John Kerry

Mr. KERRY

Mr. KERRY. I reserve the remainder of my time. Mr. GORTON addressed the Chair.

Mr. KERRY. Mr. President, I yield myself such time as I may use. Mr. President, as I listened to the distinguished chairman of the committee talk about the virtues of this bill, I kept hearing language trying to describe the bill saying it is bipartisan, it meets the demands of all the people, it has followed the guidelines, somehow suggesting that merely by saying these things, it is true, that these are the things that are in this bill. But when you look behind each of those descriptive adjectives, there is a different reality. First of all, with respect to the bipartisanship, everybody understands that the Republicans control the committee. The Republicans could have reported out whatever they wanted to do, and that the only way there would be any capacity to improve it somewhat from what people viewed as a very draconian position was to become involved and play along. Everybody in the Senate and every observer understands that just because people vote for it to come out of the committee and have played a role in helping to bring it back from a precipice doesn't mean it is where it ought to be, or that it represents the best that we could achieve or the fairest that we could achieve. Indeed, a number of people who voted to send it out of the committee will vote for the Democratic alternative because it really represents much more of what they would have liked to have gotten but couldn't get because of the dynamics of how things work in a committee. It isn't enough to say that this is good for all the people. The charts, the statistics just contradict it. It is so obvious that it almost defies imagination, and we really have to spend a lot of time on it. The fact is that the bottom 20 percent of Americans under the House plan, the Archer plan, got 0.5 percent of the savings of the tax bill. Under the Roth bill, originally they come up with 0.4 percent, but under the Democratic alternative, they did better than either, with 5.1 percent, not an enormous difference. The reason for the lack of the enormous difference is that you have the earned income tax credit and you don't have earnings sufficient on an income tax form to be able to provide credit savings that go to people at the lowest end because of the way the tax structure works. We understand that. But when I hear the chairman say that middle Americans do the best, that is where the statistics tell a contrary story. No matter how many times our colleagues on the other side of the aisle try to say this is good for middle America, this is for all Americans. All Americans, just look at the facts. Under the Archer bill, it was 9.2 percent that went to the next 20 percent of income earners; the second to the lowest 20 percent. Under the Roth bill, 2.3 percent. Under the Democratic alternative, it is 16.3 percent--16.3 percent versus 2.3 percent. You can ask any child in the fifth or sixth grade, or almost any grade, if they know the difference, whether 16.3 percent is more than 2.3 percent. But under the Democratic alternative, the second 20 percent of income earners in America will get 16 percent versus the Roth 2.3 percent. That is a very significant difference. But then I move up in the income scale to the third 20 percent of income earners. Under the Archer bill, it was 9.2 percent. Under the Roth bill, it is 10 percent. But under the Democratic bill, it is 25 percent--25 percent versus 10 percent. It is very clear on its face that the average American income earner does better under the Democratic alternative than they will under the Republican bill. In the fourth 20 percent, and we are moving up in income now, we are talking in the $50,000 to $75,000 range, that is a considerable amount above the mean earnings of most Americans. That 20 percent in the Roth bill would get 21 percent; in the Democratic bill they would get 32.3 percent. What you have here, Mr. President, is just a stark difference, but here is the most significant difference, and I ask Americans to focus on this. It is a very significant difference. Under the Archer bill and under the Roth bill, the highest 20 percent of income earners in America, the people earning more than $100,000, the millionaires, the billionaires, they would get 67 percent--67.9 to be precise--under the Archer bill, 65.5 under the Roth bill--65.5 percent. But under the Democratic bill, they get only 20.8 percent. So there is an enormous difference in the distribution in what people will get. Mr. President, I know that our colleagues on the other side of the aisle will say, well, that's what happens automatically, that people with the money are going to get the capital gains tax cut, they are going to put their capital into investments, it is automatic that if you have a specific percentage of reduction, those people are going to get the lion's share of the break. It is automatic if that is the break you write into law, but there is nobody here whose arm is being twisted or who is being forced to write that into law. We have the prerogative of deciding how we are going to divide up the benefits of this tax break. I listen to my colleagues say that the Democratic alternative is really terrible when it comes to capital investment and savings because it isn't as generous in the capital gains tax cut. Ask most Americans what they think the economy in America is doing today? Why has the stock market doubled in the last few years? Why is the stock market at a record high? Why are so many businesses reporting profits that are at record level? Why are so many chief executive officers now earning 223 times the earnings of the average worker when 20 years ago it was only about 25 times the earnings of the average worker? Corporate America is doing very well today, very well, and I am glad. I voted for a bill in 1993 that helped corporate America to do pretty well today. And it has resulted in 4\1/2\ straight years of deficit reduction. But you have to ask yourself, if capital gains tax difference between 28 and 20 percent is so great, why is America doing so well today? It hasn't stopped some of the greatest mergers and acquisitions in American history from taking place. I don't think any economist in the Nation believes fundamentally--will we release some capital? The answer is yes. I happen to be for a capital gains tax cut, and I think it is beneficial to release some capital. But I think there are ways to do it that spread the fairness and that respect a sort of evenhandedness and a playing field that is more fair than what we are going to witness here. Mr. President, the Finance Committee has given us a list of tax breaks, the benefits of which flow chiefly to the wealthiest Americans. Nearly 43 percent of all the benefits will go to the wealthiest 10 percent of American income earners. I want to say that again. Forty- three percent of the Republican proposal goes to 10 percent of Americans, and under their proposal, 60 percent of the hard-working middle class of America and the poorest of Americans will share 12.7 percent. So 60 percent of America is going to be fighting for 12 percent of the tax benefits, while 10 percent of America gets 43 percent of the tax benefits. I can't believe that any American really believes that that is fair distribution of the benefits of this, Mr. President. I think it sets a new standard of unfairness. It is a transfer of wealth, a transfer of wealth from hard-working middle Americans, middle-income earners to the wealthiest and to the people who have done the best over the last few years. If you do not believe that these are the people who have done the best in the last few years, just take a look at the charts. Take a look at the statistics which come from every single one of our Government agencies and analysts in the private sector. The bottom 20 percent of income earners in America in 1975 were earning $18,947, on average. In 1985, they were earning $18,816. They lost income. And in the year 1995, 20 years later, they were earning $19,070, which was an increase of about $110 or so over 20 years. The next 20 percent of income earners went from a $30,701 average in 1975, to $32,415 in 1985, to $32,895 in 1995. So they had about a $380 gross increase, on average, in 10 years; and they had a $2,000 increase before that. When you factor in inflation, it is a loss. They lost income over those 20 years. You know who did not lose income over those 20 years? The people who are being rewarded the most in this tax bill. The only people in America who grew in that period of time were the top 20 percent of income earners. And they grew more than 100 percent. Yet people are finding a wonderful rationale to come to the floor and suggest that in 1997 there is a new standard of fairness which is prepared to give to those who got the most even more. It is extraordinary. Mr. President, we have the ability to write a different distribution. It is up to us. And in the Democratic alternative that Senator Daschle has proposed, the poorest 60 percent of Americans receive 46 percent of the tax cuts. Some people could make an argument that the poorest 60 percent ought to earn 100 percent of the tax cut or maybe 75 percent of the tax cut or 60 percent. We have tried to respect the notion that we do want to spread it out and we do want to respect the notion of savings and growth and encourage a capital gains tax. So we settled on the notion that those 60 percent--rather than scrambling for 12.7 percent of the total tax cut--would get 46 percent of those tax cuts. In the Finance Committee proposal, people earning between $30,000 and $85,000 get only 30 percent of the tax