John Kerry

Mr. KERRY

Mr. KERRY. We are going to debate in Congress whether we are going to expand visas to bring immigrants from other countries to fill the jobs a properly educated young American ought to be able to fill or would want to fill if they had the opportunity to be able to do so. I think it is important to point out that out of a $1.8 trillion Federal budget, we are spending a relatively tiny amount of money to empower local communities to improve student achievement, to support teacher and administrator training, to help finance and encourage State, district, and school reforms, to recruit teachers, to fix failing schools, and to provide children the extra help they need to meet the challenging academic standards that are needed to make it in today's world. Let me speak quickly to the teacher situation, Mr. President. For 3 years now, some of us have been coming to the floor of the Senate to warn our colleagues and America of our need to hire 2 million new teachers in the next 10 years. Why do we need to hire 2 million? Because we lose 40 percent of the new teachers in the first 3 years; because the schools are in such disarray, they have burnout in a mere 3 years, or they find the support systems are so inadequate they don't want to continue to teach. But we are also losing them because we have a whole generation of teachers reaching retirement age and we need to renew the teaching profession. Ask any kid in college today: Do you want to go teach? How many kids plan to go teach in today's world? I read in the newspapers yesterday that the starting salary for an associate in a major law firm in Boston or New York is now equivalent to the salary of a Senator--about $140,000 a year. That is what you get the day you get out of law school and go to work for a large law firm. If you want to, coming out of college today--and most kids need to because the average student gets out of college with about $50,000 to $100,000 worth of loans--they can look to go into some dot-com company where they can earn $60,000 or $70,000 within the first year or so of employment. What does a teacher get--$21,000, $22,000 a year? And after 15 years of teaching, when you have broken through and gotten your master's degree, you can get into the midthirties or high thirties. In some school districts, you may break into the forties. You can wind up an entire career of teaching and be earning maybe somewhere in the low fifties, high fifties, and very few districts hit the sixties. How do you attract anybody, under those circumstances, to do what we pretend is the most valued profession one can undertake--teaching. So this year we are going to spend a grand total of slightly over $19 billion for all elementary and secondary education initiatives--or just barely over 1 percent of the $1.8 trillion Federal budget. When we hear our esteemed budget committee leaders talk about the great commitment on the part of Congress or the Federal Government toward improving education, I ask people to remember that what we are talking about is 1 percent of that Federal budget. We put so much more money into the back end of life in America, whether it is through Medicare or through Social Security, or just dying in a hospital--I hate to say it, but, tragically, in the last 2 weeks of life in America. We spend so much more at the back end of life than we invest when the brain is developing and it is in the most important stage of life. Not one scientist will fail to document that what a human being will be--their capacity to think, their capacity to socialize, their capacity to be able to learn and to be a full participant in society-- is 95 percent determined in the first 3 years of life. And we invest a fraction of a percentage of our budget to guarantee that children are safe and nurtured and, indeed, given the opportunities to have the maximum amount of brain development and opportunity for safety in those stages. Our young people pull in about a penny on every dollar in terms of the investment priorities of the U.S. Congress. The National Center for Educational Statistics reports that the Federal Government provided 8.4 percent of total expenditures for elementary and secondary education from 1970 to 1971. It was 9.2 percent from 1980 to 1981. Yet last year we provided only 6.1 percent. The school population goes up, the demand goes up, but the commitment of the U.S. Congress, in total terms, goes down. Let me put this in a different perspective, if I may. Let me compare the cost of investing in our children to the cost of some of our recently enacted tax provisions. In 1997, the President proposed, and Congress agreed, to create a new capital gains exclusion on home sales. Today, a homeowner can exclude from tax up to $500,000 of the capital gain from the sale of a principal residence. Obviously, we all agree that exempting the sale of a home from capital gains taxation is a good thing, and I am for that. Calculating the capital gain from the sale of a home is perhaps one of the most complex tasks a typical taxpayer faces because they have to keep detailed records of transactions on home improvements, they have to draw distinctions between improvements that add to the home's basis and repairs that don't. But what does it say about our national priorities--that the cost of exempting up to $500,000 of gain on the sale of a home will cost the Federal Government $18.5 billion this year. We are going to give up $18.5 billion of our revenue because we have decided it is important to reflect this ``priority.'' That is almost exactly the amount of money we spend as a nation on all elementary and secondary education. Mr. President, I think that is a disturbing budget reality, and it is an incontrovertible fact, which I believe requires us to try to reconcile with the current demands we face from millions of Americans, whether they are parents, teachers, or business leaders, all of whom are asking us to help improve the schools of this Nation. Now, I point this out because I believe now, when we enjoy the greatest economic expansion in the history of our Nation, we have an opportunity to lay the foundation for a new era in America. It is an opportunity to fix our schools, to increase their accountability, to recruit more and better teachers, and to reduce the average class size. I share with my Republican colleagues the desire to guarantee that we have a new accountability in the school systems. I believe we can reach a consensus and achieve that. But it must be done by some commitment of additional resources in order to allow the reformers at the local level to empower their States and local school districts to be able to turn their schools around. Under the CBO's most recent estimates, the on-budget surplus--that is, the non-Social Security surplus--will amount to somewhere between $800 billion and nearly $2 trillion. I believe their most conservative estimate is probably the better place for us to start. That conservative estimate assumes that spending will continue to increase at the rate of inflation. It assumes the continuation of emergencies, such as droughts in the Midwest and hurricanes on the east coast. It even assumes the continuation of unlikely events such as a decennial census every year--when we all know that expense occurs only once every 10 years. I ask my colleagues to focus on the fact we are not talking about just Social Security now. We are assuming that the Social Security surplus is locked up, as it ought to be and as we wanted it to be. But we must decide to dedicate a portion of these surpluses towards the appropriate investment priorities of the Nation. Yes, that includes Medicare reform and putting it on solid footing. Yes, it includes a prescription drug benefit to help people pay the extraordinary costs of prescription drugs. We should dedicate a portion of that surplus towards debt reduction so we can keep reducing interest rates, and reduce the future interest obligations and extend the virtuous cycle of fiscal discipline which is at the heart of our economic expansion. Yes, we ought to pass some targeted tax cuts for middle-income families-- such as the marriage penalty, estate tax relief, and an increase in the standard deduction. We can do those things. We can also reserve an appropriate amount of money for the education of our young people--to raise that education to the level of rhetoric, to the level of campaigning, and to the level of debate that has existed in the Congress in the past years. I think the Congress has a unique opportunity this year to tell America that our young people at those critical stages of development are worth more than one penny on the dollar. I intend to introduce a 21st century early learning and education trust fund. This legislation would set aside 20 percent of the most conservative CBO estimate of the on-budget surplus over the next 10 years only. I believe, with all of the debate on both sides of how to raise student achievement and reform public education, about the growing acknowledgment on both sides that reform costs money, that we should at the very least take a step that locks up a portion of the budget surplus and dedicate this money to early learning, and to education as a whole, where the country gets the greatest return on investment. Almost every analysis suggests that for $1 put into education at that stage, a minimum of $6 is returned to the Federal coffers over the course of the next years in one way or another. My proposal would set aside $2.2 billion this year, $30 billion over 5 years, and nearly $170 billion over 10 years for education, for early learning, for childhood interventions, which will make a difference in building the fabric of families. That will help us break the cycle of children having children out of wedlock. That will help us solve the problem of parents who do not have time to be parents and be with their children in those critical hours of the afternoon when most kids get into trouble. It will literally turn around the fabric building of our own Nation and ultimately provide us with an educated workforce that has the ability to continue the extraordinary economic growth we experienced these last years, as well as, I might add, empower us to be able to guarantee that a citizenry that grows up in a world of more information has the skills and capacities to be able to manage that information and, indeed, contribute to the wise decisionmaking--the wise choosing of policies in a world that will become increasingly more virtual, more capable of making faster decisions with more information being thrown at people and people trying to discern the truth for themselves. As Thomas Jefferson and George Washington, the Founding Fathers of this country, understood, nothing is as important as that effort of guaranteeing that your citizenry is educated. The funds that would be held by the education trust fund could be used--and only used--to finance legislation to approve the quality of early learning through secondary education above the current inflation- adjusted baseline. Eligible uses include but would not be limited to programs and reforms authorized under the Elementary and Secondary Education Act and the Head Start Act. Trust fund expenditures would have to traverse the normal budget process. If Congress were unable to agree on how to use trust fund revenue or if Congress simply doesn't commit enough resources to trigger the use of the trust fund, the trust fund assets would be carried over to the next year. The trust fund would work similar to the Social Security trust fund. On paper, those assets would carry forward to the next fiscal year. In reality, unspent funds would be used to pay down the public debt. Trust fund revenue would not be available for anything other than these education specifics. Appropriators could not tap those trust fund moneys for sugar subsidies, for pet projects, or for other related purposes. Tax writers could not tap into trust fund money to pay for special interest tax breaks. But tax writers could use the trust fund money for education purposes ranging from school construction bonds to any other number of priorities on which the Congress could reach consensus. In effect, the trust fund would create a budgetary firewall protecting our national commitment to young people for early learning and education generally. I have strong views about how some of that money might be best spent. But that is a debate for a different day. The question before us, as we think about the budget as a whole, particularly since it is the first budget of the new millennium, is, What is our commitment as a nation to education? Are we satisfied that one penny per dollar less than we used to commit under Ronald Reagan and less than we used to commit under Richard Nixon is currently being committed by the Federal Government for the purpose of building the future fabric of this Nation? I don't think I am alone in believing that surplus funds ought to be used to some degree in some manner for these education expenses. In the State of the Union Address, the President pledged to increase our commitment to the Nation's education system by using surplus funds. In fact, his fiscal year 2001 budget requests an increase in discretionary spending for $5.7 billion for elementary and secondary education. I wholeheartedly support that critical increase. But I know and you know, Mr. President, and all of us in this Congress know that if we put together the proper structure that requires accountability that changes the relationships that currently exist in our public education system, that embrace choice, competition, accountability; that if we unleash the capacity of our school systems to be the best they can be, whether it means adopting the best of a charter school, the best of a parochial school, the best of a private school, the best of the best public schools, we have the ability in this Congress to find a way to guarantee that local communities embrace real concepts of reform. But none of those concepts can be properly implemented without some commitment of resources for communities that have no tax base and no ability to fund those systems through the property tax. This is our mission, and $5 billion is not enough to fix our schools, or to guarantee a qualified teacher in every classroom, or to provide students with meaningful afterschool programs. I am not suggesting a Federal mandate. I am not suggesting the long arm of Washington reaching in and telling people how to do it. To the contrary. I am suggesting that we leverage the capacity of local districts to make those choices for themselves. If we don't tell them how to get there as true fiscal watchdogs looking over our taxpayers' dollars, we will look on the back end to see they did get where they said they were trying to go. If we in this body intend to make education a top priority and work for serious reform, we have to guarantee children have access to those things that will contribute to their education's success. I have never been able to reconcile in the Senate how it is that we are so ready to augment the expenses for the juvenile justice system, build new prisons and house people for the rest of their life for $35,000 to $75,000 a year, but we are unwilling to invest $35,000 a year to keep them out of those prisons and to provide them with a set of other choices when it matters the most. That, it seems to me, is the obligation of this country. The American people want funding for education increases. The American people in community after community know they can't take any more on the property tax burden. Seniors who want to live out their years in the house they paid for can't see the property tax go up. Young families with a fixed stream of income who bought into their first home can't see the property tax go up. However, we fund our education system as if we were still the agrarian society which set up the entire structure for property tax in the first place. Our obligation is to find a way to release the creative energies and learning capacities of our Nation. If we were to find a bipartisan consensus and reach across the aisle to end this wasted debate about saving a few kids rather than saving all of the kids, it seems to me we would have the ability in the Congress to achieve something that would truly be a long and lasting legacy. It would be a great beginning for this millennium. Education is the No. 1 issue in America. It deserves more than a penny, a dollar. That, it seems to me, is the mission we should embark on over the course of these next months. I suggest the absence of a quorum.

