J. Kerrey

Mr. KERREY

Mr. KERREY. Mr. President, I oppose the effort to strike this important provision in the Finance Committee's bill. Since Medicare was enacted in 1965, there have been many legislative efforts to make it more fair, to make it more progressive. Most colleagues, I suspect, support the Qualified Medical Beneficiary Program, the QMB Program and the SLMB Program, the dual-eligibility program. All of these programs are efforts not in 1965, but much later, to make the program fair, to help lower-income beneficiaries, to make it more progressive. That is what these programs do. Dual eligibility in Medicaid is a terrific program. It enables that low-income individual to be held harmless against all costs, premium, deductibles, copayment, as well as additional Medicaid coverage. QMB does premium deductible and copayment for all Medicare beneficiaries under 100 percent of poverty. And it made the program fair, more progressive. SLMB is up to 120 percent. The chairman has added a provision that would allow it to go from 120 to 150 percent because of the changes recommended by the President, shifting home health from part A to part B. Those who argue against this change say that we are on the slippery slope somehow. We have done this before. There have been constant efforts to try to evaluate Medicare and to try to make it fair. This proposal makes Medicare more fair on its face. Individuals earning up to $50,000 a year will continue to enjoy a 75 percent subsidy in part B. That doesn't change. That is for individuals at $50,000 and couples at $75,000. We begin to phase out the subsidy of that part B premium. It will go from about $560 to about $2,100. That $1,500 or $1,600 subsidy that we currently have in place will be phased out. For seniors, with adjusted gross incomes of $100,000 for individuals and $125,000 for couples, they will pay an unsubsidized part B. They will still receive part A with no change, but for part B, physician services, they will pay an unsubsidized premium. It makes the program more progressive, Mr. President. It has been noted, and quite correctly, that for many seniors there is a significant percentage of income that goes for health care. But what we need to look at is that inside that senior population, there are significant differentials. For lower income beneficiaries, they will pay for health care a higher out-of-pocket amount than higher income beneficiaries--30 percent versus 3 percent for higher income beneficiaries. This is a problem that we are trying to solve. We are trying to make this program more progressive. As to the suggestion that we need to study this, this is not a proposal that just came out of the blue. This is a proposal that has been around a long time. It has been discussed; it has been opposed; all kinds of arguments have been thrown up against it. There have been all kinds of good suggestions that perhaps we can improve it somehow. So this is not a brandnew proposal. We don't need to study this, Mr. President. I have great respect for the senior Senator from Massachusetts and the Senator from Maryland, as well. They come to the floor because they care deeply about Medicare beneficiaries, wanting to preserve and protect Medicare, which is the goal of this piece of legislation. By making Medicare more progressive, I believe we have a much better chance of securing the intergenerational commitment that Medicare represents. Medicare is an intergenerational commitment on the part of younger people to allow themselves to be taxed so that we can provide benefits to the beneficiaries of Medicare. It is a strong commitment. It is a good commitment. It has made our Nation better as a consequence of having it in law. This change, by making it more progressive and fair, will strengthen the commitment that we have for this good program.

Mr. KERREY. I am kind of busy.

Mr. KERREY. No, it was not the proposal that came out of the Finance Committee.

Mr. KERREY. Is this a jury deal, where I get a yes-or-no answer? You have lots of time here.

Mr. KERREY. Mr. President, we did get a proposal that came out of the committee to use deductible instead of premium and, as a consequence of that being untested, we changed it back to premium. The premium is not an untested proposal. I have been asked about whether or not----

Mr. KERREY

Mr. KERREY. Mr. President, I submit for the Record a letter from Richard Longstreth, first vice president for the Society of Architectural Historians and professor of american civilization at George Washington University to the chairman of the Commission on Fine Arts, J. Carter Brown, regarding the site selection for the proposed memorial to World War II. Professor Longstreth, editor of ``The Mall in Washington, 1791- 1991,'' is deeply concerned, as am I, by the selection of the Rainbow Pool site as the location for a proposed memorial to World War II. I deeply support honoring those who served our Nation during the most pivotal event of the 20th century, as does the professor. I would even argue, Mr. President, that a memorial is not enough. That a museum is necessary to tell the complete story to future generations of our victory over the Axis Powers and our defeat of Nazi Germany. This a story that must be told and retold. But I am deeply opposed to the selection of this expansive, reflective space at the key axis of the National Mall, lying between the Lincoln Memorial and Washington Monument as the site of a memorial. The idea of constructing a 50-foot-high, 7.4-acre memorial on this site--smack in the middle of the National Mall--is quite troubling. Any structure of such size and magnitude would forever alter the openness and grandeur that is America's front lawn. Professor Longstreth states in his letter: ``The whole meaning of one of the greatest civic spaces that exists anywhere in the world today will be irreparably cheapened by any proposed scheme for a major memorial on this site.'' I could not agree more. Just as disconcerting is the idea that a World War II memorial constructed on this site will have to be closed on the Fourth of July weekend, as ruled by the National Parks Service, for safety reasons related to the fireworks display. This does not make sense. As the Commission on Fine Arts, National Capital Planning Commission, and the Secretary of the Interior continue their deliberative process concerning this proposed memorial, you will hear more from me in the coming months, Mr. President. Especially, as my office continues to monitor the process of the environmental and urban impact studies yet to be conducted on this site. That is right, Mr. President this site was selected without any studies conducted on the impact on The Mall or the city. Currently, the Council on Environmental Quality is reviewing my request for information on the urban and environmental impact on this site. I will keep the Senate informed as to how this process progresses. The letter follows: Society of Architectural Historians, Chicago, IL, June 9, 1997. J. Carter Brown, Chairman, Commission of Fine Arts, Pension Building, Washington, DC. Dear Mr. Brown: As a scholar of the built environment, an officer of the Society of Architectural Historians, and editor of The Mall in Washington, 1791-1991, I am writing to express my very strong personal opposition to current plans for the World War II memorial. My objection lies not with the design. In the abstract I consider the design to possess the sophistication and dignity called for in a work of this nature. I also admire the members of the design team, one of whom I count as an old friend. Rather it is the site that is inappropriate, so much so that I believe this ranks among the very worst proposals ever made for the monumental core. Nothing--from John Russell Pope to Maya Lin--would be suitable at the proposed location. The basic arguments against the site have been made, often eloquently, by others in recent months. From the practical standpoint, the location on a major artery--one that cannot, and should not be closed if the Mail is to remain a part of this city--will prove a logistical nightmare that could never be solved adequately, no matter how many egregious encroachments were made to what is now grass and pedestrianways. As a matter of design, the memorial would introduce a major focal point at a location never intended to have one and would constitute a serious deviation from the McMillan Plan-- indeed, a grotesque deviation, the likes of which we have heretofore never seen come to fruition. The extent of space between the Washington Monument and the Lincoln Memorial, as well as the distinctness of its two parts, separated by Seventeenth Street, represents more than an apt representation of the vastness and complexity of American space; it is an essential open ground for those two symbols of America's greatest leaders and of American greatness. Any substantial intervention, especially one on the scale of the proposed memorial, would hideously violate that order, detracting from both the established landmarks and also from itself. The Mall is not a commercial pleasure ground--despite some attempts to make it one. The whole meaning of one of the greatest civic spaces that exists anywhere in the world today will be irreparably cheapened by any proposed scheme for a major memorial on this site. Perhaps most significantly of all is the terrible symbolic message conveyed by siting a memorial to any war on the Mall's primary axis. It may be argued, of course, that World War II had transcendent importance for the nation and its position internationally, but no war should be accorded so pivotal a place in the national capital. Is this not more a siting characteristic to dictatorships--Napoleon's Paris; Hitler's Berlin? Any number of messages can be read into this locational strategy, the great majority of them distasteful for a democracy. I would like to end on a personal note, for while I was born after World War II, it was very much a part of my youth. My father served with distinction as executive officer, then as commanding officer, of two Naval repair bases in the South Pacific. Early on I learned from him and from others how important that conflict was and how profoundly it had reshaped the world. It sickens me to think of an event of this order of magnitude degraded by what appears to be a press for expeditious resolution. The site of the memorial should not spark the kind of amazement and anger it is doing from reasonable, well-informed, and intelligent people all over the country. The legacy deserves better. Cannot the imagination and resourcefulness be found to place this memorial in a really magnificent site, fully appropriate to its place in American history? Sincerely, Richard Longstreth, Professor of American Civilization, George Washington University, First Vice President.

