John Kerry

Mr. KERRY

Mr. KERRY. I see we have more time than I anticipated. I ask unanimous consent for 5 additional minutes.

Mr. KERRY. Mr. President, I thank the distinguished Senator from California. I had not expected to speak on this matter. I came to the floor to speak on the VA-HUD bill as a whole. Let me share a couple of quick observations about these riders. I congratulate my colleague from California for the fight she is making because it is an important fight as a matter of principle, and also it is a matter of science and common sense. These riders don't find their way into this legislation accidentally. There are powerful interests in the country that made sure these riders were here. We consistently see these attacks on environmental enforcement efforts in the country because there are people who just do not want a change. On the air quality standards and nonattainment designations, the American Trucking Association is waiting for litigation with the EPA and wants to stop the EPA from keeping accountability with respect to the Clean Air Act. That is what this is about. I have great respect for truckers and great respect for their efforts across the country. They are important to our economy. No one here is going to suggest otherwise. But every American has seen what happens at stoplights where they are sitting in a car that is living up to emission standards and a truck starts out at the stoplight. There is a great plume of black smoke that comes out of that truck. It is all over our highways. We know it. SUVs are presenting us with an increased problem because they come in under the light truck exception. The fact is that the air standards of the country are not reaching the levels they ought to reach. The EPA is our chosen entity to enforce the Clean Air Act and to make sure that Americans are not subjected to pollution and air quality standards that are less than high. We are told by the EPA what happens with this delay. There is the exposure of some 15,000 premature deaths in the country. Some 350,000 more Americans will suffer asthma as a consequence of the lack of air quality standards. That is the risk the Senate will take by allowing this kind of rider. However innocuous it may seem or however people make it sound going forward, there is a diminishment of the capacity of the EPA to enforce the law Congress has already passed to allow Americans to live by the highest air quality standards. With respect to the dredging, I understand where that comes from. We have all been through that struggle in Massachusetts to try to clean up the Husatonic River. We are going to do some dredging there. There is now a struggle about the Hudson River, and other rivers, about whether or not those are going to be cleaned up. The fact is the National Academy of Sciences has already provided us with not one but two studies that show dredging is a legitimate and important mechanism for cleaning up polluted areas. We are trying to do that in the Bedford-Hartford area where we have PCBs. They fear if this rider passes, that cleanup may in fact be jeopardized because people will use the excuse to say we don't have to proceed. That is what is at stake. I know it is difficult to pull these bills together. There are a lot of different interests that have to be satisfied. But the fact is the Senate ought to take a vote on these riders. We ought to vote appropriately--that they don't belong in this legislation. I thank my colleague for her efforts.

Mr. KERRY. I thank the Chair. Mr. BOND addressed the Chair.

Mr. KERRY. Mr. President, I ask unanimous consent that at the conclusion of debate on the two amendments under the previous order, I be permitted to speak on the VA-HUD bill for 10 minutes.

Mr. KERRY

Mr. KERRY. Mr. President, I speak today to commend the President for issuing Executive Order 11625, designed to help strengthen the Federal Government's commitment to providing contracting opportunities to disadvantaged businesses. In 1998, I took to the floor to successfully defend the Transportation Department's Disadvantaged Business Enterprise (DBE) program from those who sought to weaken it. Today, I am pleased to speak out in favor of the President's efforts to strengthen programs like the DBE, along with all minority-owned business government contracting programs. It should come as no surprise to anyone in this Chamber familiar with small businesses, especially minority owned firms, that government contracting can help provide a strong foundation to build a prosperous small business. As any successful graduate of the Small Business Administration's 8(a) program will tell you, it provides the opportunities, but you have to supply the entrepreneurial spirit and hard work. And this hand-up approach is what I mean by assisting minority-owned firms. These programs are not a handout. Rather, they exist to help level the playing field and to combat the inequities in our society that may prevent these firms from receiving the same opportunities available to other businesses. These contracts are beneficial not just because they provide initial contracts to small disadvantaged firms, they also help minority firms establish a record of providing goods and services to the Federal Government. This is of critical importance because it assists these businesses in obtaining future contracts. In turn, these firms help provide jobs and competition to larger businesses, saving the taxpayers money through reduced costs and time saving innovations. Thus, these programs have direct and indirect benefits to our economy at all levels. The Executive Order signed by President Clinton on Friday will help strengthen minority business ownership by directing Federal agencies to take affirmative steps to increase contracting between the Federal government and Small Disadvantaged Businesses, 8(a) Businesses, and Minority Business Enterprises. The Executive Order also holds Federal agencies accountable for carrying out the terms of the Order by requiring them to develop a long-term strategic plan and to submit annual reports to the Office of Management and Budget (OMB) of their efforts to increase contracting with disadvantaged businesses; requires Federal agencies to ensure the participation of small and disadvantaged businesses when procuring information technology and telecommunications services; and directs Federal departments and agencies to ensure that all creation, placement, and transmission of federal advertising are fully reflective of the nation's diversity. I applaud President Clinton's action to help ensure the vitality of minority- owned small businesses. As the Senior Democrat on the Senate Committee on Small Business and a long time supporter of these programs, I urge OMB to forward the agencies' plans and their implementation reports to the House and Senate Committees on Small Business for further review.

Mr. KERRY

Mr. KERRY. Mr. President, Senator Bond and I would like to submit for the Record a tribute to Mr. Bennie Thayer, a long-time business advocate and remarkable man who passed away Monday.

Mr. KERRY

Mr. KERRY. Mr. President, I have been aware of this story since July. Many of the bonds for this project are held through mutual funds in which Americans have invested their savings. This is not just a question of inequity for the U.S. developer of the project but also for millions of Americans who are the bondholders, and many of whom are my constituents. In response to a letter written on August 7 to the Chinese ambassador, the charge d'affaires indicated that he had met with both the U.S. developer and representatives from the U.S. bondholders, had conveyed the concern back home, and would be--quote--making efforts to facilitate a satisfactory solution to this problem--end quote. It has now been almost two months, and we have seen no resolution of this problem, but rather delay and discrimination. I note that the Democratic Leader has joined us, and I would like to suggest to him a report by the Administration, but first I would yield the Floor to my colleague from Montana, Senator Baucus.

Mr. KERRY

Mr. KERRY. Mr. President, let me say a few words about the Small Business Reauthorization Act of 2000 and the managers' amendment that the Senate is considering today. While I applaud the House for their action to ensure the continuation of important Small Business Administration (SBA) programs, the managers' amendment offered by Chairman Bond and myself includes key provisions extending and improving important SBA programs. This bill, with the inclusion of the managers' amendment, is comprehensive. It reauthorizes all of the SBA's programs, setting the funding levels for the credit and business development programs, and making improvements where needed. Without this legislation, the 504 loan program would shut down; the venture capital debenture program would shut down; and funding to the states for their small business development centers would be in jeopardy. The list goes on. I just can't emphasize enough how important this legislation is. The SBA's contribution is significant. In the past eight years, the SBA has helped almost 375,000 small businesses get more than $80 billion in loans. That's double what it has loaned in the preceding 40 years since the agency's creation. The SBA is better run than ever before, with four straight years of clean financial audits; it has a quarter less staff, but makes twice as many loans; and its credit and finance programs are a bargain. For a relatively small investment, taxpayers are leveraging their money to help thousands of small businesses every year and fuel the economy. Let me just give you one example. In the 7(a) program, taxpayers spend $1.24 for every $100 loaned to small business owners. Well known successes like Winnebago and Ben & Jerry's are clear examples of the program's effectiveness. Overall, I agree with the program levels in the three-year reauthorization bill. As I said during the Small Business Committee's hearing on SBA's budget earlier in the year, I believe the program levels are realistic and appropriate based on the growing demand for the programs and the prosperity of the country. I also think they are adequate should the economy slow down and lenders have less cash to invest. Consistent with SBA's mission, in good times or bad, we need to make sure that small businesses have access to credit and capital so that our economy benefits from the services, products and jobs they provide. As First Lady Hillary Rodham Clinton says, we don't want good ideas dying in the parking lot of banks. We also want a safety net when our states are hit hard by a natural disaster. There are many members of this Chamber, and their constituents, who know all too well the value of SBA disaster loans after floods, fires and tornadoes. I will only take a short time to talk about some of important the provisions of this bill and our managers' amendment. I am pleased that we are considering legislation to extend the Small Business Innovation Research (SBIR) program for 8 more years as part of this comprehensive SBA reauthorization bill. As many of my colleagues may know, this program is set to expire on September 30, along with many other important programs critical to our nation's small businesses. While I am sorry the process has taken this long, in no way should it imply that there is not strong support for the SBIR program, the Small Business Administration, or our nation's innovative small businesses. The SBIR program is of vital importance to the high-technology sector throughout the country. For the past decade, growth in the high- technology field has been a major source of the resurgence of the American economy we now enjoy. While many Americans know of the success of Microsoft, Oracle, and many of the dot.com companies, few realize that it is America's small businesses that are working in industries like software, hardware, medical research, aerospace technologies, and bio-technology that are helping to fuel this resurgence--and that it is the SBIR program that makes much of this possible. By setting aside Federal research and development dollars specifically for small high- tech businesses, SBIR is making important contributions to our economy. These companies have helped launch the space shuttle; found a vaccine for Hepatitis C; and made B-2 Bomber missions safer and more effective. Since the start of the SBIR program in 1983, more than 17,600 firms have received over $9.8 billion in assistance. In 1999 alone, nearly $1.1 billion was awarded to small high-tech firms through the SBIR program, assisting more than 4,500 firms. The SBIR program has been, and remains, an excellent example of how government and small business can work together to advance the cause of both science and our economy. Access to risk capital is vital to the growth of small high technology companies, which accounted for over 40 percent of all jobs in the high technology sector of our economy in 1998. The SBIR program gives these companies access to Federal research and development money and encourages those who do the research to commercialize their results. Because research is crucial to ensuring that our nation is the leader in knowledge-based industries, which will generate the largest job growth in the next century, the SBIR program is a good investment for the future. I am proud of the many SBIR successes that have come from my state of Massachusetts. Companies like Advanced Magnetics of Cambridge, Massachusetts, illustrate that success. Advanced Magnetics used SBIR funding to develop a drug making it easier for hospitals to find tumors in patients. The development of this drug increased company sales and allowed Advanced Magnetics to hire additional employees. This is exactly the kind of economic growth we need in this nation, because jobs in the high-technology field pay well and raise everyone's standard of living. That is why I am such a strong supporter and proponent of the SBIR program and fully support its reauthorization. This legislation also includes H.R. 2614, which reauthorizes SBA's 504 loan program, which passed the Senate on June 14, 2000. The bill and our managers' amendment make common-sense changes to this critical economic development tool. These changes will greatly increase the opportunity for small business owners to build a facility, buy more equipment, or acquire a new building. In turn, small business owners will be able to expand their companies and hire new workers, ultimately resulting in an improved local economy. Since 1980, over 25,000 businesses have received more than $20 billion in fixed-asset financing through the 504 program. In my home state of Massachusetts, over the last decade small businesses have received $318 million in 504 loans that created more than 10,000 jobs. The stories behind those numbers say a lot about how SBA's 504 loans help business owners and communities. For instance, in Fall River, Massachusetts, owners Patricia Ladino and Russell Young developed a custom packing plant for scallops and shrimp that has grown from ten to 30 employees in just two short years and is in the process of another expansion that will add as many as 25 new jobs. Under this reauthorization bill, the maximum debenture size for Section 504 loans has been increased from $750,000 to $1 million. For loans that meet special public policy goals, the maximum debenture size has been increased from $1 million to $1.3 million. It has been a decade since we increased the maximum guarantee amount. If we were to change it to keep pace with inflation, the maximum guarantee would be approximately $1.25 million instead of $1 million. Instead of implementing such a sharp increase, we are striking a balance between rising costs and increasing the government's exposure and only seeking to increase the cap to $1 million. I am pleased to say that this legislation also includes a provision assisting women-owned businesses, which I first introduced in 1998 as part of S. 2448, the Small Business Loan Enhancement Act. This provision adds women-owned businesses to the current list of businesses eligible for the larger public policy loans. As the role of women-owned businesses in our economy continues to increase, we would be remiss if we did not encourage their growth and success by adding them to this list. The 504 loan program gets results. It expands the opportunities of small businesses, creates jobs and betters communities. It is crucial that it be reauthorized, and that is what this legislation does. Another important program reauthorized under this legislation and strengthened by the managers' amendment is the Microloan program. I have long been a believer in microloans and their power to help people gain economic independence while improving the communities in which they live. This bill authorizes lower levels for the microloan program than the Administration requested. Of course, I would prefer to have full funding because I believe it is important to expand the program so that it is available everywhere. But, compromise is part of the legislative process, and a moderate increase is better than none at all. Nevertheless, I will be monitoring usage of microloan technical assistance and have told Chairman Bond that the Senate Committee on Small Business should revisit the issue before the end of the three- year reauthorization period if the level authorized is inadequate to meet program needs. In addition to funding, our managers' amendment also makes important changes to the microloan program. We have heard from intermediaries and economic development activists around the country that with some administrative and legislative changes, this program could have a greater impact. This bill takes some important steps in the right direction. Right now we have 156 microlending intermediaries. This bill will permit the program to grow to 250 in FY 2001; to 300 in FY 2002, and to 350 in FY 2003. It also increases loan levels and technical assistance levels over three years. With more technical assistance, we will be able to increase the number of intermediaries, and therefore reach more borrowers in rural areas or large states. I also support the provision to raise the cap on microloans from $25,000 to $35,000, making it adequate to help micro-entrepreneurs in states and urban areas where operating costs are more expensive. Senator Snowe's provision to establish $1 million for peer-to-peer training for microlenders is also included. I strongly support this concept because it will help the program grow while maintaining its high quality and low loss rates. Small Business Development Centers (SBDC) are also reauthorized under this legislation. SBDCs serve tens of thousands of small business owners and prospective owners every year. This bill takes a giant step to retool the formula that determines how much funding each state receives. This is an important program for all of our states and we want no confusion about its funding. Without this change, some states would have suffered sharp decreases in funding, disproportionate to their needs. I appreciate and am glad that the SBA and the Association of Small Business Development Centers worked with me to develop an acceptable formula so that small businesses continue to be adequately served. This legislation also reauthorized the National Women's Business Council. For such a tiny office, with minimal funding and staff, it has managed to make a significant contribution to our understanding of the impact of women-owned businesses in our economy. It has also done pioneer work in raising awareness of business practices that work against women-owned business, such as some in the area of Federal procurement. Recently, they completed two studies that documented the world of Federal procurement and its impact on women-owned businesses. According to the National Foundation for Women Business Owners, over the past decade, the number of women-owned businesses in this country has grown by 103 percent to an estimated 9.1 million firms. These firms generate almost $3.6 trillion in sales annually and employ more than 27.5 million workers. With the impact of women-owned businesses on our economy increasing at an unprecedented rate, Congress relies on the Council to serve as its eyes and ears as it anticipates the needs of this burgeoning entrepreneurial sector. Since it was established in 1988, the bipartisan Council has provided important unbiased advice and counsel to Congress. This Act recognizes the Council's work and reauthorizes it for three years, from FY 2001 to 2003. It also increases the annual appropriation from $600,000 to $1 million. The increase in funding will allow the council to: support new and ongoing research; produce and distribute reports and recommendations prepared by the Council; and create an infrastructure to assist states develop women's business advisory councils, coordinate summits and establish an interstate communication network. The Historically Underutilized Business Zone, or ``HUBZone'' program, which passed this Committee in 1997, has tremendous potential to create economic prosperity and development in those areas of our Nation that have not seen great rewards, even in this time of unprecedented economic health and stability. This program is similar to my New Markets legislation in that it creates an incentive to hire from, and perform work in, areas of this country that need assistance the most. This bill would authorize the HUBZone program at $10 million for the next 3 years, which is $5 million above the Administration's request. Additionally, the managers' amendment included very important provisions to include those areas which were inadvertently missed when this legislation was crafted--namely, Indian tribal lands. I appreciate the willingness of the Committee on Indian Affairs to work with our Committee to create HUBZone opportunities in the states of Alaska and Hawaii, and in other Indian tribal lands. The HUBZone section does not contain any provision addressing the interaction of the HUBZone and 8(a) minority contracting programs. I believe that the 8(a) program is an important and necessary tool to help minority small businesses receive access to government contracts. The Chairman and I agree that there is a need to enhance the participation of both 8(a) and HUBZone companies in Federal procurement. It is my intention that the Senate Committee on Small Business consider the issue of enhancing small business procurement in the next Congress. The Senate managers' amendment also includes a provision relating to SBA's cosponsorship authority. This authority allows SBA and its programs to cosponsor events and activities with private sector entities, thus leveraging the Agency's limited resources. The managers' amendment extends the authority for three additional years. This provision also adds ``information and education'' to the types of assistance that can be provided to small businesses by public and private sector organizations working with the SBA. This provision was recommended by the SBA as an effective change to training programs that are jointly run by the SBA and partner organizations. Mr. President, let me conclude by reminding my colleagues that all of our states benefit from the success and abundance of small businesses. This legislation makes their jobs a little easier. I ask my colleagues for their support of this important legislation.