Mr. KERRY. Mr. President, as we approach the budget debate this year, I think it is important for us to take a moment ahead of time to think about the broad outline of what we spend money on and also what we do not spend money on--how we allocate the priorities of this budget-- because the budget is, after all, the most concrete, clearest expression of the priorities and intentions of the Congress. I would like to walk through that for a moment, if I can, and then make a proposal to my colleagues, which I hope might, in the context of this year's surplus and the choices we face, be attractive. The reality is, of the $1.8 trillion we will spend this year, the largest single expense, as we all know, goes to Social Security. The Federal Government is going to spend $400 billion or 22 percent of the Federal budget on monthly retirement and disability payments for about 45 million Americans who are either senior citizens or disabled. The second largest commitment will be made to Medicare, nearly $220 billion or 12 percent of the Federal budget, ensuring that virtually every individual over the age of 65 receives health insurance benefits covering hospitalization, physician services, home health care, limited nursing home care, and laboratory tests, and providing health benefits to roughly 5 million disabled people. In those two expenditures alone, we have spent a little over one- third of our budget on Social Security and Medicare. Of the remaining $1.2 trillion of that budget, we will spend $115 billion or about 6.5 percent of the budget on Medicaid. Those are, obviously, the health care benefits we provide to the least able to afford health insurance. In addition, we will spend about $110 billion or a little over 6 percent of the budget on Federal, civilian, and military retirement and disability benefits as well as veterans benefits. When you throw in the other mandatory entitlement programs--such as foster care, unemployment compensation, farm price supports, food stamps, and supplemental security income, which is, as everybody knows, an income safety net for the poorest people in America--we then reach over $1 trillion in Federal spending. This year, of the $1.8 trillion Federal budget, over $1 trillion will go towards the mandatory entitlement programs that, while vitally important, are on autopilot. We are not going to make individual judgments about them except to the degree we decide we need to shore up the Medicare program or shore up the Social Security program. They are basically on autopilot in terms of their existence. The consensus of the Congress wants them; the country wants them. We support them. They don't need to be renewed, and they don't need to be reauthorized. They obviously are not appropriated on an annual basis. When we talk about the budget that we, as Members of Congress, are going to be dealing with in terms of discretionary spending, where we will make long-term investments, where we have some flexibility, we are dealing with about $800 billion. All of us understand what happens very quickly to that remaining portion of the budget, to those $800 billion. Two hundred twenty-four billion or 12 percent of the Federal budget will go almost immediately to interest payments on the national debt. We are grateful that having reached the point of having a surplus, and with the President's proposal, we can see an end to the payments of interest on the national debt by the year 2013. But for the moment, 12 percent of the Federal budget this year is going to go to pay interest on the national debt. Those payments are not optional. Putting that spending aside, we are now left with about one-third of the overall Federal budget or $600 billion which we now can use to cover all other Government functions. But that disappears very quickly. Two hundred eighty-three billion of that budget will be spent on national defense this year, nearly 16 percent of the Federal budget. Another 2.5 percent of the budget will be spent building highways, channeling harbors, financing mass transit, all to a cost of about $45 billion this year. Then you factor in housing assistance, nutrition programs, at a cost of about $42 billion, that is another 12 plus percent of the budget. And less than 2 percent of all the budget will go to health research, public health programs, searching for a cure to cancer, for HIV-AIDS, licensing new drugs for the marketplace, programs to attack teen smoking, services for the mentally ill. One and a half percent of the budget will go to crime control, putting cops on the street, fighting drug trafficking, and barely 1 percent of the budget will go to foreign aid. Many Americans labor under the perception that somehow foreign aid is this vast proportion of the Federal budget. In fact, foreign aid is a significantly less percentage and real expenditure than it was under Ronald Reagan. I think we spent two or three times as much under Ronald Reagan in foreign affairs than we are spending today, which, I might add, is particularly ironic when you measure the changes in the world and the need for the United States to be more involved, not less involved, in a world that is increasingly globalizing and where we are all feeling the impact and forces of technology. The point I make to my colleagues today: For what most people agree is the single most important investment we can make in America, there is precious little money remaining. How many of my colleagues in the last years, recognizing the impact of the technology revolution, have come to the floor emphasizing the importance of education in America? We reap the benefits and the deficits of our attention to education in a thousand different ways. When Senators come to the floor and talk about the increasing problem of children having children, babies being born out of wedlock, the number of kids in America who are at risk, we should be directly examining how many of our schools stay open into the evening, how many of our schools have afterschool programs. How many of our schools don't even have an ability to be able to track children who are truant? It used to be that in the United States of America there was an ethic that when children were not showing up in school, the truant officer went out and found the kids. We did something about it. Today, you can be a kid in school and not show up and nobody even stops to wonder what happened. In too many schools in America they may not even contact what is too often a single parent and find out whether that single parent might have had time to be able to be aware that their kid might not be in school or what they might have time or ability to be able to do about it. I don't raise this issue of spending to try to disparage the other budget priorities. I think they are all priorities. I vote for them. I support them. I think everybody in the Senate understands the importance of all of the things I listed. We have built up a very real bipartisan consensus on the importance of most of these investments. But why is it that in the year 2000, after years of talking about education's importance and education reform, we are so absent a consensus in this institution on the need to be investing in communities that have no tax base with which to improve the school system? Ninety percent of America's children go to school in public schools. We waste more time on the floor of the Senate debating some alternative to public schools, such as vouchers or charters, rather than figuring out how we are going to fix the public school system and invest in it properly so those 90 percent of our children have a place to grow up properly and share in the virtues of this new world that America is increasingly witnessing and even playing a critical role in developing. Every one of us meets with the extraordinary creative energy of the new technology community of this Nation. We have remarkable people doing remarkable things. We have companies that have built up more wealth faster than at any time in the history of this Nation. But there is an enormous gap for those companies in their capacity to grow over the coming years. Every chief executive of every technology company in our Nation will tell us again and again and again that their greatest restraint on growth is the lack of an available skilled labor pool. There are some 370,000 jobs going wanting today in the technology field. (Mr. ROBERTS assumed the chair.)

