return a democratically-elected government to Cambodia and promote the institutional reforms that will bring peace and prosperity to a people who so desperately need it. Amendment No. 886, As Modified

Mr. KERREY

Mr. KERREY. Mr. President, recently I received a letter from the national vice commander of the American Legion expressing his displeasure with my concerns with the process surrounding the selection of a site and design for the World War II Memorial. As a matter of public record, I would like to submit my response and an article from the May 23, 1997, issue of the Washington Post. The Washington Post article discusses the recent problems with the Korean War Memorial, including flooding and damage to shade trees in the surrounding areas. I thought this article might be of interest to the American Legion and my colleagues. The material follows: U.S. Senate, Washington, DC, July 15, 1997. Robert L. Bowen, National Vice Commander, The American Legion, Woodbridge, VA. Dear Mr. Bowen: Although I am opposed to the selection of the Rainbow Pool Site, I fully support the construction of a memorial to the veterans of World War II and have even called for the construction of a museum. The struggle and sacrifices made by my parents' generation during the most pivotal event of the 20th Century is a story that must be thoroughly told to my children and grandchildren's generations. There is a process for building a memorial--any memorial-- on Federal property, which has many steps and procedures. Currently there is some confusion as to whether this process is being properly followed, because of an apparent rush for approval and completion. The result could cause the construction of a memorial not befitting to those it portends to honor, and puts at peril the sacred space that is our National Mall. Certainly you are aware of the situation concerning the Korean War Memorial (please see the attached article from the Washington Post.). This memorial has been closed almost as much as it has been open to the public in its two years and is already suffering from disrepair and flooding problems because of its location on the Mall--which lies on a flood plain. The current proposed site for the World War II memorial lies on this same flood plain and, besides its 50-foot-high berms and 7.4 acres of land space, calls for a significant amount of subterranean construction. Because there have been no studies as to the effects of subterranean construction on this site and the Mall, nor any studies on the impact the size and scope of the proposed memorial will have on the Mall, I am concerned about its long term impact and the cost to taxpayers, the City and the Federal government. Because once the memorial is completed, it will be turned over to the National Park Service for overall maintenance and thus will be supported by taxpayer dollars. I am absolutely concerned with how our veterans of World War II are honored. That is why I am particularly troubled that the National Park Service has ruled it will close any memorial built on the Rainbow Pool Site during July 4th weekend celebrations, because the Rainbow Pool Site is the launch location of the fireworks display. This seems to belabor the point that not enough scrutiny is being given to what is being built, where. I appreciate and share your concern about the progress of the World War II memorial and will continue to work on behalf of the veterans and the American people to ensure that a proper and fitting monument is constructed and that the integrity of our National Mall is maintained. Please feel free to contact me in the future if you have any further concerns and I hope you will join me in my efforts. Sincerely, Bob Kerrey.

Mr. KERREY

Mr. KERREY. Mr. President, I rise to comment on the present situation in Bosnia, the small Balkan country which is the scene of a military commitment involving thousands of American military personnel, a significant slice of our military forces, and the logistics and intelligence which support them. Our military led the way into Bosnia as the NATO alliance took on the role of overseeing the security aspects of the Dayton accords. Our soldiers and other NATO forces have prevented a recurrence of war and they have provided a security umbrella beneath which Bosnian refugees could have returned to their homes and Bosnia could have resumed normal life--if the leaders of the Bosnian factions had permitted it. Unfortunately, these leaders retain office and retain their access to public money through policies of ethnic division and hostility, not policies of reconciliation. Consequently there has been little progress in achieving the political goals of the Dayton accords. The restoration of Bosnia's economic infrastructure is similarly hobbled, partly because some of the factional leaders prefer the graft inherent in government monopolies to the prosperity that comes from open competition. Another reason is the weakness of the civil component of the international effort to implement Dayton. The diplomats from European Union and NATO countries who are charged with civil implementation have been doing their best, but they lack the authority, the resources, and the planning ability which characterize their NATO military counterparts. The international response to Bosnia is somewhat like a human body which is strong and vibrant on one side, the military side, and weak and withered on the other, civilian, side. This imbalance threatens the success of our military deployment because the civil tasks are the tasks which will bring lasting peace to Bosnia. The economic infrastructure must be restored. Local sectarian barriers must fall and people and trade must move freely throughout the country and across its borders. The rule of law must replace the rule of local bosses and the police must become impartial instruments