John Kerry

Mr. KERRY

Mr. KERRY. Mr. President, will the Senator yield for a question?

Mr. KERRY

Mr. KERRY. Mr. President, I rise today to pay tribute to one of the most inspirational and unifying individuals I have had the privilege of knowing and working with. Today, in Boston, people from all over Massachusetts are gathering to recognize and celebrate Lenny Zakim, Executive Director of the New England Regional Office of the Anti-Defamation League, and I rise today to join them in honoring this important friend. This evening's ceremony, though, has a purpose far deeper and broader than his notable leadership at the ADL. Tonight is a reflection of the love that has flowed from this man to the people of Boston, and now, it's flowing back to him as he confronts his own personal challenges. For over 20 years, Lenny Zakim has courageously traveled the world, bringing a message of tolerance and respect. Through hundreds of meetings, conferences and visits to the countless places of worship, Lenny has turned racial and cultural divides into bonds amongst people and built bridges between communities. Mr. President, one of this country's greatest inspirational figures, Helen Keller, said in 1890, ``We could never learn to be brave and patient if there was only joy in the world,'' and I believe that this quote captures the values and goals that have guided Lenny Zakim's life. What Helen Keller was saying is that our true nature only surfaces when we are confronted with adversity, and, time and time again, Lenny has turned ignorance into enlightenment, crisis into opportunity, and hostility into support. Groundbreaking collaborations with the Ten Point Coalition and Cardinal Bernard Law illuminate the often-overlooked common ground that we quietly cherish but celebrate together far too infrequently. His public meditations on subjects such as the Middle East, relationships between African Americans and Jews, and Judeo-Christian values in a modern world elevate our public dialogue and focus our attention on some of the most compelling issues of the day. On issues global he has worked with Hosni Mubarak, Menachem Begin, Yitzak Shamir, and Shimon Peres. I am fortunate to share his vision of a Middle East with a sustainable peace, a vision that he sculpted and shared with my predecessor, Paul Tsongas. Beyond the global dimension of his work, perhaps his most expansive and wisest endeavors have been those with children and young adults. He is one of the founders of A World of Difference, an anti-bias education project that has had over 350,000 teachers participate in lessons that bring the lessons of tolerance and cooperation to classrooms for thousands of children every day. He also started Team Harmony, the nation's largest annual, interracial gathering of youth. Every year, thousands of young adults from Greater Boston come together and pledge to bigotry and celebrate their support of diversity and inclusion. These two programs will allow Lenny's vision of a peaceful and respectful world to reach far beyond those that he meets directly. I have witnessed firsthand how A World of Difference and Team Harmony will help build a better world for all our citizens. Tonight's event will bring together Lenny's hundreds of friends and supporters to raise funds for the completion of the Zakim Center for Integrated Therapies at the Dana Farber Cancer Institute. Collectively, we thank Lenny for all of his work, and most importantly for what he has brought out in all of us and our communities.

Mr. KERRY

Mr. KERRY. Mr. President, I ask unanimous consent that letters of support be printed in the Record.