Mr. KERRY

Mr. KERRY. Mr. President, I ask unanimous consent that I may proceed as in morning business.

Mr. KERRY. I ask unanimous consent that I be permitted to yield for 1 minute to the Senator and that then the floor would be returned to me.

Mr. KERRY. Mr. President, I appreciate the recognition, but I do not want to deprive the Senator from Nevada speaking if he wants a brief moment to follow up. How much time does the Senator wish?

Mr. KERRY

Mr. KERRY. Mr. President, today we will vote overwhelmingly in support of a measure to dramatically reform the bankruptcy system. I join my colleagues in support of this bill, because I believe it is time we repair the bankruptcy system and I believe that this bill should progress to conference. However, the bill we support today is seriously flawed. It is my hope that some of the bill's more serious problems will be addressed in conference. The Bankruptcy Reform Act fails to provide disclosures which would tell consumers how long it would take to pay off their balance at the minimum rate and what their total costs in interest and principle would be. Without this simple provision, American consumers will not receive the kind of specific information that will encourage them to pay their balance off more quickly, and avoid falling into debt in the first place. I am also concerned that this bill fails to protect women and children who are entitled to child support and alimony. The bill increases the amount of debt for which debtors will remain liable through the creation of new types of nondischargeable debts to credit card companies and by permitting coercive ``reaffirmation'' agreements. With more competition for limited debtor resources, the bill fails to insure that parents and children will prevail over credit card companies and banks. This bill includes an arbitrary and inflexible means test to determine which debtors must file Chapter 7 bankruptcy instead of Chapter 13. It is based on IRS standards not drafted for bankruptcy purposes that do not take into account individual family needs for expenses like transportation, food and rent. If we are going to shift individuals from Chapter 7 to Chapter 13 bankruptcies, we must ensure that we are taking into account individual needs and do not inadvertently harm those who need bankruptcy protections the most. The bill also contains a number of nongermane provisions that concern me. The methamphetamine amendment increases the sentences for powder cocaine, thereby causing further overcrowding in prisons and increasing the representation of young minority males in prisons. I am also opposed to another provision that authorizes the use of public funds to pay for private school tuition for students who were injured by violent criminal offenses on public school grounds. Despite its flaws, which I sincerely hope will be addressed in conference, the bill has a number of provisions I support, I take this opportunity to thank the managers of this bill, Senators Grassley, Torricelli, and Ranking Member Leahy for their consideration and assistance in accepting three amendments that I believe are important to fishermen in Massachusetts and small businesses across America. First, I believe that the small business provisions originally in this bill establish too short a time for small businesses that must resort to bankruptcy. These provisions are counter to this country's long held policy of fostering small business creation and expansion. The amendment to the bill which was accepted will increase the time for small businesses to develop a reorganization plan to 300 days. This will allow small businesses to continue to have adequate time to develop a reorganization plan during bankruptcy proceedings. The amendment will also allow bankruptcy judges more discretion to develop an appropriate time frame for small business reorganization. I thank Senator Collins and her staff for their fine work in developing an amendment which was accepted to make Chapter 12 of the Bankruptcy Code, which now applies to family farmers, applicable for fishermen. I was proud to be the lead Democratic cosponsor of this amendment that will make bankruptcy a more effective tool to help fishermen reorganize effectively and allow them to keep fishing while they do so. The final amendment which was accepted allows the expansion of the credit committee membership under Chapter 11 bankruptcies to include a small business when it is determined that the small business' claims are disproportionally large to its gross revenues. This will ensure better access to information for those small businesses not included in the committee by allowing the committee to be open for comment and subject to additional reports or disclosures. It is my hope that each of these amendments will be included in the Conference Report for the Bankruptcy Reform Act of 1999. I look forward to working with the Managers of the bill during Conference on these and other issues.