cut, Mr. President. That is what I call and most people look at as middle class in America--$30,000 to $85,000. And they receive only 30 percent of the tax cut. So when the chairman says, under our bill we are spreading this evenly among everybody, look at what the middle class gets. The very people he said are the best beneficiaries are getting only 30 percent of this, the vast majority going to those who have done the best in recent years. By any measure, Mr. President, I think the Democratic alternative is sound economically, and I think it is fair because it helps those who actually need a tax break to raise a child or to go to college or to start a business or to generate one of those high-wage 21st century, high-value-added jobs. And this is one of the crucial differences between our parties and, I think, between these two measures. For us, deficit reduction and the tax cut is a policy. I think for the Republicans it is an end in and of itself. For us, it is a means to an end, not the objective to be achieved, but a means of achieving the larger objective, which is creating more jobs, making sure our human resources are attended to; whereas, for them, I think that just getting that cut somehow has become a goal and a target. The problem is, that in doing so, our friends on the other side of the aisle are offering America a choice that I am confident most Americans are not aware of. This tax bill is backloaded with a time bomb, because while in the beginning it does not have all of the negative impact of the massive tax cut to the wealthy and shares some at the front end so they can say, look how you are going to do well at the first part of this, at the back end you balloon the amount of lost revenue, which will have a very significant impact under any circumstances, but obviously particularly if there were to be a downturn in the current revenues or in the economy. So you have a tax cut that for the first 5 years is $85 billion going back to the American people. But the second 5 years, it is going to cost $250 billion. And 10 years after that, when baby boomers are retiring and when Medicare and Social Security are being strained at a much greater degree than they are now, you are going to have a cost in this tax bill of $650 to $700 billion. Our policy, on the other hand, in my judgment, lays out the right set of priorities, Mr. President. We have cut capital gains in the past at times in America's history where the economy really mandated it. But I find it hard to understand, given how well the stock market is doing and how well investments are doing generically and how extraordinarily competently the corporate sector has moved to deal with some of the competitive issues that we faced during the 1980's and the early part of the 1990's--I think they deserve enormous credit for having done so--but having done so, one has to ask the question, what is there in today's economic indices that suggest sound economic policy in having such a broad loss of revenue for the capital gains tax, which in itself is so broad that you are making a choice not to give more revenue back to the middle class? I mean, that is the tradeoff here. If you are going to give the full breadth of the capital gains tax cut to the higher end, you have less money available to give to the middle end. I think most Americans would join me in asking a very simple question. Why should somebody be rewarded for the sale of their Persian rugs or their art or their yachts, which do not contribute significantly to the kind of economic activity that we are talking about? Certainly it accrues capital to them, I understand, and they will spend some of that capital and invest some of that capital, but what is the justification for expanding the capital gains reduction from a 28 percent tax only to a 20 percent tax or lower in order to encourage that kind of transaction? So in the Democrat alternative, what we have done is I think sensible. We want to reward the risk-taker and the entrepreneur who creates new jobs and who put their money on the line in an entrepreneurial effort to try to broaden the tax base of this country. I think that ought to be rewarded. I think I am the only U.S. Senator who introduced a zero capital gains tax, which I would like to see for new investments in 1 of the 25 or so critical technologies which are the areas where we will fastest create the most high-value-added jobs that will raise the income of our workers and indeed raise the standard of living of our Nation. And just like Japan or other countries that did not have any capital gains tax, I think it would behoove us to take some of this money from the rugs and the collectibles and the other assets people will get a windfall from and provide a zero capital gains tax in the long run on investments up to $100 million in a new issue of stock, help for 5 years in one of those kinds of companies. In our bill we do not go to zero. But we do have a 50-percent exclusion on the capital gains tax for that kind of qualified investment up to $100 million, the stock held for 5 years. In doing so, Mr. President, I am confident that we will do what is really necessary, which is provide venture capital with the kind of incentive to move to the kinds of ventures that will truly create jobs and kick the economy. And in doing so, it allows us to provide more money to the middle class to help them send a kid to college, help them be able to pay for child care, help them be able to do some of the fundamentals that we think are so important in terms of spending time with family or raising a family, and indeed puts much more money into the pockets of the people we truly consider to be middle America. Mr. President, the Finance Committee has also tried to suggest that its child care provision is better than the child care provision that is put forward in the Democrat alternative. And I would like to just assert that again the facts do not bear that out. The Democrat alternative does more for more people than the Finance Committee proposal. It does more for precisely those families who need the help the most, and those are young families with young children where this will provide them the opportunity to do much better for the future of the country. The reason is, Mr. President, because I heard the chairman talking about how their tax credit, the tax credit in the Finance Committee proposal, goes to families earning up to $150,000 of income, and, therefore, it reaches more people. But the truth is, when you look underneath the figures, it does not reach more people. The reason it does not reach more people is that most Americans today who are with young families who need help pay most of their income through the payroll tax. Their money is taken out of their paycheck at work. And it goes to the Social Security system and they are, therefore, mostly not able to take advantage of the tax credit because too many families in America do not have enough income that is taxable to wind up getting the credit, and the payroll tax winds up penalizing them even more. The vast majority of families in America pay most of their tax in the payroll tax. And what the Finance Committee does not do is provide an offset against the payroll tax, the result of which is that very little of the credit is available to a family earning $30,000 or less under their credit. Whereas, under the Democrat proposal, the credit would be available because of the offset against the payroll tax, it would go right down to families earning $15,000. And that encompasses many more families who are in need of the child tax credit. So there is a very simple truth here, that they give the credit all the way up to $150,000; our credit fades out between $70,000 and $85,000. The result of that is we are able to give more credit to the people who are most in need. So, Mr. President, I believe that a dispassionate analysis, a fair analysis of these two proposals is very clear about who benefits and who does not. I want to emphasize that many of us on the Democrat side support a capital gains tax reduction. I am one of them. Some do not; some do. But I am convinced that you can target that capital gains reduction when you have a limited amount of resources to deal with, as we do, and we are forced to make the hard choices we are making so that you spread out the benefits in a fairer way. And that is precisely--precisely-- what the Democrat alternative does. I wish in many ways we could have gotten to this point in a different way. We might have, had we not been forced into the strictures of this deal where the deal became almost more important than some of the policies that were contained within it. By definition, the deal being a compromise, it is a bit of this and a bit of that. In the end, regrettably, Mr. President, I think it has come out with a disproportionate, imbalanced allocation or shift of resources in America. Most Americans, when they are given a chance, if they were to be or could really take note of the differences between these proposals, would obviously applaud the education benefits that the chairman talked about--of course they would--but the Democrats would support those benefits, also. That is not at issue here. What is at issue here is the difference between how you get money to the families that really need it versus how much you ought to provide in incentive for increased savings or investment out of the proposals that are in both measures. I think on balance, the proposal of the Democratic leader, Senator Daschle, is both fairer and steeped in greater economic sense, and in the end I believe most Americans will come to that judgment. Mr. President, how much time remains for the Democrat side?