Mr. KERRY. Mr. President, the bill that I am sending to the desk is the Community Development and Venture Capital Act of 1999. I am pleased to share the introduction of this with Senators Wellstone, Bingaman, Sarbanes, Levin, and Cleland as cosponsors of it. This small business legislation is designed to promote economic development, business investment, productive wealth, and stable jobs in new markets. It establishes a New Markets Venture Capital program that is part of President Clinton's New Markets Initiative that he mentioned in the ``State of the Union Address'' and promoted on a 4-day tour this summer. New Markets are our country's low- and moderate-income communities where there is little to no sustained economic activity but many overlooked business opportunities. According to Michael Porter, a respected business analyst who has written extensively on competitiveness, ``. . . inner cities are the largest underserved market in America, with many tens of billions of dollars of unmet consumer and business demand.'' Many rural areas also contain low- and moderate-income communities. Think of the inner-city areas of Boston's Roxbury or New York's East Harlem, or the rural desolation of Kentucky's Appalachia or Mississippi's Delta region. These are our neediest communities--urban and rural pockets that are so depleted that no internal resource exists to jump start the economy. These are places where there have been multi-generations of unemployment and abandoned commercial centers and main streets. To get at this complex and deep-rooted economic problem, this legislation has three parts: a venture capital program to funnel investment money into our poorest communities, a program to expand the number of venture capital firms that are devoted to investing in such communities, and a mentoring program to link established, successful businesses with businesses and entrepreneurs in stagnant or deteriorating communities in order to facilitate the learning curve. The center piece is the New Markets Venture Capital Program. Its purpose is to stimulate economic development through public-private partnerships that invest venture capital in smaller businesses that are located in impoverished rural and urban areas or that employ low-income people. Both innovative and fiscally sound, this legislation creates a new venture capital program within the Small Business Administration that is built on two of the agency's most popular programs. It is financially structured similar to the Agency's successful Small Business Investment Company program, and incorporates a technical assistance component similar to that successfully used in SBA's microloan program. However, unlike the SBIC program which focuses solely on small businesses with high-growth potential and claims successes such as Staples and Calloway Golf, the New Markets Venture Capital program will focus on smaller businesses that show promise of financial and social returns--what we call a ``double bottomline.'' These businesses tend to be higher risk, need longer periods to pay back money, need intensive, ongoing financial, management and marketing assistance, and have more modest prospects for return on investment than SBIC investments. For example, the returns on investments typically range from five to ten percent for community development venture capital funds versus SBIC's expected 20 to 30 percent rates of returns. To balance out the equation, they also provide quality, stable jobs, create productive wealth in and among our neediest communities and need a smaller equity investment. Equity investments for community development investment funds will range from $50,000 to $300,000 versus the $300,000 to $5 million of typical deal sizes in the Agency's SBIC program. Among other conditions, in order for an organization to be eligible to participate and approved as a New Markets Venture Capital company, it must have a management team with experience in community development financing or venture capital financing, be able to raise at least $5 million of non-SBA money for debentures, and raise matching funds for SBA's technical assistance grants. Community development venture capitalists, we should be reminded, use all the discipline of traditional venture capitalists. At the Small Business Committee roundtable we held in May on the Agency's SBIC program and other venture capital proposals, community development venture capital groups from Massachusetts to Minnesota to Kentucky talked about profit. Like traditional venture capital funds, community development funds have to make prudent investments to earn profits in order to attract and keep investors. But they balance that with social objectives. One of the most important social goals for Boston Community Venture Fund is job creation and job quality. Elyse Cherry, who is President of the Boston Community Venture Fund, invited me, former Treasury Secretary Robert E. Rubin and former Congressman Joseph P. Kennedy II and others to tour a company her Fund invested in called City Fresh Foods. Located in Roxbury, one of Boston's neediest neighborhoods, Glynn and Sheldon Lloyd started a company that manufactures prepares African-American and Hispanic meals for the community and corporate clients. And through the Meals-on- Wheels program, this company serves the elderly in Roxbury and Dorchester districts. In addition to providing a needed service, City Fresh Foods has created 20 jobs, hires from the community, pays its employees from $8 to $16 per hour, and offers training and opportunity for them to move from entry-level jobs to supervisory positions. There are more success stories like this around the country. The Community Development Venture Capital funds across the country have a proven track record in making smart, responsible investments in small businesses in their communities, but the capital needs of firms in economically distressed areas far outweigh the existing capacity of these organizations. Compared to the more than 1,143 traditional and SBIC venture capital firms in the U.S., only some 40 funds nationwide concentrate on investing in companies that show promise of financial and social returns. We simply need more community development venture capital funds to reach more of these underserved communities. The second component of this bill, the ``Community Development Venture Capital Assistance Program,'' recognizes that need and is designed to increase the number and expertise of community development venture capital funds, such as New Markets Venture Capital companies, around the country. A Community Development Venture Capital organization has a primary mission of promoting community development in low-income communities through investment in private businesses. Senator Wellstone has carried the water on community development venture capital concept and deserves special credit for educating the Small Business Committee about this important economic development tool. He introduced this initiative in March. It is virtually identical to the bill he introduced in the last Congress and passed the full Senate as part of a comprehensive small business bill, H.R. 3412. First, the Community Development Venture Capital Assistance program would authorize $15 million for SBA grants to private, nonprofit organizations with expertise in making venture capital investments in poor communities. These organizations would use these grants to provide hands-on technical assistance to spawn and develop new and emerging CDVC or NMVC companies. The intermediary organizations would match the grants dollar-for-dollar with non-Federal sources. Second, this program would provide $5 million in SBA grants to colleges, universities, and other firms or organizations--public or private--to create and operate training and intern programs, organize a national conference, and fund academic research and studies dealing with community development venture capital. Finally, to complement the venture capital investments and the program to foster the emergence and growth of more community development venture capital companies, this legislation would build on the BusinessLINC grant program. Already a successful public-private partnership that the SBA and Department of Treasury launched last June, it encourages larger businesses to mentor smaller businesses, enhancing the economic vitality and competitive capacity of small businesses located in the targeted areas. This Act will authorize $3 million a year to further promote and expand this program. It's easy to stare past the broken inner cities and boarded up rural towns to the intrigues and fantasies of a booming Wall Street, flourishing suburbs and record-low national unemployment. But as we trumpet the successes of our economy, we must be smart and leverage that prosperity to jumpstart and strengthen our communities that are struggling. This legislation aims to do just that.

Mr. KERRY

Mr. KERRY. Mr. President, I ask unanimous consent that letters of support be printed in the Record.