Mr. KERRY

Mr. KERRY. Mr. President, earlier this week I laid out an agenda for restoring the federal role in expanding the nation's stock of affordable housing. Today, I am making a small downpayment on that promise with the First Time Homebuyer Affordability Act. This legislation, which I am introducing with Senator Bryan, will create new homeownership opportunities for many Americans by allowing them to borrow from their Investment Retirement Accounts (IRAs), or their parents or grandparents IRAs, on a tax free basis for a downpayment on a first home. The legislation would also allow IRA funds to be used under an equity participation agreement. In both cases, the funds would have to be repaid to the IRA. We have all talked about the importance of homeownership. Indeed, homeownership makes a very significant contribution to solving many social problems we face in America. Children of homeowners are less likely to become involved in the criminal justice system; they are less likely to drop out of school, or have children out of wedlock. Homeowners vote more often and participate more in community organizations and activities. Yet, the single biggest barrier to homeownership is a downpayment. This legislation will help hundreds of thousands of homeowners surmount this barrier and realize the American dream. Mr. President, it is ironic that IRAs today can be invested in almost any asset, including real estate investment trusts, except one's own home. Yet, homeownership continues to be a winning investment, both for the family and the community. Under current law, individuals may borrow up to $10,000 from their 401(k) retirement accounts to help buy a home without paying taxes. This legislation would put IRAs on the same footing as 401(k) plans while unlocking $2 trillion in IRA saving to help families become homeowners. It has a number of protections to ensure that the loan or investment will be repaid, with interest, or a taxes will be owed and a penalty assessed. This is good legislation, which has been endorsed by the Mortgage Bankers Association, the National Association of Realtors, and the National Association of Homebuilders. I urge my colleagues to support this bill. Mr. President, I ask unanimous consent that a letter of support be printed in the Record.

Mr. KERRY

Mr. KERRY. Mr. President, earlier this week I laid out an agenda for restoring the federal role in expanding the nation's stock of affordable housing. Today, I am making a small downpayment on that promise with the First Time Homebuyer Affordability Act. This legislation, which I am introducing with Senator Bryan, will create new homeownership opportunities for many Americans by allowing them to borrow from their Investment Retirement Accounts (IRAs), or their parents or grandparents IRAs, on a tax free basis for a downpayment on a first home. The legislation would also allow IRA funds to be used under an equity participation agreement. In both cases, the funds would have to be repaid to the IRA. We have all talked about the importance of homeownership. Indeed, homeownership makes a very significant contribution to solving many social problems we face in America. Children of homeowners are less likely to become involved in the criminal justice system; they are less likely to drop out of school, or have children out of wedlock. Homeowners vote more often and participate more in community organizations and activities. Yet, the single biggest barrier to homeownership is a downpayment. This legislation will help hundreds of thousands of homeowners surmount this barrier and realize the American dream. Mr. President, it is ironic that IRAs today can be invested in almost any asset, including real estate investment trusts, except one's own home. Yet, homeownership continues to be a winning investment, both for the family and the community. Under current law, individuals may borrow up to $10,000 from their 401(k) retirement accounts to help buy a home without paying taxes. This legislation would put IRAs on the same footing as 401(k) plans while unlocking $2 trillion in IRA saving to help families become homeowners. It has a number of protections to ensure that the loan or investment will be repaid, with interest, or a taxes will be owed and a penalty assessed. This is good legislation, which has been endorsed by the Mortgage Bankers Association, the National Association of Realtors, and the National Association of Homebuilders. I urge my colleagues to support this bill. Mr. President, I ask unanimous consent that a letter of support be printed in the Record.

Mr. KERRY

Mr. KERRY. Mr. President, I am pleased that Sec. 2002 of S. 1948 directs the Federal Communications Commission to expedite its review of license applications to deliver local television signals into all local markets. it's my understanding that the FCC has had applications pending before it since January, which, if approved, would clear the way for nationwide deployment of an innovative digital terrestrial wireless system for multi-channel video programming. This new technology will benefit all Americans by providing robust competition to incumbent cable systems in Massachusetts and across the entire nation. Equally important, it will provide rural Americans with the same access to local signals as their urban and suburban counterparts. Under Sec. 2002(b)(2), the FCC shall ensure that licensees will not cause harmful interference to existing primary users of the spectrum. Moreover, the FCC, consistent with its mission to manage the spectrum in the public interest, will address, any coordination related to new users of a particular band.

Mr. KERRY

Mr. KERRY. Mr. President, I want to share with all of my colleagues, particularly with the citizens of Massachusetts, the deepest sense of appreciation I have for the longest serving member of my staff, someone I have been privileged to have work with me since I entered elective office in 1982. Jeanette Boone Smith is leaving my staff after serving all of that time, since 1982, both in the Lieutenant Governor's Office of Massachusetts and in the Senate. Throughout those years, Jeanette has symbolized the values and the priorities I have tried to represent in the Senate. I am, indeed, extraordinarily fortunate to have had her friendship and her counsel throughout my public life. Jeanette embodies the fight for equality and for social justice that defines the entire second half of this century. Her life is filled with stories of personal struggle, public struggle, and of triumph, of sacrifice, and of victory. She was born in Englewood, NJ, and she remained in that State throughout young adulthood. For Jeanette, public service and political action came very early. She became president of Englewood's Fourth Ward Democratic Club, where she worked for local and national Democratic candidates. Her commitment to ensuring equality of opportunity and access to resources led her to fight tirelessly for the integration of the Englewood schools and for public housing. The success of the campaign in which she was involved opened up education and affordable housing to the whole community, and it serves as just one example of the countless times Jeanette sacrificed her time and her energy to help provide a better life to people who had traditionally been denied the full measure of the American dream. Jeanette interviewed with me in January 1983 when I was putting my staff together for the Lieutenant Governor's Office. From that time on, through those early years, she served as my executive assistant, performing the endless and thankless tasks that all here understand are so vital to our ability to be able to manage our schedules and our State operations. As the years passed, she took on greater responsibilities as the director of constituent services where her warm, generous, open personality, and remarkable compassion for people in need allowed my office to advocate successfully to open and to successfully complete the work on more than 100,000 individual cases throughout Massachusetts. As my colleagues well know, constituent services are critical in serving the people of our States and they are sometimes the most thankless and the most difficult tasks we confront. Jeanette assembled and managed a team that continues to help people in search of housing, education opportunities, and nutritional assistance. She has also overseen many complex housing partnerships with the U.S. Department of Housing and Urban Development and State agencies, helping to bring quality, affordable housing to thousands of people throughout the State. Jeanette is leaving to enjoy more time with her husband Perry, her son Tracey, and his sons, and the South End community she loves so dearly. Within the South End, she formed the Four Corners Neighborhood Association, which led to the construction of the Langham Court Apartments. This complex is a wonderful example of Jeanette's abilities and her commitment to improving her community. It has been recognized with awards for its architecture and innovative program of mixed-income housing. She is also deeply involved in the Roxbury Presbyterian Church where she serves as an elder, a trustee, a member of the choir, and a member of the renovation committee. These words today--and I know my colleagues will share this sense for any long-term staff person who departs--cannot fully recognize Jeanette's contributions to the people of Massachusetts or the full extent of my personal appreciation for her time with me. Although she departs my staff tomorrow, the principles she has represented in her work will never leave; rather, they will do as Jeanette has done, which is to serve as a moral compass pointed toward a better world where a bright future is open and available to everyone in this country. I am deeply grateful for her time with me, and I extend to her and Perry my very best wishes as they begin a wonderful new chapter in their lives. I yield the floor.