Mr. KERREY

Mr. KERREY. Mr. President, the Telecommunications Act of 1996 was to usher in a new era of competition, choice, jobs, universal service, and infrastructure investment. Much of the promise of the new act remains unfulfilled. Most disappointing has been progress on the competition front. Rather than and explosion of competition, in the year since the law was enacted, there has been a disturbing trend toward consolidation. I rise to express serious concern about the Department of Justice's approach to mergers in the telecommunications industry. I feel very strongly that the Justice Department approval of the Bell Atlantic and Nynex merger is bad competition policy and bad telecommunications policy. With this merger, two strong potential competitors with two vibrant, rich markets are now one. This loss of competition follows the equally troublesome merger between Telecomm giants Pacific Telesis and Southwestern Bell. Perhaps most troubling is that these approvals have opened the door for even larger mergers. What was unimaginable a year ago, the reconstruction of the old Bell System monopoly is very much within the realm of possibility. Mr. President, the urge to compete should not be replaced with the urge to merge. A little more than a year ago, the Congress enacted landmark legislation to open telecommunications markets to competition, preserve and advance universal service, and spur private investment in telecommunication infrastructure. Over the last year, the Federal Communications Commission has worked around the clock to implement the new law. It has been a daunting task, frustrated by litigation and regulatory wrangling. While the FCC and the States struggle with implementation of the new 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. To unshackle the restraints of the Court supervised breakup of AT&T, the Congress gave Regional Bell Operating Companies instant access to long distance markets outside of their local service regions and access to long distance markets inside their regions when they opened their markets to local competition. In addition to responding to the lure of long distance markets, Regional Bell Operating Companies and other local exchange carriers were expected to covet each other's markets. The attraction of serving new local markets was to be a key catalyst for breaking down barriers to competition. With these mergers, local competition and long distance competition is lost. In addition, potential internet, video and broad band competition has disappeared. The promise of the new law was that competition, not consolidation would bring new services at lower prices to consumers. Where competition failed to advance service and restrain prices, universal service support would assure that telephone rates and services where comparable in rural and urban areas. When certain large telecommunications companies combine, they not only eliminate the potential of competition with each other in each other's markets, but they can create a market power which may be capable of resisting competition from others. They can also create the possibility of an unequal bargaining power when they compete with or deal with small, independent and new carriers. The promise of the Telecommunications Act was improved service and lower rates for consumers through competition and the advancement of universal service. If properly implemented, the Telecommunications Act of 1996 can deliver, but the disappointing merger decisions of the Department of Justice will make that task much more difficult. The legislation I introduce today would clearly institute an appropriate level scrutiny for mergers between large telecommunications companies. I believe that the antitrust laws and the Telecommunications Act would permit this type of analysis, without the adoption of a new statute, but to date, the Department of Justice has not seemed willing to pursue this approach. Under the Telecommunications Monopoly Prevention Act, new mega- mergers would not be prohibited but be required to be reviewed in the context of their contribution to competition. This legislation is by no means a moratorium on mergers. Indeed, some mergers, even among large telecommunications companies, may be very much in the consumers interests and in the interest of competition. This legislation simply requires a level of review consistent with the vision of the Telecommunications Act. It is my view that the Justice Department is presently pursuing a standard of review for telecomm mergers which would be appropriate for competitive companies tending toward monopoly, but not for monopolies which should be moving toward competition. Mr. President, I ask that the text of the Telecommunications Monopoly Prevention Act be printed in the Record as read and urge my colleagues to review and support this needed piece of legislation.

Mr. KERREY

Mr. KERREY. Mr. President, the Telecommunications Act of 1996 was to usher in a new era of competition, choice, jobs, universal service, and infrastructure investment. Much of the promise of the new act remains unfulfilled. Most disappointing has been progress on the competition front. Rather than and explosion of competition, in the year since the law was enacted, there has been a disturbing trend toward consolidation. I rise to express serious concern about the Department of Justice's approach to mergers in the telecommunications industry. I feel very strongly that the Justice Department approval of the Bell Atlantic and Nynex merger is bad competition policy and bad telecommunications policy. With this merger, two strong potential competitors with two vibrant, rich markets are now one. This loss of competition follows the equally troublesome merger between Telecomm giants Pacific Telesis and Southwestern Bell. Perhaps most troubling is that these approvals have opened the door for even larger mergers. What was unimaginable a year ago, the reconstruction of the old Bell System monopoly is very much within the realm of possibility. Mr. President, the urge to compete should not be replaced with the urge to merge. A little more than a year ago, the Congress enacted landmark legislation to open telecommunications markets to competition, preserve and advance universal service, and spur private investment in telecommunication infrastructure. Over the last year, the Federal Communications Commission has worked around the clock to implement the new law. It has been a daunting task, frustrated by litigation and regulatory wrangling. While the FCC and the States struggle with implementation of the new 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. To unshackle the restraints of the Court supervised breakup of AT&T, the Congress gave Regional Bell Operating Companies instant access to long distance markets outside of their local service regions and access to long distance markets inside their regions when they opened their markets to local competition. In addition to responding to the lure of long distance markets, Regional Bell Operating Companies and other local exchange carriers were expected to covet each other's markets. The attraction of serving new local markets was to be a key catalyst for breaking down barriers to competition. With these mergers, local competition and long distance competition is lost. In addition, potential internet, video and broad band competition has disappeared. The promise of the new law was that competition, not consolidation would bring new services at lower prices to consumers. Where competition failed to advance service and restrain prices, universal service support would assure that telephone rates and services where comparable in rural and urban areas. When certain large telecommunications companies combine, they not only eliminate the potential of competition with each other in each other's markets, but they can create a market power which may be capable of resisting competition from others. They can also create the possibility of an unequal bargaining power when they compete with or deal with small, independent and new carriers. The promise of the Telecommunications Act was improved service and lower rates for consumers through competition and the advancement of universal service. If properly implemented, the Telecommunications Act of 1996 can deliver, but the disappointing merger decisions of the Department of Justice will make that task much more difficult. The legislation I introduce today would clearly institute an appropriate level scrutiny for mergers between large telecommunications companies. I believe that the antitrust laws and the Telecommunications Act would permit this type of analysis, without the adoption of a new statute, but to date, the Department of Justice has not seemed willing to pursue this approach. Under the Telecommunications Monopoly Prevention Act, new mega- mergers would not be prohibited but be required to be reviewed in the context of their contribution to competition. This legislation is by no means a moratorium on mergers. Indeed, some mergers, even among large telecommunications companies, may be very much in the consumers interests and in the interest of competition. This legislation simply requires a level of review consistent with the vision of the Telecommunications Act. It is my view that the Justice Department is presently pursuing a standard of review for telecomm mergers which would be appropriate for competitive companies tending toward monopoly, but not for monopolies which should be moving toward competition. Mr. President, I ask that the text of the Telecommunications Monopoly Prevention Act be printed in the Record as read and urge my colleagues to review and support this needed piece of legislation.