Mr. KERRY. Mr. President, the bill that I am sending to the desk is the Community Development and Venture Capital Act of 1999. I am pleased to share the introduction of this with Senators Wellstone, Bingaman, Sarbanes, Levin, and Cleland as cosponsors of it. This small business legislation is designed to promote economic development, business investment, productive wealth, and stable jobs in new markets. It establishes a New Markets Venture Capital program that is part of President Clinton's New Markets Initiative that he mentioned in the ``State of the Union Address'' and promoted on a 4-day tour this summer. New Markets are our country's low- and moderate-income communities where there is little to no sustained economic activity but many overlooked business opportunities. According to Michael Porter, a respected business analyst who has written extensively on competitiveness, ``. . . inner cities are the largest underserved market in America, with many tens of billions of dollars of unmet consumer and business demand.'' Many rural areas also contain low- and moderate-income communities. Think of the inner-city areas of Boston's Roxbury or New York's East Harlem, or the rural desolation of Kentucky's Appalachia or Mississippi's Delta region. These are our neediest communities--urban and rural pockets that are so depleted that no internal resource exists to jump start the economy. These are places where there have been multi-generations of unemployment and abandoned commercial centers and main streets. To get at this complex and deep-rooted economic problem, this legislation has three parts: a venture capital program to funnel investment money into our poorest communities, a program to expand the number of venture capital firms that are devoted to investing in such communities, and a mentoring program to link established, successful businesses with businesses and entrepreneurs in stagnant or deteriorating communities in order to facilitate the learning curve. The center piece is the New Markets Venture Capital Program. Its purpose is to stimulate economic development through public-private partnerships that invest venture capital in smaller businesses that are located in impoverished rural and urban areas or that employ low-income people. Both innovative and fiscally sound, this legislation creates a new venture capital program within the Small Business Administration that is built on two of the agency's most popular programs. It is financially structured similar to the Agency's successful Small Business Investment Company program, and incorporates a technical assistance component similar to that successfully used in SBA's microloan program. However, unlike the SBIC program which focuses solely on small businesses with high-growth potential and claims successes such as Staples and Calloway Golf, the New Markets Venture Capital program will focus on smaller businesses that show promise of financial and social returns--what we call a ``double bottomline.'' These businesses tend to be higher risk, need longer periods to pay back money, need intensive, ongoing financial, management and marketing assistance, and have more modest prospects for return on investment than SBIC investments. For example, the returns on investments typically range from five to ten percent for community development venture capital funds versus SBIC's expected 20 to 30 percent rates of returns. To balance out the equation, they also provide quality, stable jobs, create productive wealth in and among our neediest communities and need a smaller equity investment. Equity investments for community development investment funds will range from $50,000 to $300,000 versus the $300,000 to $5 million of typical deal sizes in the Agency's SBIC program. Among other conditions, in order for an organization to be eligible to participate and approved as a New Markets Venture Capital company, it must have a management team with experience in community development financing or venture capital financing, be able to raise at least $5 million of non-SBA money for debentures, and raise matching funds for SBA's technical assistance grants. Community development venture capitalists, we should be reminded, use all the discipline of traditional venture capitalists. At the Small Business Committee roundtable we held in May on the Agency's SBIC program and other venture capital proposals, community development venture capital groups from Massachusetts to Minnesota to Kentucky talked about profit. Like traditional venture capital funds, community development funds have to make prudent investments to earn profits in order to attract and keep investors. But they balance that with social objectives. One of the most important social goals for Boston Community Venture Fund is job creation and job quality. Elyse Cherry, who is President of the Boston Community Venture Fund, invited me, former Treasury Secretary Robert E. Rubin and former Congressman Joseph P. Kennedy II and others to tour a company her Fund invested in called City Fresh Foods. Located in Roxbury, one of Boston's neediest neighborhoods, Glynn and Sheldon Lloyd started a company that manufactures prepares African-American and Hispanic meals for the community and corporate clients. And through the Meals-on- Wheels program, this company serves the elderly in Roxbury and Dorchester districts. In addition to providing a needed service, City Fresh Foods has created 20 jobs, hires from the community, pays its employees from $8 to $16 per hour, and offers training and opportunity for them to move from entry-level jobs to supervisory positions. There are more success stories like this around the country. The Community Development Venture Capital funds across the country have a proven track record in making smart, responsible investments in small businesses in their communities, but the capital needs of firms in economically distressed areas far outweigh the existing capacity of these organizations. Compared to the more than 1,143 traditional and SBIC venture capital firms in the U.S., only some 40 funds nationwide concentrate on investing in companies that show promise of financial and social returns. We simply need more community development venture capital funds to reach more of these underserved communities. The second component of this bill, the ``Community Development Venture Capital Assistance Program,'' recognizes that need and is designed to increase the number and expertise of community development venture capital funds, such as New Markets Venture Capital companies, around the country. A Community Development Venture Capital organization has a primary mission of promoting community development in low-income communities through investment in private businesses. Senator Wellstone has carried the water on community development venture capital concept and deserves special credit for educating the Small Business Committee about this important economic development tool. He introduced this initiative in March. It is virtually identical to the bill he introduced in the last Congress and passed the full Senate as part of a comprehensive small business bill, H.R. 3412. First, the Community Development Venture Capital Assistance program would authorize $15 million for SBA grants to private, nonprofit organizations with expertise in making venture capital investments in poor communities. These organizations would use these grants to provide hands-on technical assistance to spawn and develop new and emerging CDVC or NMVC companies. The intermediary organizations would match the grants dollar-for-dollar with non-Federal sources. Second, this program would provide $5 million in SBA grants to colleges, universities, and other firms or organizations--public or private--to create and operate training and intern programs, organize a national conference, and fund academic research and studies dealing with community development venture capital. Finally, to complement the venture capital investments and the program to foster the emergence and growth of more community development venture capital companies, this legislation would build on the BusinessLINC grant program. Already a successful public-private partnership that the SBA and Department of Treasury launched last June, it encourages larger businesses to mentor smaller businesses, enhancing the economic vitality and competitive capacity of small businesses located in the targeted areas. This Act will authorize $3 million a year to further promote and expand this program. It's easy to stare past the broken inner cities and boarded up rural towns to the intrigues and fantasies of a booming Wall Street, flourishing suburbs and record-low national unemployment. But as we trumpet the successes of our economy, we must be smart and leverage that prosperity to jumpstart and strengthen our communities that are struggling. This legislation aims to do just that.