Mr. KERRY

Mr. KERRY. Would the majority leader then permit us to put in place the request we have made?

Mr. KERRY. Mr. President, again, may I ask the distinguished majority leader: I think we have such a tight containment here, there are some who have some problems off the floor. So it may be that he would be held up by about 5 minutes, I think, in total.

Mr. KERRY. I ask unanimous consent that following the Senator from Texas, the Senator from Louisiana be recognized for 10 minutes; following that, the Senator from Alaska be recognized for 5 minutes; the Senator from Minnesota for 5 minutes; and I would like to follow the Senator from Minnesota for 5 minutes.

Mr. KERRY. It is my understanding the Senator appropriately asked for an extension until 6. It is my understanding the Senator from Louisiana wants to speak for only 10 minutes, or less. The Senator from Minnesota wants 5 minutes. I think if we could get an order, we could contain it within the time and everybody would be satisfied. I ask the Senator from Alaska how long he wants to speak.

Mr. KERRY. Reserving the right to object, Mr. President.

Mr. KERRY

Mr. KERRY. Mr. President, I rise today to co-sponsor a bill introduced by Mr. Breaux, that is called the Atlantic Highly Migratory Species Act of 1999. This legislation closes large areas to longline gear, including the important spawning areas where juvenile bycatch of swordfish and other billfish species are the highest. This legislation will also provide a fair and equitable program for longline vessel owners who are adversely impacted by the fishing prohibition. Funding of the permit buyback program would come through a partnership of the recreational and commercial fishing industries and federal funds. Lastly, this legislation directs the National Marine Fisheries Service to conduct a comprehensive research program in cooperation with the U.S. longline fleet to identify and test a variety of longline gear configurations to determine which are the most effective at reducing billfish bycatch in the Atlantic and Gulf of Mexico. We are introducing this legislation at an important time. It will serve as an example to show the international community at next week's negotiations in Brazil, at the International Commission for the Conservation of Atlantic Tunas (ICCAT), that the U.S. embraces use of time-area closures to help swordfish recover. I believe that this legislation will serve as one prong, of a two- prong U.S. strategy in international negotiations on swordfish quotas that ensures the total mortality of swordfish, including discards, is limited to levels that will allow the stock to recover in 10 years. I look forward to working with Mr. Breaux and other cosponsors of the bill to ensure that this legislation is both consistent with the principles of the Magnuson-Stevens Act and part of an effective national plan to ensure recovery of the North Atlantic swordfish stock within 10 years.

Mr. KERRY

Mr. KERRY. Mr. President, I rise today to co-sponsor a bill introduced by Mr. Breaux, that is called the Atlantic Highly Migratory Species Act of 1999. This legislation closes large areas to longline gear, including the important spawning areas where juvenile bycatch of swordfish and other billfish species are the highest. This legislation will also provide a fair and equitable program for longline vessel owners who are adversely impacted by the fishing prohibition. Funding of the permit buyback program would come through a partnership of the recreational and commercial fishing industries and federal funds. Lastly, this legislation directs the National Marine Fisheries Service to conduct a comprehensive research program in cooperation with the U.S. longline fleet to identify and test a variety of longline gear configurations to determine which are the most effective at reducing billfish bycatch in the Atlantic and Gulf of Mexico. We are introducing this legislation at an important time. It will serve as an example to show the international community at next week's negotiations in Brazil, at the International Commission for the Conservation of Atlantic Tunas (ICCAT), that the U.S. embraces use of time-area closures to help swordfish recover. I believe that this legislation will serve as one prong, of a two- prong U.S. strategy in international negotiations on swordfish quotas that ensures the total mortality of swordfish, including discards, is limited to levels that will allow the stock to recover in 10 years. I look forward to working with Mr. Breaux and other cosponsors of the bill to ensure that this legislation is both consistent with the principles of the Magnuson-Stevens Act and part of an effective national plan to ensure recovery of the North Atlantic swordfish stock within 10 years.

Mr. KERRY

Mr. KERRY. Mr. President, let me begin by congratulating Senator Lautenberg for developing this important piece of legislation that recognizes the importance of rail in our overall transportation system as we approach the 21st Century. I am proud to be an original cosponsor of the High Speed Rail Investment Act, which will provide Amtrak with much needed resources to pay for high speed rail corridors across the country. This legislation is crucial for the country, and for my home state of Massachusetts, and I am hopeful we can move it quickly through Congress. This bill will give Amtrak the authority to sell $10 billion in bonds over the next ten years to finance high speed rail. Instead of interest payments, the federal government would provide tax credits to bondholders. Amtrak would repay the principle on the bonds after 10 years, however, the payments would come primarily from required state matching funds. I know many states will gladly participate in this matching program, as their governors and state legislatures are eager to promote high speed rail. Amtrak would be authorized to invest this money solely for upgrading existing lines to high speed rail, constructing new high speed rail lines, purchasing high speed rail equipment, eliminating or improving grade crossings, and for capital upgrades to existing high speed rail corridors. Let there be no mistake, this country needs to develop a comprehensive national transportation policy for the 21st Century. So far, Congress has failed to address this vital issue. What we have is an ad hoc, disjointed policy that focuses on roads and air to the detriment of rail. We need to look at all of these modes of transportation to alleviate congestion and delays on the ground and in the sky and to move people across this country efficiently. Failing to do this will hamper economic growth and harm the environment. Despite rail's proven safety, efficiency and reliability in Europe and Japan, and also in the Northeast corridor here in the U.S., passenger rail is severely underfunded. We need to include rail into the transportation mix. We need more transportation choices and this bill helps to provide them. In the Northeast corridor, Amtrak is well on its way to implementing high speed rail service. The high speed Acela service should start running from in January. This will be extremely helpful in my home state of Massachusetts, where airport and highway congestion often reach frustrating levels. The more miles that are traveled on Amtrak, the fewer trips taken on crowded highways and skyways. But new service in the Northeast corridor is only the beginning. We need to establish rail as a primary mode of transportation along with air and highways. This bill well help us achieve that goal across the country and I am proud to be an original cosponsor of such an important piece of legislation.

Mr. KERRY

Mr. KERRY. I understand that some suggest that it would be impossible to achieve new pollution standards because of technological limitations. I would like to address that point. States in Northeast have already taken steps to reduce pollution to comply with Clean Air Act requirements, including instituting major controls on these older power plants ed plants. Northeast Utilities has spent $40 million in the last 8 years to reduce fossil plant emissions. In a July 31, 1998 letter to Administrator Browner, Northeast Utilities wrote that ``in our experience the Merrimack Station selective catalytic reduction technology is effective in removing NOX, can be installed fairly quickly, and the installation has minimal impact on the availability of the generating unit.'' Other companies, including Pacific Gas & Electric and Southern Company have made similar investments at plants in Massachusetts. While these are only a few examples, the experience of these companies is echoed by others. Real world experience bears out the fact that solutions are available and are cost effective. It is also interesting to note that the Tennessee Valley Authority, which is the subject of the enforcement action, recently announced plans to implement state of the art ozone controls. The solutions are out there, and as utilities in New England have demonstrated, when there is a will there is a way. I would like to address what is, in my opinion, the fundamental problem with this rider. These power companies and our Department of Justice have a legal dispute, and that dispute should be settled through the legal process. I understand that some of the defendant companies, and some in the Senate, may feel that the Environmental Protection Agency and the Department of Justice are being overzealous in pursuing this enforcement action or that there are politics at play here. I respectfully and strongly disagree, and I urge my colleagues to disregard such rhetoric. It has been estimated that as many as 1,000 people each year die in Massachusetts from air pollution from power plants, automobiles and other sources. And, in particular, emissions from coal-fired plants, the dirtiest of which are outside my state, cause high levels of ozone, which increases the incidence of respiratory disease and premature aging of the lungs. Acid deposition from sulfur can severely degrade lakes and forests. Mercury, which is highly poisonous, accumulates in fish locally. In other words, there is a very real cost to this pollution. Indeed, for some, the price they pay is their very health and well being. I can accept that some of my colleagues may feel that the Department of Justice or the Environmental Protection Agency is pursuing a flawed legal argument, but I cannot accept that the people who are alleging harm, who are paying the price for this pollution, should be denied their day in court. The Department of Justice should not serve at the pleasure of Congress and defendants with the power influence Congress, it should serve the law and the people. I yield to my colleague Senator Lieberman.