Mr. KERRY. I yield 3 minutes.

Mr. KERRY. I yield 2 minutes to the Senator from California.

Mr. KERRY. Mr. President, I ask unanimous consent that I be permitted to yield 2 minutes to the Senator from California without losing my right to the floor, and then I will proceed on our time.

Mr. KERRY

Mr. KERRY. Mr. President, I send a bill to the desk and ask for its appropriate referral. Mr. President, I am pleased to introduce today the Welfare-to-Work Microloan Pilot Program Act of 1997, and I do so with Senators Bumpers, Harkin, Grassley, Landrieu, Cleland, Lieberman, Wellstone, Levin, Snowe, and Lautenberg. I thank and congratulate all of them for their commitment to this important program. This legislation will assure that Americans who have had to rely on public assistance have the same opportunities as other Americans to start and operate a small business. Mr. President, America is the home of the entrepreneurial frontier. Here, anyone can explore boundless opportunities to try new things, to begin again, and to build new lives. Americans have inherited characteristics from the frontiersmen--embracing risk, change, and individualism--and applied it directly to starting and expanding American small businesses. As the ranking member of the Small Business Committee and a Senator from Massachusetts, I am honored to represent a State that employs more and more people and continues to fuel the national economy and job market. Massachusetts' 360,000 small firms are employing over 50 percent of our workers. From 1991 to 1995, all American businesses with fewer than 500 employees created 11 million new jobs, while businesses with more than 500 employees cut three million jobs overall. I want to open the entrepreneurial frontier to all Americans who want to leave the welfare system behind and build new lives for themselves and their children. The Welfare-to-Work Microloan Pilot Program is geared to assist people in moving people from welfare into the work force, not just as workers but as entrepreneurs. It is more than a jobs bill. It will not only build businesses, but it will build communities. This bill builds on the foundation of the SBA's remarkable Microloan Program which allows businesses and startup companies to receive development counseling and small loans of up to $25,000. The average microloan size is only $10,800. Under the Welfare-to-Work Microloan Pilot Program local organizations will serve welfare recipients by using SBA grants for intensive business development assistance. In addition, the bill will allow local organizations to help future business owners overcome two of the greatest obstacles that they have, access to affordable transportation and convenient child care. Mr. President, I urge my colleagues to support this legislation--to assure that the American dream can be realized by all Americans and future generations. We must build a system now that will help our children. One in five of America's children--14.3 million--live in poverty. Two-thirds of welfare recipients are children. If we want to lift them up and out of poverty, we must give them new opportunities to explore and benefit from the resources of America's frontier. We must act now to provide their parents and guardians with a map across the entrepreneurial frontier. Mr. President, the fact is that this type of program has already worked, and I just want to share a couple of quick examples with you. One of the people who has already received this type of grant under the Microloan Pilot Project is Karla Brown, owner of Ashmont Flowers Plus in Boston. In 1990, she found herself divorced with a young daughter, a mountain of debt, bad credit and unemployed as a result of major surgery. After being on disability for 3 years, she decided to start her own business. In 1993, she started selling flowers at a subway station. As the business grew, she leveraged the resources of local organizations, developed a business plan, received an SBA funded Microloan, and opened a store in Codman Square, a critical commercial node in a low-income neighborhood in Boston. With a $19,000 loan from the Jewish Vocational Service in Boston and a tremendous commitment to become a successful entrepreneur, she is now the proud owner of a business that has annual sales of $100,000 and employs two people part- time. Karla Brown's big idea of a flower shop was one of many new businesses applauded by an article entitled ``SBA Microloans Fuel Big Ideas'' in a recent issue of the U.S. Chamber of Commerce's magazine. Karla is joined by others on this entrepreneurial frontier. In 1995, the Western Massachusetts Enterprise Fund made a loan of less than $10,000 to a divorced, single mother who was receiving public assistance. The woman believed in her own skills as a hairdresser and her own personal efforts. With the help of her community organization, she developed a marketing plan, targeted special underserved markets-- homebound elderly, group home residents' and disabled people--and, in just 2 years, she is now busy with appointments all day long and has never missed a loan payment. In fact, under the SBA's Microloan Program, the Government has not lost one dime in the 6 years of operation because loan repayment rates are so high. The reason this program is so successful is because the SBA provides grants for technical assistance for the loan recipients and helps to make certain that these ventures are successful. Another Massachusetts organization, Jobs for Fall River, Inc., saw the potential in a 35-year-old woman who was relying on welfare while caring for her elderly mother and her young son. She wanted to start a business to design clothing. Her first attempt at the enterprise failed because she was not able to afford the child care, transportation costs, and operating costs for running the business without a loan. However, after attending an 8-week intensive training session, she was able, through the assistance of Jobs for Fall River and SBA-provided funding, to develop a business plan and receive a loan in May of 1996. We can open the entrepreneurial frontier for more Americans on public assistance with the Welfare to Work Microloan Pilot Program--partnering the resources of the SBA with local organizations like the Western Massachusetts Enterprise Fund, Jobs for Fall River, and the Jewish Vocation Services in Boston. During a recent hearing before the Small Business Committee, an inspiring witness from Iowa, Mr. John Else of the Institute of Social and Economic Development, told of the successes his organization is working with welfare recipients under the SBA Microloan Program. Individuals in their program have a business success rate that is three times higher than the average for new businesses. His testament, combined with the requests of other local organizations for more flexibility to help this community, convinced me that we need to expand the success of this program. Opening the frontier for more small businesses is critical to achieving the aims of welfare reform. States are now facing tall goals to reduce the welfare roles--their caseloads must be reduced by 25 percent this year under the new law. The growth in job creation is directly parallel to the growth in small businesses. In America today, there are over 22 million small businesses compared with only 14,000 big businesses. We see more women than ever exploring the entrepreneurial frontier. Women-owned businesses represent one-third of all U.S. companies, contribute more than $1.5 trillion in sales to the U.S. economy, and employ more people than the Fortune 500. Women-owned sole proprietorships have a start-up rate twice that of male-owned businesses. It is important for us to help women move into entrepreneurial roles because women comprise a large share of welfare roles. I suggest that the program I am introducing today is an excellent way to move people from welfare into the marketplace, not just as workers and wage earners, but as business creators, as people who will be able to provide jobs for other people as well as gain their own self-sufficiency. Because the record shows that during the 6 years of the Microloan pilot project the Federal Government has not suffered one loss, we ought to be prepared to replicate these results with programs that create more jobs and enhance the economy. I hope my colleagues will support this effort.

Mr. KERRY

Mr. KERRY. Mr. President, I send a bill to the desk and ask for its appropriate referral. Mr. President, I am pleased to introduce today the Welfare-to-Work Microloan Pilot Program Act of 1997, and I do so with Senators Bumpers, Harkin, Grassley, Landrieu, Cleland, Lieberman, Wellstone, Levin, Snowe, and Lautenberg. I thank and congratulate all of them for their commitment to this important program. This legislation will assure that Americans who have had to rely on public assistance have the same opportunities as other Americans to start and operate a small business. Mr. President, America is the home of the entrepreneurial frontier. Here, anyone can explore boundless opportunities to try new things, to begin again, and to build new lives. Americans have inherited characteristics from the frontiersmen--embracing risk, change, and individualism--and applied it directly to starting and expanding American small businesses. As the ranking member of the Small Business Committee and a Senator from Massachusetts, I am honored to represent a State that employs more and more people and continues to fuel the national economy and job market. Massachusetts' 360,000 small firms are employing over 50 percent of our workers. From 1991 to 1995, all American businesses with fewer than 500 employees created 11 million new jobs, while businesses with more than 500 employees cut three million jobs overall. I want to open the entrepreneurial frontier to all Americans who want to leave the welfare system behind and build new lives for themselves and their children. The Welfare-to-Work Microloan Pilot Program is geared to assist people in moving people from welfare into the work force, not just as workers but as entrepreneurs. It is more than a jobs bill. It will not only build businesses, but it will build communities. This bill builds on the foundation of the SBA's remarkable Microloan Program which allows businesses and startup companies to receive development counseling and small loans of up to $25,000. The average microloan size is only $10,800. Under the Welfare-to-Work Microloan Pilot Program local organizations will serve welfare recipients by using SBA grants for intensive business development assistance. In addition, the bill will allow local organizations to help future business owners overcome two of the greatest obstacles that they have, access to affordable transportation and convenient child care. Mr. President, I urge my colleagues to support this legislation--to assure that the American dream can be realized by all Americans and future generations. We must build a system now that will help our children. One in five of America's children--14.3 million--live in poverty. Two-thirds of welfare recipients are children. If we want to lift them up and out of poverty, we must give them new opportunities to explore and benefit from the resources of America's frontier. We must act now to provide their parents and guardians with a map across the entrepreneurial frontier. Mr. President, the fact is that this type of program has already worked, and I just want to share a couple of quick examples with you. One of the people who has already received this type of grant under the Microloan Pilot Project is Karla Brown, owner of Ashmont Flowers Plus in Boston. In 1990, she found herself divorced with a young daughter, a mountain of debt, bad credit and unemployed as a result of major surgery. After being on disability for 3 years, she decided to start her own business. In 1993, she started selling flowers at a subway station. As the business grew, she leveraged the resources of local organizations, developed a business plan, received an SBA funded Microloan, and opened a store in Codman Square, a critical commercial node in a low-income neighborhood in Boston. With a $19,000 loan from the Jewish Vocational Service in Boston and a tremendous commitment to become a successful entrepreneur, she is now the proud owner of a business that has annual sales of $100,000 and employs two people part- time. Karla Brown's big idea of a flower shop was one of many new businesses applauded by an article entitled ``SBA Microloans Fuel Big Ideas'' in a recent issue of the U.S. Chamber of Commerce's magazine. Karla is joined by others on this entrepreneurial frontier. In 1995, the Western Massachusetts Enterprise Fund made a loan of less than $10,000 to a divorced, single mother who was receiving public assistance. The woman believed in her own skills as a hairdresser and her own personal efforts. With the help of her community organization, she developed a marketing plan, targeted special underserved markets-- homebound elderly, group home residents' and disabled people--and, in just 2 years, she is now busy with appointments all day long and has never missed a loan payment. In fact, under the SBA's Microloan Program, the Government has not lost one dime in the 6 years of operation because loan repayment rates are so high. The reason this program is so successful is because the SBA provides grants for technical assistance for the loan recipients and helps to make certain that these ventures are successful. Another Massachusetts organization, Jobs for Fall River, Inc., saw the potential in a 35-year-old woman who was relying on welfare while caring for her elderly mother and her young son. She wanted to start a business to design clothing. Her first attempt at the enterprise failed because she was not able to afford the child care, transportation costs, and operating costs for running the business without a loan. However, after attending an 8-week intensive training session, she was able, through the assistance of Jobs for Fall River and SBA-provided funding, to develop a business plan and receive a loan in May of 1996. We can open the entrepreneurial frontier for more Americans on public assistance with the Welfare to Work Microloan Pilot Program--partnering the resources of the SBA with local organizations like the Western Massachusetts Enterprise Fund, Jobs for Fall River, and the Jewish Vocation Services in Boston. During a recent hearing before the Small Business Committee, an inspiring witness from Iowa, Mr. John Else of the Institute of Social and Economic Development, told of the successes his organization is working with welfare recipients under the SBA Microloan Program. Individuals in their program have a business success rate that is three times higher than the average for new businesses. His testament, combined with the requests of other local organizations for more flexibility to help this community, convinced me that we need to expand the success of this program. Opening the frontier for more small businesses is critical to achieving the aims of welfare reform. States are now facing tall goals to reduce the welfare roles--their caseloads must be reduced by 25 percent this year under the new law. The growth in job creation is directly parallel to the growth in small businesses. In America today, there are over 22 million small businesses compared with only 14,000 big businesses. We see more women than ever exploring the entrepreneurial frontier. Women-owned businesses represent one-third of all U.S. companies, contribute more than $1.5 trillion in sales to the U.S. economy, and employ more people than the Fortune 500. Women-owned sole proprietorships have a start-up rate twice that of male-owned businesses. It is important for us to help women move into entrepreneurial roles because women comprise a large share of welfare roles. I suggest that the program I am introducing today is an excellent way to move people from welfare into the marketplace, not just as workers and wage earners, but as business creators, as people who will be able to provide jobs for other people as well as gain their own self-sufficiency. Because the record shows that during the 6 years of the Microloan pilot project the Federal Government has not suffered one loss, we ought to be prepared to replicate these results with programs that create more jobs and enhance the economy. I hope my colleagues will support this effort.