Mr. KERRY

Mr. KERRY. I thank the Chair and suggest the absence of a quorum.

Mr. KERRY. I thank the Chair. (The remarks of Mr. Kerry and Mr. Sarbanes pertaining to the introduction of S. 1594 are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. KERRY. Mr. President, it would be just about 5 minutes. If I could have a little leeway, I would appreciate it.

Mr. KERRY. I ask unanimous consent that I be permitted to proceed as in morning business for a few minutes, not very long.

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

Mr. KERRY

Mr. KERRY. Mr. President, the current situation in East Timor is spiraling dangerously out of control. Members of the international community are meeting to discuss this issue in New Zealand as I speak, while violence is escalating in East Timor and uncertainty is rising in the minds of many about the future of Indonesia as a whole. Indonesia's strategic position in South East Asia, as well as its economic and political stability, are of utmost importance, not only to the United States, but to the international community which has an interest in securing a stable and democratic future for South East Asia and a lasting peace for East Timor. The Indonesian government holds the primary responsibility for restoring peace and stability to East Timor. I concur wholeheartedly with U.N. Secretary General Kofi Annan that the Indonesian government has so far failed to take adequate steps towards that end. The Indonesian government must move immediately to restore the portion of its credibility that was lost for not preparing adequately for the onslaught of civil strife that was predicted after the August 30 vote. The government must reign in the military factions, disarm the militias, restore law and order on the ground in East Timor, and provide for humanitarian assistance to the thousands of East Timorese who have been displaced from their homes and are fleeing the region. If it cannot, or is unwilling to, then the Indonesian government must accept the international community's offer to send in a peacekeeping force. To his credit, President Habibie took an important step forward by allowing East Timor's political future to be decided democratically. It truly was significant that for the first time in twenty four years, the Indonesian government made a ballot in East Timor possible. I have long believed that the government should take this action and I have supported numerous pieces of legislation urging the Indonesian government to that effect. However, the Habibie government, once having made the decision to hold a consultation on the future status of East Timor, assumed responsibility for the security of its people during and after the ballot was held. The international community was watching closely as the May 5, 1999 agreement detailing how the ballot was to be conducted--was signed by the governments of Indonesia and Portugal and the U.N. This agreement held great promise that the future of East Timor could be determined peacefully. However, anti-independence militia leaders refused to sign and refused to disarm, vowing to oppose violently any steps to give the East Timorese their independence. The militia groups have followed through on their commitments, regrettably. The Indonesian government, I fear, has not. The Indonesian government, in no uncertain terms, has the responsibility to curb the violence now and work to create a peaceful atmosphere so that the results of the ballot can be implemented. It must also protect the humanitarian missions that remain in East Timor and secure the safe passage of humanitarian aid to the region. No reasonable justification exists for the Indonesian military cutting off the water supply and electricity inside the U.N. Compound. That only leaves us with the question, who is really calling the shots? Indeed, the history of the Indonesian military is far too bleak to have given it free reign to operate under martial law. We have already seen evidence of the military directly firing on civilians, forcibly removing them from their homes, or just turning a blind eye to the havoc being unleashed on them by the paramilitary forces. I do not believe that martial law--which establishes curfews, enables the military to shoot violators of the curfews on sight, and provides for unwarranted searches--is the step that the Indonesian government should have taken if it wanted to stop the violence and re-establish credibility for itself in the international community. Martial law has only succeeded in unleashing more violence and greater terror. It is especially problematic since many members of the Indonesian military remain inextricably linked to the militia forces or have joined radical military splinter groups. I do not believe that the Indonesian government has taken adequate steps, if any at all, to disassociate itself from the civilian militias and to dismantle and disarm them when it became apparent that these groups would not work to bring peace to the region. The human rights abuses they have committed over the years was only a prologue to the devastation they are orchestrating today. The alarm bells were ringing months ago, but was anyone listening? The Indonesian military's direct involvement in committing human rights abuses and perpetuating violence in Indonesia led me to support a restriction on U.S. arms sales and International Military Education Training (IMET) aid to Indonesia, which Congress initiated in 1993. I believe it is crucial to suspend all of the remaining U.S. military contacts with the Indonesian armed forces and all arms sales to Indonesia. The outcome of this crisis will have implications not only for East Timor but for Indonesia as a whole. We need to be responsive to the crisis in East Timor, but we must carefully consider the implications of any action on the larger political, economic and social climate in Indonesia. I believe it is vital for the Indonesian government to accept the international community's offer to send an international peacekeeping force to East Timor and that force must be robust, with the capacity to restore law and order on the ground. The U.S. must continue to work with its allies in the region in order to urge the Indonesian government to invite this force in. I am pleased that the Australian government has taken the lead in this effort by offering up to 7,000 peacekeepers to operate in such a force and has sent war ships to the waters off East Timor as a message to the Indonesian government that the global community is serious. The East Timor crisis will be, and indeed should be, the top priority for discussion at the Asia-Pacific Economic Cooperation (APEC) Forum this weekend. There is no issue of greater importance to the region at the moment. I believe that the U.S. must play a strong role in coordinating the efforts of all APEC nations in order to formulate a strong, multilateral response to the crisis. All members of APEC have a direct interest in preventing the further escalation of violence and political instability. I urge the Administration to continue to work aggressively with APEC nations to make it clear to the Indonesian government that the clock is ticking on a resolution of this issue. In addition to the diplomatic efforts, we must take some steps to demonstrate our own disapproval of the government's response to the situation to date. I support the Administration's decision to cease our direct military-to-military contacts with Indonesia. I believe we also should offer to send humanitarian aid to both East Timor and governments in the region that accept refugees. There are other steps that we can take as well. That is why I have joined my colleague Senator Russ Feingold in introducing a bill to suspend international financial assistance to Indonesia pending resolution of the crisis in East Timor. Specifically, this bill would suspend the remaining U.S. military assistance to Indonesia, require the United States to oppose the extension of financial support to Indonesia by international financial institutions such as the IMF, and require Congressional approval before any FY 2000 bilateral assistance to Indonesia may be allocated. I see the introduction of this bill as a way to send a signal--not only to President Habibie, but to all of the players in Jakarta--that we regard this issue very seriously. Mr. President, I appreciate the opportunity to talk about East Timor and I yield the remainder of my time.