Mr. KERRY. I understand from some of the publicity around a similar suit filed by the New York Attorney General that some of the modifications being made to power plants were significant. For example, one company allegedly replaced a reheater header and outlet, a pulverized coal conduit system, the economizer, and casing insulation. While it is impossible to judge any of these types of modifications without additional information, it certainly seems like utilities created a loophole in the law to essentially rebuild the system without considering it as a major modification. Would a legislative rider on this issue essentially pre-judge the court's findings as to whether the modifications undertaken at the plant are indeed ``major''?

Mr. KERRY. Will the Senator yield for a question?

Mr. KERRY

Mr. KERRY. Mr. President, I am opposed to amendment No. 2771 to S. 625, the bankruptcy bill, because it contains a provision allowing school districts to use funds from any federal education program to provide a school voucher to any student attending a Title I school that has been the victim of a violent crime on school grounds. I believe that providing vouchers to students to attend private or parochial schools is a wrong-headed policy notion that would do nothing to improve the education system that 90% American children depend upon. Further, the Hatch amendment attempts to relieve only those students against whom a violent crime has been committed, but does nothing to improve school safety for students remaining in the public schools. Federal funding must be focused on improving educational excellence in our nation's public schools. Money provided by the federal government to state and local education agencies is critical to increasing student achievement and improving teacher quality. A disservice to the public school system is done with this money is directed to private or parochial schools. School reform should not translate into an abandonment of our nation's public schools. I agree with Mr. Hatch in that there is a crisis of violence and disruption undermining too many classrooms. Last year 6,000 children were expelled from public schools and there were 4,000 cases of rape or sexual battery reported. Parents, students, and educators know that serious school reform will only succeed in a safe and orderly learning environment. But Mr. President, my solution for stemming the tide of violence differs radically from that of Mr. Hatch. Instead of abandoning the public schools, the legislation that Mr. Smith of Oregon and I introduced would establish a competitive grant program for school districts to create ``Second Chance Schools.'' In order to receive the funds, school districts would need to have in place district-wide discipline codes which use clear language with specific examples of behaviors that will result in disciplinary action and have every student and parent sign the code. Additionally, schools could use the funds to promote effective classroom management; provide training for school staff and administrators in enforcement of the code; implement programs to modify student behavior including hiring school counselors; and establish high quality alternative placements for chronically disruptive and violent students that include a continuum of alternatives from meeting with behavior management specialists, to short-term in-school crisis centers, to medium duration in-school suspension rooms, to off-campus alternatives. Schools could implement a range of interventions including short-term in-school crisis centers, medium duration in-school suspension rooms, and off-campus alternatives. Mr. President, I advocate a solution to the problem of violence in our schools that would help troubled students and ensure those students do not act out again, in their schools, in their homes, or in their communities. Mr. President, I also oppose this amendment because it would require local school officials to determine whether a student has committed a drug felony on school property. Administrators and educators in this country's public schools are not trained or well-suited to perform the job of law enforcement officers. Their job is to establish policies regulating drugs, alcohol, and tobacco on school grounds, but the business of suspected drug felonies should clearly be handled by law enforcement officers.

Mr. KERRY

Mr. KERRY. Mr. President, since 1938 we have had a minimum standard we accept as the lowest possible wage in our society. Today we are engaged in debate about the need to raise that standard. The modest proposal before us seeks to raise the minimum wage by $1.00 over the next two years. Even then--even if we succeed in doing what is so obvious, so reasonable, and so fair--Mr. President the real value of the lowest acceptable wage will only reach what it was in 1982, over 17 years ago. We're not really talking about an increase here, we're talking about trying to keep pace, about making work pay, about restoring minimum wage workers to the purchasing power they had nearly two decades ago. Mr. President, opponents of a minimum-wage increase argue that it increases unemployment rates for entry-level workers, thereby hurting the very people it is meant to help. But this is not a radical proposal--as some Republicans claim--that will cause a dramatic spike in the unemployment rates and cripple small business. Numerous empirical studies, Mr. President, have found that recent hikes in the minimum wage have had little or no effect on job levels. A 1999 Levy Institute survey of small businesses revealed that more than three-quarters of the firms surveyed said their employment practices would not be affected by an increase in the minimum wage to $6.00. A September New York Times editorial reported that ``. . . a modest hike is not likely to cause higher unemployment, even among low-skilled workers. Indeed, jobless rates fell after the 90-cent minimum-wage hike of 1996-7.'' We have not in the past nor are we now advancing a radical proposal that will reverberate dangerously throughout our economy. We are merely considering a moderate increase in our Nation's wage floor, one that will bring us just back to where we were nearly 18 years ago. And while the increase is a modest one, it is crucial to today's working families. A $1.00 increase in the minimum wage will affect 11.4 million workers. Full-time workers will make an additional $2,000 each year. Many minimum wage jobs do not provide pensions or health care. An additional $2,000 each year might mean the difference between being sick and getting treatment, the difference between a sickly child and a thriving one. An additional $2,000 each year might mean the difference between being hungry and being fed. Currently, a full-time minimum wage worker earns $10,712 per year--an income well below the poverty line for a family of three or four. Increasing the minimum wage will bring workers wages up to $12,800 per year, an income still below the poverty line for a family of three. So while we refer to the minimum wage as the lowest wage acceptable in our society, we must acknowledge that even after we pass this modest increase, a full-time minimum wage worker cannot safely raise a family on his/her earnings. Right now we are facing the greatest wage inequality since the Great Depression. Income inequality between the Nation's top earners and those at the bottom has been widening since the early 1970s. The strong economy and these generally prosperous times cause us to overlook the struggles faced by hard-working families. The growing wage gap between the rich and poor threatens our social fabric and the stability of our Nation. It is our job in the Congress to ensure that stability is maintained--that hard-working individuals are paid a fair wage--that working families can afford the basic necessities of life--that we are the kind of country that values work--and which values the contributions of each working American. It is time we meet that responsibility.