Mr. KERRY

Mr. KERRY. I wanted to ask the Senator a question. I think there are two truths here. I don't think the gap is that great. All of us accept the fact that the demographics are changing. We accept the fact that we are going to have to do something. We accept the fact that people are living longer. You are going to have an increasing number retiring that we don't have a sufficient capacity to cover. We understand that. But the other truth is the truth that the Senator from Illinois spoke of--the fact that you have this very large proportion of people today who aren't covered and who haven't reached the age of eligibility. The question that is avoided by the Senator from New Mexico, which would bridge the gap, is: How do you guarantee, as you raise the age, that you are not going to lose more people in that gap? That is the only issue that separates us. As I have talked to colleagues on the other side of the aisle, they have agreed that the commission will probably recommend that solution. We could have provided some kind of capacity for a stopgap and we would all walk out of here having done the right thing, but also having guaranteed that we are not going to lose more people without coverage.

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

Mr. KERRY. Mr. President, I have listened to a number of my colleagues come to the floor and say we are heading toward the cliff, we have to do this because people are living longer and, if we do not do this, we are not going to be able to save Medicare. It is true that people are living longer. But it is not true that this is the only way to save Medicare. The notion that we have to be forced to have a choice on the floor of the Senate, with the idea that, in order to make up for a fixed amount of money that we are supposed to find to make up for cutting, that we have to take it out of that gap between the age of 65 and 67, is absolutely specious. What they have decided to do is find a fixed amount of money so we can give an $85 billion tax cut. I mean, the tax bill is not on the floor today, but this is related to the tax bill. The fact is, we are going to find our capacity to give back $85 billion, the lion's share of which will go to the wealthiest people in America under the current construction. And, in order to do that, we are forced to come here and tell people who are 65 years old, in the future--even if it begins for somebody who is 60 or 65 today, if you are 61 and you are looking at the time when you are 67 then you will be eligible for Medicare, you are forced to go out and find it somewhere in the marketplace. For a whole lot of people in America that age they cannot find it in the marketplace. They cannot afford it. There is no provision in this measure that provides some kind of stopgap capacity for those people to be able to afford the premiums they will be charged in the marketplace. So the choice of the U.S. Senate is, so we can give an $85 billion tax bonanza to a lot of people in America, people between the age of 65 and 67 in the future are going to have to do whatever they can to get health care. Do whatever you can; we are cutting you off. We are moving exactly in the opposite direction from what everybody in the health care industry in this country says--that we ought to be covering more people, not less. What is the rationale for that? What is the philosophical connection between saying we want more people covered in their health care in America, particularly in the later years of their life, but we are going to come along here now and facilitate this great tax give-back by making sure that we fix Medicare. What is the connection between the tax and the Medicare? Everybody says we have to fix it. Well, it is money that is available. This is a zero sum game. There is money here. There is money there. You have the ability to find it if you want to. You do not have to necessarily do that, but, instead, we are making a choice to do it. I recognize obviously people are living longer. I know what the demographics say about Medicare in the long run. Maybe in the long run the commission would come back and say it makes sense to lift the age but it also makes sense to guarantee that nobody falls through the cracks. The way you are going to guarantee that nobody falls through the cracks is raise the premiums on the richest people in America, for whom the average person is paying for their ability to be able to ride the Medicare train, and ask them to contribute more so the people who will fall through the cracks won't in fact fall through the cracks. This is not that hard a choice. But rather than even try to do that, we are being presented at the 11th hour with something that the White House didn't cut in in the deal. This wasn't in the budget agreement. This is right out of the sky. We are going to reach out and do this because in a certain respect it seems to make sense on paper. I do not think it makes sense in the lives of a lot of people who will not be able to buy health care, who will be squeezed out of the system, even if you can say it is not going to cut in until the year 2002 and people are going to have plenty of time for it. Somebody who is downsized and out of work at that age and does not have the ability to provide additional income does not have the capability of paying $6,000 or $7,000--and it will be more by then, incidentally, for the annual health care premiums. So what you are really deciding to do is cut off and not include people, poor people, in coverage. You are going to exclude people from coverage, and that is the exact opposite direction than we ought to be moving in. I yield back whatever time I have.

Mr. KERRY

Mr. KERRY. Mr. President, today I am introducing along with Senators Cleland, Wellstone, Robb, Landrieu, and Harkin, the Small Business Technology Transfer Act of 1997. I ask unanimous consent that those senators listed in my statement be named original co-sponsors. This legislation would reauthorize the Small Business Administration's Small Business Technology Transfer Pilot Program through fiscal year 2003. The STTR program was originally authorized five years ago to combine the technological innovation of America's universities and research institutions with the business know-how and entrepreneurial spirit of our country's small businesses. The fact is that other countries are significantly more aggressive in many ways about their joint ventures or partnerships between government and business in order to try to steal market share or create market where there may not even be one. Recently we learned that even as the United States was cutting back on basic research in our budget, Japan had committed a 50-percent increase to its budget because they understand that basic research is the foundation for the future products of the world, and those countries that are able to capitalize on this research are in a much better position to expand their job base. Millions of dollars each year go to federally sponsored research projects at America's universities, non-profit research centers and federal research laboratories. The innovations that are developed are amazing but the people who conduct the research are not always the best ones to market the product and develop it for commercial use. We have seen case after case where somebody at a university or at a federally sponsored research facility is sitting on top of a gold mine of information and technology, or even a specific product, but they do not know how to identify the proper target market, gain access to capital, or do the other things necessary to move that product from the laboratory to the marketplace. The STTR program was developed by those of us who feel very strongly that we need to help bridge that gap; that it is an important function in this modern marketplace for us to leverage the ability of those small entrepreneurs by partnering them with the researchers to take the technology out into the marketplace. Because the core competency of research institutions lies in research and not business, fewer practical applications for federally sponsored research were developed than was originally desired. It was Congress' intention to reconcile this problem by coupling non-profit research institutions with small businesses in order to promote the transfer of valuable technology into the commercial sector. This not only benefits the economy, but it ensures that the sponsoring Federal agencies get far more results for the dollars that we invest in research. I know taxpayers are much happier when we do that. Small business is a more effective mechanism for transferring technology from research institutions to industry where the technology can be used to improve the economy. This is important because even though our research institutions lead the world in science and engineering research, we have had difficulty successfully developing them into commercial applications. Transferring technology from research forums to the commercial marketplace not only benefits the American economy, but also further serves the needs of the sponsoring federal agency by providing better products as a result of the collaboration between the non-profit and for-profit sectors. Research for federal agencies is conducted in very diverse areas. Because the STTR program is limited to federal agencies with at least one billion dollars designated for outside research, currently five federal agencies participate in the STTR program. Through a series of three phases, research in areas of defense, health and transportation is transformed by small businesses into products and innovations that can be applied in the commercial marketplace. In the first three years of the STTR program, over $115 million have been awarded by the five participating federal agencies. In fiscal year 1996 alone, over $60 million in awards were made to over 320 projects. My home state of Massachusetts had 50 projects receive awards in fiscal year 1996 for a total of over $8.7 million. Among the recipients of these awards were Harvard Medical School, Worcester Polytech and Boston University. The STTR program helps American businesses compete in the highly competitive marketplace of science and technology. Most of the small businesses participating in this program do not have their own research departments and could not afford to conduct the research needed to produce these products. But by collaborating with the various research institutions, these small businesses gain the access to technology and advanced research they need to bring quality products to the private sector. I want to tell you about one company whose experience with the STTR program exemplifies how the small business/research institution partnership has succeeded in bringing ideas to market. Metal Matrix Cast Composites is a small business located in Waltham, Massachusetts. MMCC is working with the Massachusetts Institute of Technology to develop and test aluminum alloys reinforced with ceramic particulates. Besides having potential military applications, these new materials have many commercial applications including brake systems for cars and landing gears for airplanes. Under a previous STTR contract, MMCC developed a product along with Northeastern University in Boston, that allowed them to provide advanced composite parts to its customers. Under that contract, MMCC has already sold these parts to aerospace, electrical, computer and medical instrument suppliers. The lesson of Metal Matrix Cast Composites is clear. When given the opportunity to collaborate with each other, small businesses and research institutions can produce quality products with real commercial applications that otherwise may not have reached the marketplace. We are not talking about substituting for what the sector does already. We are not talking about taking the place of something that the private sector figured out it could do better by itself or wanted to do. We are talking about providing something where it did not exist, where it will not exist, where in most instances it cannot without the proper kind of leverage and the proper kind of coordination. As much as all of us would like to feel that Adam Smith's rules are the ones that ought to prevail in the marketplace, the fact is that every other one of our industrial competitors is playing today by a different set of rules, by a set of, in many cases, unfair trade practices where they are willing to dump, willing to joint venture, willing to subsidize, willing to engage in a host of practices that undermine our capacity to move to those markets. By reauthorizing the STTR program, we will be giving more small businesses the opportunity to gain access to technology and then to succeed in the marketplace. I urge my colleagues to support this worthy program. Mr. President, I ask unanimous consent that the full text of the bill be printed in the Record, and I also ask unanimous consent that the bill be available for other sponsors who wish to cosponsor it through the course of the day.