of the law. Foreign investment, integration with Europe, and the eventual prosperity which is needed to undergird peace will not occur unless these civil tasks are accomplished. Because these tasks are so essential to a successful outcome in Bosnia, our soldiers there will some day be measuring the value of their Bosnia service medals based on how well the civilian component of the effort did its job. A precondition for democracy in any country is justice: the ability for any citizen to get justice from his or her institutions, and the ability of those institutions to provide justice when crimes are committed. This precondition is lacking in Bosnia. Furthermore, the very concept of justice is daily mocked by the presence in Bosnia of individuals who have been indicted for war crimes by the Hague Tribunal. Until these individuals are tried by the Tribunal, until the people of Bosnia see that the world takes seriously what happened to them and is committed to doing justice, the Bosnians of all ethnic groups have no reason to hope for a better future. If the crimes that occurred during the Bosnian civil war are not publicly brought to closure, if the criminals can just wait out the world's outrage, then there is no reason for the average Bosnian to have any hope in a democratic future. Mr. President, it is because justice for war crimes is so important that I am particularly pleased at recent news reports that NATO is now acting to capture persons in Bosnia who have been indicted for war crimes. The recent raid conducted by British troops to capture a suspected war criminal who was subsequently transported to the Hague should give hope to ordinary Bosnians that justice will be done and armed thugs will not continue to dominate their local affairs. I applaud the bravery of the British troops in this raid and I urge additional raids by the NATO forces in Bosnia to accomplish this essential and unfinished part of our collective duty.

Mr. KERREY

Mr. KERREY. Mr. President, I have come to the floor to talk about the nomination of Joel Klein to be the head of the Antitrust Division of the Department of Justice. I have had the opportunity on a couple of occasions to meet and to talk with Mr. Klein, and I like him personally and I admire his career and what he has done as an individual. However, I have serious reservations about his capacity to serve in this position. He has been nominated. I appreciate and respect the President's confidence in him. But it is with deepest sincerity that I say, although I would like to support his nomination for high office and hope that by the time the Senate votes on this nomination I can support him, at this time I believe that his nomination requires much more deliberation. I am especially troubled by many of the administration's telecommunications policies and especially in this case Mr. Klein's interpretation of the 1996 Telecommunications Act. I have asked Attorney General Reno by letter to clarify the policy Mr. Klein will be required to implement should Mr. Klein be confirmed. In 1995, when this bill was being debated, I led, unfortunately, at times a filibuster in the Chamber when this bill was being discussed because I wanted the Department of Justice to have a role in determining whether or not there was competition before other entities were going to be allowed to expand their services. The Telecommunications Act should work, but it will only work if we have an unrelenting dedication on the part of all Government agencies, the FCC and the Antitrust Division of the Department of Justice, their unrelenting attention and dedication to making certain we have competition. Mr. President, just recently, I met with Joel Klein. I like him and admire him. It is the second time I have had a chance to visit with him since he was nominated by the President to serve as the Assistant Attorney General for Antitrust. It is with the deepest sincerity, that I say that I would like to support his nomination for this high office. I hope that by the time the Senate votes on this nomination that I can support him. At this time, however, I believe that this nomination requires considered deliberation. I am deeply troubled by the administration's telecommunications policies and Mr. Klein's interpretation of the Telecommunications Act of 1996. I have asked the Attorney General to clarify the policy Mr. Klein will be required to implement should he be confirmed. My colleagues know that in 1995, I led a filibuster against the Senate Commerce Committee version of the Telecommunications Act to assure that the American people were fully aware of the monumental decisions being made by the Senate. I believed then, as I do now, that only an unrelenting dedication to competition and universal service by the Congress and the executive branch could make that legislation beneficial to consumers. For days, with the support of the Clinton administration, my colleagues and I fought to assure that the law would embrace real competition and universal service. If it did not, it would simply be one more piece of legislation for the big, the powerful, and moneyed interests. On the Senate floor we were successful in making the commitment to vigorously pursue competition central to the decision to end the court supervised Modified Final Judgement [MFJ] which controlled the activities of the seven Baby Bells and AT&T following the breakup of the Bell System. The bottom line, Mr. President, was that the American people did not ask for the Telecommunications Act. I do not recall one Nebraskan complain to me that telephone service was too expensive or that their service was poor. For most Americans, when asked about their phone service, they might quote Andy Griffth from the old AT&T commercial, and say ``rings true, and not a lick of trouble * * *.'' While there was satisfaction