Mr. KERRY

Mr. KERRY. Mr. President, seven months ago I introduced the Women's Business Centers Sustainability Act of 1999, a bill to help our Women's Business Centers weather the increasingly harsh climate of fundraising. These centers play an important role in our economy and in promoting economic independence for women. They help women take an honest look at their strengths and interests to find out whether they should strike out on their own. They teach women how to turn their talents into a business. And they train women in the fundamentals of starting and running a successful business. The centers are located in rural, urban and suburban areas, and direct much of their training and counseling assistance toward socially and economically disadvantaged women. Through the Women's Business Centers Program, business development resources and assistance available to women have steadily improved. The program opened its first 12 centers in 1989. Ten years later, women receive assistance at 81 centers in 47 states, the District of Columbia, Puerto Rico, and the Virgin Islands. In addition to increasing self-sufficiency among women, Women's Business Centers strengthen women's business ownership overall and encourage local job creation. Over the past decade, the number of women-owned businesses operating in this country has grown by 103 percent to an estimated 9.1 million firms, generating $3.6 trillion in sales annually, while employing more than 27.5 million workers. In 1998, women-owned businesses made up more than one-third of the 23 million small businesses in the United States. In spite of the important contributions the Women's Business Centers make to the national economy, we are in danger of losing many effective centers if we don't change the funding structure before their five-year funding runs out. Currently, the Small Business Administration's Women's Business Centers program provides five-year grants of up to $150,000, matched by non-Federal dollars, to private-sector organizations so that they can establish business-training centers for women. From Senate and House hearings at the beginning of the year, we know that without the Federal matching grant, most centers cannot afford to continue providing the same quality of services or to keep their doors open. That money is their bread and butter, as well as indispensable for leveraging fundraising dollars. I believe the Women's Business Centers Sustainability Act of 1999 is a fair way to let WBCs recompete for the base funding. The Women's Business Centers Act creates a four-year pilot that allows graduating and graduated centers to recompete for five-year matching grants of up to $125,000. It requires the SBA to do site visits as part of the final selection process so that we can better judge which centers merit a sustainability grant after five years in the program. It includes a provision from Senator Bond to increase management oversight and review of Centers to better evaluate the viability of centers and improve SBA's management of the program. And it incrementally raises over four years the annual authorization levels from $12 million in fiscal year 2000 to $14.5 million in fiscal year 2003. The increased authorization levels ensure that there are adequate monies to fund 45 existing centers, an average of eight recompeting centers annually, and an average of 10 new centers per year. The Women's Business Centers Sustainability Act of 1999 has tremendous support. It is also the product of old-fashioned cooperation between Democrats and Republicans, and the House and Senate. I want to thank not only the 30 Senators--20 Democrats and 10 Republicans--who are cosponsors of this bill, but also the staff members on the House Small Business Committee who work for Chairman Talent, Ranking Member Nydia Velazquez, and Congresswoman Kelly. For the record, I would like to recognize the 30 cosponsors of my bill--Bond, Harkin, Bingaman, Domenici, Levin, Enzi, Kennedy, Abraham, Sarbanes, Akaka, Edwards, Feinstein, Landrieu, Boxer, Cleland, Kohl, Wellstone, Burns, Leahy, Snowe, Hutchison, Durbin, Santorum, Murray, Mikulski, Inouye, Jeffords, Lieberman, Bennett and Robb. Mr. President, I know how important this bill is to members on both sides of the aisle. I thank my colleagues for their support.