Mr. KERRY

Mr. KERRY. Mr. President, I rise to introduce the Taunton River Wild and Scenic River Study Act of 1999. The bill directs the Secretary of the Interior to study the Taunton River in Massachusetts for potential addition to the National Wild and Scenic Rivers Systems. The Taunton River is ecologically and historically significant, and this legislation is supported by local officials and residents. Senator Kennedy is joining this bill as an original cosponsor.

Mr. KERRY

Mr. KERRY. Mr. President, I rise to introduce the Taunton River Wild and Scenic River Study Act of 1999. The bill directs the Secretary of the Interior to study the Taunton River in Massachusetts for potential addition to the National Wild and Scenic Rivers Systems. The Taunton River is ecologically and historically significant, and this legislation is supported by local officials and residents. Senator Kennedy is joining this bill as an original cosponsor.

Mr. KERRY

Mr. KERRY. Mr. President, I support this bill. A little more than a year ago, SBA Administrator Aida Alvarez formed a task force to study the needs of veterans with a talent, skill, dream or need to start their own business. I commend the Administrator for her initiative. And thanks to the quick and earnest work of the task force representatives, particularly the Veterans Service Organizations and advocacy groups, a report was drafted in three short months. H.R. 1568 gives life to many of the 21 report recommendations. Appropriately, it includes S. 918, the Military Reservists Small Business Relief Act of 1999--the fourteenth report recommendation--that I introduced on March 29th and the full Senate passed by unanimous consent last week, on July 27th. Reservists have been asking for this safety net since 1991 to keep their businesses going while they are called to active duty. I am glad that we will again put this bill one step closer to enactment for the men and women who--whether deployed in Iraq, Bosnia or Kosovo--could benefit from the provisions of this bill now. These provisions should already be available for those who need it, and I deeply regret that it wasn't enacted earlier, either as S. 918 or as part of this bill, H.R. 1568. The nature of the provisions are uncontroversial. As S. 918, it passed the Committee on Small Business June 9th, almost 60 days ago, by unanimous consent and has 51 Senators co-sponsors--21 Republicans and 30 Democrats. Since then, it has also passed the full House and the Senate Committee on Small Business as part of this bill before us tonight, H.R. 1568. As much as I am frustrated by the delay, it probably doesn't compare to that of reservists who are on active duty and losing sleep over how they are going to keep their businesses going and avoid ruining their credit records. Ask the truck driver who serves in the Missouri National Air Guard and reported to active duty more than four months ago. He bought a new rig shortly before being called up and has hefty monthly payments to meet. He lined up a replacement to drive his truck while he was gone to keep money coming in, but the driver backed out of the agreement right before the reservist was to leave. He tried to do the right thing--to implement a contingent plan--and yet something beyond his control interfered. It's hard to keep your customers happy when their merchandise isn't getting delivered. And it's even harder to make your loan payments when you're not bringing in enough money. Or ask the reservist from Oklahoma who has supported his wife and four children for the past five years with a carpet and upholstery business. In 1998, he was called up for eight months, and he's been active this year since May 8th. What made it particularly damaging for his business this year was that he was called up at the beginning of the industry's high season. January to April are slow times, and April to December are the money-making months. He called my office a month ago to find out about this bill and find out how he could get assistance. Though this bill was still waiting for action by the full Senate, we put him in contact with the SBA office in Oklahoma City to find some way to help. After reviewing his options and what it would take to resuscitate his business, he called to say that he was closing shop for good: ``I'm just going to close my business down. I'm not going to try to get a small business loan. I want to cut my losses now. . . .'' I look forward to spreading the message that reservists, such as this man from Oklahoma, will soon be able to apply for loan deferrals, reductions on interest rates, low-interest disaster loans, and get training assistance for the employee or family left behind to run their businesses. Importantly, this bill goes further, making more comprehensive changes for all veterans. Incorporating other recommendations that are designed to help service-disabled veterans and veteran form and expand small businesses, H.R. 1568-- Elevates the SBA's Office of Veterans Affairs so that it has more credibility and visibility. Creates a federally chartered corporation to facilitate technical and management assistance to veteran entrepreneurs. Establishes a three-percent procurement goal for service-disabled veteran-owned businesses. Requires the Federal Procurement Data System to collect data on the percentage and dollar value of prime contracts and subcontracts awarded to small businesses owned and controlled by veterans and service- disabled veterans. According to the SBA and the Department of Veterans Administration, out of the estimated 22 million veterans in this country, 4 million own their own businesses. I encourage the SBA and the veterans groups to use these tools to make real progress in expanding and strengthening small businesses owned by veterans and service-disabled veterans so that they can have the dignity and financial benefits of self- sufficiency. Mr. President, I thank my colleagues for supporting veterans and small business. It's one vote that will help thousands. Amendment No. 1617 (Purpose: To make amendments with respect to the Board of Directors of the National Veterans Business Development Corporation)

Mr. KERRY

Mr. KERRY. They eliminate the alternative minimum tax that guarantees that the wealthiest of Americans will pay some kind of tax. So they trade off: Don't give the marriage penalty to the working poor, but give the wealthiest of Americans an exemption from the alternative minimum tax that guarantees fairness. That is not all they do. They wipe away the tax relief for child care. They dropped the Senate provision. They provide additional capital gains tax relief for investors, but they provide no tax relief to the people who pay most of their taxes through the payroll tax in America, which is the vast majority of Americans. There are many other egregious transfers to the wealthy at the expense of the average American. So let's take this as the political statement it is. It is a political statement that makes clear the priorities of their party, and it makes clear that they are prepared to even risk the high-technology boom we have been through, because when you give a tax cut of this level without sufficient money to pay for it at a time when the economy is doing well, as Alan Greenspan and countless Nobel laureates and economists have said: You are going to reduce capital formation and increase interest rate costs and, in effect, may even reverse some of the plus side that has given us this option. It is a political statement that I think ultimately will come back to haunt them because Americans know better. There is no American in this country who does not appreciate the vast commitment we have had to children, to education, to higher education, to technology creation, transfers, to a host of things which make this country what it is: a better country and, in fact, an extraordinary country measured against all the other nations of the world in today's economy. I do not think we should put it at risk, and I hope colleagues will join in rejecting this political statement and in rejecting this irresponsible direction they seem prepared to adopt. I thank my friend for the time.

Mr. KERRY. Can I have a couple minutes?