Mr. KERRY

Mr. KERRY. Mr. President, today I am introducing along with Senators Cleland, Wellstone, Robb, Landrieu, and Harkin, the Small Business Technology Transfer Act of 1997. I ask unanimous consent that those senators listed in my statement be named original co-sponsors. This legislation would reauthorize the Small Business Administration's Small Business Technology Transfer Pilot Program through fiscal year 2003. The STTR program was originally authorized five years ago to combine the technological innovation of America's universities and research institutions with the business know-how and entrepreneurial spirit of our country's small businesses. The fact is that other countries are significantly more aggressive in many ways about their joint ventures or partnerships between government and business in order to try to steal market share or create market where there may not even be one. Recently we learned that even as the United States was cutting back on basic research in our budget, Japan had committed a 50-percent increase to its budget because they understand that basic research is the foundation for the future products of the world, and those countries that are able to capitalize on this research are in a much better position to expand their job base. Millions of dollars each year go to federally sponsored research projects at America's universities, non-profit research centers and federal research laboratories. The innovations that are developed are amazing but the people who conduct the research are not always the best ones to market the product and develop it for commercial use. We have seen case after case where somebody at a university or at a federally sponsored research facility is sitting on top of a gold mine of information and technology, or even a specific product, but they do not know how to identify the proper target market, gain access to capital, or do the other things necessary to move that product from the laboratory to the marketplace. The STTR program was developed by those of us who feel very strongly that we need to help bridge that gap; that it is an important function in this modern marketplace for us to leverage the ability of those small entrepreneurs by partnering them with the researchers to take the technology out into the marketplace. Because the core competency of research institutions lies in research and not business, fewer practical applications for federally sponsored research were developed than was originally desired. It was Congress' intention to reconcile this problem by coupling non-profit research institutions with small businesses in order to promote the transfer of valuable technology into the commercial sector. This not only benefits the economy, but it ensures that the sponsoring Federal agencies get far more results for the dollars that we invest in research. I know taxpayers are much happier when we do that. Small business is a more effective mechanism for transferring technology from research institutions to industry where the technology can be used to improve the economy. This is important because even though our research institutions lead the world in science and engineering research, we have had difficulty successfully developing them into commercial applications. Transferring technology from research forums to the commercial marketplace not only benefits the American economy, but also further serves the needs of the sponsoring federal agency by providing better products as a result of the collaboration between the non-profit and for-profit sectors. Research for federal agencies is conducted in very diverse areas. Because the STTR program is limited to federal agencies with at least one billion dollars designated for outside research, currently five federal agencies participate in the STTR program. Through a series of three phases, research in areas of defense, health and transportation is transformed by small businesses into products and innovations that can be applied in the commercial marketplace. In the first three years of the STTR program, over $115 million have been awarded by the five participating federal agencies. In fiscal year 1996 alone, over $60 million in awards were made to over 320 projects. My home state of Massachusetts had 50 projects receive awards in fiscal year 1996 for a total of over $8.7 million. Among the recipients of these awards were Harvard Medical School, Worcester Polytech and Boston University. The STTR program helps American businesses compete in the highly competitive marketplace of science and technology. Most of the small businesses participating in this program do not have their own research departments and could not afford to conduct the research needed to produce these products. But by collaborating with the various research institutions, these small businesses gain the access to technology and advanced research they need to bring quality products to the private sector. I want to tell you about one company whose experience with the STTR program exemplifies how the small business/research institution partnership has succeeded in bringing ideas to market. Metal Matrix Cast Composites is a small business located in Waltham, Massachusetts. MMCC is working with the Massachusetts Institute of Technology to develop and test aluminum alloys reinforced with ceramic particulates. Besides having potential military applications, these new materials have many commercial applications including brake systems for cars and landing gears for airplanes. Under a previous STTR contract, MMCC developed a product along with Northeastern University in Boston, that allowed them to provide advanced composite parts to its customers. Under that contract, MMCC has already sold these parts to aerospace, electrical, computer and medical instrument suppliers. The lesson of Metal Matrix Cast Composites is clear. When given the opportunity to collaborate with each other, small businesses and research institutions can produce quality products with real commercial applications that otherwise may not have reached the marketplace. We are not talking about substituting for what the sector does already. We are not talking about taking the place of something that the private sector figured out it could do better by itself or wanted to do. We are talking about providing something where it did not exist, where it will not exist, where in most instances it cannot without the proper kind of leverage and the proper kind of coordination. As much as all of us would like to feel that Adam Smith's rules are the ones that ought to prevail in the marketplace, the fact is that every other one of our industrial competitors is playing today by a different set of rules, by a set of, in many cases, unfair trade practices where they are willing to dump, willing to joint venture, willing to subsidize, willing to engage in a host of practices that undermine our capacity to move to those markets. By reauthorizing the STTR program, we will be giving more small businesses the opportunity to gain access to technology and then to succeed in the marketplace. I urge my colleagues to support this worthy program. Mr. President, I ask unanimous consent that the full text of the bill be printed in the Record, and I also ask unanimous consent that the bill be available for other sponsors who wish to cosponsor it through the course of the day.

Mr. KERRY

Mr. KERRY. Mr. President, I yield whatever time remains, and I thank my colleague. Mr. ALLARD addressed the Chair.

Mr. KERRY. Mr. President, I thank the Chair. Mr. President, I will not use that full amount of time because other colleagues are waiting. (The remarks of Mr. Kerry pertaining to the introduction of S. 929 are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. KERRY. Mr. President, what is the regular order?