for most residential consumers, there were a host of new technologies and opportunities to bring the benefits of the information revolution to all Americans which the monopoly organization of the telecommunications marketplace was stifling. Every day of the status quo represented a lost opportunity for American homes, schools, and economic development. There were proposals to invest Government funds in building the utopian information superhighway, there were regulatory initiatives to prod monopolies to invest in the future. The pathway chosen to bring advanced services, lower prices, and more choices to consumers was to fundamentally change the economics of telecommunications services from a regulated monopoly to a competitive market. The price for opening all markets to competition, however, was an obligation by all telecommunications carriers to contribute to the support of universal service. The vision of telecommunications reform was that competition would spur investment, innovation, and choice and universal service support would assure that no American would be left behind. It was and is a grand vision. One which if properly implemented can energize the economy, enhance productivity, build wealth, enhance freedom, and revolutionize the way Americans work, learn, and relax. A significant part of the battle on the Telecommunications Act centered on the appropriate role for the Department of Justice in telecommunications policy. The first draft of the Telecommunications Act, written by Senator Pressler on behalf of the Republicans on the Senate Commerce Committee had no role for the Department of Justice and did not even explicitly reserve the Department's preexisting antitrust powers. As passed by the Senate Commerce Committee and the full Senate, the Department's antitrust authority had been preserved and the Department was given an advisory role in the FCC's decision to allow the Regional Bell Operating Companies, RBOCs, to enter the long-distance market within their own regions. To strengthen the bill Senators Dorgan, Leahy, Thurmond, and I proposed amendments to strengthen the role of the Department of Justice. I believed and continue to believe that the Department of Justice using its powers under the antitrust laws and the new law would and should be the bulwark against the abuse of monopoly power. I was confident that the Department of Justice would steadfastly be on the side of the consumer and fight for a vision of telecommunications competition which served the interests of all Americans. I opposed the Senate passed bill, because it did not have a strong enough role for the Department of Justice. I voted for the conference agreement in large part, because the role of the Department had been strengthened. Specifically, the bill as enacted, gave the Department's opinion on Bell entry into long distance ``substantial weight,'' and eliminated the ability of the Federal Communications Commission to approve a merger of telephone companies which bypassed antitrust review. Mr. President, the effort to protect and enhance the role of the Department of Justice was a hard fought fight. President Clinton, even threatened a veto of the bill if it had a weak role for the Department. Having fought and won the legislative battle, I am particularly concerned about recent comments made by Acting Assistant Attorney General Klein regarding the Department of Justice's role in facilitating competition under the Telecommunications Act of 1996. In response to questions by the chairman of the Senate Communications Subcommittee, Mr. Klein said that he ``specifically rejected using the suggestion in the Conference Report that the Department analyze Bell Operating Company (BOC) applications employing the standard used in the AT&T consent decree''. This standard, known as the 8(c) test would reject BOC entry into in-region long distance unless ``there is no substantial possibility that the BOC or its affiliates could use its monopoly power to impede competition in the market such company seeks to enter.'' While the Telecommunications Act gave the Attorney General the authority to choose any standard she sees fit to evaluate Bell entry into in-region service, I have asked the Attorney General to clarify the Department's policy on this matter. I am hopeful that a clarification from the Attorney General can put Mr. Klein's comments into a fuller and more appropriate context. I certainly hope that Mr. Klein's statement does not mean that a Bell Operating Co. should be allowed to enter the in-region long distance market even if there is a ``substantial possibility that the BOC or its affiliates could use monopoly power to impede competition.'' In fairness to Mr. Klein, he put forward an alternate test known as the ``irretrievably open to competition test.'' Unfortunately, it is placed in a context, which at least implies that the 8(c) test is too tough on Bell Operating Companies. During the consideration of the Telecommunications Act, President Clinton wrote in a letter to Members of Congress that the Telecommunications Act should ``include a test specifically designed to ensure that the Bell companies entering into long distance markets will not impede competition * * *'' I hope that Mr. Klein and the Attorney General can set this record straight as to the administration's policy. Mr. Klein also wrote to Chairman Burns that ``we think that the openness of a local market can be best assessed by the discretionary authority of the FCC, relying in part on the department of Justice's competitive assessment, and based on the evaluation of the particular circumstances in an individual state.'' Mr. President, I fought hard to include DOJ in the process of determining when Bell Operating Companies enter in region long distance markets because of the legal and economic expertise of the Antitrust