Mr. KERREY

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

Mr. KERREY. Mr. President, first, I would like to praise the chairman of the Finance Committee, Senator Roth, and the ranking Democrat on the Finance Committee, Senator Moynihan, as well as the chairman and ranking member on the Budget Committee, Senator Domenici and Senator Lautenberg. The bill we are debating right now makes a substantial contribution to deficit reduction. The goal of all this deliberation is to balance the budget by the year 2002, the purpose of which is to enable us to continue with an economy that is growing and continue creating jobs and continue the prosperity that we are currently enjoying in the United States. I am saying all this because we will be debating all kinds of reasons why this bill is bad, and I think it is very important for us to begin by saying there is a purpose here. We know Medicare is a very substantial program in terms of cost, and any attempt to balance the budget has to look at this program. Chairman Roth has done, I think, an exceptional job of producing a proposal that not only contributes to deficit reduction, but does a number of other things which I believe are very important. First of all, one of the things this bill does, in addition to contributing to deficit reduction, is there are a number of provisions that Chairman Roth and Senator Moynihan put in this bill that directly affect our capacity in rural America to get good health care. That has been a bit of a problem. There are a number of issues we have identified over the years, and Chairman Roth has made some changes in law in this bill that will benefit those of us who represent rural States. I would like to list some of those provisions. First, rural hospitals and physicians will be able to form their own networks, independent of larger managed care companies, and contract directly with Medicare on a capitated basis. These provider-responsive organizations would not only provide competition, but they will enable us to increase coverage and increase health care delivery in the rural areas. Second, the proposal is one that will increase managed care payments in rural areas. The increase in payments will be detailed during the course of this debate, but it is critical, if we are going to get managed care in rural areas, that the payments be increased, and Chairman Roth has made certain in this bill that happens. Third, it creates a single designation for small rural limited service hospitals that would be paid on a reasonable-cost basis. This new authority will include the current--called EACH/RPCH--demonstration hospitals. Once again, we have been asked by rural hospitals and rural providers for this provision. Chairman Roth and Senator Moynihan have included it in their bill, and for those of us who represent rural States, we are going to be able to say, correctly so, that this law is going to make it more likely that we are going to get good care in the rural community. Next, it allows sole community hospitals to opt for a fourth payment option based upon the costs from fiscal year 1994 or fiscal year 1995. It is a detail that I will not go into at length here today, but again on the ground at the community level this will make a tremendous difference in most States where rural health care shortages are a problem. Next, it reinstates the Medicare dependent hospital program through 2002. This means that hospitals with less than 100 beds and where 60 percent or more of the discharge is paid for by Medicare will be paid on the same basis as sole community hospitals. It is a very important provision. There are lots of hospitals in Nebraska sort of hanging on the edge with fewer than 100 beds. This will give them a fighting chance to survive. Last, it allows rural referral centers greater flexibility to receive payments based on rates for the nearest germane area. Mr. President, I just say again that this provision is one last thing in the bill that will enable us to say that in addition to eliminating this deficit that has plagued us for so many years, this proposal will increase the likelihood that managed care and good health care will reach the rural area. I thank Chairman Roth and I thank Senator Moynihan and Senator Domenici and Senator Lautenberg. It is a terribly important provision for those of us who represent rural States. Second, and I will not go at length in describing this, this bill grants authority to the Secretary of Health and Human Services to bring more competition into this system. Competition in my judgment will not solve all of the problems, but it is a tremendously useful tool to bring costs out of the system. It is more likely to get it done in an efficacious fashion. Again, Senator Roth and Senator Moynihan have included this in the mark. And I believe it represents substantial reform and important reform in the Medicare system. Third, this committee, the Finance Committee, again under Senator Roths's and Senator Moynihan's leadership, has paid attention to the unique problems that low-income Medicare beneficiaries face. And it can be a tremendously difficult problem. It is relatively easy for us to get caught up in all the numbers and presume that all we are doing is trying to find numbers savings. But for an individual out there at the community level, Medicare really can be a lifesaver. I have a woman in Omaha, NE, that I pulled from our file, we are working with at the moment, that faces some problems, a very common situation. A widow on Medicare, she has $610 a month in Social Security. She has $182 in rent subsidized through section 8. Her utilities and phone are $55 a month. Her Medicare part B is $43 a month. She has a Medigap cost on top of that. By the time she is done, she has $4,000 left over for everything, for food, clothing, and other expenses. It does not take much in the way of prescription drugs and additional costs for health care for her to find herself with almost no money left over. So this mark, for those of us concerned about low-income people, continues the dual eligibility system for Medicare and Medicaid. It continues both the SLMB and the QMB Programs that enables lower-income people to get payment. And I believe the managers' amendment will make it more likely that the SLMB Program will enable low-income people to find themselves able to accommodate the increases in premiums that will occur as a consequence of the shift of some home-based coverage from part A to part B. Though I would argue there is still some room for improvement, this bill represents a good-faith effort to acknowledge that there are low- income beneficiaries out there who are faced with different problems than higher-income beneficiaries. There is still one out of seven Americans over the age of 65 who live in poverty. Medicare and Social Security reduces the rate of poverty from 50 percent to about 12 percent in the country. But still, for those 12 percent, life can be quite difficult. And I assure you, Chairman Roth and Senator Moynihan have paid attention to that problem and, I think, have enabled us to say that we have at least tried to make certain that low-income beneficiaries are given full consideration. The next thing that I would like to spend most of my time talking about is, this mark, this piece of legislation does acknowledge, as well, that we have long-term problems, that we cannot stick our heads in the sand and ignore that the Medicare Program not only promises to make payments for the next 5 and for the next 10 years but it promises to make payments for the long-term as well, promises to make payments especially for that baby-boom generation that will begin to retire in 2010, 2011, depending upon when you mark the generation. It is either 1945 to 1965 or 1946 to 1965. In that 20-year period, about 2010 to 2030, under current forecasts, even as we have adjusted the program--I note there will be some that try to knock out the increase in the eligibility age. There will be some that try to knock out the income- related test on part B, the copayment on home health, the $5 fee on home health, and make compelling arguments. But you can only make those arguments persuasive if you ignore where this program is going. Mr. President, the current cost of Medicare represents about 10 percent of this budget. And from 2010 to 2030, Medicare costs will go from about 10 percent to 35 percent of the budget. That is the kind of growth that we see out in the future. It is a demographic problem. And when you move the eligibility age from 65 to 67, in order to bring it into line with where Social Security is going, we are making and recommending an adjustment that takes into account where this program is going, what the future looks like out there. I acknowledge that there are problems when you move the eligibility age for people who are between the ages of 60 and 66 or 67. There is a problem. This legislation has in it not only a commission, but in law we recommend that the commission consider doing what Kerrey-Danforth recommended, which is to allow seniors between the ages of 62 and eligibility age to be able to buy into the Medicare Program. I think it is the sort of thing that we are going to have to consider whether we adjust the eligibility age or not. But I will give this evening--I suspect I am going to have plenty of opportunity to argue this when the amendment is offered to strike it on the eligibility age--I give this evening one set of facts. Between the years 2010 and 2030, the number of people in the work force will grow by 5 million, a 5-million-person increase between 2010 and 2030. But the number of people who are retiring who will be eligible for payments will increase by 22 million. That is a problem, Mr. President, that we face with our program. And we can either ignore it and say we do not want to make change or we can acknowledge, in order to preserve and protect Medicare for the long term, these kinds of changes will be necessary. The change does not impact anyone over the age of 58 today and does not fully impact anyone over the age of 36. I say that because I have already seen interviews given to current Medicare beneficiaries, people who are 65, people who are 70, receiving Medicare that are beneficiaries today, and the question is put to them, ``What do you think about moving the eligibility age?'' as if it is going to affect them. And very often again they will find themselves concerned about losing their Medicare, about whether or not they are going to be paying more for their Medicare. And there is a presumption made that this change is going to have an impact on them. Mr. President, this movement of the eligibility age is one of the easiest. Right along with that, a change that I believe should be made