Mr. KERRY

Mr. KERRY. Mr. President, I rise to make a few remarks on the Coastal Zone Management Act of 2000, legislation to reauthorize the Coastal Zone Management Act. This bill, S. 1534, was passed last Thursday evening by unanimous consent. To begin, I want to thank Senator Snowe, our chairman on the Oceans and Fisheries Subcommittee on the Commerce Committee, for putting this legislation on the Committee agenda this Congress and working for its enactment When Congress enacted the Coastal Zone Management Act in 1972, it made the critical finding that, ``Important ecological, cultural, historic, and esthetic values in the coastal zone are being irretrievably damaged or lost.'' As we deliberated CZMA's reauthorization this session, I measured our progress against that almost 30-year-old congressional finding. And, I concluded that while we have made tremendous gains in coastal environmental protection, the increasing challenges have made this congressional finding is as true today as it was then. At our oversight hearing on this legislation, Dr. Sylvia Earle testified on the current and future state of our coastal areas. Dr. Earle has dedicated her career to understanding the coastal and marine environment, and knows as much about it as anyone. She warned us that, ``We are now paying for the loss of wetlands, marshes, mangroves, forests barrier beaches, natural dunes and other systems with increasing costs of dealing somehow with the services these systems once provided--excessive storm damage, benign recycling of wastes, natural filtration and cleansing of water, production of oxygen back to the atmosphere, natural absorption of carbon dioxide, stabilization of soil, and much more. Future generations will continue to pay, and pay and pay unless we can take measures now to reverse those costly trends.'' The Coastal States Organization, represented by their chair, Sarah Cooksey, told the Committee that, ``In both economic and human terms, our coastal challenges were dramatically demonstrated in 1998, by numerous fish-kills associated with the outbreaks of harmful algal blooms, the expansion of the dead zone of the Gulf coast, and the extensive damage resulting from the record number of coastal hurricanes and el Nino events. Although there has been significant progress in protecting and restoring coastal resources since the CZMA and Clean Water Acts were passed in 1972, many shell fish beds remain closed, fish advisories continue to be issued, and swimming at bathing beaches across the country is too often restricted to protect public health.'' It is clear from the evidence presented to the Committee in our oversight process and from other input that I have received, that a great need exists for the federal government to increase its support for states and local communities that are working to protect and preserve our coastal zone. To accomplish that goal, the Committee has reported a bill that substantially increases annual authorizations for the CZMA program and targets funding at controlling coastal polluted runoff, one the more difficult challenges we face in the coastal environment. S. 1534 would provide a significant increase to the CZMA Program. Total authorization levels would increase to $136.5 million in FY2001. For grants under Section 306, 306A, and 309, the bill would authorize $70 million beginning in FY00 and increasing to $90.5 million in FY04. For grants under section 309A, the bill would authorize $25 million in FY00, increasing to $29 million in FY 04; of this amount, $10 million or 35 percent, whichever is less, would be dedicated to approved coastal nonpoint pollution control strategies and measures. For the NERRS, the bill would provide $12 million annually for construction projects, and for operation costs, $12 million in FY 2001, increasing to $15 million in FY04. Finally, the bill would provide $6.5 million for CZMA administration. This reauthorization also tackles the problem of coastal runoff pollution. This is one of the great environmental and economic challenges we face in the coastal zone. At the same time that pollution from industrial, commercial and residential sources has increased in the coastal zone, the destruction of wetlands, marshes, mangroves and other natural systems has reduced the capacity of these systems to filter pollution. Together, these two trends have resulted in environmental and economic damage to our coastal areas. These effects include beach closures around the nation, the discovery of a recurring ``Dead Zone'' covering more than 6,000 square miles in the Gulf of Mexico, the outbreak of Pfiesteria on the Mid-Atlantic, the clogging of shipping channels in the Great Lakes, and harm to the Florida Bay and Keys ecosystems. In Massachusetts, we've faced a dramatic rise in shell fish beds closures, which have put many of our fishermen out of work. To tackle this problem, the Coastal Zone Management Act of 2000 targets up $10 million annually to, ``assist coastal communities to coordinate and implement approved coastal nonpoint pollution control strategies and measures that reduce the causes and impacts of polluted runoff on coastal waters and habitats.'' This is an important amendment. For the first time, we have elevated the local management of runoff as national priority within the context of the CZMA program. Runoff is not a state-by-state problem; the marine environment is far too dynamic. States share the same coastlines and border large bodies of waters, such as the Gulf of Mexico, the Chesapeake Bay or the Long Island Sound, so that pollutants from one state can detrimentally affect the quality of the marine environment in other states. We are seeing the effects of polluted runoff both in our coastal communities and on our nation's living marine resources and habitats. I'm pleased that we've included the runoff provision in S. 1534. It's an important step forward and I believe we will see the benefits in our coastal environment and economy. The Coastal Zone Management Act of 2000, Mr. President, has been endorsed by the 35 coastal states and territories through the Coastal State Organization. It also has the endorsement of the Great Lakes Commission, American Oceans Campaign, Coast Alliance, Center for Marine Conservation, Sierra Club, Environmental Defense, California CoastKeeper and many other groups. It's a long list. I will ask unanimous consent to have printed into the Record a letter from support organizations. I add that S. 1534 passed the Senate Commerce Committee, with its regionally diverse membership, unanimously. I want to thank some of those assisted my staff with this legislation, and helping us pass it in the Senate. They include the Massachusetts Coastal Zone Program office and its Director, Tom Skinner, who provided technical assistance on the program, as well as the Center for Marine Conservation, Natural Resources Defense Council, American Ocean Campaign, the Coastal States Organization and the Coast Alliance. And I thank my colleagues on the Commerce Committee. I ask unanimous consent that the letter to which I referred be printed in the Record.

Mr. KERRY

Mr. KERRY. Mr. President, I would like to take this opportunity to commemorate the 30-day period from September 15 through October 15, which was designated by the President as Hispanic Heritage Month. Hispanic Heritage Month was first initiated by Congress in 1968 to celebrate the diverse cultures, traditions, and valuable contributions of Hispanic people in the United States. We are living through the longest and strongest economic boom in American history. Since 1992, our economy has created 22 million new jobs--and Hispanics in Massachusetts and around the country are sharing in our national prosperity and contributing to this marvelous growth. Since 1993, Hispanic employment has increased by nearly one-third nationwide, and median weekly wages for Hispanics have risen more than 16 percent. The unemployment rate for Hispanics is the lowest since we began tracking it, and the median income for Hispanic households has risen 15.9 percent over the last three years. But for all our progress, we know that many challenges remain. The dropout rate for Hispanic youth is astonishingly high. There are far too many young people with nothing to do after school, and the unemployment rate is still too high in many predominately-Hispanic communities. We cannot ignore or turn our backs on these young people, because they are truly the future of this nation. And prosperity that is not broadly shared is not true prosperity. In February of 1994, President Clinton signed Executive order 12900, ``Educational Excellence for Hispanic Americans,'' specifically, ``To advance the development of human potential, to strengthen the Nation's capacity to provide high-quality education, and to increase opportunities for Hispanic Americans to participate in and benefit from Federal education programs.'' I am proud to tell you about an initiative in my state, the Massachusetts Education Initiative for Latino Students (MEILS), which was created to implement the White House Initiative on Educational Excellence for Hispanic Americans in Massachusetts. MEILS created a Steering Committee responsible for developing and implementing a comprehensive approach for dealing with Latino educational issues statewide. MEILS has formulated a partnership between the state, federal, and local government to ensure high-level educational achievements for Latino students, from preschoolers to lifelong learners. MEILS has already established working groups in 13 of the communities with the highest percentages of Hispanic populations in the state of Massachusetts. Last Fall, MEILS held a conference in Worcester, Massachusetts, expecting approximately 300-400 participants, but ultimately drawing 700. They are currently planning their second conference, anticipating over 1,000 participants. By 2050, one-quarter of all Americans will be Hispanic. In Massachusetts, Hispanics comprise 6% of the population and have made significant contributions to our communities, to our workplaces, to our public schools, and to academe. One of those contributors, Juan Maldacena, an Associate Professor of Physics at Harvard University, recently secured a MacArthur Foundation ``genius'' grant for his work on ``string theory,'' a method for describing gravity in the same terms as other forces in the universe. A colleague of Mr. Maldacena's from the University of Chicago was so taken by this theory that he penned a new version of the ``Macarena'' called the ``Maldacena.'' We know that the key to growing and staying strong is making sure that every American participates in our nation's prosperity. I will continue, and I hope the Congress will continue, to work closely with the Hispanic community because, together, we bring Massachusetts and America closer to the vision of a nation where all citizens are free to reach their potential.

Mr. KERRY

Mr. KERRY. Mr. President, I speak today to make note of the anniversary of the signing into law of the Regulatory Flexibility Act. Twenty years ago today, the Reg Flex Act, as it is better known, was signed into law after its passage by the 96th Congress. This historic piece of legislation explicitly recognized the importance of small businesses to the economy and their contributions to innovation and competition. With the Reg Flex Act, Congress intended that no federal action taken in the name of good public policy would undermine the nation's equally important commitment to preserving competition and to maintaining a level playing field for small businesses. The law established an analytical framework in which regulatory agencies were directed to consider the impact on small businesses of their regulatory proposals and consider alternatives that would have a more equitable impact without compromising public policy objectives. The Reg Flex Act had bipartisan support, as well as the support of the small business community. In 1996 the Senate Small Business Committee led the effort to strengthen the Reg Flex Act with the passage of the Small Business Regulatory Enforcement Fairness Act. Under SBREFA, for the first time, the courts were given jurisdiction to review agency compliance with the law and impose remedial action where necessary. This and other changes have truly altered the culture within regulatory agencies. Federal government agencies are learning that they must balance diverse public interest concerns when developing regulations and they must ensure that their actions do not adversely affect small businesses and competition. Nearly every regulation is now examined for its impact on small businesses. Although they may never know it, small businesses have saved billions of dollars and countless work hours thanks to agency compliance with the Reg Flex Act. Mr. President, the Reg Flex Act clearly helps small businesses every day by compelling agencies to reduce their compliance burdens. The Senate should take pride in the innovative Reg Flex Act, which has helped to create the best climate in the world for small business growth and prosperity. As the Ranking Member of the Senate Committee on Small Business, I am pleased to have played a key role in strengthening this legislation and ensuring its effective application for the benefit of our nation's small businesses.