Division. It would be tragic if the Department abdicate its role in this area. The Federal Communications Commission [FCC] is not the only agency equipped to make decisions about the openness of markets. A market cannot be competitive if it is not open. The Department's responsibility under the act and the Nation's antitrust laws is most serious and should be aggressively pursued by the Antitrust Division. Although the ultimate decision lies with the FCC, the Department must accept its important role as the expert in competition and market power and adopt a meaningful entry standard based on procompetitive principles. I am not yet convinced that the Department has done that. To me, what is most important is that the Attorney General put forward a test which Mr. Klein will implement which is unrelenting in its commitment to competition. The Kerrey test of competition would be as simple as do customers have a choice? If the answer is no, you do not have competition. The ideal open telecommunications market would allow an entrepreneur, new to the market to offer bundled services to the home. To do that there must be full access to the local exchange carrier at fair prices. If it takes a legion of lawyers, lobbyists, and investment bankers to even offer a new service to a customer of a monopolist, you do not have an open market. On a separate but equally important competition issue, I remain very concerned about recent mergers between large telecommunications providers. The decision by the Department of Justice to approve the Bell Atlantic/NYNEX merger without any conditions is troubling. Reports of AT&T's efforts to bring two BOC's back into it's fold should give everyone pause. A year ago, such action would have been laughable. I feel strongly that the Bell Atlantic merger approval, personally supervised by Mr. Klein sent exactly the wrong message to the market. I fear that this merger will lead to a new round of large telecommunications mergers which could greatly reduce any chance for the swift adoption of a vibrant, competitive telecommunications market. Competitive entry could be frozen while real and potential competitors court, woo, and marry each other. As to unions between the progeny of the former Bell System, I believe that it is generally not a good idea for family members to wed! One thing is certain, Congress did not intend to replace the urge to compete with the urge to merge. While the FCC and the States struggle with implementation of the new telecommunications law, it is important to remember that a key part of that legislation did not rely on regulation, it relied on the marketplace. The idea was to unleash pent up competitive forces among and between telecommunications companies. Mega mergers between telecommunications titans quell these market forces for increased investment, lower rates, and improved service. I can accept an honest disagreement on competitive impact of the Bell Atlantic/NYNEX merger. I want the head of the Antitrust Division to follow the law, even if it provokes my ire. It is in honest disagreement that we can examine the effectiveness of the law. If the law needs to be changed, let's change it. Beyond that, there are elements of the Bell Atlantic/NYNEX decision which are deeply troubling to me. Those concerns could be relieved if I were convinced that the competitive concerns received full, open, and deliberate consideration and that efforts were made to mitigate the loss of actual and potential competition. Most importantly, this merger should not be a precedent for a no holds barred approach to telecommunications combinations. The history of telecommunications service in America is at a critical point. At risk is a lifeline service important to every citizen of this Nation. The Department's commitment to using its full authority to promote competition is important to achieving an environment where consumers come first and entrepreneurs are encouraged to challenge the status quo. The bold vision of the Telecommunications Act is a promise yet unfilled. The man or woman who executes the responsibilities of this office will have a profound effect on every American, and not only in telephone service. Our antitrust laws form the keystone of our market economy. They stand between every American and the tyranny of raw, unbridled economic power. The person entrusted with the enforcement of those laws must have an unwavering commitment to a marketplace built on full, fair, and open competition. As the Senate fully considers this nomination, I am willing to be convinced that Joel Klein is that person. Mr. President, the need for competition is the overriding imperative of this Telecommunications Act. I am not in business as a monopoly. My business is such that customers come in. If they do not like what I am serving them, do not like the price, they go elsewhere, and as a consequence of that we pay very close attention to the customer. And those customers right now who are buying local services, especially residential service at the local level, they still have two choices: Take it or leave it. That is not competition. I do not come to the floor here criticizing the regional Bell operating companies or AT&T or any other long distance providers. I am just very much aware, if I am a monopoly, I do very much business if I have to compete, if I have to satisfy my customers' desires, demands for high quality and a reasonable and fair price. There is a businessman in Nebraska who owns many things, and one of the things he owns is newspapers. I once asked him how he managed to make money in the newspaper business, and he said to me, well, it's real simple; he takes advantage of two of America's most endearing and enduring institutions, monopoly and nepotism. Mr. President, with the Telecommunications Act need to ensure that the monopolies face