is to bring a new accounting to the cost of living index. We debated it earlier on in the year. We were not able to get it. Some objected to the so-called ``politicization'' of the CPI. The CPI was imposed in 1973 for political reasons. I want a good formula, a good calculation. Unfortunately, we were not able to get that because we ended up being opposed both on the left and on the right. But these are the kinds of changes that are necessary to accommodate demographics. There was a piece in the New York Times Sunday magazine yesterday. I think it was Ben Wattenberg that made a couple of suggestions. And if Members want to bring that kind of suggestion to the floor, why it will be an interesting debate. He suggested that we change our tax and our spending laws to encourage Americans to have more babies or we open our borders and accept more people in the United States as immigrants, trying to increase the number of workers per retiree. Or one can walk to the floor if they choose to and propose a tax increase. Many people who have honestly evaluated this program have suggested that all we need to do is increase the payroll tax just a little bit and that will solve the problem. Mr. President, I intend in this debate to repeatedly point out to colleagues that the tax-cut provisions in this bill addresses the income tax. It does not address what is for many Americans the largest tax of all, and that is the payroll tax. And I have been in Nebraska many times in townhall meetings and talked about this movement of the eligibility age and the income- related test on part B, which is also in the chairman's mark. And very often it provokes a big debate. And some do not like it. I say, let me just ask the audience, How many of you would support increasing the payroll tax? And it is rare where you will find more than one or two people holding up their hand, Mr. President. And the reason is, that for a family of four in Nebraska, earning $34,000 a year, husband, wife, two children, they will pay $2,719 in Federal income tax; they will pay $5,358 in payroll taxes, $4,300 of which is FICA and $1,000 of which is the Medicare tax. Mr. President, that is almost twice as much in payroll taxes. One of the reasons that we find people say to us that this system has to be fixed with these kinds of changes is that they acknowledge that this payroll tax is taking a substantial bite out of the income of the working families of America. So the bill has a change in the eligibility age. I defend it strongly. I intend to come down when the amendment is offered to strike and explain at greater length why those who are arguing to strike it will not help strengthen this program. I intend to argue as well, by the way, that I, having studied this a long time, believe long term it is going to be difficult for us to maintain Medicare and Medicaid, the VA, and the income-tax deductions as intact programs. I think it is going to be difficult for us to not, at some time, relatively soon, begin to examine once more whether or not we should change the law and change the way people become eligible. It is very revealing when you talk about moving the eligibility age, Mr. President. The law says if you have reached the age of 65 in America you are eligible for Medicare. If you can prove you are poor, under the law, the law says you are eligible for Medicaid. If you get blown up in a war, as I did, the law says you are entitled to the VA system. If you work for the right employer, the law says you can get a subsidy through the income tax system. If you work for the Government very often, the law says you also have a right to health care. Mr. President, I believe, though it may seem counterintuitive for those of us who have been worried about the growing cost of the mandatory programs and entitlements and that interest, that we need to consider rewriting the social contract for Federal health care and establishing a simplified eligibility. If you are an American or legal resident, you pay according to your capacity to pay. Everybody has to pay the true cost of health care. We ought to allow competition to control the cost. And we ought to allow consumers to get far more information about what the health care system is both doing for them and sometimes doing to them. I think it is very difficult for me to stand here and say that we can preserve Medicare as an intact program unless some demographic change occurs between now and 2010. I believe it is inescapable you look at these kinds of choices, otherwise you are basically going to prolong the due date and at some point we are going to be facing choices that are far more difficult than the choices that are being presented by the committee in this budget. Mr. President, another change that we have in this proposal is a change that says that we are going to make the Medicare part B more progressive than it currently is by asking Americans who have higher incomes to pay more, to be subsidized less, in short, by Americans with lower income for that part B premium. Initially, Senator Gramm of Texas and I, who worked on this proposal, had an offering that we would use the deductible as a basis for change, in short, that we were going to try to affect utilization. It got a bit confusing. And as a result of that confusion, both he and I have agreed to change it so that it will be an adjustment in the part B premium for Americans under $50,000 a year. They will not be affected at all. Roughly 94 percent of beneficiaries are somewhere in that range. It does not fully affect any individual under $100,000. We phase the subsidy out over $100,000 for an individual and $125,000 for a couple. I appreciate the sacred nature of Medicare, but nowhere do I find it persuasive that we ought to ask people with lower incomes to subsidize people of higher incomes. Very often the people of lower incomes do not even have health insurance. They are struggling to pay the cost of health care themselves out of pocket, and part of their taxes--again, the larger share of their taxes coming from payroll taxes being delivered to pay the health care of individuals with a capacity to be able to take care of themselves. I do not believe this challenges the Medicare system. I do not believe it is a slippery slope to destroying Medicare. I believe it is consistent with what Medicare attempts to do, which is to say that the market will not provide insurance for all of our citizens, that we have to, on a progressive basis, write a law that enables us to do that. This change will make the system more progressive, not less. I emphasize that. For all those who will come to the floor and argue that this package is not sufficiently progressive, they will find themselves, in my judgment, turning their arguments inside out in proposing this test of income on part B. How can you defend a change, a simple change at a relatively high income, Mr. President, $100,000 for an individual and $125,000 for a couple? Mr. President, this is a substantial first-step change, once again, to acknowledge that we have a long-term problem with Medicare, and we are going to have to begin to make more difficult choices if we want to arrive out there in the future and say we have solved future problems as well. Very importantly, under this change, we did not do it for budgetary reasons. Neither the move of the eligibility age nor the change in part B premiums has been done in order to generate budget savings. Indeed, the revenue that we get from the part B premium will go into the health insurance trust fund, strengthening the health insurance trust fund. We have not had it scored. We are not using it to pay for other things. We are using it to strengthen the Medicare Program and, as I say, to make the program more progressive. Mr. President, finally, as we go through this debate, I intend to repeatedly come to the floor and call to my colleagues' attention another terrifying fact. People come and they will argue, well, in 1965 when we passed Medicare, we intended the following--and whatever it is that the colleague wants to offer in opposition to either moving the eligible age or in opposition to putting an income test on part B, will suggest there was something in 1965 that caused us to say we would do something and never come back and change it. There have been lots of changes that have occurred since 1965. I will in the midst of the debate have plenty of opportunity to go through many of those changes that I think dictate that we change the program again. The one that is the most impressive of all is that in 1965, 30 percent of the Federal budget went to mandatory programs. That is entitlement programs plus net interest, and 70 percent of our budget went to discretionary spending. Mr. President, in the year 2002, when this budget agreement ends, we will have exactly the opposite--70 percent will be mandatory spending and 30 percent will go to discretionary. It does not stop there. It will continue to grow until 100 percent of the budget is mandatory, until we have converted the Federal Government into an ATM machine, collecting taxes and merely transferring back out. Mr. President, for all those who care about investing in our future, who want to invest more in education, who are concerned about productivity, we have all kinds of other things we believe this Nation needs to be addressing, unless we come to grips with the growing cost of mandatory programs, it will be impossible for us to do all the things that most of us would like to do in order not only to make our country fair but also to make our country more prosperous and productive. I believe the legislation that Chairman Roth and Senator Moynihan have presented to the chairman of the Budget Committee, Senator Domenici, and Senator Lautenberg, the ranking member, is a fair proposal. It will enable us to say we will balance the budget by the year 2002. It is more progressive than the current law, taking greater account both of low-income Americans as well as upper-income Americans' capacity to pay. It is a terrific package that will enable us in rural America to increase the quality of care that we see our citizens getting. It moves more toward a competitive model, not only giving Health and Human Services more power, but giving consumers more power by giving them the data and the information that they need to make choices. There is substantial reform not just for budgetary reasons but for the purpose of improving the quality of this program that has been so enormously beneficial for our country. I appreciate the opportunity to work with the chairman and the ranking member, Senator Moynihan, and I look forward to the opportunity of returning to the floor to debate some of the specific amendments that are offered. I yield the floor.