Mr. KERRY

Mr. KERRY. Mr. President, the Senate is debating an important question with tremendous ramifications for our relationship with China and the American economy: whether to extend Permanent Normal Trade Relations status to China (PNTR). The opponents of PNTR argue that China is not worthy of receiving PNTR. They offer a laundry list of reasons. Its track record on human rights has not only not improved but has gotten worse. It continues to ignore commitments made in the nonproliferation area, particularly with respect to the spread of missile technology. Its intimidation of Taiwan continues, with little indication that Chinese leaders are prepared to avail themselves of Taiwanese President Chen Shui-bian's offers to begin negotiations. Its compliance with existing agreements leave a lot to be desired. They speak passionately about those concerns. And these issues should never be overlooked in any thoughtful analysis of our relationship with China. They must productively be incorporated into a policy of engagement; but make no mistake: we must have a policy of engagement. I support PNTR and I intend to vote for it. I will admit to you that when I read recent press accounts of yet another crackdown on religious practitioners in China--this time members of a Christian sect called the China Fang-Cheng Church--and of the deaths of three Falung Gong members who have been imprisoned--I understood once more the temptation to reverse my position and vote against PNTR. But I am not going to do that Mr. President, because PNTR is not an effective tool for changing China's behavior at home or abroad--and as much as we detest the behavior in China with regard to religious freedom, it is not symbolic protest that will bring about change, but thoughtful approaches and a new and different kind of engagement--economic as well as diplomatic-- that will leverage real change in China in the years ahead . So let me say once more, there is no question that the issues raised by the opponents of PNTR are serious and real. We are all outraged by the repression of Chinese citizens who simply want to practice their spiritual beliefs or exercise political rights. But denying China PNTR will not force the Chinese leadership to cease its crackdown on religious believers or political dissidents. It will not force China to abide by the principles of the Missile Technology Control Regime (MTCR) or slow down its nuclear or military modernization, or reverse its position on Taiwan. Denying PNTR will NOT keep China out of the WTO. But I am certain that denying China PNTR will set back the broad range of U.S. interests at stake in our relationship with China and undermine our ability to promote those interests through engagement. China has the capacity to hinder or help us to advance our interests on a broad range of issues, including: nonproliferation, open markets and free trade, environmental protection, the promotion of human rights and democratic freedoms, counter-terrorism, counter-narcotics, Asian economic recovery, peace on the Korean peninsula and ultimately peace and stability in the Asia-Pacific region. It is only by engaging with China on all of these issues that we will make positive progress on any and thereby advance those interests and our security. Engagement does not guarantee that China will be a friend. But by integrating China into the international community through engagement, we minimize the possibility of China becoming an enemy. Over the last three decades, U.S. engagement with China, and China's growing desire to reap the benefits of membership in the global community have already produced real--if limited--progress on issues of deep concern to Americans, including the question of change in China. There are two faces of life in China today: The first face is the disturbing crackdown on the Falon Gong and the China Fang-Cheng Church, the increase of repressive, destructive activities in Tibet, the restraints placed on key democracy advocates and the harassment of the underground churches. The second face is that of the average citizen who has more economic mobility and freedom of employment than ever before and a better standard of living. More information is coming in to China than ever before via the Internet, cable TV, satellite dishes, and western publications. Academics and government officials openly debate politically sensitive issues such as political reform and democratization. Efforts have begun to reform the judicial system, to expand citizen participation and increase choices at the grass roots level. While China's leaders remain intent on controlling political activity, undeniably there are indications that the limits of the system are slowly fading, encouraging political activists to take previously unimaginable steps including the formation of an alternative Democracy Party. On the whole, Chinese society is more open and most Chinese citizens have more personal freedom than ever before. Of course, we must press for further change, but we should not ignore the remarkable changes that have taken place. China's track record on weapons proliferation is another issue of serious concern. Senator Thompson has introduced sanctions legislation targeted at China's proliferation policies, and I understand he will be offering that as an amendment to PNTR. With this legislation, Senator Thompson has done the Senate and this Nation a great service, by forcing us to take a hard look at the reality of China's commitment to international proliferation norms. And that reality, particularly over the last eighteen months, is disturbing. But I do not believe that a China- specific sanctions bill is an effective response to the challenge of weapons proliferation. And we should not scuttle PNTR just to make a point--however valid--about China's continuing export of missile- related technology. Our concern about recent Chinese activities related to the transfer of missile technology should not lead us to overlook the totality of China's performance in the arms control area. The fact is China has taken steps, particularly in the last decade, to bring its nonproliferation and arms export control policies more in line with international norms. China acceded to the Biological Weapons Convention in 1984. In 1992, China acceded to the Nonproliferation Treaty, NPT. China signed the Comprehensive Test Ban Treaty in 1996, CTBT, and the next year promulgated new nuclear export controls identical to the dual-use list used by the Nuclear Suppliers Group. In 1997 China joined the Zangger Committee, which coordinates nuclear export policies among NPT members. The same year it ratified the Chemical Weapons Convention and began to enforce export controls on dual-use chemical technology. In 1998 China published detail export control regulations for dual-use nuclear items. These developments have also been accompanied by various pledges, for example not to export complete missile systems falling within MTCR payload and range and not to provide assistance to Iran's nuclear energy program. China's commitment to these pledges has been spotty but the fact is, China's record today is dramatically different from what it was in the 1980s or the three decades before. Then we were faced with a China exporting a broad range of military technology to an array of would-be nuclear states including Libya, Syria, Iran, Iraq, Pakistan and North Korea. Today, our principal concern is Chinese exports in the area of missile-related technology--not complete missile systems--and to two countries: Pakistan and Iran. That, it seems to me, is progress, and progress made during a period of growing engagement between China and the international community. Some in this body, frustrated that our current engagement with China has born little fruit, are offering amendments in an attempt to use the presumed leverage in PNTR as a means of changing China's policies. I believe that engagement offers the best prospects for promoting our interests with China but I understand and share their frustration over the way in which the current administration has engaged China. The next administration must engage with greater clarity of message, consistency of policy, pragmatism about what can be achieved and over what time frame, and determination to hold China accountable when it misbehaves or ignores commitments made. However, we should not let our frustration with the benefits of engagement lead us to undermine that policy by delaying or denying PNTR in a vain quest to change China overnight. PNTR is not a ``reward'', as the opponents of PNTR suggest. It is a key element in our economic engagement with China and an affirmation of our intention to have a normal trading relationship with China, as we do with the overwhelming majority of our other trading partners. Many of China's most outspoken critics including Martin Lee, the head of Hong Kong's Democratic Party, Bao Tong, one of China's most prominent dissidents; and Dai Qing, an engaging writer and environmental activist who was jailed in the wake of Tiananmen Square for her pro-democracy activities and writings, want us to give PNTR to China. They want it because they know that drawing China deeper into the international community's institutions and norms will promote more change in China over time. As Dai Qing told U.S. when she testified before the Foreign Relations Committee in July: ``Firstly, PNTR will help to reduce governmental control over economy and society; secondly, PNTR will help to promote the rule of law; and thirdly, PNTR will help to nourish independent political and social forces in China.'' The opponents of PNTR have argued that we are giving up leverage over China because we are abandoning our annual review of U.S.-China relations. This argument ignores two critical points: first, there has been little leverage in the MFN review because China can simply do business with others; and second, Congress has never revoked the status in the last 12 years. So how meaningful is this review in reality? There is nothing in the action we are contemplating here that prevents Congress from acting in the future, if it so desires. In fact, the pending legislation sets up a commission to review China's performance on key issues including human rights and labor rights and trade compliance so that if Congress wants to act, we will be better informed at the outset. This vote on extending PNTR is not a referendum on the China of today. It is a vote on how best to pursue all of our interests with China including our economic interests. Extending PNTR will allow the United States to enjoy economic benefits stemming from the bilateral agreement negotiated between the United States and China. I am concerned that critical labor, human rights and environmental protections were left out of the agreement. However, I believe the agreement undeniably forces China to open its doors to more trade, and if we fail to vote in favor of PNTR, we risk forfeiting increased trade with the largest emerging market in the world to other countries in Europe and Asia. This would be no small loss for the United States. Just consider the facts which underscore the importance of trade with China. By granting PNTR status to China, the U.S. will be able to avail itself to China-- to make American goods and services available to one-fifth of the world's population. China is the world's second largest economy in terms of domestic purchasing power. It is the world's seventh largest economy in terms of Gross Domestic Product and is one of the fastest growing economies in the world. Simply put, China's economy is simply too large to ignore. It is of course true that there has been sharp growth in the U.S. trade deficit with China, which surged from $6.2 billion in 1989 to more than $68 billion in 1999. But it is also true that the deficit is in large part due to the fact that China has closed its doors to U.S. products. I believe that only by granting PNTR to China will U.S. businesses be able to open those doors and export goods and services to China, so that our economy can continue to grow and our workers be fully employed. U.S. exports to China and Hong Kong now support 400,000 American jobs. Trade with China is of increasing importance in my home state. China is Massachusetts' eighth largest export market. The Massachusetts Institute for Social and Economic Research at the University of Massachusetts calculated that in 1999, Massachusetts exported goods worth a total of nearly $366 million to China. That represents an increase in total exports to China of more than 15 percent from the previous year and translates into more jobs and a stronger economy in my state. The bilateral trade agreement between the U.S. and China will give businesses in every state the chance to increase their exports to China, ultimately leading to more growth here at home. Under the agreement, China is committed to reducing tariffs and removing non- tariff barriers in many sectors important to the U.S. economy. China has agreed, for instance, to cut overall agricultural tariffs for U.S. priority products--beef, grapes, wine, cheese, poultry, and pork--from 31.5 percent to 14.5 percent by 2004. Overall industrial tariffs will fall from an average of 24.6 percent to 9.4 percent by 2005. Tariffs on information technology products--which have been driving the tremendous economic prosperity our country is currently enjoying--would be reduced from an average level of 13.3 percent to zero by the year 2005. China must also phase out quotas within five years. The U.S. market, on the other hand, is already open to Chinese products. We have conceded nothing to China in terms of market access, while China must now open its doors to increased exports. This is a one-way trade agreement favoring the United States of America. China has made other concessions that are likely to be extremely beneficial to the U.S. economy. It has agreed to open service sectors, such as distribution, telecommunications, insurance, banking, securities, and professional services to foreign firms. China has agreed to reduce restrictions on auto trade. Tariffs on autos will fall from 80-100 percent to 25 percent by 2006, and auto quotas will be eliminated by 2005. Perhaps most importantly, the agreement and this legislation provide that China must accept the use by the United States of safeguard, countervailing, and antidumping provisions to respond to surges in U.S. imports from China that might harm a U.S. industry. A favorable vote on PNTR will also benefit the agriculture industry. China is already the United States' sixth largest agricultural export market, and that market is expected to grow tremendously in the 21st century. China is a major purchaser of U.S. grain, meat, chicken, pork, cotton and soybeans. In the next century, USDA projects China will account for almost 40 percent of the growth in U.S. farm exports. We must recognize that the U.S. will not be able to sell its wheat, provide its financial services, or market its computer software in China unless we grant China PNTR status. Let there be no mistake, China will become a member of the WTO whether or not we pass PNTR. Under the Jackson-Vanik Amendment to the Trade Act of 1974, the United States can and does extend Normal Trade Relations treatment to China annually. If Congress fails to amend its laws to provide permanent, rather than annual, normal trade relations, we will not be able to satisfy the requirement that normal trade relations be unconditional. The U.S.- China agreements could therefore not be enforced and the U.S. would not be able to avail itself to the dispute resolution procedures of the WTO. The benefits of the WTO agreement extend beyond more open Chinese markets to the application of a rules-based system to China, a country that has historically acted outside the world's regulations and norms. Under the terms of this agreement, the Chinese government is obliged to publish laws and regulations subjecting some of China's most important decisions to the review of an international body for the first time. WTO membership will force China to accelerate market-oriented economic reforms. This will be a difficult and challenging task for China, but an important one that will result in freer and fairer trade with China. Despite the likely benefits that the United States will reap if it grants PNTR to China, we must pay attention to the concerns expressed by those in the labor, environmental and human rights communities about the impact of this vote. We must hear their voices and heed their warnings so that we are on alert in our dealings with China. In China, workers cannot form or join unions and strikes are prohibited. There are no meaningful environmental standards and the prevalent use of forced labor make production in China extremely inexpensive. Because they cannot bargain collectively, Chinese workers are paid extremely low wages and are subject to unsafe working conditions. No one on either side of the aisle, not even the most ardent supporter of PNTR, supports these most undemocratic, morally reprehensible conditions in China, and we have a duty and a responsibility to pay attention to the conditions there. It is my hope and belief that as U.S. firms move into China, they will bring with internationally-accepted business practices that may actually raise labor and environmental standards in China. I also hope that they will provide opportunities for Chinese workers to move from state-owned to privately-owned companies, or from one private company to another, where the conditions are better. These steps are small, but important. Nevertheless, the international community in general and the United States in particular must remain vigilant in order to ensure that standards are rising in China and it is simply not the case where the only benefit to come from freer trade with China is that the corporate coffers of large companies are being lined with money saved on the backs of Chinese laborers. We must also be vigilant in ensuring that once China becomes a member of the WTO, it complies with the rules of the WTO and lives up to its commitments under trade agreements. There are many critics of PNTR with China who rightly point out that China has an extremely poor record of compliance with current trade agreements with the U.S., and that it ``can't be trusted'' to live up to commitments once it is in the WTO. China's trading partners worldwide must cooperate to police China so as to ensure its adherence to the trade concessions it has made. The environment is another area in which we must be vigilant in our efforts to encourage the Chinese government to begin to promulgate and enforce environmental standards. Right now, levels of air pollution from energy and industrial production in Shanghai and Shenyang are the highest in the world. Water pollution in regions such as Huai River Valley is also among the worst in the world. In 1995, more than one half of the 88 Chinese cities monitored for sulfur dioxide were above the World Health Organization guidelines. It is estimated that nearly 178,000 deaths in urban areas could be prevented each year by cleaner air. We simply cannot allow this complete degradation of the environment in China to continue unabated. Denying PNTR to China won't stop its unfair labor practices or its environmental devastation. So while I would have liked to see these issues addressed in this legislation or in the bilateral agreement, I believe that, on balance, the risk of not engaging China at this time far outweighs any value we would gain by signaling to China that we still do not approve of its practices and policies. That symbolic signal would only strip U.S. of the leverage that WTO membership brings with it to hold China accountable and effect real progress. If the U.S. fails to support PNTR, and thus fails to take advantage of the benefits of China's inevitable membership in the WTO, U.S. companies stand to lose market share and U.S. workers may lose jobs to European and Asian companies that gain a strong foothold in China. We would also lose the opportunity to engage China and advance our positions on all of our interests including human rights and security. And that would be far too high a price to pay in this new global economy for the short term rewards of merely sending a message with far more negative consequences for U.S. than for China. Engagement, is the course we must pursue--intelligently, with strength and a commitment to accountability. Engagement is a course best pursued by granting China Permanent Normal Trade Relations and bringing it into the WTO. It is in the best interests of our economy and it is in the best interests of our foreign policy, and I hope we can all join together in moving the United States Senate and our Nation in that direction.

Mr. KERRY

Mr. KERRY. Mr. President, I would like to take a few minutes to pay tribute to someone who has been a good friend to those of us in Massachusetts who are committed to quality higher education, Dr. John DiBiaggio, for his service, his vision, and the academic leadership the he has shown--not just in Massachusetts, but nationwide. Dr. DiBiaggio has been the president of Tufts University, in Medford, Massachusetts, since 1993. Yesterday he announced that he will be retiring in June 2002 and I know that he will be sorely missed. I think anyone who has spent time at Tufts in the last several years has seen Dr. DiBiaggio, or his wife, Nancy, walking their dogs on campus. When the DiBiaggio's moved to Medford in 1993, they moved into Gifford House, an on-campus residence. I think that that decision to live on campus, just like an incoming freshman, to have an sincere open-door policy, and to create a real sense of community, is an enormous testimony to his dedication to service. Dr. DiBiaggio's tenure at Tufts has been an extremely successful one. Since Dr. DiBiaggio arrived at Tufts, the university has shored up its fiscal condition by tripling the size of its endowment. The University has built six new buildings at its Grafton campus and a new fieldhouse. The school's student-faculty ratio has dropped to 8:1, one of the best of any major college or university. Since Dr. DiBiaggio became president, the University has established study abroad programs in Chile, Moscow, Japan and Ghana. Most recently, he announced the creation of a new school of public service. In my judgment, The University College of Citizenship and Public Service will be one of Dr. DiBiaggio's most enduring legacies at Tufts. Despite the large increase in volunteer rates among Tufts students, Massachusetts residents and citizens nationwide, voter apathy and cynicism are at all-time highs. This new school will be a ``virtual college,'' which aims to incorporate the goals of public service into the school's curriculum. In April, the College of Citizenship and Public Service received a $10 million donation from Pierre and Pam Omidyar, the founders of the person-to-person online trading website, eBay. This gift allowed the College of Citizenship and Public Service to grant twenty-one scholarships to undergraduates to participate in programs geared to develop values and skills of active citizenship and covers the financial aid needs of students who are eligible for scholarship assistance. Tufts is no longer one of Massachusetts' best kept secrets. Under Dr. DiBiaggio's guidance, Tufts' undergraduate, medical, dental, nutrition, international relations, and veterinary schools have grown in stature and are consistently ranked among the nation's elite. The number of applicants increased by more than 70 percent in just the past five years. The test scores, grades and class rank of the incoming freshmen continues to break school records. The University is now standard on U.S. News and World Report's annual list of top colleges and universities, rubbing elbows with Harvard, MIT and Boston College. I again commend Dr. DiBiaggio on a successful term as President of Tufts University. All of us in Massachusetts know the tremendous vision and scholarship that will be the legacy of Dr. DiBiaggo's service at Tufts. I know that he will be missed by students, parents and alumni alike, but I thank him for his service, and I am genuinely happy for him and for Nancy. I wish them the best of luck in their future endeavors.

Mr. KERRY

Mr. KERRY. Mr. President, I ask unanimous consent the yeas and nays be vitiated and this be a voice vote.