Mr. KERRY. Mr. President I thank the distinguished ranking member. I share the affection and feeling expressed by the Senator from Montana, about how much we will miss the remarkable insightfulness and stewardship of the Senator from New York. Let me also associate myself with his praise of the Senator from Montana. That was a very thoughtful and very honest statement about what has happened in the Senate. I haven't been here quite as long as the Senator from Montana. I have been here 15 years. But I have never seen this body as polarized, as personalized, and as partisan as it is at this moment. I think it is very dangerous. It is dangerous for the country; divisive and difficult for the institution itself. I find it very hard, frankly, to understand. I guess I can understand it in macro terms. I find it hard to understand in the context of why we all run for the Senate and what we are in politics to try to achieve. There is something more than just winning elections. There are some people around here who do not believe that, but I am convinced the American people believe that. Indeed, I think an adherence to that notion is what has made us different from other countries, and the best moments of the Senate have been when we have tried to adhere to that notion. This is not a bill. This is not a tax bill. This is a political statement, a raw, fundamental, basic political statement. The statement is essentially one that seeks to say: Democrats want to spend money. Republicans want to give you back your money. That is the political statement. But it is not real when you look underneath it because the Republicans will join in September and October in spending the money because none of them are going to go back and tell the citizens of their State they are going to cut veterans hospitals, they are going to cut the Coast Guard, they are going to cut the FBI, and a host of other programs. None of them are going to do that. They are positioning themselves to say to their electorate: Gee, Clinton made me do it, but I wanted to give you back your money, even though the money wasn't there to give back. It is one of the great posturings and one of the great frauds of recent time from the very people who brought you Gramm-Rudman that fell on its face, the very people who built the great deficits of the early 1980s when they adopted the Stockman philosophy of how to create crisis in Government and undo Government itself, the very people who predicted in 1993 that if we passed the 1993 Deficit Reduction Act there would be economic chaos, unemployment lines, massive economic failure. The results are, here we are today with the best economy we have ever had in this country, with unemployment at record low rates, with the stock market at high rates, with the greatest sustained period of growth, and the very same people who brought you those three great failures are now trying to sell this snake oil to the American people. Let's look at it as a political statement. That is what it is. It is a political statement. It is a political statement in which they are prepared to take the House tax bill that was worse than the Senate bill and bring most of it back so that their political statement is: 60 percent of American taxpayers get 14 percent of the tax break that won't happen. On the other hand, their political belief is that the top 10 percent of income earners in America ought to get 47.6 percent of the benefits of their tax statement that won't happen. So they can run around and say: Gee, we tried to service those who service us the best in the process of campaign financing. But the reality is, it is just a political statement. The conference report remarkably delays the Senate's marriage penalty tax relief for earned-income tax recipients. I cannot tell you how many times we heard people on the other side of the aisle saying: Oh, my God, marriage is being destroyed in America; we have a disincentive for marriage, particularly among the poor in this country. We heard it all through the welfare debate. We heard it from the Republicans year after year. Many of us say we ought to get rid of the marriage penalty. We voted to get rid of the marriage penalty, but they come back and delay for working people the capacity to get rid of the marriage penalty. In exchange for delaying getting rid of the marriage penalty, what do they think is more important?

Mr. KERRY

Mr. KERRY. Mr. President, pursuant to section 904 of the Budget Act, I move to waive that section in that act for consideration of this motion. I ask for the yeas and nays.

Mr. KERRY. Mr. President, let me share with my colleagues what this is. Under the Balanced Budget Act, we set out to save some $103 billion in Medicare expenditures with respect to hospitals, home care, et cetera. The problem is the unintended consequences of the way that has happened, coupled with the managed care process, in fact, about $205 billion in Medicare payments has been reduced. The result is that, in hospitals, home care facilities, and nursing homes all across the country, all of our States are significantly affected in the quality of care that is being delivered. Special care units in hospitals are closing. Home care facilities are refusing patients. There has been a significant reduction in the quality of care across the country. Our teaching hospitals are threatened. What we are saying is that we need to reserve some $20 billion in order to be able to adequately make up for the unintended consequences of the Balanced Budget Act.

Mr. KERRY. Mr. President, I understand I have 1 minute.

Mr. KERRY. Mr. President, I have a motion at the desk and ask that it be called up.