competition, they come to us, the RBOC's and AT&T and the other carriers are all coming to us saying they want to compete. What they need to make sure happens is that there is competition, that you get rigorous and vigorous competition at the local level. In addition to that, though it is not the role of Antitrust at Justice, it is the role of the FCC to make certain that on the table we have before us those things that the market will not get done. There are some things that competition will not get done for us. There is a need to make certain we have real service. There is a need to make certain that areas that are remote are getting good service. There is a need to make certain people with lower incomes are going to get universal service. There are all sorts of things the market will not get done, and we have to put them on the table. I think we have an easier time surfacing those things and debating those things than we do in making certain that at the local level we have competition. As I said, Mr. President, it is not an easy thing to accept that competition if you are in business right now and you are a monopoly. It is easy to talk about it, but it is not easy to do it. There is a lot of pressure on Justice and FCC to make decisions and determinations that are anticompetitive under the veil and cloak of competitive language. I am very much concerned, not by his actions, but by some statements and a particular letter he wrote in response to a concern of a Member of this body about a speech that Mr. Klein had given. The letter, in my judgment, gives away the authority that this Senate and the House of Representatives, when we finally passed the Telecommunications Act of 1996, gave the Department of Justice. Mr. Klein appeared to me, in this letter, to give away the authority that this law gives the Department of Justice. I, for one, need to hear from the Attorney General saying that she believes that the Department of Justice has this authority and she intends to make certain that Antitrust exercises that authority before I am going to be willing to vote for Mr. Klein. It is a difficult job being head of Antitrust. As far as I am concerned, the Antitrust Division of the Department of Justice creates a lot of jobs because they insist on competition. I believe you get more jobs in a competitive environment, not less. I believe competition determines in a much better way who is being successful in giving the customer what they want and, as a consequence, much more likely in the long term to create jobs than if we allow entities to perform vertically monopoly, or near monopoly, control over the marketplace, and, in that kind of environment, to be able to basically say, as I indicated earlier, to the customer, ``Take it or leave it; I don't care whether you like the price, whether you like the service; I am saying to you, you have to take it or leave it.'' This is one of the most difficult things we have ever gone through, going from a monopoly to a competitive environment. It is going to be wrenching and difficult for rural areas and for private sector companies that have to adjust their hiring policies, have to adjust their personnel policies, have to adjust their marketing policies. I know that this kind of change is going to force the private sector, the monopoly private sector, to go through substantial change. But it is the intent of this legislation that they go through that change. It is only if we have a competitive environment, again, acknowledging there are some things the market will not do for rural areas, and we have to make sure, in order to achieve universal service, that we identify those things upfront or it will not happen. But acknowledging and setting aside those things, it is terribly important for the consumers to take advantage of the benefits of what the Telecommunications Act of 1996 allows. It is vitally important that both the FCC and Antitrust at Justice insist on a competitive environment in order for that to happen. I regret at this stage in the game having to say I do not support Mr. Klein. As I indicated, my view can be changed, depending upon what the Attorney General says in response to a letter I have sent to her. My hope is she will indicate she intends to make certain that Antitrust, whoever is confirmed, will carry out the intent of the law as debated fully on this floor and as enacted both by the Senate and the House of Representatives. It would be my hope to be able to vote for Mr. Klein. At this stage in the game, I will not. At this stage in the game, I hope this body deliberates a good deal of time upon not just Mr. Klein, but what is going to happen if Antitrust and Justice doesn't enforce the law, what is going to happen to consumers of this country if we don't get a competitive environment. The only reason we had benefit in the long distance environment with reduced price and increased quality was the presence of competition. In the absence of that, the consumers of this country are going to come back to us and say that that law wasn't very darn good. All of us who voted for that act have a lot at stake. All of us who voted for the Telecommunications Act of 1996 have a lot at stake, and the job that Mr. Klein does, or whoever it is at Antitrust and all the Commissioners who are going to be nominated over at FCC, as well, all need to take a lot of time in deliberating over what those individuals are going to do before we vote to confirm them as a consequence of the impact that they are going to have, not just upon us, but especially upon the consumers, upon whom all of us, at the end of the day, depend. Mr. President, I look forward to having an opportunity later to come down, and I most especially look forward to not only yielding the floor, but listening to the majority leader. I yield the floor. Mr. LOTT addressed the Chair.