Mr. KERRY

Mr. KERRY. Mr. President, I am pleased to introduce the Home Health Refinement Amendments of 2000. This legislation will protect patient access to home health care under Medicare, and ensure that providers are able to continue serving seniors who reside in medically underserved areas, have medically complex conditions, or require non- routine medical supplies. Medicare was enacted in 1965, under the leadership of President Lyndon Johnson, as a promise to the American people that, in exchange for their years of hard work and service to our country, their health care would be protected in their golden years. Today, over 30 million seniors rely on the Medicare home health benefit to receive the care they need to maintain their independence and remain in their own homes, and to avoid the need for more costly hospital or nursing home care. Home health care is critical. It is a benefit to which all eligible Medicare beneficiaries should be entitled. But, this benefit is being seriously undermined. Since enactment of the Balanced Budget Act, BBA, of 1997, federal funding for home health care has plummeted. According to the Congressional Budget Office, CBO, Medicare spending on home health care dropped 48 percent in the last two fiscal years--from $17.5 billion in 1998 to $9.7 billion in 1999--far beyond the original amount of savings sought by the BBA. Across the country, these cuts have forced over 2,500 home health agencies to close and over 900,000 patients to lose their services. In my own State of Massachusetts--a state that, because of economic efficiency, sustained a disproportionate share of the BBA cuts in Medicare home health funding--28 home health agencies have closed, 6 more have turned in their Medicare provider numbers and chosen to opt out of the Medicare program, and 12 more have been forced to merge in order to consolidate their limited resources. The home health agencies that have continued to serve patients despite the deep cuts in Medicare funding reported net operating losses of $164 million in 1998. The loss of home health care providers in Massachusetts has cost 10,000 patients access to home health services. Consequently, many of the most vulnerable residents in my state are being forced to enter hospitals and nursing homes, or going without any help at all. To compound the problem, without Congressional action, Medicare payments for home health care will be automatically cut by an additional 15 percent next year. It is critical that we defend America's seniors against future cuts in home health services, and this bill will eliminate the additional 15 percent cut in Medicare home health payments mandated by the BBA. However, we must do more than attempt to stop future cuts. Indeed, it is equally as important that we begin to provide relief to home health providers who are already struggling to care for patients. During the first year of implementation of the Interim Payment System, IPS, agencies were placed on precarious financial footing because of insufficient payments, particularly for high-cost and long- term patients. Accordingly, it is critical that we bolster the efforts of home health care providers to transcend their current operating deficits, especially as they transition from the Interim Payment System to the Prospective Payment System, PPS. The Home Health Refinement Amendments of 2000 would ensure that providers are able to treat the sickest, most expensive patients who rely on home health care. Independent studies indicate that, under IPS, thousands of patients have been denied home health care benefits--while ``outlier'' patients (those who require the most intensive services) have been most at risk of losing access to care. To address the costs of treating the sickest homebound patients, this legislation provides additional funding for outliers under PPS. Specifically, this bill would set the funding level for outliers at 10 percent of the total payments projected or estimated to be made under PPS each year. This would double the current 5 percent allocation without reducing the PPS base payment. In addition, the Home Health Refinement Amendments of 2000 would remove the costs of non-routine medical supplies from the PPS base payment and, instead, arrange for Medicare reimbursement for these supplies on the basis of a fee schedule. PPS rates include average medical supply costs, but some agencies' patient populations have greater or lesser supply needs than the average. Thus, current rates would underpay agencies that treat patients with high medical supply needs and overpay agencies that treat patients with low medical supply needs. Agencies that treat our most ill, frail, and vulnerable should not be punished with low payment rates. Agencies that treat patients in medically underserved communities also deserve equitable reimbursement for the services they provide. In order to address the unique costs of treating patients in underserved areas, the Home Health Refinement Amendments of 2000 would establish a 10 percent add-on to the episodic base payment for patients in rural areas, to reflect the increasing costs of travel, and a ``reasonable cost'' add-on for security services utilized by providers in our urban areas. These add-ons ensure that patients in all types of communities across the country continue to receive the home care they need and deserve. Finally, this legislation would encourage the incorporation of telehealth technology in home care plans by allowing cost reporting of the telemedicine services utilized by agencies. Telemedicine has demonstrated tremendous potential in bringing modern health care services to patients who reside in areas where providers and technology are scarce. Cost reporting will provide the data necessary to develop a fair and reasonable Medicare reimbursement policy for telehomecare and bring the benefits of modern science and technology to our nation's underserved. Unless we increase the federal commitment to the Medicare home health care benefit, we can only expect to continue to imperil the health of an entire generation. We must act to deliver on that promise that President Johnson made 25 years ago--our nation's seniors deserve no less.

Mr. KERRY

Mr. KERRY. Mr. President, I am pleased to introduce the Home Health Refinement Amendments of 2000. This legislation will protect patient access to home health care under Medicare, and ensure that providers are able to continue serving seniors who reside in medically underserved areas, have medically complex conditions, or require non- routine medical supplies. Medicare was enacted in 1965, under the leadership of President Lyndon Johnson, as a promise to the American people that, in exchange for their years of hard work and service to our country, their health care would be protected in their golden years. Today, over 30 million seniors rely on the Medicare home health benefit to receive the care they need to maintain their independence and remain in their own homes, and to avoid the need for more costly hospital or nursing home care. Home health care is critical. It is a benefit to which all eligible Medicare beneficiaries should be entitled. But, this benefit is being seriously undermined. Since enactment of the Balanced Budget Act, BBA, of 1997, federal funding for home health care has plummeted. According to the Congressional Budget Office, CBO, Medicare spending on home health care dropped 48 percent in the last two fiscal years--from $17.5 billion in 1998 to $9.7 billion in 1999--far beyond the original amount of savings sought by the BBA. Across the country, these cuts have forced over 2,500 home health agencies to close and over 900,000 patients to lose their services. In my own State of Massachusetts--a state that, because of economic efficiency, sustained a disproportionate share of the BBA cuts in Medicare home health funding--28 home health agencies have closed, 6 more have turned in their Medicare provider numbers and chosen to opt out of the Medicare program, and 12 more have been forced to merge in order to consolidate their limited resources. The home health agencies that have continued to serve patients despite the deep cuts in Medicare funding reported net operating losses of $164 million in 1998. The loss of home health care providers in Massachusetts has cost 10,000 patients access to home health services. Consequently, many of the most vulnerable residents in my state are being forced to enter hospitals and nursing homes, or going without any help at all. To compound the problem, without Congressional action, Medicare payments for home health care will be automatically cut by an additional 15 percent next year. It is critical that we defend America's seniors against future cuts in home health services, and this bill will eliminate the additional 15 percent cut in Medicare home health payments mandated by the BBA. However, we must do more than attempt to stop future cuts. Indeed, it is equally as important that we begin to provide relief to home health providers who are already struggling to care for patients. During the first year of implementation of the Interim Payment System, IPS, agencies were placed on precarious financial footing because of insufficient payments, particularly for high-cost and long- term patients. Accordingly, it is critical that we bolster the efforts of home health care providers to transcend their current operating deficits, especially as they transition from the Interim Payment System to the Prospective Payment System, PPS. The Home Health Refinement Amendments of 2000 would ensure that providers are able to treat the sickest, most expensive patients who rely on home health care. Independent studies indicate that, under IPS, thousands of patients have been denied home health care benefits--while ``outlier'' patients (those who require the most intensive services) have been most at risk of losing access to care. To address the costs of treating the sickest homebound patients, this legislation provides additional funding for outliers under PPS. Specifically, this bill would set the funding level for outliers at 10 percent of the total payments projected or estimated to be made under PPS each year. This would double the current 5 percent allocation without reducing the PPS base payment. In addition, the Home Health Refinement Amendments of 2000 would remove the costs of non-routine medical supplies from the PPS base payment and, instead, arrange for Medicare reimbursement for these supplies on the basis of a fee schedule. PPS rates include average medical supply costs, but some agencies' patient populations have greater or lesser supply needs than the average. Thus, current rates would underpay agencies that treat patients with high medical supply needs and overpay agencies that treat patients with low medical supply needs. Agencies that treat our most ill, frail, and vulnerable should not be punished with low payment rates. Agencies that treat patients in medically underserved communities also deserve equitable reimbursement for the services they provide. In order to address the unique costs of treating patients in underserved areas, the Home Health Refinement Amendments of 2000 would establish a 10 percent add-on to the episodic base payment for patients in rural areas, to reflect the increasing costs of travel, and a ``reasonable cost'' add-on for security services utilized by providers in our urban areas. These add-ons ensure that patients in all types of communities across the country continue to receive the home care they need and deserve. Finally, this legislation would encourage the incorporation of telehealth technology in home care plans by allowing cost reporting of the telemedicine services utilized by agencies. Telemedicine has demonstrated tremendous potential in bringing modern health care services to patients who reside in areas where providers and technology are scarce. Cost reporting will provide the data necessary to develop a fair and reasonable Medicare reimbursement policy for telehomecare and bring the benefits of modern science and technology to our nation's underserved. Unless we increase the federal commitment to the Medicare home health care benefit, we can only expect to continue to imperil the health of an entire generation. We must act to deliver on that promise that President Johnson made 25 years ago--our nation's seniors deserve no less.