Mr. KERREY. I thank the Senator from New Jersey.

Mr. KERREY

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

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

Mr. KERREY. Mr. President, I support the amendment offered by Senator Torricelli to declassify the aggregate intelligence budget. This body has been on record a number of times over the years as supporting disclosure of the intelligence budget total. Last year the Intelligence Authorization Act as reported by the SSCI and adopted by the Senate required the President to disclose in his annual budget submission to Congress each year the total amount appropriated for all intelligence and intelligence-related activities, that is, the total of NFIP, JMIP, and TIARA, in the current fiscal year and the total amount requested for the next fiscal year. As has happened on each previous occasion that the Senate has voted in favor of disclosure, the provision in last year's bill ultimately was dropped in conference with the House. The Senate's support for this position dates back at least to the Church committee, in 1976. The following year the Select Committee on Intelligence was established and the members of that committee voted in 1977 for public disclosure of the aggregate intelligence budget. In the years since, the Senate has regularly voted to disclose the aggregate amount of intelligence spending. Senators will recall that in 1994 we chartered a commission to conduct a comprehensive review of American intelligence. Part of the statutory mandate of this commission was to study the issue of budget disclosure and resolve it once and for all. The Aspin-Brown Commission unanimously recommended that the total amounts appropriated and requested be disclosed. Senators Warner and Rudman and other traditional opponents agreed. In fact, Senator Rudman and former Defense Secretary Brown would declassify the CIA budget as well in order to show it is only a fraction of the overall budget. Public disclosure of total budget amount for intelligence is symbolically important: it sends a message that intelligence is a legitimate and open governmental function. It helps to instill public confidence and enables the American people to know what proportion of the entire Federal budget is spent on intelligence, as compared with other functions. Moreover, there is an argument that disclosure is constitutionally required by the statement and account clause of the Constitution (Art. I, Sec. 9, clause 7), which provides that ``A regular Statement and Account of the Receipts and Expenditures of all public money shall be published from time to time.'' Disclosure of the aggregate budget amount will not harm our national security. Disclosure of the top-line number is not sufficient to alert adversaries to deployment of new systems; spending on new systems doesn't occur in 1 year, it's stretched out over a number of years. There has been no history of conspicuous spikes in intelligence spending. It is interesting to note that our major allies disclose their intelligence budgets. The United Kingdom recently decided to disclose the total budgets for MI-5 and MI-6. The reality is that this number is already in the public domain in approximate terms. The intelligence budget is already widely reported in the press. A congressional committee released the actual numbers for all agencies a couple of years ago by mistake. Even efforts to talk around the budget numbers, by using percentages, for example, instead of actual numbers, have given industrious reporters and analysts sufficient information to extrapolate the dollar figures. Knowledge of the top-line does not give an adversary useful information about intelligence targets, sources, or methods. Nor has the de facto disclosure of the budget total taken us down the so-called slippery slope of more detailed disclosures. In fact, I believe this disclosure will actually strengthen our ability to protect vital national secrets by bolstering the credibility of our classification decisions--officially revealing the budget total tells the American public that we are using classification to protect vital national secrets, not to conceal information that might be inconvenient to defend. And I think it would not be difficult to defend the size of the intelligence budget, given the complex world we live in today. For these reasons, Mr. President, I support this amendment and urge my colleagues to do the same.

Mr. KERREY. No second-degree amendments on either amendment.

Mr. KERREY. Mr. President, I rise to join my chairman, the distinguished Senator from Alabama, in offering this year's intelligence authorization bill. It is designed to focus the national intelligence agencies of the United States on today's and tomorrow's threats. The bill is the product of the open, bipartisan process that has long been the hallmark of the Select Committee on Intelligence. It was voted unanimously out of the committee and in accordance with Senate Resolution 400, the founding document of the Intelligence Committee, the bill was reviewed by the Committee on Armed Services. Before I discuss the bill, I want to say a word about the bipartisan process which created this legislation under Chairman Shelby's leadership. Unlike many other topics which we consider here each day, there is no Republican agenda or Democratic agenda with regard to intelligence, or at least none apparent to me. Intelligence is simply the best informed estimate of the truth about something. It knows no party. Every member of our committee seeks the most effective and most efficient methods for the collection, processing, analysis, production, and dissemination of intelligence. Every member of our committee seeks intelligence collection and operations to be conducted in accordance with American law and American values. We certainly often disagree on which approach to take in a particular situation, but our disagreements are not based on party agendas. We are simply seeking the best performance for the intelligence community and the best outcome for our country. So the chairman and I were united in purpose as we approached this legislation, we came to closure on our disagreements, and we are united in recommending it to the full Senate. Most of the intelligence authorization is contained in a classified annex which we cannot discuss in open session but which is available to Members in S-407. The schedule of authorizations in that annex comprise the National Foreign Intelligence Program of the United States, together with the Intelligence Committee's markup of the Joint Military Intelligence Program and recommendations to the Armed Services Committee on Tactical Intelligence and Related Activities. The total amount allocated for these programs is not something I can report in open session, and I understand that fact will be the subject of an amendment. But I can say while it is a good value, it is a substantial amount of money. Before we discuss any amendment which may be introduced in that regard, I want to respond to the concerns of Members who may doubt the need for significant investment in intelligence at this stage of our history. The best intelligence is simply a necessity for the protection of our people and for the leadership of a nation with America's power and America's responsibilities. Intelligence illuminates policy. Much is made of the strategic crossroads the Nation finds itself at, the need to develop fresh strategies for the new century. You can't make good strategy without good intelligence. Intelligence is also the essential American advantage in war. Victory in battle comes, and will come in the future, from the convergence of three things we saw in the gulf war: American courage and precise American weapons linked to precise American intelligence. The ability to avoid conflict, to gain victory or attain our objectives without risking American lives, is also founded on the inside knowledge gained from intelligence. I can assure my colleagues: intelligence gives America a huge advantage in policymaking, in defense, and in the international aspects of law enforcement. This year's authorization bill addresses today's and tomorrow's threats. We have focused on international terrorism, the proliferation of weapons of mass destruction, and on narcotics trafficking from foreign countries. We have also stressed counterintelligence and the need for more advanced research and development. Good science is essential to keeping and extending our edge in intelligence, and we do not recommend standing pat in this key area. Our bill also reflects our understanding that despite the good relations we now enjoy with Russia, our intelligence agencies need to continue to pay attention to Russian nuclear warheads which still pose the greatest threat, just in terms of capability, to our national life and the lives of our citizens. The bill also has some important legislative provisions, which are unclassified. The most important, in my view, is the requirement for the executive branch to make crystal clear to every employee of the national intelligence community that he or she has the right to disclose classified information to the appropriate congressional oversight committee, if the employee believes the information provided gives evidence of wrongdoing. This provision, like the rest of this bill, does not have a partisan basis. We simply intend it to preserve the ability of Congress to perform oversight, which cannot be done without information. In most circumstances, I hope an employee who felt the obligation to report something classified to Congress would first approach his superiors and get their views on how the information should be presented. But in some circumstances, such as when the employee suspects his superiors of complicity in the alleged wrongdoing, the employee should not fear to communicate with the appropriate committee member or cleared staff. The administration does not agree, and believes they have greater authority, by virtue of Executive Order 12356, to control the release of executive branch classified information to Congress. But, given the guarantees in the bill for responsible handling of the received classified information by Congress, I would hope every Member of the Senate would support Congress' right to be informed. This legislation also provides subpoena powers for the CIA inspector general to obtain documentary evidence in support of investigations. The CIA IG is the only inspector general in any of the major national security agencies who lacks this power, and its absence has adversely affected investigations. We have made clear in the bill that subpoena power will remain strictly in the service of the IG for investigative purposes, and will not be used by or in behalf of any other element of the CIA. The Intelligence Committee in 1989 originated the legislation creating the CIA inspector general, and in the past year the Audit Team of the Select Committee on Intelligence conducted a review of the performance of the IG and his office. The confidence of the oversight committees and ultimately the public is essential if the IG is to do his job properly. If I may quote from the report accompanying the bill, ``the [IG] office has increased the level of trust and respect from within the Agency, the Oversight Committees, and the Intelligence Community.'' Mr. President, the distinguished chairman has described other highlights of the bill, one of which we learned from the Khamisiya nerve gas experience and is intended to ensure intelligence better supports our deployed forces, and another which enables Americans whose family members are victims of murder or kidnapping overseas to be kept better informed by their Government. These provisions, like others I have already described, are the result of investigations or hearings by the committee and represent, as does the entire bill, the committee's reasoned view of what is necessary to keep the Nation safe and informed in today's world. Finally, I would like to call the Senate's attention to the arrest and return to the United States, this past Tuesday, of Mir Aimal Kansi for the murder of two CIA employees and wounding of three others at the gate to CIA headquarters several years ago. The CIA and FBI pursued this man to the ends of the Earth, just as former Director James Woolsey promised at the time of the crime. Mr. President, this is a great triumph for U.S. intelligence and law enforcement, working in a harmony which could not have been imagined just a few years ago. All involved in this mission have my deepest respect and congratulations. The Kansi case underlines the quality and dedication of the remarkable people who work for the American people in our intelligence organizations. They are selfless and patriotic, many of them risk their safety for the sake of our country, and many more are denied the gratification of the ego that comes from being able to talk freely about their professional accomplishments. A lot of our talk here is meaningless without the commitment of people like these to actually do something or learn something for America's benefit. The annual authorization bill debate is a chance to thank them, and I do. Mr. President, I look forward to the Senate's deliberations on this bill and I yield the floor.