Mr. KERRY

Mr. KERRY. Mr. President, the Fourth of July will occur in a little over 2 weeks. That is the date by which the President challenged the Congress to act on campaign finance reform in this first session of the 105th Congress. I regret I must announce the obvious: not only has neither house of the Congress addressed this issue in serious floor debate and legislative action; there is virtually no prospect that either house will do so by the time we leave for the July 4 recess. Nor is it clear when or if the 105th Congress will address this issue. The Fourth of July has other implications, of course, Mr. President-- and some of these, too, are related to campaign finance reform. This is a peculiarly American holiday, when Americans throughout the Nation take time out to gather in parks and back yards, at barbecues and picnics and family reunions and community parades, to celebrate our democracy, our freedom. But I think there would be widespread agreement, as we do this in 1997, that there is an unease across the Nation about the political process. The American people are concerned. Their concern is not primarily about who their elected officials are. Their frustration, cynicism, and anger run deep and broad--directed, as most of us realize, at the entire political system. Americans believe that their Government has been hijacked by special interests, that the political system responds to the needs of wealthy special interests, not the interests of ordinary, hard-working citizens. They sense, in many ways, that the Congress is not necessarily ``the people's house.'' We see evidence of this in the feeling of powerlessness described by many Americans, and in the great gulf that grows wider between the American people and their elected officials. You can see it expressed frequently in town meetings and in various polls. The people feel that Congress all too often fails to represent the real concerns of real Americans, and they sense that they are being left out. The result is that more and more Americans are checking out of the system. If their democracy isn't going to respond to their concerns, then they ask themselves why they should respond to the request that they participate meaningfully in the political process. The reason for the disconnect is very simple, Mr. President. The amount of money in politics--money given to office seekers to campaign for office-- disenfranchises the average person who knows that he or she can never hope to have the same kind of access as that money achieves for those who give it. Special interest money is moving and dictating and governing the agenda of American politics, and most Americans understand that. A few findings from a bipartisan poll tell the story: 49 percent of registered voters believe that lobbyists and special interests control the Federal Government; 92 percent of registered voters believe that special interest contributions affect the votes of Members of Congress; and 88 percent believe that people who make large campaign contributions get special favors from politicians. The evidence of public discontent could hardly be more compelling, yet the Congress drifts on, with no apparent sense of urgency in trying to respond to that discontent. We all understand there are differences on each side of the aisle about the best way to address the problem, but I do not see how anyone can say in good conscience that there is a bona fide effort under way involving the leadership of both parties in the U.S. Congress to even try to work out those differences. If we want to regain the respect and confidence of the American people and if we want to reconnect to them and reconnect them to our democracy, we have to get the special interest money out of politics. As my friend Ross Perot says, ``It's just that simple.'' The American people, however, are skeptical about either our willingness or ability to do that, and it doesn't help that the 105th Congress has yet to take up campaign finance reform. It doesn't help that the President and the Speaker of the House shook hands in a very public way 2 years ago and promised to do something about campaign finance, and nothing has transpired between then and now to fulfill that commitment, and from the perspective of the ordinary citizen who wants to see the special interest money removed from politics, it really looks like a conspiracy of inaction. Those who profit from the current system --special interests who know how to play the game, and politicians who know how to play the game--seem to be shutting down any prospect of real change. Mr. President, I know why people feel that way. I have been working on campaign finance reform since I came to the Senate. I have worked for years with my colleagues Joe Biden and Robert Byrd and others, and with former Senators such as George Mitchell, David Boren, and Bill Bradley--searching for the right equation to bring about change. Although from my arrival in the Senate I have advocated sweeping overhaul of the system, in recent times I have been a strong supporter of the proposal advanced by John McCain and Russ Feingold, even though it is incremental in design, because they succeeded in assembling a package of reforms that bridged the party divide that so often has been permitted to poison this debate and prevent meaningful action--and because I believe so fervently that we must succeed to whatever extent it is possible in moving toward what should be our objective. Throughout these years of activity--the 12 years of my service as a Senator--my goal has always been the same, to get special interest influence and special interest access out of politics. Mr. President, we come to the floor this afternoon on an auspicious day--or, perhaps more accurately, an inauspicious day. In any event it is a red-letter day for America. It was the day 25 years ago that was the beginning of two very difficult years in American history. It was 25 years ago today that the famous burglary at the Watergate complex overlooking the Potomac in Washington, DC, took place, followed by coverup activities that reached into the Oval Office and resulted in the resignation in disgrace of an American President. During the investigation of the illegal activities, there were multiple revelations of huge amounts of cash moving in brown paper bags and leather briefcases. The public revulsion triggered real reform, although that reform, sadly, was directed primarily toward only the Presidential election financing system. But even that spirit of reform, and the significant alterations of the system to which it led, has been broken by those who want to trample it with the exploitation of every loophole possible in the campaign finance system. It is unfortunately fitting, then, Mr. President, that we return our attention on this day to that nemesis of the democratic process, the corrosive effect of money in politics. This time, 25 years later, it is the no-holds-barred pursuit of quite stunning amounts of money by both parties in the 1996 Presidential and congressional elections that captures the attention and the condemnation of the American people--and the allegations that many of those who gave large sums to one or the other party, or one candidate or another, expected favors in return, ranging from the trivial to the significant. The American people are not stupid. They know that there is no such thing as a free lunch. They believe--with considerable justification-- that the scores of millions of dollars that flow from well-to-do individuals and special interest organizations usually are not donated out of absolute disinterested patriotism, admiration for the candidates, and support for our electoral system. They watch repeatedly as public policy decisions made by the Congress and the Executive Branch appear to be influenced by those who have made the contributions. They conclude--again, I fear, with considerable good reason--that either those contributions directly affected the decision- making process, or, at the very least, purchased for those contributors a greater degree of access to the elected officials who make the decisions, so that the contributors can more effectively and persuasively make their case. During this past election, 1996, not only in congressional races but also, distressingly, in the Presidential campaign--and it is especially distressing because many of us thought the Watergate reform legislation of 1974 had suitably repaired the system of presidential campaign finance--we saw a flood of special interest money the likes of which have never previously been seen here or anywhere. Every day during the past year, it has been impossible to open a newspaper or turn on a television without being confronted by yet another new revelation about an alleged campaign finance irregularity or abuse--or a defense of the actions at which the charges are leveled. And, I must say, the defenses are generally pretty lame. Those against whom the allegations are leveled may be able to find protection in the letter of the law, but they are unsuccessful in avoiding the opprobrium of the American people and consequent cynicism about our government system. I am one who believes we absolutely must do something to reverse the trend if we are to save our precious democratic system. And I also have concluded that the forces arrayed against the kind of partial public financing approaches we previously have pushed are so strong that we must find a new approach behind which it will be possible to develop such strong consensus support across the nation that the Congress will be unable to resist it. To the extent competent polling and other public opinion assessment techniques can make a reliable determination, the evidence is persuasive that, while the American people are willing to embrace radical change of campaign financing--to take all special interest money and heave it over the side and shoulder all reasonable campaign costs--they have only passing interest and precious little enthusiasm for half-way measures. Their judgment appears to be that it would be a waste of effort and tax dollars to invest public resources in a system that retains any significant degree of special interest funding. They see such an approach as playing them for chumps--while the influence of special interests would remain as strong as it currently is. What does seem to capture the attention and imagination--and support--of a significant majority of Americans is sweeping reform of campaign finance that removes all special interest money from the system. This is not a notion dreamed up here in Washington--either here on Capitol Hill or in an organization's office downtown. Activities to implement such an approach to campaign finance reform have been underway in a number of States, including my own State of Massachusetts. Maine voters took the boldest step, approving such a concept for State elections. Now Vermont has followed suit with a provision applying to the Governor's office, and Governor Howard Dean is poised to sign the proposal into law. Other State-level efforts are in various stages of advancement. Paul Wellstone and John Glenn came early-on to the same conclusion to which I came--that we want to champion such an approach at the federal level. And we have been joined by Joe Biden and Pat Leahy, and other Senators are studying the idea carefully and we hope and trust we will be joined by some of them in the near future. We come to the floor today to introduce the Clean Money, Clean Elections Act, a bill that, as its most important feature, takes all special interest money out of Federal elections. This initiative will offer a set amount of funding, based on a State's voting-age population, to each candidate who agrees to foreswear private contributions. It not only removes all special interest money from the system, but also removes the necessity for candidates to spend a huge amount of time fundraising and to pour massive amounts of the money they do raise into further fundraising efforts. In addition, this legislation will shut down the so-called soft money, or unregulated money, loopholes that have permitted massive amounts of special interest money to enter the electoral process around even those restrictions that now exist. This process takes a major step forward today with the introduction of this legislation. Comparable efforts are underway in the House of Representatives, and I understand a similar bill will be introduced there in coming weeks. We believe the people are, once again, ahead of Washington--and, once again, ahead of the politicians. And we believe that ultimately this or a derivative approach is the only way effectively to restore people's confidence that, in America, anybody truly can run, and win--not just those who have access to wealth or who are wealthy themselves. This is a bill to restore our own democracy and preserve what we think is the heart of our precious system. We hope and believe that-- with a strong assist from their constituents--increasing numbers of our colleagues, over time, will come to recognize this and support the bill. This will not be a rapidly completed process, Mr. President. We introduce this bill with the knowledge that it would not attract more than perhaps a quarter of the votes in the Senate today. This will be a journey, a journey of mobilizing the American people to require their elected representatives to take needed action. Our bill will be the objective, and it also will be the rallying point. And with the commitment of the organizations and individuals who advocate this approach, a movement will develop which cannot be stopped. Just as in Maine and now in Vermont, the support will grow to critical mass and these reforms will succeed. I look forward to walking this road with all who support this approach--both my colleagues in the Senate and friends outside the Senate. We who introduce this bill are committed to fundamentally changing our electoral system, and returning control of our elected officials and their agenda to the people after wresting it back from the special interests. I believe we will succeed, and can look back on this day--the 25th anniversary of a lamentable event in American history--as an important beginning point in that endeavor. I want to commend those colleagues who join in introducing this legislation today--Senators Wellstone, Glenn, Biden, and Leahy. I particularly want to compliment Senator Wellstone's capable staff, especially Brian Ahlberg, who have invested countless hours in the effort that is so essential but often unnoticed, of transforming complex policy objectives into legislative language, working hand-in- hand with Senate Legislative Counsel staff and representatives of organizations which have been developing this idea at the State level. My staff has greatly appreciated their contributions to this effort and enjoyed working with them, as I have enjoyed the cooperative efforts with Senator Wellstone and my other colleagues. Mr. President, before I yield to Senator Wellstone and then, in turn, to other Senators who may wish to make remarks about this legislation, I ask unanimous consent that the full text of the bill be printed in the Record at the conclusion of my remarks, followed by a summary of the bill and a chart depicting the qualifying contribution requirement and the ``Clean Money'' allocation and spending limit for a general election that would apply to a candidate participating in the ``Clean Money, Clean Election'' system in each State.