Mr. KERRY

Mr. KERRY. Madam President, I rise to oppose the Thompson amendment. I want to talk a little bit about the reasons I oppose it, and perhaps respond a little bit to some of the comments that have been made in the course of the afternoon. Having been part of these debates now for some period of time, I have begun to notice the ebb and flow on how we approach these issues of concern about foreign countries, about issues of national security and how they do and do not impact us. It is interesting because we tend to go to the extremes. That is perhaps part of the nature of the Senate. It is part of the nature of the political process. But what is clear to me, after observing this over a long period of time, is that it is not always beneficial to furthering the larger national security concerns of the country. I approached this issue originally with much the same concern as the Senator from Tennessee. I think all of us are deeply concerned about the degree to which certain countries seem to be contributing to the potential of instability in the world. Obviously, there is nothing more destabilizing or threatening than weapons of mass destruction. We have spent an enormous amount of time and energy focused on Iraq, on Iran, on Russia, on loose nukes, on nuclear materials, and of course on China and on the issue of the transfer of technology to Pakistan. So I took the time to go to the Intelligence Committee briefing on this subject, to really get a handle and try to get a sense of how concerned should I be about this: Are we really at a point where this is so clear-cut and such an egregious violation of Presidential discretion that the Congress of the United States ought to step in and, in a sense, take away from the President whatever flexibility he has been left with to date? May I say I went into that briefing with a sense of: Boy, these guys have really screwed up and now is the time to bring the hammer down. I came out of it, however, with a much different sense of the road that has been traveled and of the choices we ought to be making and we face in the Senate today. The fact is, on nuclear issues--separate from missile technology transfers--we have made rather remarkable progress in the last 8 years, with a country that very recently accepted no norms of international proliferation behavior. On March 9, 1992--let's recollect here, this is only 8 years ago, a very short span of time in terms of the evolutionary process occurring in China, and particularly a short span of time in terms of our period of real engagement with China. On March 9, 1992, China acceded to the Nuclear Nonproliferation Treaty. Later in 1992, China agreed not to export complete missile systems which fall within the payload and range parameters governed by the Missile Technology Control Regime. On January 13, 1993, China signed the Chemical Weapons Convention. In May of 1996, China agreed not to provide any assistance to nuclear facilities not under the International Atomic Energy Agency safeguards. In September of 1996, China signed the Comprehensive Test Ban Treaty. In September of 1997, China promulgated new export controls, and that control list is substantively identical to the dual-use list used by the Nuclear Suppliers Group. On October 16, 1997, China joined the Zangger Committee which coordinates nuclear export policies among NPT members. On April 25, 1997, China ratified the Chemical Weapons Convention and began to enforce export controls on the dual-use chemical technology. In June of 1998, China published a detailed export control regulation governing dual-use nuclear items. In 1998, China agreed to phase out all support for Iran's nuclear energy program, even support to safeguarded facilities, which was not prohibited by the Nuclear Non-Proliferation Treaty. So that is a rather remarkable series of progressive movements towards the community of nations whereby China not only signed agreements but began to lay down a substantive record of making choices to enforce and to adhere to those standards. With respect to missiles and missile control technology, I am not going to stand here in front of the Senator from Tennessee or my other colleagues and suggest there are not some concerns. I am not going to suggest that, with respect to the 1994 agreement under the Missile Technology Control Regime, that with respect to the complete production facility there is not a question about Pakistan being in violation. That is what, in fact, prompted me to suggest perhaps the administration had erred and we ought to be doing more. After 1997, that progress clearly tapers off. But I ask my colleagues to think hard about this--how do you best build a relationship with a nation that is neither friend nor enemy but a nation with which you have a developing relationship? How do you best build the capacity to achieve the kind of national security standards you want adhered to. I suggest very respectfully that this unilateral, rather draconian, inflexible approach that is being offered in the Thompson amendment is precisely not the kind of step we should be taking. Some colleagues of mine will focus on the PNTR components of this, the clean PNTR component. I am not going to focus on that now. That is a pretty simple argument, and they have done their part in articulating it. I know the Senator from Tennessee did not intend to wind up in this predicament, offering his amendment to PNTR. In fairness to the Senator, there are colleagues in the Senate who saw political advantage in guaranteeing we come to the floor in the particular parliamentary knot we are in. He would have preferred an alternative venue for considering his amendment. That does not mean the argument can be ignored. I want my colleagues to vote against the Thompson amendment not only to preserve a ``clean'' PNTR, but because there are substantive reasons that thoughtful foreign policy and thoughtful relationships between the Senate and the executive branch mandate we refuse to accept this amendment in its current form. Specifically, let me talk about that for a minute. There are a number of questions the Thompson amendment in its current form presents the Senate with. One, and the most evident of all, is will this amendment cause China to clean up its act on the issue of proliferation? I say to my colleagues, if you look at the record of China's statements with respect to the annex of the missile technology and control regime, and if you measure where China has traveled in these past years, I think this act could have the opposite effect. It could drive China away from this slow process of understanding we have been working toward on proliferation. I ask my colleagues to remember that as recently as only 1997, China did not even have an office that dealt with the issues of missile technology exports. In the last 5 or 6 years, China had no record whatsoever of restraining its companies from making any sales whatsoever. Yet already, because the United States of America has raised this issue again and again in a diplomatic context, we now are at a point where companies in China are being refused export rights for certain kinds of technology that are deemed to be dual use. In other words, China is moving towards the international community in its efforts to enforce the spirit--not the letter because they have not signed on to the law yet--but to enforce the spirit of the law. I say to my colleagues, if you want China to sign on to the letter of the law and to sit down and negotiate with you a realistic regime by which we can lay out a mutual agreement on these issues, I guarantee that adopting this amendment will end those discussions and push us in the opposite direction from the direction in which we are trying to move. We should also ask ourselves the question: Will this legislation force the President to sanction China for a proliferation violation? Does this legislation accomplish the goal which it sets out to accomplish? For all of the talk on the floor of the Senate and for all of the rhetoric about we have to send China a signal and we have to make certain that China toes the line, the bottom line is that even if this were passed and signed into law, it simply will not force the President to do what it sets out to do, because it offers the opportunity for the President to define a waiver in national security terms that can not be overridden by the Congress, under the procedures outline in this bill. I will set out a series of reasons why I believe colleagues should oppose this amendment, strictly on substantive grounds. No. 1, this amendment takes a piecemeal approach to the global problem of proliferation by focusing on just a few countries. Originally, it was focused on China. Russia and North Korea are add- ons, afterthoughts, if you will, to try to make it more palatable and to somehow suggest there is a rationale for doing what we are doing. But the fact is, if the rationale is proliferation, it ought to apply to every country. There is no reason to have a specific China-centric effort when, in fact, there are many other countries about which we are equally concerned. No. 2, it uses the blunt instrument of mandatory, unilateral sanctions to respond to any violation of the law no matter how inconsequential or unintentional. No. 3, it bases those sanctions on unreasonably low standards of evidence. No. 4, it imposes a burdensome reporting requirement on agencies whose time is arguably better spent stopping proliferation rather than simply collating thousands of pieces of information, some of which is based on such a low standard with respect to ``credible information'' that it could literally tie you up forever, and I will show evidence of that a little later. No. 5, it introduces the U.S. capital markets for the first time in history into proliferation policy, a concept that Federal Reserve Chairman Alan Greenspan has strongly questioned. In short, in my judgment, this legislation as currently drafted, would hinder rather than help U.S. efforts to address the problem of proliferation in China or particularly elsewhere in the world. I think the problems with this amendment start at the very beginning. The legislation is titled ``The China Nonproliferation Act.'' While Senator Thompson has, as I said, included a couple of other countries as targets, China remains singled out in the title and China remains the focus, as everybody understands. Whether or not he intends it, that will certainly be the way it is read by the Chinese, and I know no observer, neutral or biased, who would not agree that would, in fact, be the result of this legislation. So rather than heeding the next President and his advisers when they tell China its proliferation of WMD and ballistic missile technology has to end, China's leadership is going to point to this legislation as evidence that the United States is simply using the proliferation as an excuse to single them out. Again, I repeat, we have spent decades working to pull China into a serious dialog about serious issues. China has come to acknowledge that it is important to embrace some of these international norms. And we should not force the next administration, whoever it is, to waste valuable diplomatic energy persuading China that we take proliferation seriously, whatever the source, even though the Senate in the context of this particular treaty is singling them out. I do not believe we should set aside U.S. national interests simply to avoid angering the nations targeted by this amendment. That is not what I am suggesting. But I do think it is foolish of us to ignore real sensitivities and real reactions that occur and which we have especially seen historically with China. This amendment essentially sends a signal to the world that we are less bothered by proliferation that does not come from the three states named in this legislation: If you are not China, if you are not North Korea, and if you are not Russia, somehow there we care less about your proliferation activities. I think that is a mistake in terms of any messages sent by the Senate. The second major flaw in the amendment is its reliance on mandatory unilateral sanctions. We have had a number of debates on the floor of the Senate in the last couple of years about the negative impact of mandatory sanctions. It has almost, I think, become a consensus in the Senate that we want to move away from mandatory unilateral sanctions. The sanctions that have been proven to work globally are the sanctions that are applied multilaterally. That is what happened in South Africa with apartheid. We have a long list of sanctions unilaterally applied by the United States of America which simply open up opportunities to other countries to fill the vacuum created we are unilaterally taken off the playing field. The question is whether or not that really helps us in terms of our nonproliferation objectives. There is, in effect in this legislation a sledge-hammer approach; there is no subtlety. There is no ability to provide a President with flexibility. There is no ability even to allow a sufficient amount of time for the diplomatic process to work. Because the requirement of this legislation is that the President has to impose all of the sanctions simultaneously in response to one proliferation violation. This is a heavyhanded, one-size-fits-all approach that destroys some of the flexibility to calibrate appropriate responses to inappropriate proliferation behavior. It destroys any potential that we might be able to change China's behavior as we go down the road. I know it is not easy to argue for that sort of approach. It is always easier to come to the floor and talk tough or pass a tough kind of signal. But every time we have done that in the Senate, we have come back later questioning why it is that other countries are not following us, questioning why it is that other countries are, in fact, engaged in an overt effort to circumvent what the United States is doing, questioning how, in fact, we could have had a more effective policy in the first place. I will fault this administration on its lack of focus and energy on the proliferation issue as a whole. They will not like to hear that. Nevertheless, I am convinced that unless you have a more visible, multilateral effort, then you are simply opening a Pandora's box of opportunity for the competitive marketplace to undermine what you are trying to achieve and, in the process, making it far more difficult to achieve a larger set of goals which require a more sophisticated approach. The Thompson amendment also does not allow the United States to coordinate its proliferation response in China, North Korea, or Russia with our allies. By forcing the President to impose sweeping unilateral sanctions within 30 days of submitting a report to Congress on proliferation it severely limits the President's ability to consult with either the government of the covered country or with U.S. allies in order to develop the most effective response. This amendment ensures that the United States will therefore come into conflict with key allies in Europe and in Asia over how to best manage important relationships with China, Russia, and North Korea. I think that is of enormous concern. It is also, I may say, almost guaranteed to fail in changing the proliferation activity of a particular country. Let's say China were caught in some particular effort, and we were unsuccessful, and you wind up unilaterally imposing the sanction. Do you really believe that at that point you have made it more likely they are going to acknowledge it, at least in the near term, by suddenly putting up their hands and saying, OK, you caught us red-handed? No pun intended. The fact is, you have a much greater opportunity of holding people accountable if you use diplomacy to allow people sufficient opportunity to back down or to find alternative forms of behavior. The third major failing of this amendment is that it creates an unreasonable standard for imposing sanctions, targeting even inadvertent and immaterial transfers of technology. All of the power the President needs to be able to hold a country accountable for proliferation violations already exists in the law today. You do not have to do what the Senator from Tennessee is seeking to do in order to hold these countries accountable. I understand why he is doing it. He is doing it because the administration does not seem to want to do it. So supporters of this amendment are trying to legislate the political will for a President to do something that, for whatever reasons, the current President has decided not to do. They have every right in the world to try to do that. But I ask my colleagues if we ought to take the permanent normal trade relations and put that on the table with respect to achieving something that is already in the law? We have the Arms Export Control Act, section 3(f). We have the Arms Export Control Act, section 101, 102. We have section 129 of the Atomic Energy Act. We have section 821 of the Nuclear Proliferation Prevention Act of 1994. We have section 824 of the Nuclear Proliferation Prevention Act of 1994. We have section 2(b)(4) of the Export-Import Bank Act. We have sections 72 and 73 of the Arms Export Control Act; section 11(b) of the Export Administration Act. We have section 498(a)(b) of the Foreign Assistance Act. We have section 81 of the Arms Export Control Act; section 11(c) of the Export Administration Act with respect to chemical and biological weapons proliferation. We have Executive Order No. 12938 with respect to all weapons of mass destruction technology and delivery systems. We have the Iran-Iraq Arms Nonproliferation Act of 1992 and the Iran Nonproliferation Act of the year 2000. In fact, missile technology transfers are already subject to U.S. law, and the President has the authority to sanction those violations. Senator Thompson will argue: Well, we are going to make the Administration do it because they haven't done it. That is the whole purpose of being here. I understand that argument. But in fact he won't necessarily make them do it because, of course, there is the waiver. Well, then they have a redress. They can have one-fifth of the Congress, either House, which is 20 Senators who don't particularly like trade with China, they can come back and tell the President: Well, we don't like the fact that you haven't applied sanctions. So they can try to go around that decision, which means we could be tied up on a standard that simply doesn't make sense for the Congress of the United States to be tied up on with respect to the potential of some kind of ``credible information'' suggesting some dual-use technology transfer that might contribute to the creation of a missile or some kind of missile capacity. That is the standard in here. Those U.S. sanctions laws I cited--with only one or two exceptions--includes the standard that a violation must be a knowing transfer of sensitive technology that makes a material contribution to a weapon of mass destruction program. A knowing transfer with a material contribution. The standard in this legislation requires any kind of contribution made with no deliberate knowing whatsoever. So you have all five mandatory sanctions that could be put in place absent, obviously, the waiver I described, or if the Congress wanted to fight over it, which we can all find 100,000 reasons why it might choose to do so, given the nature of this institution in the last years. I don't think we should open ourselves up to that situation. The new standard under this is any transfer that ``contributes to'' instead of the ``materially contributes to,'' the design, development, production, or acquisition of weapons of mass destruction. That could mean that the President could be required to impose sanctions on a company that makes legal and legitimate sales to a person or a government engaged in WMD development. Fourth, the Thompson amendment requires a rather remarkably burdensome report identifying every person in China, Russia, and North Korea for whom there is ``credible information indicating that that person is engaged in proliferation activity.'' The flood of information guaranteed by this amendment will tie up already limited resources in the executive branch that could, in fact, be doing a far more serious job of working on proliferation itself. The low credible information standard, I know, is derived from the Iran Nonproliferation Act of 2000, but that doesn't make it an advisable standard, No. 1, and, No. 2, under that standard, any piece of information from a source deemed to be credible has to be reported without discretion, even if the information later proves to be false. Now, Congress has yet to receive the first report that was required under the INA, in part because the intelligence community has so far generated 8,000 pages of information that is deemed credible just on chemical and biological weapons and missile proliferation alone. Analyzing that mountain of data to determine what should be included in a report to Congress requires obviously countless man-hours. And as burdensome as the reporting requirement for INA is proving to be, believe me, that law, since it focuses only on one country with a far more identifiable set of sources because of the limits of commerce, trade, presents us with a gargantuan task. The Thompson amendment applies the same reporting requirement to possible proliferation from three nations: Russia, a gigantic task; China, a gigantic task; and North Korea, a far more limited task but nevertheless real. It will also require reporting on all dual-use exports by the United States and key allies. The amendment's reporting requirement is tied to a report by the Director of Central Intelligence on suppliers of dual use and other technology. And because that report covers global exports of these technologies, the 1997 DCI report included information about legal and legitimate exports by the United States, Italy, Germany, France, and the United Kingdom. According to the DCI, these nations were ``favorite targets of acquisition for foreign WMD programs.'' So the report required under section 3 of the Thompson amendment will likely include information on Western countries just so long as the information is credible. Firms in these countries can probably avoid the mandatory sanctions because those countries qualify for exemption for membership in multilateral nonproliferation regimes. It doesn't mean you won't report; it simply means you won't have the sanctions. But you still have to go through the convoluted process of providing the reports themselves and analyzing the information. Finally, the Thompson amendment introduces U.S. capital markets for the first time in history into proliferation policy. It will impose indirect sanctions against those entities included in the President's report that are publicly traded on stock markets regulated by the U.S. Securities and Exchange Commission. Companies named in the President's report will have to so inform investors, according to the requirements of this legislation. Supporters of the amendment argue that those provisions are simply to provide transparency for American investors in entities that are active in U.S. capital markets and involved in proliferation activities. In fact, because the reporting standard is so low, it is likely that many of the entities implicated in the report will, with further investigation, be proven innocent of engaging in proscribed proliferation activities. In short, the President must shoot first, and ask questions later--after the financial damage has been done to firms that are innocent. I don't want to step over the line as to what was classified and what is not classified with respect to the briefings. I think it is fair to say that the intelligence community will tell you that this is not a clear cut and dry process by which there is a clear understanding at every level of government in China as to who is doing what. There are many people in the intelligence community who have a sense that because of the orders given to the military a number of years ago with respect to their dependency on revenue in order to survive, that there are certain military entities that weren't necessarily under direct orders to effect something. There are certain companies that weren't under central control, and the process of education with respect to America's concern and their own interests in adhering to these standards has been an ongoing process, which has brought a greater level of understanding and a greater level of commitment. Now, I would personally prefer that China formally adopt and embrace the full measure of the Missile Technology Control Regime. That should be the immediate and first priority of our diplomacy. That should be the immediate and first effort of our country and of the multilateral efforts of our allies to guarantee that we are all on the same page, that we are all operating from the same level of understanding. But the intelligence community acknowledges that there is a difference of opinion as to precisely what the understandings were or what was agreed to with respect to certain kinds of transfers, and that there is clearly progress being made with respect to the development of that understanding. And while it is difficult sometimes to take this position in the Senate, I argue that we have a much greater opportunity of reaching a fuller understanding and of guaranteeing that we move down a road of multilateral understanding and interest if we do not pass the Thompson amendment at this particular point in time. The truth is that the United States-China relationship is our most complex and difficult bilateral relationship. It is one of the most important that we have. It is yet to be fully defined. As I said earlier, China cannot be considered a friend; but China cannot yet--and should not, we hope--ultimately be considered an enemy. There are many adversarial aspects of our relationship. There is much we wish would change more rapidly in China. Thirty years of engagement with China has taught us that you can't necessarily advance one issue at the expense of another. While I am under no illusions that supporting PNTR is going to produce overnight changes in other aspects of China's policy that we care about, I am absolutely confident that singling China out with this amendment will make it more difficult to draw China into an international nonproliferation regime, and it will undermine the limited success that we have achieved in the arms control arena over the last 10 years. I am absolutely convinced that in the near term it will make progress more difficult without bringing us closer to the goal that we may well be able to achieve in the near term through other approaches. I believe Senator Thompson has done the Senate and the country a service by raising this issue. It is important for us in the Senate to talk about the degrees to which there are currently misunderstandings, or the degrees to which we believe there are just overt violations by China of understandings. It is important for China to understand the full measure of our concern and determination to hold them and other countries accountable to the international norms with respect to proliferation issues. But I believe that will best be done not by singling out three countries, but rather by continuing in the Senate to push all nations toward a stronger regime and a better understanding. I think this amendment is flawed, therefore, in its current definition, for the reasons I have stated. It is not the right response. It is not the right forum for addressing this issue that does deserve thoughtful and full consideration. I urge my colleagues, therefore, to oppose the Thompson amendment. I ask unanimous consent that a letter from the president of the New York Stock Exchange regarding the stock exchange components of this and the opposition of the SEC to it be printed in the Record. Thre being no objection, the letter was ordered to be printed in the Record, as follows: Hon. Trent Lott, Majority Leader, The Capitol, Washington, DC. Dear Mr. Majority Leader: I am writing to express the strong opposition of the New York Stock Exchange, Inc. (NYSE) to the provisions of S. 2654, the China Nonproliferation Act, pertaining to access to U.S. capital markets. The NYSE is the world's largest equities marketplace and is home to more than 3,000 companies with more than $17 trillion in global market capitalization. Non-U.S. issuers play an increasingly important role on the NYSE. The NYSE list more than 380 non- U.S. companies--more than triple the number listed five years ago. While the NYSE does not in any way condone the proliferation activities that S. 2654 attempts to address, the NYSE believes that one of the bill's sanctions--denial of access to the U.S. capital markets--will hurt U.S. investors while failing to deter these activities. Under S. 2654, the NYSE could be prohibited from listing additional Chinese companies or be required to delist Chinese companies trading on the Exchange. The reach of these expansive provisions is not limited to companies involved in proliferation activities but could extend to any company owned or controlled by nationals of the PRC, including those in Hong Kong. If the NYSE is required to de-list a company as a result of S. 2654, U.S. investors in the company will be harmed. However, companies denied access to the U.S. capital markets by S. 2654 sanctions would not be deprived of the ability to raise capital. Non-U.S. exchanges actively compete with the NYSE for non-U.S. listings. These exchange would be happy to list the stock of any company denied access to the U.S. capital markets by S. 2654. As Federal Reserve Chairman Alan Greenspan stated in response to a question about S. 2654 at a July 20 Senate Banking Committee hearing ``a most fundamental concern about this particular amendment is it doesn't have any capacity of which I'm aware to work. And by being put in effect, the only thing that strikes me is a reasonable expectation that it would harm us more than it would harm others.'' We appreciate your consideration of our views on this matter. Sincerely, Richard A. Grasso, President, NYSE.