Mr. KERREY. We will need a consent agreement to set time for the votes.

Mr. KERREY. I wonder if the Senator will yield for a unanimous consent to set the other vote? Mr. President, I ask unanimous consent that the only amendments in order to S. 858 be an amendment offered by Senator Torricelli regarding funding, an amendment by Senator Wellstone regarding tax fairness, and, further, no other amendments be in order, that the amendment offered by Senator Torricelli have 40 minutes equally divided, and that the vote on these two amendments be stacked and begin at 2:45.

Mr. KERREY

Mr. KERREY. Mr. President, I rise today to discuss my thoughts on the State Department authorization bill. I am afraid that too often we minimize the importance of legislation that deals with foreign policy because it is an issue that fails to capture the interest of our constituents. In my opinion, this lack of interest is a sign of failure on our part to explain to our constituents the importance of sound foreign policy to their lives. At the same time, more and more people in my home State are coming to know the importance of trade in developing our economy and creating new markets for Nebraska agricultural and industrial products. Essential to a profitable trade environment is a stable diplomatic relationship. It is our State Department that takes a leading role in creating the ties that will lead to new markets and prosperous trade relations. We must do a better job of explaining the link between foreign policy and a healthy economy based on free trade. Mr. President, it is also important that we remember that failure of foreign policy can have deadly consequences. Our investment in the State Department and international organizations such as the United Nations represents a fraction of the monetary investment required for the United States to respond militarily to a threat to our interests that may have been averted through diplomacy, not to mention the investment in human lives. Mr. President, this bill is a significant improvement over similar legislation that has come before the Senate in that it addresses very difficult and contentious issues with fewer of the controversial policy provisions that have doomed past legislation. This is not to say that this bill is void of provisions that cause me concern, but I am hopeful that as the process moves forward these issues will be worked out. Division A of this bill addresses the consolidation and restructuring of our foreign policy agencies. Aside from streamlining these agencies, I am hopeful this legislation will help us construct a foreign policy structure better prepared to respond to the challenges it will face in the post-cold-war world. By consolidating the Arms Control and Disarmament Agency and the U.S. Information Agency into the State Department, we are not saying that arms control and public diplomacy are less important than during the cold war. Instead, we are reaffirming their importance by placing these tasks under the direct control of the Secretary of State. On this point, I would like to praise the administration, the chairman, and ranking member of the Foreign Relations Committee for pursuing a reorganization plan that will strengthen U.S. foreign policy by strengthening the role of our Secretary of State. I do share the concerns expressed by the administration and believe that it is important for the President and the Secretary of State to have a sufficient amount of flexibility during the process of restructuring in order to ensure the greatest amount of efficiency and ability to meet the challenges of the 21st century. Division B of this bill contains the authorizations of appropriations for the State Department and related agencies. I recognize the fiscal constraint under which we are operating, but I am very concerned by the failure of this bill to fully fund our foreign policy agencies. While the $6.08 billion authorized in the bill is close to the $6.15 billion requested by the President, funding levels fall short in several key accounts. First, this bill authorizes $59 million less than was requested by the President for contributions to international organizations; there is also a $40 million shortfall from the amount requested for international peacekeeping. Finally, the bill reduces ACDA's authorization level from $46 million to $39 million. At a time in which we are calling for ACDA to be integrated into the State Department, it is important that we not shortchange this agency. Each of these funding shortfalls threatens the effectiveness of agencies and calls into question our commitment to maintaining a strong foreign policy. Mr. President, the final section of the bill, division C, is of particular interest and concern to me. Once again, I am pleased that the Senate has finally chosen to address the issue of US arrears to the United Nations, but I am concerned about the approach that is taken in this bill. Mr. President, let me first state that I fully support U.S. participation in the United Nations. In helping to create the United Nations in 1945, the United States sought to create an organization of countries that could work together to achieve common goals. Today, the United Nations remains an important forum of consultation and cooperation in which the United States can work with other nations to advance our interests. However, I fear that the ability of the United States to use its power in the United Nations will be jeopardized by our inability to pay our bills. I do not disagree with those who push for continued reforms within the United Nations. However, I am concerned that many of the benchmarks and conditions contained in this bill play to the unfounded fears of a few in our society and go too far in dictating policy to the United Nations. Mr. President, I do not believe that the United States should put itself in the position of micromanaging the United Nations. While the United States remains the most influential country in the United Nations we must recognize the need to work with, rather than dictate to, the remaining 183 countries. We in the United States are groping with our own fiscal problems, we should not be so quick to assume we have a monopoly on reform. It is for this reason that I supported Senator Lugar's amendment. Aside from fully funding the $819 million in arrears payments over 2 years, Senator Lugar's amendment would have deleted the benchmarks and conditions contained in the bill. In my opinion, we must live up to our international commitments or be prepared to face the consequences of surrendering our leadership role in the world. Mr. President, while I have many concerns, and I believe that this bill could have been crafted in a way that would have further advanced our foreign policy goals, on balance I believe this bill represents a positive step forward and I will vote in favor of final passage. By radically reorganizing our foreign policy apparatus, we better prepare ourselves to meet the foreign policy challenges we are certain to face in the future. Finally, despite the concerns I have about our approach, I believe that this bill will move us toward paying our debts to the United Nations and reestablishing U.S. leadership. section 2108

Mr. KERREY

Mr. KERREY. Thank you, Mr. President. I thank the senior Senator from Vermont and my colleague from Nebraska, Senator Hagel. Mr. President, I rise today to join with my colleagues Senator Leahy and Senator Hagel to express my strong support for a worldwide ban on the use of land mines. Senator Leahy's bill, of which I am an original cosponsor, is an important step in this effort in that it will restrict the use of funds for new deployments of U.S. anti-personnel land mines beginning no later than January 1, 2000. One only has to look at the statistics to realize that these weapons carry a legacy that lasts far longer than the wars in which they were laid. More than 26,000 people will be killed in the world this year by landmines; the vast majority of these deaths will be civilians. In fact, every 22 minutes a man, woman, or child is killed or injured by a land mine. It is impossible to truly calculate the cost of 26,000 deaths due to land mines in a single year. Mr. President, I believe that there can be no better example of the destructive nature of these weapons than Cambodia. It is estimated that over 10 million land mines remain in that country. After years of conflict and chaos, the people of Cambodia must still fear to walk along footpaths or rice paddies; or to allow their children to play along riverbeds or around villages. Mr. President, they have reason to be afraid; current statistics show that 1 Cambodian in every 236 has lost an eye or a limb to a land mine. Again, these are noncombatants, civilian individuals that are suffering as a consequence of the indiscriminate placing of these dangerous weapons. My interest in this issue also extends to not only protecting civilians but protecting our own military forces. The truth is, far too often the victims of these mines are the men and women who serve in the U.S. Armed Forces. The Department of Defense has estimated that 33 percent of United States Army casualties in Vietnam were caused by land mines. It is further estimated that 90 percent of those mines contained components made in the United States. Today in Bosnia, the greatest threat to U.S. troops involved in the SFOR mission is not from hostile fire, but from the millions of land mines that were indiscriminately laid during the years of fighting in that country. Mr. President, not only do I believe that we can continue to protect our national security without these weapons, I believe that ridding the world of land mines would be a significant step toward our providing greater protection to our forces stationed abroad. I want to thank Senator Leahy for his continued leadership in this area, because I believe the bill that we have sponsored is an important first step. However, it is also important for the United States now to take the lead on a global scale. While I applaud President Clinton's support for the eventual elimination of antipersonnel land mines, I would urge him to join our closest allies around the world by supporting the so-called Ottawa process which seeks to negotiate a treaty to ban land mines to be completed no later than December 1997. I firmly believe that a treaty negotiated with U.S. leadership, and which would include many countries where land mines have been used with devastating results, would help to create the moral authority to establish a global norm that would make these weapons unacceptable forever. Again Mr. President, I believe now is the time for the U.S. exercise its leadership role in the world to stop the use of these devastating weapons. I thank the Senator from Vermont and the Senator from Nebraska for their leadership on this issue. I hope that the President will change and begin to see the wisdom of adopting the Ottawa process.