Mr. KERRY

Mr. KERRY. Mr. President, the Fourth of July will occur in a little over 2 weeks. That is the date by which the President challenged the Congress to act on campaign finance reform in this first session of the 105th Congress. I regret I must announce the obvious: not only has neither house of the Congress addressed this issue in serious floor debate and legislative action; there is virtually no prospect that either house will do so by the time we leave for the July 4 recess. Nor is it clear when or if the 105th Congress will address this issue. The Fourth of July has other implications, of course, Mr. President-- and some of these, too, are related to campaign finance reform. This is a peculiarly American holiday, when Americans throughout the Nation take time out to gather in parks and back yards, at barbecues and picnics and family reunions and community parades, to celebrate our democracy, our freedom. But I think there would be widespread agreement, as we do this in 1997, that there is an unease across the Nation about the political process. The American people are concerned. Their concern is not primarily about who their elected officials are. Their frustration, cynicism, and anger run deep and broad--directed, as most of us realize, at the entire political system. Americans believe that their Government has been hijacked by special interests, that the political system responds to the needs of wealthy special interests, not the interests of ordinary, hard-working citizens. They sense, in many ways, that the Congress is not necessarily ``the people's house.'' We see evidence of this in the feeling of powerlessness described by many Americans, and in the great gulf that grows wider between the American people and their elected officials. You can see it expressed frequently in town meetings and in various polls. The people feel that Congress all too often fails to represent the real concerns of real Americans, and they sense that they are being left out. The result is that more and more Americans are checking out of the system. If their democracy isn't going to respond to their concerns, then they ask themselves why they should respond to the request that they participate meaningfully in the political process. The reason for the disconnect is very simple, Mr. President. The amount of money in politics--money given to office seekers to campaign for office-- disenfranchises the average person who knows that he or she can never hope to have the same kind of access as that money achieves for those who give it. Special interest money is moving and dictating and governing the agenda of American politics, and most Americans understand that. A few findings from a bipartisan poll tell the story: 49 percent of registered voters believe that lobbyists and special interests control the Federal Government; 92 percent of registered voters believe that special interest contributions affect the votes of Members of Congress; and 88 percent believe that people who make large campaign contributions get special favors from politicians. The evidence of public discontent could hardly be more compelling, yet the Congress drifts on, with no apparent sense of urgency in trying to respond to that discontent. We all understand there are differences on each side of the aisle about the best way to address the problem, but I do not see how anyone can say in good conscience that there is a bona fide effort under way involving the leadership of both parties in the U.S. Congress to even try to work out those differences. If we want to regain the respect and confidence of the American people and if we want to reconnect to them and reconnect them to our democracy, we have to get the special interest money out of politics. As my friend Ross Perot says, ``It's just that simple.'' The American people, however, are skeptical about either our willingness or ability to do that, and it doesn't help that the 105th Congress has yet to take up campaign finance reform. It doesn't help that the President and the Speaker of the House shook hands in a very public way 2 years ago and promised to do something about campaign finance, and nothing has transpired between then and now to fulfill that commitment, and from the perspective of the ordinary citizen who wants to see the special interest money removed from politics, it really looks like a conspiracy of inaction. Those who profit from the current system --special interests who know how to play the game, and politicians who know how to play the game--seem to be shutting down any prospect of real change. Mr. President, I know why people feel that way. I have been working on campaign finance reform since I came to the Senate. I have worked for years with my colleagues Joe Biden and Robert Byrd and others, and with former Senators such as George Mitchell, David Boren, and Bill Bradley--searching for the right equation to bring about change. Although from my arrival in the Senate I have advocated sweeping overhaul of the system, in recent times I have been a strong supporter of the proposal advanced by John McCain and Russ Feingold, even though it is incremental in design, because they succeeded in assembling a package of reforms that bridged the party divide that so often has been permitted to poison this debate and prevent meaningful action--and because I believe so fervently that we must succeed to whatever extent it is possible in moving toward what should be our objective. Throughout these years of activity--the 12 years of my service as a Senator--my goal has always been the same, to get special interest influence and special interest access out of politics. Mr. President, we come to the floor this afternoon on an auspicious day--or, perhaps more accurately, an inauspicious day. In any event it is a red-letter day for America. It was the day 25 years ago that was the beginning of two very difficult years in American history. It was 25 years ago today that the famous burglary at the Watergate complex overlooking the Potomac in Washington, DC, took place, followed by coverup activities that reached into the Oval Office and resulted in the resignation in disgrace of an American President. During the investigation of the illegal activities, there were multiple revelations of huge amounts of cash moving in brown paper bags and leather briefcases. The public revulsion triggered real reform, although that reform, sadly, was directed primarily toward only the Presidential election financing system. But even that spirit of reform, and the significant alterations of the system to which it led, has been broken by those who want to trample it with the exploitation of every loophole possible in the campaign finance system. It is unfortunately fitting, then, Mr. President, that we return our attention on this day to that nemesis of the democratic process, the corrosive effect of money in politics. This time, 25 years later, it is the no-holds-barred pursuit of quite stunning amounts of money by both parties in the 1996 Presidential and congressional elections that captures the attention and the condemnation of the American people--and the allegations that many of those who gave large sums to one or the other party, or one candidate or another, expected favors in return, ranging from the trivial to the significant. The American people are not stupid. They know that there is no such thing as a free lunch. They believe--with considerable justification-- that the scores of millions of dollars that flow from well-to-do individuals and special interest organizations usually are not donated out of absolute disinterested patriotism, admiration for the candidates, and support for our electoral system. They watch repeatedly as public policy decisions made by the Congress and the Executive Branch appear to be influenced by those who have made the contributions. They conclude--again, I fear, with considerable good reason--that either those contributions directly affected the decision- making process, or, at the very least, purchased for those contributors a greater degree of access to the elected officials who make the decisions, so that the contributors can more effectively and persuasively make their case. During this past election, 1996, not only in congressional races but also, distressingly, in the Presidential campaign--and it is especially distressing because many of us thought the Watergate reform legislation of 1974 had suitably repaired the system of presidential campaign finance--we saw a flood of special interest money the likes of which have never previously been seen here or anywhere. Every day during the past year, it has been impossible to open a newspaper or turn on a television without being confronted by yet another new revelation about an alleged campaign finance irregularity or abuse--or a defense of the actions at which the charges are leveled. And, I must say, the defenses are generally pretty lame. Those against whom the allegations are leveled may be able to find protection in the letter of the law, but they are unsuccessful in avoiding the opprobrium of the American people and consequent cynicism about our government system. I am one who believes we absolutely must do something to reverse the trend if we are to save our precious democratic system. And I also have concluded that the forces arrayed against the kind of partial public financing approaches we previously have pushed are so strong that we must find a new approach behind which it will be possible to develop such strong consensus support across the nation that the Congress will be unable to resist it. To the extent competent polling and other public opinion assessment techniques can make a reliable determination, the evidence is persuasive that, while the American people are willing to embrace radical change of campaign financing--to take all special interest money and heave it over the side and shoulder all reasonable campaign costs--they have only passing interest and precious little enthusiasm for half-way measures. Their judgment appears to be that it would be a waste of effort and tax dollars to invest public resources in a system that retains any significant degree of special interest funding. They see such an approach as playing them for chumps--while the influence of special interests would remain as strong as it currently is. What does seem to capture the attention and imagination--and support--of a significant majority of Americans is sweeping reform of campaign finance that removes all special interest money from the system. This is not a notion dreamed up here in Washington--either here on Capitol Hill or in an organization's office downtown. Activities to implement such an approach to campaign finance reform have been underway in a number of States, including my own State of Massachusetts. Maine voters took the boldest step, approving such a concept for State elections. Now Vermont has followed suit with a provision applying to the Governor's office, and Governor Howard Dean is poised to sign the proposal into law. Other State-level efforts are in various stages of advancement. Paul Wellstone and John Glenn came early-on to the same conclusion to which I came--that we want to champion such an approach at the federal level. And we have been joined by Joe Biden and Pat Leahy, and other Senators are studying the idea carefully and we hope and trust we will be joined by some of them in the near future. We come to the floor today to introduce the Clean Money, Clean Elections Act, a bill that, as its most important feature, takes all special interest money out of Federal elections. This initiative will offer a set amount of funding, based on a State's voting-age population, to each candidate who agrees to foreswear private contributions. It not only removes all special interest money from the system, but also removes the necessity for candidates to spend a huge amount of time fundraising and to pour massive amounts of the money they do raise into further fundraising efforts. In addition, this legislation will shut down the so-called soft money, or unregulated money, loopholes that have permitted massive amounts of special interest money to enter the electoral process around even those restrictions that now exist. This process takes a major step forward today with the introduction of this legislation. Comparable efforts are underway in the House of Representatives, and I understand a similar bill will be introduced there in coming weeks. We believe the people are, once again, ahead of Washington--and, once again, ahead of the politicians. And we believe that ultimately this or a derivative approach is the only way effectively to restore people's confidence that, in America, anybody truly can run, and win--not just those who have access to wealth or who are wealthy themselves. This is a bill to restore our own democracy and preserve what we think is the heart of our precious system. We hope and believe that-- with a strong assist from their constituents--increasing numbers of our colleagues, over time, will come to recognize this and support the bill. This will not be a rapidly completed process, Mr. President. We introduce this bill with the knowledge that it would not attract more than perhaps a quarter of the votes in the Senate today. This will be a journey, a journey of mobilizing the American people to require their elected representatives to take needed action. Our bill will be the objective, and it also will be the rallying point. And with the commitment of the organizations and individuals who advocate this approach, a movement will develop which cannot be stopped. Just as in Maine and now in Vermont, the support will grow to critical mass and these reforms will succeed. I look forward to walking this road with all who support this approach--both my colleagues in the Senate and friends outside the Senate. We who introduce this bill are committed to fundamentally changing our electoral system, and returning control of our elected officials and their agenda to the people after wresting it back from the special interests. I believe we will succeed, and can look back on this day--the 25th anniversary of a lamentable event in American history--as an important beginning point in that endeavor. I want to commend those colleagues who join in introducing this legislation today--Senators Wellstone, Glenn, Biden, and Leahy. I particularly want to compliment Senator Wellstone's capable staff, especially Brian Ahlberg, who have invested countless hours in the effort that is so essential but often unnoticed, of transforming complex policy objectives into legislative language, working hand-in- hand with Senate Legislative Counsel staff and representatives of organizations which have been developing this idea at the State level. My staff has greatly appreciated their contributions to this effort and enjoyed working with them, as I have enjoyed the cooperative efforts with Senator Wellstone and my other colleagues. Mr. President, before I yield to Senator Wellstone and then, in turn, to other Senators who may wish to make remarks about this legislation, I ask unanimous consent that the full text of the bill be printed in the Record at the conclusion of my remarks, followed by a summary of the bill and a chart depicting the qualifying contribution requirement and the ``Clean Money'' allocation and spending limit for a general election that would apply to a candidate participating in the ``Clean Money, Clean Election'' system in each State.