Mr. KERRY

Mr. KERRY. Mr. President, I rise to make a short statement about the Pipeline Safety Improvement Act of 2000, which the Senate will pass tonight through unanimous consent. Mr. President, to understand this legislation, you must understand the situation from which we started. The federal government, through the Department of Transportation, regulates more than 2,000 gas pipeline operators with more than 1.3 million miles of pipe and more than 200 hazardous liquid pipeline operators with more than 156,000 miles of pipe. To protect the public safety, the environment and maintain reliability in the energy system over that massive system is an enormous challenge. I don't doubt that. The responsibility for meeting that challenge, no matter how great it is, falls upon the industry and federal government, specifically, DOT's Office of Pipeline Safety. It is clear that both OPS and the industry have failed to raise to that challenge, and we have paid a high price. According to the OPS, since 1984, there have been approximately 5,700 natural gas and oil pipeline accidents nationwide, 54 of them in my home state of Massachusetts. In the 1990s, nearly 4,000 natural gas and oil pipeline ruptures--more than one each day--caused the deaths of 201 people, injuries to another 2,829 people, cost at least $780 million in property damages, and resulted in enormous environmental contamination and ecological damages. Two accidents in particular show us the tragic consequences of pipeline accidents. On June 10, 1999, a leaking gasoline pipeline erupted into a fireball in Bellingham, Washington. The fire extended more than one and half miles, killing two 10-year-old boys and a young man. The second accident took place in August in Carlsbad, New Mexico. A leaking natural gas pipeline erupted killing 12 members of an extended family on a camping trip. My sympathies go out to all those involved in these incidents. They are truly tragic. The Senate Commerce Committee and others have investigated the cause of this tragic record. What we found, sadly, is that OPS was simply failing to do its job. The head of the National Transportation Safety Board, Jim Hall, gave the OPS ``a big fat F'' for its work. And as we considered the legislation in the Commerce Committee, I found that OPS had fallen short in the area of enforcement, in particular. Enforcement is the backbone of any system of safeguards designed to protect the public and the environment. Without the threat of tough enforcement, companies, the unfortunate record shows, do not consistently comply with safeguards. The resulting harm to people and places is predictable. I will not outline all of the details here today, but I recommend to anyone interested that they read the General Accounting Office's investigation into OPS dated May 2000. The Pipeline Safety Improvement Act of 2000 includes enforcement reforms and enhances the role of OPS and the Department of Justice in enforcement. These provisions, which I proposed in the Commerce Committee, will, I believe, put some teeth into our pipeline safety laws. They include raising the maximum fines that OPS can assess a company from $500,000 to $1,000,000; ensuring that companies cannot profit from noncompliance; clarifying the law regarding one-call services; and allowing DOJ, at the request of DOT, to seek civil penalties in court to ensure that serious violators can be punished to the fullest extent of the law. The bill makes other significant improvements to existing law. My colleagues from Washington, Mr. Gorton and Mrs. Murray have outlined many of these improvements and how they will improve pipeline safety. However, Mr. President, S. 2438, despite significant improvements, also falls short in some areas. This is, in part, a reflection of inadequacy of current protections. It is my hope that further improvements can be made in conference with House and in discussions with the Clinton Administration. These improvements include allowing OPS to delegate enforcement to states as we do with the Clean Air Act and other laws; establishing federal standards for testing, re-testing, and repairs, leak detection, emergency shut-off valves, and failsafe mechanisms to prevent over pressurization; establishing federal standards to improve corrosion prevention; and removing the cost-benefit provisions incorporated into the law during the 1996 reauthorization, which may limit development of pipeline safety standards by requiring any new standards to meet economic and judicial tests that no other federal agency's regulations must meet. I do not mean to detract from the hard work of Mr. McCain, Mr. Hollings, Mr. Gorton, Mrs. Murray, Mr. Bingaman and Mr. Domenici with my remarks. They have done great work crafting this bill and bringing it before the Senate for passage tonight. The public and the environment will be better protected thanks to their work. section 10(b)

Mr. KERRY. Mr, President, my friend, Mr. Brownback, is correct that it is the intention of Section 60117(b)(3) to reach those companies that don't comply with a clearly written request for documents and information from the agency, but thwart the investigative process either by refusing to turn over relevant information or by dragging their feet in providing it. The bill does not contemplate that this penalty provision will be applied to a company that actively cooperates in an investigation and makes a good faith effort to provide all of the information requested only to find out later that, because of an ambiguously or poorly written request, the company technically failed to meet the requirements of Section 60117(b)(3).

Mr. KERRY. I thank my friend, Mr. Hollings, for his question. It is the intention of this legislation to treat all information requests pursuant to a single incident investigation as ``related'' for purposes of applying the civil penalty cap under Section 60122(a). To increase the incentive for pipeline companies to cooperate during an agency investigation, the cap has been increased to $1,000,000 for a related series of violations. That $1,000,000 cap is not intended to separately apply to each and every information request--of which there could be many--but rather serves as a restriction on the total amount of civil penalties applicable to a particular incident for failure to comply with the reporting requirement of Section 60117(b)(3).

Mr. KERRY

Mr. KERRY. Mr. President, I rise today to introduce the Magnuson- Stevens Act Amendments of 2000. I would like to thank Mr. Hollings for joining me as an original cosponsor of this legislation to reauthorize and update the Magnuson-Stevens Fishery Conservation and Management Act. As my colleagues and I well remember, we last substantially reauthorized the Act only four years ago with the Sustainable Fisheries Act--a three-year effort in itself. As in 1996, I look forward to working with members of the Commerce Committee as we update and improve this most important legislation. Mr. President, the fishery resources found off U.S. shores are a valuable national heritage. In 1998, the last year for which we have figures, U.S. commercial fisheries produced $3.1 billion in dockside revenues, contributing a total of more than $25 billion to the Gross National Product. By weight of catch, the United States is the world's fifth largest fishing nation, harvesting over 4 million tons of fish annually. The United States is also a significant seafood exporter, with exports valued at over $8 billion in 1998. In addition to supporting the commercial seafood industry, U.S. fishery resources provide enjoyment for about 9 million saltwater anglers who take home roughly 200 million pounds of fish each year. Over the past year, the Commerce Committee under Senator Snowe's leadership has been holding a series of hearings around the country in preparation for this year's reauthorization. These hearings have pointed to one central theme--while there is certainly room for improving fisheries management under the Magnuson-Stevens Act, the sweeping changes we made in 1996 are still being implemented in each region. In fact, a number of regions are showing good progress, including New England where the yellowtail flounder and haddock stocks are rebounding. For this reason, I believe this year's reauthorization should leave in place the core conservation provisions of the Act, and focus on providing adequate resources, and any organizational or other changes necessary for NOAA Fisheries and Regional Fishery Management Councils to achieve the goals we set forth in the Sustainable Fisheries Act. Mr. President, the bill I introduce today outlines a proposal for making this a reality. While we have added increasingly complex technical and scientific requirements to the fisheries management process, we have failed in many cases to provide the resources necessary to meet these requirements. Effective fisheries management for the future will rely on committing adequate resources and direction to the fisheries managers as well as the fishing participants. These include providing necessary funding increases to both the agency and the Councils, creation of a national observer program, establishing a nationwide cooperative research program with the fishing industry, and ensuring that we are collecting the socioeconomic data we need to design management measures that make sense for fishermen. This legislation aims to remedy this by providing a significant increase in funding, and specifying amounts required to support both the new initiatives and existing programs. Over the years, we have reauthorized the Magnuson-Stevens Act many times, and each time we have wrestled with the question of how to improve the ability of the Regional Fisheries Management Councils to effectively and fairly implement the requirements of the Act. This bill suggests ways in which to begin remedying these concerns. First, the bill would clarify that the Secretary of Commerce must ensure representation on the Council of all qualified persons who are concerned with fisheries conservation and management. While fishermen are the source of tremendous wisdom and expertise needed in managing these fisheries, there are others such as scientists and those with other relevant experience who may also provide valuable service to the Councils. To help the Secretary meet this requirement, the bill requires Governors to consult with members of recreational, commercial, and other fishing or conservation interests within a State before selecting a list of nominees to send to the Secretary. We would like to see all those who can provide constructive attention to our fishery management problems to work together to forge innovative and progressive solutions. In addition, we must increase independent scientific involvement in the Councils, and my legislation would provide that Councils must involve Science and Statistics Committee members in the development and amendment of fisheries management plans. I do know of the grave concerns expressed by conservation groups, fishermen, scientists and managers about problems with the existing fishery management process. I believe we need to address these questions, both with respect to the Councils and the Agency. I would like to work on this further with my colleagues as we go forward, but in the meantime this bill asks the National Academy of Sciences to bring together international and regional experts to evaluate what works and what may be broken in the current system, and what additional changes may be necessary to modernize and make more effective our entire fishery management process. In our series of hearings around the country, we have consistently heard a call from both industry and conservation groups for observer coverage in our fisheries. We have failed to adequately provide funding mechanisms for observer coverage; each year, federally funded observers are deployed in as few as five to seven fisheries, and observer coverage is rarely over 20 percent. Without observer coverage, there is little hope that we will have statistically significant data, particularly data on actual levels of bycatch. I have included provisions to ensure that each fishery management plan details observer coverage and monitoring needs for a fishery, and created a new National Observer Program. This national program would address technical and administrative responsibilities over regional observer programs. I have also included provisions to allow Councils or the Secretary to develop observer monitoring plans, and have established a fishery observer fund which would include funds appropriated for this purpose, collected as fines under a new bycatch incentive program, or deposited through fees established under this section. In the 1996 reauthorization, we took a first step in dealing with the issue of bycatch by instructing NMFS to implement a standardized bycatch reporting methodology. Nonetheless, I believe we have a long way to go in dealing with the bycatch problem in many of our fisheries. In addition to establishing a national observer program, my bill would establish a task force to recommend measures to monitor, manage, and reduce bycatch and unobserved fishing mortality. The Secretary would then be charged with implementing these recommendations. In addition, I have provided for the development of bycatch reduction incentive programs that could include a system of fines, non-transferable bycatch quotas, or preferences for gear types with low-bycatch rates. It is also time for us to move forward on ecosystem-based fishery management. We do not yet have the data to actually manage most of our fisheries on an ecosystem basis, but I still believe we must begin the preparation and consideration of fishery ecosystem plans. We must strive to understand the complex ecological and socioeconomic environments in which fish and fisheries exist, if we hope to anticipate the effects that fishery management will have on the ecosystem, and the effects that ecosystem change will have on fisheries. My legislation would require each Council to develop one fishery ecosystem plan for a marine ecosystem under its jurisdiction. Each ecosystem plan would have to include a listing of data and information needs identified during development of the plan, and the means of addressing any scientific uncertainties associated with the plan. One of the most resounding comments we heard at all of our regional hearings was the need to continually improve scientific information, and to involve the fishing industry in the collection of this information. My bill would establish a national cooperative research program, patterned after the successful cooperative research program in the New England scallop fishery, for projects that are developed through partnerships among federal and state managers, fishing industry participants, and academic institutions. Priority would be given to projects to reduce bycatch, conservation engineering projects, projects to identify and protect essential fish habitat or habitat area of particular concern, projects to collect fishery ecosystem information and improve predictive capabilities, and projects to compile social and economic data on fisheries. Over the years, I have heard much complaint that NMFS does not communicate effectively with the fishing industry or the general public. To remedy this, my bill calls for the establishment of a fisheries outreach program within NMFS to heighten public understanding of NMFS research and technology, train Council members on implementation of National Standards 1 and 8 requirements of NEPA and the Regulatory Flexibility Act, and identify means of improving quality and reporting of fishery-dependent data. New provisions would also require improvement of the transparency of the stock assessment process and methods, and increase access and compatibility of data relied upon in fishery management decisions. I have required the Secretary to periodically review fishery data collection and assessment methods, and to establish a Center for Independent Peer Review under which independent experts would be provided for special peer review functions. Mr. President, I have also included provisions to address one of our biggest problems in fisheries today--too many fishermen chasing too few fish. It is true that many of our fisheries are overcapitalized. A buyout in New England several years ago attempted to deal with this problem, and according to Penny Dalton, Assistant Administrator for Fisheries, in a recent USA Today article, the buyout ``jump started recovery in the New England groundfish fishery.'' A section of my bill would require the Secretary to evaluate overcapacity in each fishery, and identify measures planned or taken to reduce any such overcapacity. My legislation would amend the existing Act to ensure that capacity reduction programs also consider and address latent fishing capacity, and would allow the use of Capital Construction Funds and funds from the Fisheries Finance Program for measures to benefit the conservation and management of fisheries such as capacity reduction, as well as for gear and safety improvements. In 1996, we enacted a new concept in defining, and requiring protection and identification of, essential fish habitat (EFH). While there has been much outcry that essential fish habitat has been identified too broadly and that EFH consultation processes have resulted in regulatory delay, GAO reports very few real problems resulting from such designations. As a result, I do not feel it is necessary to significantly modify EFH provisions. Instead, I believe we can improve the current work of NMFS and the Councils to identify EFH, and areas within them called ``habitat areas of particular concern'' (HAPCs). I have added new provisions that would require Councils to protect and identify HAPCs as part of existing requirements to identify and protect EFH. My bill would clarify that HAPCs are to be identified pursuant to the NMFS EFH guidelines, and that these areas should receive priority identification and protection, as they are oftentimes the areas most critical to fish spawning and recruitment. It is crucial that we improve our understanding of fisheries habitat, and my bill would establish pilot cooperative research projects on fishery and non- fishery impacts to HAPCs. Finally, Mr. President, I would like to address the issue of individual fishing quotas, which have been the subject of much debate over the past few years. There is a moratorium on these programs in place until September 30, 2000, and we have been skirting consideration of this new management tool for too long. We must begin debate and consideration of the panoply of exclusive quota-based programs that have developed over the past several years, which must include adoption of legislative guidance for these programs. For this reason, the bill suggests a set of national criteria that would permit establishment of exclusive quota based programs--including community-based quotas, fishing cooperatives, and individual fishing quotas--but still protect the concerns of those who do not wish to employ these tools. I invite all those who are concerned about these issues to engage in a discussion with my colleagues and me on the appropriate way to address this national issue as we move forward this session. I understand the many concerns of small fishermen in New England regarding the use of these tools. First, no region would have to implement an exclusive quota-based program without approval of a 3/5 majority of eligible permit holders through a referendum process. In addition, any exclusive quota-based program developed under my legislation would have to meet a set of national criteria. These national criteria would include provisions specifically aimed at protecting small fishermen such as the following: (1) ensuring that quota-based programs provide a fair and equitable initial allocation of quota (including the establishment of an appeals process for qualification and allocation decisions), (2) preserving the historical distribution of catch among vessel categories and gear sectors, (3) considering allocation of a portion of the annual harvest specifically to small fishermen and crew members; and (4) requiring programs to consider the effects of consolidation of quota shares and establish limits necessary to prevent inequitable concentration of quota share or significant impacts on other fisheries or fishing communities. To respond to the concern that we must ensure quota-based programs meet conservation objectives, my legislation would provide a 7-year review of the performance of quota holders, including fulfillment of conservation requirements of the Act. Finally any quota-based program would have to have a plan to rationalize the fishery--which in some cases would require a buyout of excess capacity under section 312(b) of the Act. Mr. President, I believe this legislation provides the funding, tools, and programs to ensure the important changes made in the 1996 amendments are implemented effectively and improved where necessary. During the last reauthorization, our nation's fisheries were at a crossroads, and action was required to remedy our marine resource management problems, to preserve the way of life of our coastal communities, and to promote the sustainable use and conservation of our marine resources for future generations and for the economic good of the nation. We made changes in 1996 that were good for the environment, good for the fish, and good for the fishermen. We must stay the course, and this bill will help us do just that. In addition, the bill will provide us with innovative tools, such as exclusive quota-based programs and the new national observer program, to further advance fisheries management. Mr. President, I remain committed to the goal of establishing biologically and economically sustainable fisheries so that fishing will continue to be an important part of the culture of coastal communities as well as the economy of the Nation and Massachusetts.