Mr. KERRY

Mr. KERRY. Mr. President, I rise also in support of the amendment of the Senator from New Mexico. It is a smart amendment. It invests in the future of our country by making certain that, at a time when our schools all across the Nation do not have the resources necessary to prepare students for the future, we will do so as a matter of priority. I must say I was struck by the Senator from Arkansas a moment ago. He said this benefits not the wealthy but, rather, it benefits 61 percent of the people in his State. He was only pointing to one component of the program; that is, the lowering of the tax bracket from I think 15 percent to 14 percent. That is about a $150 billion part of the $791 billion. But when you add in the other parts of the $791 billion, here is exactly what happens. In the whole tax package the Republicans are giving, the lowest 20 percent of income earners in America will get $22, the second 20 percent will get $120, the middle 20 percent will get $276, and the top 1 percent gets $22,964. The next 4 percent gets $3,400, and the next 15 percent gets $1,500. You have to be in the upper-income brackets to get the larger amount. The Republicans will always come to the floor and say, Gee, Democrat Senator, did you just wake up to the fact that that is how it works? If you earn more money, you get more money? If you are a bigger taxpayer, you get more money back? I understand that. I understand basic mathematics. But basic fairness, basic decency, dictates if you are really trying to help the lower-income person, you set the figures of the tax break so the person with the smaller income gets the bigger amount. Why is it that the lowest 20 percent doesn't get $100 and the top 1 percent gets maybe $1,000 back? It is because that is the way they rigged the bill. That is the difference in approach and philosophy. It is a difference that fundamentally divides us. Let me speak for a moment, if I may, to an issue in one of the amendments that will be coming up very shortly, but we will not have time to do full measure on it, and that is the question of where we are with respect to Medicare. There is an amendment Senators Rockefeller, Mikulski, I, and others have introduced to ask the Finance Committee to go back and set aside $20 billion, about 3 percent of the total size of the tax cut, in order to guarantee that we will undo the damage the Balanced Budget Act is currently doing to America's health care system. Today, despite the fact that we have a remarkable economy, there are 43 million individuals in our Nation who do not have health insurance--1 out of every 6 Americans. Experts anticipate that is going to increase by 1.5 million per year. For the uninsured, academic health centers, the teaching hospitals of our country, have created an enormous safety net. Teaching hospitals have stood by to ensure there is care available to everyone in our country when it is absolutely needed. Today, at a time when teaching hospitals are more important than ever before, the combination of cost containment measures imposed by managed care and the effects of the Balanced Budget Act in reducing Medicare payments has literally made the future of our Nation's academic medical centers unclear. I would like my colleagues to think about the impact of what is happening today because of the reduction of Medicare reimbursements. At the Medical College of Georgia in Augusta, the training facility for the State university system's medical school, officials are now raising room fees by an average of 28 percent and they are increasing the cost of lab tests and other services by 10 percent. In Tennessee, Vanderbilt University recently decided it can no longer accept Medicare patients from outside the State. In March, Massachusetts General Hospital eliminated 130 positions and raised prices. In New York City, which has the Nation's largest concentration of teaching hospitals, city hospitals have cut their staffs by 10 percent since 1993. In California, Medicare cuts are largely to blame for the loss of over 1,250 jobs at the USFF, Stanford Health Care Network. In May, the University of Pennsylvania health system announced it was going to lay off 450 people, 9 percent of its total health care workforce. Detroit's hospitals have eliminated 4,500 jobs since January, but as my colleagues will tell you, the problems associated with the Balanced Budget Act are not unique to