Mr. KERREY

Mr. KERREY. Mr. President, earlier, I sent to the desk a bill that I introduced on behalf of myself, Senator McCain of Arizona, Senator John Kerry of Massachusetts, and Senator Fritz Hollings of South Carolina. The bill is called the Secure Public Networks Act of 1997, and it establishes as a priority that we are going to try with our law to develop a mechanism whereby, in collaboration with the private sector, the U.S. Government can work to secure these public networks upon which our commerce depends, our Government operations depend, and increasingly our national security depends. Secure public networks are essential to the protection of personal privacy and the promotion of commerce on the Internet and other communications networks. Without trust in the system, the Internet will never reach its full potential as a new form of communications in commerce. I believe there is an urgent need to enact legislation this year which can promote the creation and use of new networks, provide the security American citizens require in their communications and balance America's compelling interest in commerce and public safety. Congress has been gridlocked for more than a year in the debate about the Nation's export policy for encryption products. Our Nation's policy on encryption is only a single piece of the puzzle, however. We need to ensure that the whole system of our public communications networks provides the security required. There are three large interests, as I see it, at stake in this entire debate. One of the reasons there is an urgency to develop new legislation and enact new legislation that the President will be able to sign this year is that unless these networks are secure, we risk all three. The first is in the area of commerce. The increasing amount of business that is being done on the network and the failure to be able to establish security on an international basis risks the full development potential of commercial networks. The second is in the area of Government operations itself. Not only are there concerns in the private sector but on the Government side, from the Internal Revenue Service even to the operations of schools, that we need to have a secure public network. Obviously, if we are going to develop fully the electronic filing system--and for colleagues' reference, less than 1 percent error rate occurs in electronic filing, where nearly a 25-percent filing rate occurs in paper filing, there is a potential for saving money. In addition to that, there is an increasing amount of education that is occurring on the network, once again offering a tremendous amount of savings for individuals who look for ways to leverage intellectual property and increase the efficiency of education. You need look no further than what is going on now in the area of education on the network, but it needs to be secure. In the area of law enforcement, again, there is an offensive and defensive capability, and I am addressing at this instance the defensive capability, our ability to be able to communicate, for national security reasons, and our ability to be able to communicate for law enforcement reasons and know those communications are secure is the first order of business of the Secure Public Networks Act of 1997. Our commercial interests, Mr. President, lie in maintaining American companies' leading position as producers of software and in the promotion of commerce on-line on the Internet. I do not believe we can fully achieve either of these objectives if the current law remains unchanged. Second, the American people should be able to have secure access to their Government, as I indicated before, not just with the IRS, but also a whole range of other services, including the Government job of educating our people. There is a tremendous requirement in every single operation of Government for the consumer of those services to know that their communication is secure, that there is no manipulation of the data, no transference of that data. And as I said, again, thirdly, there is a public safety interest in meeting the needs of law enforcement and national defense. Here a secure public network can provide both defensive and offensive security. Mr. President, the greatest threat to our citizens' privacy is very often described by some advocates of change as being the Government. They are afraid of the Government interfering with their privacy. But I urge my colleagues to consider what the marketplace sees out there, which is that increasingly it is the private-sector interests that are the greatest threat to the privacy of citizens. For example, the FBI reported last month that a hacker collected 100,000 credit card numbers from an Internet provider and then attempted to sell these numbers for cash. This is a private-sector individual out there, obviously very skilled. These hackers and crackers are skilled way beyond my capacity to understand what they are doing, except to know that they have the ability to come in and steal information that has great value, to manipulate that data and do not just a little bit of mischief but put our commercial and our national security interests at risk. There was a story in the New York Times last week, Mr. President, that detailed the trauma and the horror faced in 1994 by a Texas woman who received a letter full of threatening sexual comments from an inmate in a Texas prison. She asked the question, ``How did this inmate get access to the information?'' and was surprised to discover that her personal life had become available as a result of a private-sector company's use of Texas inmates to do input into their data bases. There was another example in this same article about a 1993 employee at a car dealership in New Jersey using their company's access to credit information to open false accounts in their customers' names and charging up thousands of dollars of merchandise with the fraudulent cards. Another example, in 1995, a convicted child rapist, working in a Boston hospital, used a former fellow employee's password to access information on the hospital's patients. He found the phone numbers of young patients in the area, and then made obscene phone calls to girls as young as 8 years old. There are many other examples that one could give. The point that I am trying to make, Mr. President, is, as this debate unfolds, one of the things you will hear immediately is that this legislation is an attempt by Government to gain access over the privacy of individuals. That is simply not true. There is protection after protection after protection in this legislation guarding against that. This is an attempt to tighten up the security so that we know that a private individual, as I indicated here earlier with three or four examples, does not have the opportunity to either come in and intercept your communication or go into your data base and retrieve information that they will use against you or manipulate a data base so as to engage in fraudulent transactions that could cost not only the companies but could cost the individual substantial amounts of money. To provide privacy protection and help prevent abuse of public networks, the Secure Public Networks Act makes it illegal for a person to use encryption to commit a crime; to exceed lawful authority in decrypting data or communications; to break the encryption code of another for the purpose of violating privacy, security, and property rights; to steal intellectual property on a public communications network; and to misuse key recovery information. This act fully protects and strengthens the privacy rights of the individual without damaging the interest of public safety. Law enforcement will be granted access to key recovery information only if they have authority based on existing statute, rule or law. Audits will be performed by the Department of Justice which will ensure this process is not circumvented or abused, and I would expect these audits to be available to the appropriate congressional oversight committees. Both the Government and the private sector need to work together to create the infrastructure and technology that will give the users total confidence in the security of commercial transactions and personal communications. As the largest purchaser of computer software and hardware, the Federal Government can create important incentives to help the market fulfill this need. The idea here, Mr. President, is to say that the Federal law can provide incentives for market-based solutions. It will be for the most part the market that solves these problems and determines what kind of technology will be used in the solution of these problems. The Secure Public Networks Act of 1997, however, provides a framework and some standardization to make certain that we expedite that happening. This act also sets up a voluntary registration system for public key certificate authorities and key recovery agents which help build confidence in the secure public network. Since the Internet is international and online commerce will be worldwide, the United States alone cannot develop a secure public network on the scale necessary to address this technology. Our legislation therefore, Mr. President, calls on the President to continue consultations and negotiations with foreign countries to ensure secure public networks are built on a global scale. The Secure Public Networks Act creates an advisory panel with industry representatives to assist the Government in adapting policies to meet changing technology and changing commercial situations. This panel will also advise the Secretary of Commerce on the commercial situation American companies face overseas and recommend changes in U.S. policy to assist industry. The act also calls for additional Federal research to facilitate the creation of secure public networks and the cooperation and coordination of departments and agencies on both Federal and State levels to ensure the development of secure public networks. Mr. President, I believe the Secure Public Networks Act of 1997 will move our Nation closer to secure computer and telecommunications networks and help resolve the debate on encryption as well. The alternative to the rule of law in this dynamic area is chaos and anarchy, a condition which will prevent Internet-type networks from reaching their full potential and which will hurt the interests of industry, the interests of the public, and the interests of law enforcement and national security. Congress' duty to make laws to strengthen these networks is clear. I suggest we set a public goal of getting a bill to the President by October 1. I believe if we set a goal of this kind and stick to it, we will enable not only the market to develop, but it will enable us to provide the security needed for us to be able to move Government operations into the new paradigm of network activity.