Mr. KERRY. Mr. President, I believe the United States must do more to stop international criminals from washing the blood off their profits from the sale of drugs, from terror or from organized crime by laundering money into the United States financial system. That is why today, along with Senators Grassley, Sarbanes, Levin, and Rockefeller, I am introducing the International Counter-Money Laundering and Foreign Anticorruption Act of 2000 which will give the Secretary of the Treasury the tools to crack down on international money laundering havens and protect the integrity of the U.S. financial system from the influx of tainted money from abroad. I very much appreciate work of the Secretary of Treasury Lawrence Summers in the development of this legislation. Secretary Summers has been a leader in bringing the issue of money laundering to the attention of the American public and the Congress. Earlier this year, Secretary Summers said, ``The attack on money laundering is an essential front in the war on narcotics and the broader fight against organized crime worldwide. Money laundering may look like a polite form of white collar crime, but it is the companion of brutality, deceit and corruption.'' I am deeply saddened that I will not have the pleasure of working with Senator Paul Coverdell, who was to be the primary cosponsor of this legislation. His passing is a tremendous loss to the both to the American people and the U.S. Senate. Money laundering is the financial side of international crime. It occurs when criminals seek to disguise money that was illegally obtained. It allows terrorists, drug cartels, organized crime groups, corrupt foreign government officials and others to preserve the profit from their illegal activities and to finance new crimes. It provides the fuel that allows criminal organizations to conduct their ongoing affairs. It has a corrosive effect on international markets and financial institutions. Money launderers rely upon the existence of jurisdictions outside the United States that offer bank secrecy and special tax or regulatory advantages to non-residents, and often complement those advantages with weak financial supervision and regulatory regimes. Today, the global volume of laundered money is estimated to be 2-5 percent of global Gross Domestic Product, between $600 billion and $1.5 trillion. The effects of money laundering extend far beyond the parameters of law enforcement, creating international political issues while generating domestic political crises. International criminals have taken advantage of the advances in technology and the weak financial supervision in some jurisdictions to place their illicit funds into the United States financial system. Globalization and advances in communications and technologies allow criminals to move their illicit gains faster and farther than ever before. The result has been a proliferation of international money laundering havens. The ability to launder money into the United States through these jurisdictions has allowed corrupt foreign officials to systemically divert public assets to their personal use, which in turn undermines U.S. efforts to promote democratic institutions and stable, vibrant economies abroad. In February, State and Federal regulators formally sanctioned the Bank of New York for ``deficiencies'' in its anti-money laundering practices including lax auditing and risk management procedures involving their international banking business. The sanctions were based on the Bank of New York's involvement in an alleged money laundering scheme where more than $7 billion in funds were transmitted from Russia into the bank. Federal investigators are currently attempting to tie the $7 billion to criminal activities in Russia such as corporate theft, political graft or racketeering. In November 1999, the minority staff of the Senate Governmental Affairs Subcommittee on Investigations released a report on private banking and money laundering. The report describes a number of incidences where high level government officials have used private banking accounts with U.S. financial institutions to launder millions of dollars from foreign governments. The report details how Raul Salinas, brother of former President of Mexico, Carlos Salinas, used private bank accounts to launder money out of Mexico. Representatives from Citigroup testified at a Subcommittee hearing that the bank had been slow to correct controls over their private banking accounts. During the 1980's, as chairman of the Senate Permanent Subcommittee on Investigations, I began an investigation of the Bank of Credit and Commerce International (BCCI), and uncovered a complex money laundering scheme. Unlike any ordinary bank, BCCI was from its earliest days made up of multiplying layers of entities, related to one another through an impenetrable series of holding companies, affiliates, subsidiaries, banks-within-banks, insider dealings, and nominee relationships. By fracturing corporate structure, record keeping, regulatory review, and audits, the complex BCCI family of entities was able to evade ordinary legal restrictions on the movement of capital and goods as a matter of daily practice and routine. In creating BCCI as a vehicle fundamentally free of government control, its creators developed an ideal mechanism for facilitating illicit activity by others. BCCI's used this complex corporate structure to commit fraud involving billions of dollars; and launder money for their clients in Europe, Africa, Asia and the Americas. Fortunately, we were able to bring many of those involved in BCCI to justice. However, my investigation clearly showed that rogue financial institutions have the ability to circumvent the laws designed to stop financial crimes. In recent years, the United States and other well-developed financial centers have been working together to improve their antimoney laundering regimes and to set international anti- money laundering standards. Back in 1988, I included a provision in the State Department Reauthorization bill that requires major money laundering countries to adopt laws similar to our own on reporting currency, or face sanctions if they did not. Panama and Venezuela wound up negotiating what were called Kerry agreements with the United States and became less vulnerable to the placement of U.S. currency by drug traffickers in the process. Unfortunately, other nations--some small, remote islands--have moved in the other direction. Many have passed laws that provide for excessive bank secrecy, anonymous company incorporation, economic citizenship, and other provisions that directly conflict with well- established international anti-money laundering standards. In doing so, they have become money laundering havens for international criminal networks. Some even blatantly advertise the fact that their laws protect anyone doing business from U.S. law enforcement. Just last month, the Financial Action Task Force, an intergovernmental body developed to develop and promote policies to combat financial crime, released a report naming fifteen jurisdictions--including the Bahamas, The Cayman Islands, Russia, Israel, Panama, and the Philippines--that have failed to take adequate measures to combat international money laundering. This is a clear warning to financial institutions in the United States that they must begin to scrutinize many of their financial transactions with customers in these countries as possibly being linked to crime and money laundering. Soon, the Financial Action Task Force will develop bank advisories and criminal sanctions that will have the effect of driving legitimate financial business from these nations, depriving them of a lucrative source of tax revenue. This report has provided important information that governments and financial institutions around the world should learn from in developing their own anti-money laundering laws and policies. The Financial Stability Forum has recently released a report that categorizes offshore financial centers according to their perceived quality of supervision and degree of regulatory cooperation. The Organization of Economic Cooperation and Development (OECD) has begun a new crackdown on harmful tax competition. Members of the European Union has reached an agreement in principle on sweeping changes to bank secrecy laws, intended to bring cross-border investment income within the net of tax authorities. The actions by the Financial Action Task Force, the European Union and others show a renewed international focus and commitment to curbing financial abuse around the world. I believe the United States has a similar obligation to use this new information to update our anti-money laundering status. The International Counter-Money Laundering and Anticorruption Act of 2000 which I am introducing today would provide the tools the U.S. needs to crack down on international money laundering havens and protect the integrity of the U.S. financial system from the influx of tainted money from abroad. The bill provides for actions that will be graduated, discretionary, and targeted, in order to focus actions on international transactions involving criminal proceeds, while allowing legitimate international commerce to continue to flow unimpeded. It will give the Secretary of the Treasury--acting in consultation with other senior government officials and the Congress--the authority to designate a specific foreign jurisdiction, foreign financial institution, or class of international transactions as being of ``primary money laundering concern.'' Then, on a case-by-case basis, the Secretary will have the option to use a series of new tools to combat the specific type of foreign money laundering threat we face. In some cases, the Secretary will have the option to require banks to pierce the veil of secrecy that foreign criminals hide behind. In other cases, the Secretary will have the option to require the identification of those using a foreign bank's correspondent or payable-through accounts. And if these transparency provisions were deemed to be inadequate to address the specific problem identified, the Secretary will have the option to restrict or prohibit U.S. banks from continuing correspondent or payable-through banking relationships with money laundering havens and rogue foreign banks. Through these steps, the Secretary will help prevent laundered money from slipping undetected into the U.S. financial system and, as a result, increase the pressure on foreign money laundering havens to bring their laws and practices into line with international anti-money laundering standards. The passage of this legislation will make it much more difficult for international criminal organizations to launder the proceeds of their crimes into the United States. This bill fills in the current gap between bank advisories and International Emergency Economic Powers Act (IEEPA) sanctions by providing five new intermediate measures. Under current law, the only counter-money laundering tools available to the federal governments are advisories, an important but relatively limited measure instructing banks to pay close attention to transactions that involve a given country, and full-blown economic sanctions under the IEEPA. This legislation gives five additional measures to increase the government's ability to apply pressure against targeted jurisdictions or institutions. This legislation will in no way jeopardize the privacy of the American public. The focus is on foreign jurisdictions, financial institutions and classes of transactions that present a threat to the United States, not on American citizens. The actions that the Secretary of the Treasury is authorized to take are designated solely to combat the abuse of our banks by specifically identified foreign money laundering threats. This legislation is in no way similar to the Know-Your-Customer regulations that were proposed by the regulators last year. Further, the intent of this legislation is not to add additional regulatory burdens on financial institutions, but, to give the Secretary of the Treasury the ability to take action against existing money laundering threats. Let me repeat, this legislation only gives the discretion to use these tools to the Secretary of the Treasury. There is no automatic trigger which forces action whenever evidence of money laundering is uncovered. Before any action is taken, the Secretary of the Treasury, in consultation with other key government officials, must first determine whether a specific country, financial institution or type of transaction is of primary money laundering concern. Then, a calibrated response will be developed that will consider the effectiveness of the measure to address the threat, whether other countries are taking similar steps, and whether the response will cause harm to U.S. financial institutions and other firms. This legislation will strengthen the ability of the Secretary to combat the international money laundering and help protect the integrity of the U.S. financial system. This bill is supported by the heads of all the major federal law enforcement agencies. The House Banking Committee recently reported out this legislation with a bipartisan 33-1 vote. I believe this legislation deserves consideration by the Senate during the 106th Congress. Today, advances in technology are bringing the world closer together than ever before and opening up new opportunities for economic growth. However, with these new advantages come equally important obligations. We must do everything possible to insure that the changes in technology do not give comfort to international criminals by giving them new ways to hide the financial proceeds of their crimes. I believe that this legislation is a first step toward limiting the scourge of money laundering will help stop the development of international criminal organizations.

Mr. KERRY

Mr. KERRY. Mr. President, I come to the floor today to offer the National Affordable Housing Trust Fund Act which would establish a Trust Fund to fill the growing gap in our ability to provide affordable housing in this country. We are living through a time of great economic expansion. Many Americans are benefitting from the growing economy. On the flip side however, is that the economy is fueling rising housing costs. While these costs skyrocket at record pace, there are many families in this country who are unable to keep up. HUD estimates that 5.4 million low-income households have ``worst case'' housing needs. These families are paying over half their income towards housing costs or living in severely substandard housing. Since 1990, the number of families who have ``worst case'' housing needs has increased by 12 percent--that's 600,000 more American families who cannot afford a decent and safe place to live. For these families living paycheck to paycheck, one unforseen circumstance, a sick child, a needed car repair, or a large utility bill can send them into homelessness. Just this week, on the front page of the Washington Post, an article detailed these problems right here in our own backyard. The article details the plight of low-income families living in apartments which are no longer affordable because the owners have decided to no longer accept federal assistance. For these families, the loss of their affordable housing unit means they may go without a home. We mistakenly view the housing crisis in this country as confined to specific demographics. This is untrue. There is not one metropolitan area in the country where a minimum wage earner can afford to pay the rent for a two-bedroom apartment. A person needs to earn over $11 an hour to afford the median rent for a two bedroom apartment in this country. This figure rises dramatically in many metropolitan areas--an hourly wage of $22 is needed in San Francisco; $21 on Long Island; $17 in Boston; $16 in the D.C. area; $14 in Seattle and Chicago; and, $13 in Atlanta. Working families in this country are increasingly finding themselves unable to afford housing. Using the numbers I just cited, a person in Boston would have to make over $35,000 just to afford a 2 bedroom apartment. This means teachers, janitors, social workers, police officers--these full time workers can have trouble affording even a modest 2-bedroom apartment. A story from my home state of Massachusetts highlights the problems faced by working families. On Cape Cod, Susan O'Donnell a mother of three, earns $21,000 a year working full-time. Nonetheless, she is forced to live in a campground because she cannot find affordable housing. The campground she is living at has time limits, so the only way she is able to stay for a prolonged period of time is through cleaning the campground's toilets. When her time runs out at the campground, she will again be forced to move with her three children, though it is not clear where she will be able to afford to move. Skyrocketing housing costs have pushed her, and other full time workers on the Cape out of their housing and into homelessness. And, as I mentioned earlier, the problem is not only that we have failed to create additional affordable units. We have actually witnessed a tremendous loss in affordable housing. Between 1993 and 1995, a loss of 900,000 rental units affordable to very low-income families occurred. From 1996 to 1998, there was a 19% reduction in the number of affordable housing units. This amounted to a dramatic reduction of 1.3 million affordable housing units available to low- income Americans. The Washington Post article I mentioned previously, helps to show the real impact of these losses. Because of the ability of higher wage earners to pay higher housing costs, building owners are now choosing not to rent to households assisted with Section 8 vouchers. Right over the D.C. line, in Prince Georges County, Maryland, 300 tenants in a apartment complex were recently told that they would have to move because the owner will no longer accept Section 8. This means 300 families will lose their housing. And, it is not clear that there will be anywhere for them to go. The same article introduces us to a woman who experienced the same traumatizing eviction in Alexandria, Virginia. Ms. Evans is now living in a cockroach infested building with her children, because there are no decent units affordable to her. This, in part, stems from the fact that of 31 properties in Alexandria which accepted voucher holders in the past, 12 will not longer accept tenants with federal assistance. The loss of this affordable housing has exacerbated the housing crisis in this country, and the federal government must take action. However, the government has clearly not been doing enough. In fact, despite the fact that more families are unable to afford housing, we have decreased federal spending on critical housing programs over time. From fiscal year 1995 to fiscal year 1999, we engaged in what I call the ``Great HUDway Robbery,'' diverting or rescinding over 20 billion dollars from federal housing programs for other uses. With a few exceptions, the funding increases of this past year have gone primarily to cover the rising costs of serving existing assisted families. We need to bring our levels of housing spending back up to where they belong. Between 1978 and 1995, the number of households receiving housing assistance was increased by almost 3 million. From 1978 through 1984, we provided an additional 230,000 families with housing assistance each year. This number dropped significantly to 126,000 additional households each year from 1985 through 1995. And, in 1996, this nation's housing policy went all the way back to square one--not only was there no increase in families receiving housing assistance, but the number of assisted units actually decreased. From 1996 to 1998, the number of HUD assisted households dropped by 51,000. In this time of rising rents and housing costs, and the loss of affordable housing units, it is incomprehensible that we are not doing more to bring the levels of housing assistance back from the dead. It is high time that we focused on housing policies in Congress and around the country because housing is an anchor for families. It is no secret that housing, neighborhood and living environment play enormous roles in shaping young lives. Maintaining a stable home, made possible through housing assistance, has positive outcomes for low-income children. A child will be unable to learn if she is forced to change schools every few months because her family is forced to move from relative to relative to friend to friend because her parents can't afford the rent. What I am doing today, is standing up before the Nation and saying, ``no more.'' We have the resources we need to ensure that all Americans have the opportunity to live in decent and safe housing, yet we are not devoting these resources to fix the problem. Today, I am proposing to address the severe shortage of affordable housing by establishing a National Affordable Housing Trust Fund which uses excess income generated by 2 federal housing programs--the Federal Housing Administration (FHA) and the Government National Mortgage Association (GNMA). These federal housing programs generate billions of dollars in excess income which currently go to the general Treasury for use on other federal priorities. It is time to stop taking housing money out of housing programs. These excess funds should be used to help alleviate the current housing crisis. My proposal would create an affordable housing production, ensuring that new rental units are built for those who most need assistance-- extremely low-income families, including working families. In addition, Trust Fund assistance will be used to promote homeownership for low- income families, those families whose incomes are below 80% of the area median income. The Trust Fund aims to create long-term affordable, mixed-income developments in areas with the greatest opportunities for low-income families. A majority of assistance from the Trust Fund will be given out as matching grants to the States which will distribute funds on a competitive basis like the low-income housing tax credit. Localities, non-profits, developers and other entities will be eligible to apply for funds. The remaining assistance will be distributed through a national competition to intermediaries, such as non-profits which will be required to leverage private funds for investment in affordable housing. This proposal will bring federal, State and private resources together to create needed affordable housing opportunities for American families. We can no longer ignore the lack of affordable housing, and the impact it is having on families and children around the country. It is not clear to me why this lack of housing has not caused more uproar. How many families need to be pushed out of their homes and into the streets, before action is taken. Earlier in this Congress, I proposed a program which would assist in maintaining the affordable housing stock that already exists. I hope that this preservation program is taken up this Congress and passed so that we can avoid losing anymore affordable units. However, we must also focus on producing additional housing, which is exactly what this Housing Trust Fund will do. Mr. President, I asked of the housing policy experts and practitioners in Massachusetts to work with me to come up with a viable program which would put the government back in the business of producing affordable housing. This legislation is a result of collaboration among numerous organizations and experts. I want to thank in particular, Aaron Gornstein of the citizens Housing and Planning Association in Massachusetts for helping to bring all of the relevant actors to the table to formulate this proposal. I appreciate the help of many people and organizations, but want to mention some people in Massachusetts who were critical in shaping the ideas behind this legislation: Vince O'Donnell of the Community Economic Development Assistance Corp; Peter Gagliardi with the Hampden Hampshire Housing Partnership; Conrad Egan of the National Housing Conference; Joe Flately with the Massachusetts Housing Investment Corporation; Howard Cohen with Beacon Residential; and, Patrick Dober of Lendlease. I urge you to support this legislation which restores our commitment to providing affordable housing for all families. We can no longer turn our backs on those families who struggle each month just to put a roof over their heads. I ask unanimous consent to have the text of the legislation, along with a section-by-section summary, and letters of support from a number of organizations including the National Association of Homebuilders, the National Council of State Housing Agencies, the National Low-Income Housing Coalition, the National Coalition for the Homeless, the National Housing Conference, and others put in the Record.