hospitals. In Massachusetts, as of mid-June, 20 home health care agencies have closed since late 1997. The administration may be busy sort of brushing off some of this as the simple corrections of market inefficiencies, but I could not disagree more, and I think many of my colleagues would disagree with that. I do not direct my colleagues' attention to statistics to debate the bottom line for health care providers. This has never been a debate about the interest of hospitals or nursing homes. It is a debate about the fact that if we do not act, we will further reduce the access to quality care so critical for our Nation's elderly, our Nation's poor, and our Nation's rural communities. It means something to real people. In Massachusetts alone, in South Shore, in the last 2 years the South Shore Hospital has had to lay off close to 50 of their visiting nurses. They have had to close their satellite offices, and their budget is more than 40 percent less than they require just to meet the needs of elderly and disabled patients. Who suffers as a result of that? Let me share with you a real elderly couple, a man and a woman with heart disease, lung disease, asthma, and hypertension. The wife of this gentleman has heart disease. They are 89 and 90 years old, and one of their greatest hopes has been to live together in the home they saved for years to buy, living as independently as they can in old age. They have been able to do it with the help of a visiting nurse from the South Shore Hospital. But now that is gone. Now, because the services are being cut because the Medicare reimbursements are so low, the impact is that those people can no longer continue to do it. I recently received a letter from another constituent named Harlan Smith. He says the following: Dear Senator Kerry: My 80-year-old father was discharged from my hospital to his home Friday afternoon, and we are meeting with home health care nurses and physical therapists today to plan a strategy for my 80-year-old mother and us to manage him at home. This is ironic since the cuts from the Balanced Budget Act have caused my hospital to cut services to the point where my mother and family now have to hire the required help privately. They cannot afford it. These days, that story is repeated in countless communities across the country. When the Balanced Budget Act of 1997 passed, the Congressional Budget Office projected the 335 provisions of the law were going to cut Medicare payments by $103 billion over 5 years. But today, CBO estimates that Medicare spending is going to drop $205 billion--a 100-percent increase above what the expectations were supposed to be. The projected net on-budget surplus for fiscal years 1998 through 2002 is $100 billion. You are seeing the surplus we will have in the country is basically going to come out of the hides of elderly infirm patients, people who cannot afford it, hospitals that are being forced to close, and medical care that is being reduced. When the Balanced Budget Act passed, total Medicare spending inflation was expected to drop from almost 10 percent in 1997 to approximately 5 percent in the outyears. But in April, the Treasury Department reported that total Medicare spending in the first half of the year had fallen by over 2 percent. In 1999 alone, the BBA was projected to cut Medicare spending by less than $16 billion. Instead, we anticipate Medicare spending is going to fall by $38 billion in 1999--$22 billion more than was expected. Medicare hospital spending is plummeting, and the quality of care is plummeting with it. When the Balanced Budget Act passed, CBO had projected a 2.5-percent increase in part A spending, hospital insurance, for 1999. But actually, spending fell almost 5 percent during the first half of the year, and the impact on hospitals is clear. Total hospital Medicare margins are expected to decline from 4.3 percent in 1997 to only 0.1 percent this year. We have a fundamental crisis. I say to my colleagues on the other side of the aisle, as we are busy giving back this tax money, we need to consider the impact on our hospitals, on health care, on home health care, and rural communities. I beg my colleagues to try to find the money that is going to save us from the loss of the crown jewels of the American health care system--our teaching hospitals.

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

Mr. KERRY. I thought he had additional time.