Mr. KERRY

Mr. KERRY. Mr. President, I express my genuine appreciation to all the members of the Senate Banking Committee for their hard work, commitment and dedication to resolving the tough and contentious issues surrounding the conference report that we are considering today. It is no exaggeration to suggest that this conference report represents more than 15 years of hard work and perseverance in tackling one of the most important issues in the new economy. I support the conference report. However, I do so with some reservations about the way the final product was developed and because it does not include a number of important consumer protection provisions. For example, the legislation will pre-empt important state legislation prohibiting certain predatory lending practices that result in poor, vulnerable, elderly homeowners being bilked out of thousands of dollars or, in some cases, losing their homes. However, I believe enactment of financial modernization is a critical first step toward breaking down barriers to allow financial services companies to provide better services at lower costs to consumers and to help insure American dominance of global finance in the 21st Century. As we all know, breaking down the walls that separate commercial banking from the insurance and securities industries is of enormous importance to the future of the financial services industry, which has undergone an immense transformation in recent years. Dramatic changes in technology along with historic mergers, consolidations, and acquisitions have reordered the structure of the financial services industry and made the statutory distinctions that have existed in the law until today less and less relevant in the real world. As a result of these changes, large corporations have begun bypassing traditional financial institutions and accessing capital markets directly. Many large corporations now meet their funding needs by issuing commercial paper, rather than by borrowing from banks. Banks and thrifts are also experiencing increased competition from non- banking institutions that offer a range of financial products and services. During this time, commercial banks have been unable to provide consumers with a number of important financial products and services. The conference report that the Senate is considering today repeals the Glass-Steagall Act, which has separated banks from securities firms since the 1930s. It also repeals a similar provision that has separated banking and insurance. It will permit the creation of new financial holding companies that could offer banking, insurance, securities and other financial products. I am very pleased that the Treasury Secretary Summers and Federal Reserve Bank Chairman Alan Greenspan have come to an agreement on the operating subsidiary issue that was included in the conference report. Banks will now be able to choose the corporate structure under which to conduct new non-banking activities--either through an operating subsidiary or through an affiliate. The bill would allow operating subsidiaries to engage in merchant banking activities, but only if the Federal Reserve and the Treasury jointly agree that the activity is permissible. A bank would have to be well capitalized and well managed after deducting its equity investment in an operating subsidiary from its capital in order to take advantage of these new activities. I believe that this compromise will let banks choose their own operating structure and will help maintain safety and soundness in our financial system. The operating subsidiary provisions also include language that would retain state authority over state chartered bank subsidiaries. Section 121(d)(1) of the final bill provides that nothing in Section 46(d) supersedes the current authority of the FDIC over bank subsidiary activities under Section 24 of the Act. The provision recognizes that, consistent with current and proposed rules of the FDIC, investment authorities of state-chartered bank subsidiaries are not to be restricted to any greater extent that those authorized for a state bank itself. More particularly, in several states, including Massachusetts, state banks have a long history of exercising limited authority to invest in common stocks either directly or through wholly-owned subsidiaries. The FDIC has acknowledged and approved such investment authority through so-called investment subsidiaries. It is my understanding that the newly added Section 46(d) acknowledges and preserves that authority and does not contemplate imposition of additional regulatory requirements or impediments. I am also glad that the conference report will permit financial institutions to engage in merchant banking activities. This will allow banks to invest in small companies for the purpose of appreciating and ultimately reselling the investment. The merchant banking provisions limit the day-to-day management of companies by financial institutions and the duration of the investment. I am hopeful that these new powers will allow banks to provide more capital for small businesses, which have been leading contributors to the economic growth of our country. The conference report includes an important limitation on banking and commerce which eliminates the ability of commercial firms to form new unitary thrifts unless they had owned or had applied to own a unitary thrift by May 4, 1999. Under the conference report, current unitary thrift holding companies and their savings association subsidiaries would be able to continue their normal activities. However, future sales of unitary thrift holding companies would not be allowed to commercial firms. Sales would be limited only to financial holding companies. Building this fence around financial firms to keep them largely isolated from joint ownership with commerce and industry is an extremely important safeguard in this legislation. My first priority as member of the Senate Banking Committee is to maintain the safety and soundness of our financial system to insure that American taxpayer funds are not necessary to bail out our financial institutions. However, we are now in an era in which banks and other firms are becoming ``too big to fail'' where the government will intervene if its collapse would cause a major harm to the economy. With the enactment of this legislation, banks, insurance and securities conglomerates will grow even larger and more intertwined. The failure of any one of these new conglomerates could disrupt our financial system and risk a taxpayer-funded bailout that would dwarf the savings and loan payout. For example, recently the Federal Reserve Bank felt compelled to rescue the Long Term Capital, a hedge fund, even though it was not a federally insured bank. That is why I strongly supported including a provision that would have required large banks to back some portion of their assets with subordinated debt. Holders of this type of debt would have a strong incentive to monitor each financial institution's level of risk to protect their investment. This approach could also serve as an early warning signal for regulators of banks that are engaged in risky activities. Unfortunately, this requirement was reduced to only a study. I will be working with my colleagues and with federal regulators to address this problem in the future. I am also very disappointed that the conference report does not include acceptable language regarding mutual insurance companies. Many States currently have laws that restrict the hostile take over of a mutual insurance company that has recently converted to a stock insurer. However, the conference report allows these state laws to be preempted ``so long as such restriction does not have the effect of discriminating, intentionally or unintentionally, against an insured depository institution or an affiliate thereof * * *.'' I believe that this language, as currently written, would allow only banks whose takeover attempts were denied by a state insurance commissioner to litigate. The ability to litigate would not be extended to any other potential acquisitor. This law means that any state restriction of a banking organization's attempts to takeover a demutualizing insurance company could be construed by a court as discrimination against the bank. I believe that this could lead to costly and time consuming litigation for every insurance company that attempts demutualization. Further, if a court were to fail to interpret the word ``discrimination'' narrowly, this new language could essentially end the important state preemption provision only in cases where a bank is the proposed acquisitor. It would not allow other potential acquisitors to litigate. I am also very concerned about the provision included in the conference report that will allow mutual insurance companies to redomesticate to another state and reorganize into a mutual holding companies or stock companies. I believe that this provision will allow some mutual insurance companies to move to states without adequate consumer protections and could endanger policyholders during a conversion from mutual to stock form. I am pleased, however, that the conference report includes the PRIME Act, which will provide an opportunity to lend a helping hand to those in need of financial aid and technical assistance so that they can fulfill their personal, family, and community responsibilities. Microenterprise development has given many a chance to break the cycle of poverty and welfare and move toward individual responsibility and financial independence. Specifically, the PRIME Act authorizes funding for technical assistance to give microentrepreneurs access to information on developing a business plan, record-keeping, planning, financing and marketing, which are crucial to small business development. For example, PRIME would augment funds for valuable programs run by Working Capital, located in Massachusetts and a recipient of a Presidential Award for Excellence in Microenterprise Development in 1997. Working Capital currently offers a number of valuable programs to its microenterprise customers which could be augmented by additional funding under PRIME such as providing business credit to microentrepreneurs and providing business education and training on how to draw up business plans and prepare financial projections. These programs instruct microentrepreneurs on how to use these tools in managing their businesses. This type of assistance is crucial to the development of our low-income communities and throughout the United States. I very much appreciate that the conference report includes a provision to repeal the Savings Bank Provisions in the Bank Holding Company Act. Section 3(f) was added to the Bank Holding Company Act in 1987 to provide a special grant of authority to savings banks, but court decisions and Federal Reserve Board interpretations now make it restrictive for many Massachusetts banks. Repeal of this provision will bring the treatment of Massachusetts savings banks in line with that of other financial institutions. Mr. President, I also want to emphasize that although I strongly believe that we have to take this first step to toward modernizing our banking industry and although I will support this conference report, I remain committed to strengthening and improving consumer privacy protections and to encouraging greater community investment by financial institutions. I believe that we can and must do more to safeguard the financial privacy of every American. Every American deserves to control his or her personal financial information. I am concerned that the changes in technology and in the marketplace have diminished every American's ability to safeguard his or her personal financial privacy. The conference report gives customers of financial services companies only limited control over their personal financial information. Customers will now have the right to object to their institutions' sharing their financial data with third parties and will require these institutions to provide notice to customers when they disclose financial information within an affiliate. Fortunately, the conference report does not preempt stronger state privacy laws. I want to note for the Record that I supported stronger privacy protections that would have given every customer the right to see what financial information would be shared with affiliates or third parties. I also supported an opt-in standard for consumers whose financial institution provides their personal financial information to unaffiliated third parties. This provision was supported by 26 state Attorneys General and many others. I will be working with my distinguished colleagues including the Senator from Maryland Mr. Sarbanes, as well as Senators Bryan, Shelby and others to work on strengthening safeguards to protect the privacy of every American. All throughout the consideration of this legislation, from the very first meetings of the Banking Committee, through floor consideration and the conference negotiations, Congressional Democrats and the Administration have insisted that the Community Reinvestment Act must be allowed to grow and adapt to the new circumstances being created for the financial industry. Despite the most aggressive, uninformed, and sustained attack on that important law I have ever witnessed, I am happy to say that the new law will reflect this important goal. The new law established that, as a precondition for any bank to exercise any of the new powers authorized by this legislation, either de novo or through a merger or acquisition, a bank must have a satisfactory CRA rating. This test will be applied each time a bank seeks to take engage in a new activity, so that a bank will have to, as a practical matter, both have and maintain a satisfactory CRA rating to take advantage of the new law. Prior to this agreement, a bank could start up a securities affiliate without any regard to its CRA rating, so this new law is clearly a step forward. That is why Reverend Jesse Jackson and the Local Initiatives Support Corporation (LISC) support the CRA provisions in the bill. I understand and share the concerns of some of my colleagues who believe that the conference report does not go far enough. Certainly, the alternative that and my fellow Democrats supported would have been more acceptable. However, I believe that this legislation clearly meets the objective of ensuring that CRA remains a central part of every financial institution's operations into the next century. The conference report would also require certain agreements between a bank and community groups made in connection with CRA to be fully disclosed and would reduce the frequency of CRA compliance exams for certain banks with less than $250 million in assets. I am concerned that further attempts to weaken the Community Reinvestment Act will occur during the 106th Congress. Let me be absolutely clear: I will strongly oppose any attempts to weaken CRA in any manner whatsoever. CRA is a fundamental tool to insure that all creditworthy Americans, regardless of the neighborhood they live in, regardless of their race or circumstances, have access to the bank loans that are needed to buy a home or start a business. It is a law that breathes life into the rhetoric we all use extolling the virtues of equal opportunity. We cannot and must not return to the days of poverty and desperation borne of bank redlining in too many communities across the nation. This conference report is far from perfect, but few compromises ever are. A product that represents more than 15 years of hard work and the debates of literally hundreds of individuals and disparate constituencies could hardly represent a perfect product to every side. This report is no different. But I will tell you, and I think almost all of us would agree that in the American system of free enterprise the interests of consumers and industry are best served if we permit competition as long as that competition is fair and does not give any industry or player an advantage over another. I believe that this legislation is an important step in facilitating that competition and it meets that test by allowing every American access to a broader group of financial services at a lower cost. We have a historic chance to provide meaningful financial services reform. I will support the conference report and I urge my colleagues to support it as well. And, remembering as I think we all should, that this legislation represents not an endpoint but a starting point, I would respectfully suggest that we all focus in the months and years ahead on the potential role this Senate can play in helping to create the environment in which financial services work to the best advantage of every American. Our goal should be nothing less.