Mr. KERRY

Mr. KERRY. Mr. President, I send to the desk a bill for introduction. The bill is entitled the Judicial Education Reform Act of 2000. Mr. Feingold is cosponsoring the legislation. Mr. President, as the arbiters of justice in our democracy, judges must be honest and fair in their duties. As importantly, if the rule of law is to have force in our society, citizens must have faith that judges approach their duties honestly and fairly, and that their decisions are based solely on the law and the facts of each case. Even if every judge were uncorrupt and incorruptible, their honesty would mean nothing if the public loses confidence in them. Court rulings are effectively only if the public believes that they have been arrived at through impartial decision-making. The judiciary must avoid the appearance of conflict as fastidiously as it avoids conflict. Recent press coverage and an investigation by the public interest law firm Community Rights Counsel have revealed that more than 230 federal judges have taken more than 500 trips to resort locations for legal seminars paid for by corporations, foundations, and individuals between 1192 and 1998. Many of these sponsors have one-sided legal agendas in the courts designed to advance their own interests at the expense of the public interest. In many cases, judges accepted seminar trips while relevant cases were pending before their court. In some cases, judges ruled in favor of a litigant bankrolled by a seminar sponsor. And in one case a judge ruled one way, attended a seminar and returned to switch his vote to agree with the legal views expressed by the sponsor of the trip. The notion that federal judges are accepting all-expense-paid trips that combine highly political legal theory with stays at resort locations from persons with interests before their courts creates an appearance of conflict that is unacceptable and unnecessary. At a minimum, it creates a perception of improper influence that erodes the trust the American people must have in our judicial system. Fortunately, the problems posed by improper judicial junkets can be remedied and the appearance of judicial impartiality restored. The Judicial Education Reform Act will seek to amend the Ethics Reform Act of 1989 to close the loophole that allows for privately-funded seminars by requiring federal judges to live by the same rules that now govern federal prosecutors. The proposal is modeled after the successful Federal Judicial Center. It will ensure that legal educational seminars for judges serve to educate, not improperly influence. It will ensure that these seminars improve our judiciary through better-trained and better-informed judges, not undermine it by eroding public confidence in judicial neutrality. Specifically, the legislation bans privately-funded seminars by prohibiting judges from accepting private seminars as gifts, providing appropriate exceptions, such as where a judge is a speaker, presenter or panel participant in such a seminar. The proposal establishes a Judicial Education Fund of $2 million within the U.S. Treasury for the payment of expenses incurred by judges attending seminars approved by the Board of the Federal Judicial Center. It requires the Judicial Conference to promulgate guidelines to ensure that the Board approves only those seminars that are conducted in a manner that will maintain the public's confidence the judiciary. Finally, the proposal requires that the Board approve a seminar only after information on its content, presenters, funding and litigation activities of sponsors and presenters are provided. If approved, information on the seminar must be posted on the Internet. Mr. President, in introducing this legislation, I am not charging the federal judiciary or any single judge with improper behavior. I do not question the integrity of judges, rather I question a system that creates the clear appearance of conflict. I understand the need for education. Our economy has mainstreamed once exotic technologies in communication, medicine and other fields, and it is important that judges have access to experts to keep current on technological advances. And I recognize the need for judges to be exposed to diverse legal views and to test current legal views. The Judicial Education Reform Act legislation provides $2 million for precisely that purpose. No judge will be without access to continuing education. But, that education will not be funded by private entities with broad legal agendas before the federal courts, or, as has happened in some of the most unfortunate cases, private entities with cases pending before participating judges. Finally, Mr. President, I ask unanimous consent to place in the record a statement from the Honorable Abner J. Mikva on this subject. Mr. Mikva is a former Chief Judge on the United States Court of Appeals for the D.C. Circuit and a current Visiting Professor of Law at the University of Chicago. His statement captures this the essence this issue and need for reform.

Mr. KERRY

Mr. KERRY. Mr. President, I believe the United States must do more to stop international criminals from washing the blood off their profits from the sale of drugs, from terror or from organized crime by laundering money into the United States financial system. That is why today, along with Senators Grassley, Sarbanes, Levin, and Rockefeller, I am introducing the International Counter-Money Laundering and Foreign Anticorruption Act of 2000 which will give the Secretary of the Treasury the tools to crack down on international money laundering havens and protect the integrity of the U.S. financial system from the influx of tainted money from abroad. I very much appreciate work of the Secretary of Treasury Lawrence Summers in the development of this legislation. Secretary Summers has been a leader in bringing the issue of money laundering to the attention of the American public and the Congress. Earlier this year, Secretary Summers said, ``The attack on money laundering is an essential front in the war on narcotics and the broader fight against organized crime worldwide. Money laundering may look like a polite form of white collar crime, but it is the companion of brutality, deceit and corruption.'' I am deeply saddened that I will not have the pleasure of working with Senator Paul Coverdell, who was to be the primary cosponsor of this legislation. His passing is a tremendous loss to the both to the American people and the U.S. Senate. Money laundering is the financial side of international crime. It occurs when criminals seek to disguise money that was illegally obtained. It allows terrorists, drug cartels, organized crime groups, corrupt foreign government officials and others to preserve the profit from their illegal activities and to finance new crimes. It provides the fuel that allows criminal organizations to conduct their ongoing affairs. It has a corrosive effect on international markets and financial institutions. Money launderers rely upon the existence of jurisdictions outside the United States that offer bank secrecy and special tax or regulatory advantages to non-residents, and often complement those advantages with weak financial supervision and regulatory regimes. Today, the global volume of laundered money is estimated to be 2-5 percent of global Gross Domestic Product, between $600 billion and $1.5 trillion. The effects of money laundering extend far beyond the parameters of law enforcement, creating international political issues while generating domestic political crises. International criminals have taken advantage of the advances in technology and the weak financial supervision in some jurisdictions to place their illicit funds into the United States financial system. Globalization and advances in communications and technologies allow criminals to move their illicit gains faster and farther than ever before. The result has been a proliferation of international money laundering havens. The ability to launder money into the United States through these jurisdictions has allowed corrupt foreign officials to systemically divert public assets to their personal use, which in turn undermines U.S. efforts to promote democratic institutions and stable, vibrant economies abroad. In February, State and Federal regulators formally sanctioned the Bank of New York for ``deficiencies'' in its anti-money laundering practices including lax auditing and risk management procedures involving their international banking business. The sanctions were based on the Bank of New York's involvement in an alleged money laundering scheme where more than $7 billion in funds were transmitted from Russia into the bank. Federal investigators are currently attempting to tie the $7 billion to criminal activities in Russia such as corporate theft, political graft or racketeering. In November 1999, the minority staff of the Senate Governmental Affairs Subcommittee on Investigations released a report on private banking and money laundering. The report describes a number of incidences where high level government officials have used private banking accounts with U.S. financial institutions to launder millions of dollars from foreign governments. The report details how Raul Salinas, brother of former President of Mexico, Carlos Salinas, used private bank accounts to launder money out of Mexico. Representatives from Citigroup testified at a Subcommittee hearing that the bank had been slow to correct controls over their private banking accounts. During the 1980's, as chairman of the Senate Permanent Subcommittee on Investigations, I began an investigation of the Bank of Credit and Commerce International (BCCI), and uncovered a complex money laundering scheme. Unlike any ordinary bank, BCCI was from its earliest days made up of multiplying layers of entities, related to one another through an impenetrable series of holding companies, affiliates, subsidiaries, banks-within-banks, insider dealings, and nominee relationships. By fracturing corporate structure, record keeping, regulatory review, and audits, the complex BCCI family of entities was able to evade ordinary legal restrictions on the movement of capital and goods as a matter of daily practice and routine. In creating BCCI as a vehicle fundamentally free of government control, its creators developed an ideal mechanism for facilitating illicit activity by others. BCCI's used this complex corporate structure to commit fraud involving billions of dollars; and launder money for their clients in Europe, Africa, Asia and the Americas. Fortunately, we were able to bring many of those involved in BCCI to justice. However, my investigation clearly showed that rogue financial institutions have the ability to circumvent the laws designed to stop financial crimes. In recent years, the United States and other well-developed financial centers have been working together to improve their antimoney laundering regimes and to set international anti- money laundering standards. Back in 1988, I included a provision in the State Department Reauthorization bill that requires major money laundering countries to adopt laws similar to our own on reporting currency, or face sanctions if they did not. Panama and Venezuela wound up negotiating what were called Kerry agreements with the United States and became less vulnerable to the placement of U.S. currency by drug traffickers in the process. Unfortunately, other nations--some small, remote islands--have moved in the other direction. Many have passed laws that provide for excessive bank secrecy, anonymous company incorporation, economic citizenship, and other provisions that directly conflict with well- established international anti-money laundering standards. In doing so, they have become money laundering havens for international criminal networks. Some even blatantly advertise the fact that their laws protect anyone doing business from U.S. law enforcement. Just last month, the Financial Action Task Force, an intergovernmental body developed to develop and promote policies to combat financial crime, released a report naming fifteen jurisdictions--including the Bahamas, The Cayman Islands, Russia, Israel, Panama, and the Philippines--that have failed to take adequate measures to combat international money laundering. This is a clear warning to financial institutions in the United States that they must begin to scrutinize many of their financial transactions with customers in these countries as possibly being linked to crime and money laundering. Soon, the Financial Action Task Force will develop bank advisories and criminal sanctions that will have the effect of driving legitimate financial business from these nations, depriving them of a lucrative source of tax revenue. This report has provided important information that governments and financial institutions around the world should learn from in developing their own anti-money laundering laws and policies. The Financial Stability Forum has recently released a report that categorizes offshore financial centers according to their perceived quality of supervision and degree of regulatory cooperation. The Organization of Economic Cooperation and Development (OECD) has begun a new crackdown on harmful tax competition. Members of the European Union has reached an agreement in principle on sweeping changes to bank secrecy laws, intended to bring cross-border investment income within the net of tax authorities. The actions by the Financial Action Task Force, the European Union and others show a renewed international focus and commitment to curbing financial abuse around the world. I believe the United States has a similar obligation to use this new information to update our anti-money laundering status. The International Counter-Money Laundering and Anticorruption Act of 2000 which I am introducing today would provide the tools the U.S. needs to crack down on international money laundering havens and protect the integrity of the U.S. financial system from the influx of tainted money from abroad. The bill provides for actions that will be graduated, discretionary, and targeted, in order to focus actions on international transactions involving criminal proceeds, while allowing legitimate international commerce to continue to flow unimpeded. It will give the Secretary of the Treasury--acting in consultation with other senior government officials and the Congress--the authority to designate a specific foreign jurisdiction, foreign financial institution, or class of international transactions as being of ``primary money laundering concern.'' Then, on a case-by-case basis, the Secretary will have the option to use a series of new tools to combat the specific type of foreign money laundering threat we face. In some cases, the Secretary will have the option to require banks to pierce the veil of secrecy that foreign criminals hide behind. In other cases, the Secretary will have the option to require the identification of those using a foreign bank's correspondent or payable-through accounts. And if these transparency provisions were deemed to be inadequate to address the specific problem identified, the Secretary will have the option to restrict or prohibit U.S. banks from continuing correspondent or payable-through banking relationships with money laundering havens and rogue foreign banks. Through these steps, the Secretary will help prevent laundered money from slipping undetected into the U.S. financial system and, as a result, increase the pressure on foreign money laundering havens to bring their laws and practices into line with international anti-money laundering standards. The passage of this legislation will make it much more difficult for international criminal organizations to launder the proceeds of their crimes into the United States. This bill fills in the current gap between bank advisories and International Emergency Economic Powers Act (IEEPA) sanctions by providing five new intermediate measures. Under current law, the only counter-money laundering tools available to the federal governments are advisories, an important but relatively limited measure instructing banks to pay close attention to transactions that involve a given country, and full-blown economic sanctions under the IEEPA. This legislation gives five additional measures to increase the government's ability to apply pressure against targeted jurisdictions or institutions. This legislation will in no way jeopardize the privacy of the American public. The focus is on foreign jurisdictions, financial institutions and classes of transactions that present a threat to the United States, not on American citizens. The actions that the Secretary of the Treasury is authorized to take are designated solely to combat the abuse of our banks by specifically identified foreign money laundering threats. This legislation is in no way similar to the Know-Your-Customer regulations that were proposed by the regulators last year. Further, the intent of this legislation is not to add additional regulatory burdens on financial institutions, but, to give the Secretary of the Treasury the ability to take action against existing money laundering threats. Let me repeat, this legislation only gives the discretion to use these tools to the Secretary of the Treasury. There is no automatic trigger which forces action whenever evidence of money laundering is uncovered. Before any action is taken, the Secretary of the Treasury, in consultation with other key government officials, must first determine whether a specific country, financial institution or type of transaction is of primary money laundering concern. Then, a calibrated response will be developed that will consider the effectiveness of the measure to address the threat, whether other countries are taking similar steps, and whether the response will cause harm to U.S. financial institutions and other firms. This legislation will strengthen the ability of the Secretary to combat the international money laundering and help protect the integrity of the U.S. financial system. This bill is supported by the heads of all the major federal law enforcement agencies. The House Banking Committee recently reported out this legislation with a bipartisan 33-1 vote. I believe this legislation deserves consideration by the Senate during the 106th Congress. Today, advances in technology are bringing the world closer together than ever before and opening up new opportunities for economic growth. However, with these new advantages come equally important obligations. We must do everything possible to insure that the changes in technology do not give comfort to international criminals by giving them new ways to hide the financial proceeds of their crimes. I believe that this legislation is a first step toward limiting the scourge of money laundering will help stop the development of international criminal organizations.