Mr. KERREY

Mr. KERREY. Mr. President, I see there is no one still here on the floor. I suggest the absence of a quorum.

Mr. KERREY. I thank the Chair. (The remarks of Mr. Kerrey pertaining to the introduction of S. 909 are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. KERREY. Mr. President, I ask unanimous consent that the pending business be set aside so I may speak on a bill introduced earlier today on behalf of myself and Senator McCain.

Mr. KERREY

Mr. KERREY. Mr. President, earlier, I sent to the desk a bill that I introduced on behalf of myself, Senator McCain of Arizona, Senator John Kerry of Massachusetts, and Senator Fritz Hollings of South Carolina. The bill is called the Secure Public Networks Act of 1997, and it establishes as a priority that we are going to try with our law to develop a mechanism whereby, in collaboration with the private sector, the U.S. Government can work to secure these public networks upon which our commerce depends, our Government operations depend, and increasingly our national security depends. Secure public networks are essential to the protection of personal privacy and the promotion of commerce on the Internet and other communications networks. Without trust in the system, the Internet will never reach its full potential as a new form of communications in commerce. I believe there is an urgent need to enact legislation this year which can promote the creation and use of new networks, provide the security American citizens require in their communications and balance America's compelling interest in commerce and public safety. Congress has been gridlocked for more than a year in the debate about the Nation's export policy for encryption products. Our Nation's policy on encryption is only a single piece of the puzzle, however. We need to ensure that the whole system of our public communications networks provides the security required. There are three large interests, as I see it, at stake in this entire debate. One of the reasons there is an urgency to develop new legislation and enact new legislation that the President will be able to sign this year is that unless these networks are secure, we risk all three. The first is in the area of commerce. The increasing amount of business that is being done on the network and the failure to be able to establish security on an international basis risks the full development potential of commercial networks. The second is in the area of Government operations itself. Not only are there concerns in the private sector but on the Government side, from the Internal Revenue Service even to the operations of schools, that we need to have a secure public network. Obviously, if we are going to develop fully the electronic filing system--and for colleagues' reference, less than 1 percent error rate occurs in electronic filing, where nearly a 25-percent filing rate occurs in paper filing, there is a potential for saving money. In addition to that, there is an increasing amount of education that is occurring on the network, once again offering a tremendous amount of savings for individuals who look for ways to leverage intellectual property and increase the efficiency of education. You need look no further than what is going on now in the area of education on the network, but it needs to be secure. In the area of law enforcement, again, there is an offensive and defensive capability, and I am addressing at this instance the defensive capability, our ability to be able to communicate, for national security reasons, and our ability to be able to communicate for law enforcement reasons and know those communications are secure is the first order of business of the Secure Public Networks Act of 1997. Our commercial interests, Mr. President, lie in maintaining American companies' leading position as producers of software and in the promotion of commerce on-line on the Internet. I do not believe we can fully achieve either of these objectives if the current law remains unchanged. Second, the American people should be able to have secure access to their Government, as I indicated before, not just with the IRS, but also a whole range of other services, including the Government job of educating our people. There is a tremendous requirement in every single operation of Government for the consumer of those services to know that their communication is secure, that there is no manipulation of the data, no transference of that data. And as I said, again, thirdly, there is a public safety interest in meeting the needs of law enforcement and national defense. Here a secure public network can provide both defensive and offensive security. Mr. President, the greatest threat to our citizens' privacy is very often described by some advocates of change as being the Government. They are afraid of the Government interfering with their privacy. But I urge my colleagues to consider what the marketplace sees out there, which is that increasingly it is the private-sector interests that are the greatest threat to the privacy of citizens. For example, the FBI reported last month that a hacker collected 100,000 credit card numbers from an Internet provider and then attempted to sell these numbers for cash. This is a private-sector individual out there, obviously very skilled. These hackers and crackers are skilled way beyond my capacity to understand what they are doing, except to know that they have the ability to come in and steal information that has great value, to manipulate that data and do not just a little bit of mischief but put our commercial and our national security interests at risk. There was a story in the New York Times last week, Mr. President, that detailed the trauma and the horror faced in 1994 by a Texas woman who received a letter full of threatening sexual comments from an inmate in a Texas prison. She asked the question, ``How did this inmate get access to the information?'' and was surprised to discover that her personal life had become available as a result of a private-sector company's use of Texas inmates to do input into their data bases. There was another example in this same article about a 1993 employee at a car dealership in New Jersey using their company's access to credit information to open false accounts in their customers' names and charging up thousands of dollars of merchandise with the fraudulent cards. Another example, in 1995, a convicted child rapist, working in a Boston hospital, used a former fellow employee's password to access information on the hospital's patients. He found the phone numbers of young patients in the area, and then made obscene phone calls to girls as young as 8 years old. There are many other examples that one could give. The point that I am trying to make, Mr. President, is, as this debate unfolds, one of the things you will hear immediately is that this legislation is an attempt by Government to gain access over the privacy of individuals. That is simply not true. There is protection after protection after protection in this legislation guarding against that. This is an attempt to tighten up the security so that we know that a private individual, as I indicated here earlier with three or four examples, does not have the opportunity to either come in and intercept your communication or go into your data base and retrieve information that they will use against you or manipulate a data base so as to engage in fraudulent transactions that could cost not only the companies but could cost the individual substantial amounts of money. To provide privacy protection and help prevent abuse of public networks, the Secure Public Networks Act makes it illegal for a person to use encryption to commit a crime; to exceed lawful authority in decrypting data or communications; to break the encryption code of another for the purpose of violating privacy, security, and property rights; to steal intellectual property on a public communications network; and to misuse key recovery information. This act fully protects and strengthens the privacy rights of the individual without damaging the interest of public safety. Law enforcement will be granted access to key recovery information only if they have authority based on existing statute, rule or law. Audits will be performed by the Department of Justice which will ensure this process is not circumvented or abused, and I would expect these audits to be available to the appropriate congressional oversight committees. Both the Government and the private sector need to work together to create the infrastructure and technology that will give the users total confidence in the security of commercial transactions and personal communications. As the largest purchaser of computer software and hardware, the Federal Government can create important incentives to help the market fulfill this need. The idea here, Mr. President, is to say that the Federal law can provide incentives for market-based solutions. It will be for the most part the market that solves these problems and determines what kind of technology will be used in the solution of these problems. The Secure Public Networks Act of 1997, however, provides a framework and some standardization to make certain that we expedite that happening. This act also sets up a voluntary registration system for public key certificate authorities and key recovery agents which help build confidence in the secure public network. Since the Internet is international and online commerce will be worldwide, the United States alone cannot develop a secure public network on the scale necessary to address this technology. Our legislation therefore, Mr. President, calls on the President to continue consultations and negotiations with foreign countries to ensure secure public networks are built on a global scale. The Secure Public Networks Act creates an advisory panel with industry representatives to assist the Government in adapting policies to meet changing technology and changing commercial situations. This panel will also advise the Secretary of Commerce on the commercial situation American companies face overseas and recommend changes in U.S. policy to assist industry. The act also calls for additional Federal research to facilitate the creation of secure public networks and the cooperation and coordination of departments and agencies on both Federal and State levels to ensure the development of secure public networks. Mr. President, I believe the Secure Public Networks Act of 1997 will move our Nation closer to secure computer and telecommunications networks and help resolve the debate on encryption as well. The alternative to the rule of law in this dynamic area is chaos and anarchy, a condition which will prevent Internet-type networks from reaching their full potential and which will hurt the interests of industry, the interests of the public, and the interests of law enforcement and national security. Congress' duty to make laws to strengthen these networks is clear. I suggest we set a public goal of getting a bill to the President by October 1. I believe if we set a goal of this kind and stick to it, we will enable not only the market to develop, but it will enable us to provide the security needed for us to be able to move Government operations into the new paradigm of network activity.