Mr. KERRY

Mr. KERRY. Mr. President, I ask unanimous consent that Senator Wellstone and I be permitted to proceed as in morning business, with the interruption not to show in the course of the legislative day on the foreign relations bill.

Mr. KERRY. Somewhere, say, around 12 minutes I think we should be able to finish; 12 minutes, Mr. President, divided between the two of us.

Mr. KERRY. Mr. President, if I can ask the Senator if Senator Wellstone and I can proceed as we had discussed for a few moments outside of the legislative business.

Mr. KERRY. Mr. President, I am pleased to cosponsor the amendment by the Senator from Georgia and I congratulate him for leading this effort to get the State Department to better focus its counternarcotics resources. For too long our fight against drugs has suffered from a lack of quantifiable goals by which to measure progress. Year after year we spend hundreds of millions of dollars on our international drug control programs without a clear idea of how these programs fit into the overall counterdrug effort and with no way to determine whether these programs are having the desired effect. This amendment will require the State Department to come up with a plan for implementing its portion of the President's national strategy and to establish specific goals that will allow us to know how well we are doing. This is a very simple concept that anyone who has been in private business understands. You devise a strategy and then you set goals and objectives that will let you know that you are on target in implementing that strategy. That is what we want the State Department to do. I want to emphasize that the amendment requires the Secretary of State to submit to Congress a long-term strategy that is consistent with the national drug control strategy. This is not an attempt to undermine the President's Office of National Drug Control Policy [ONDCP] and its role in devising the national drug control strategy. General McCafferey has done a good job at defining the national strategy and setting broad national objectives. I know that he is working to develop a comprehensive performance measurement system that would give us a better sense of how well programs are working. This amendment supports that effort. We want the State Department to follow the lead of the drug czar's office and to develop a long-term plan that supports the national strategy. Likewise we want to see quantifiable measures of performance that conform to whatever comprehensive measurement system that ONDCP develops. The second part of this amendment is also straight forward. For several years the State Department has used a database to identify narcotics traffickers and deny them visas. This amendment expands that effort to include other international crime figures. Finally, the amendment seeks to strengthen the coordination of U.S. crime fighting efforts by designating an officer in every U.S. Embassy that will be responsible for ensuring the fullest possible cooperation with the host nation on these issues. This is particularly, important in countries where we do not have a full-time law enforcement officer assigned to the embassy. These may seem like modest steps but they are the kinds of initiatives that will greatly enhance the effectiveness of our efforts to battle the international criminal organizations. Again I thank the Senator from Georgia for his leadership and I urge my colleagues to support this amendment. amendment no. 411 (Purpose: To clarify section 1166) On line 17 on page 110, delete ``knowingly assists or has'' and insert in lieu thereof: ``is known by the Department of State to have intentionally''. On line 20 on page 110, delete ``is providing or has provided'' and insert in lieu thereof: ``is known by the Department of State to be intentionally providing''. At the end of line 3 on page 111 insert the following: ``as designated at the discretion of the Secretary of State,''. On line 7 on page 111 before the period, insert the following: ``, and such person and child are permitted to return to the United States. Nothing in clauses (i) or (ii) of this section shall be deemed to apply to a government official of the United States who is acting within the scope of his or her official duties. Nothing in clause (i) or (ii) of this section shall be deemed to apply to a government official of any foreign government if such person has been designated by the Secretary of State at the Secretary's discretion''.

Mr. KERRY

Mr. KERRY. I thank the Senator from New Mexico. I want to thank the distinguished Senator for his leadership on this issue and also the Senator from Missouri, the chairman of the Small Business Committee. I am delighted to join with both of them. I think this will have an enormous, positive impact, and their leadership is greatly appreciated. I am pleased to stand in support as we introduce the Women's Business Centers Act of 1997. Nine years ago, when we first established a demonstration program for helping women-owned businesses attain capital and assistance in business development, a lot of people had some doubts about it. The legislation brought together the SBA and independent organizations in order to deliver assistance to women-owned businesses. Nine years ago, Mr. President, many people in the country were skeptical about the need for women-owned business assistance. There was a kind of perception problem with respect to whether or not it was needed and whether or not a lot of women in the country were going to take advantage of it and, in some cases, doubts even by some about whether or not they could. Everything in the years since then has destroyed the stereotypes. It changed attitudes and has proven that the people who believed in this effort were correct. The program has matured since its creation. And, to date, nearly 50,000 American women have been served by 54 sites in 28 States and the District of Columbia. The bill that we introduce today is really only underscoring a small part of the many contributions that women make to the economy of this country. One of the reasons that we are currently enjoying such a significant economic boom is because of the contributions in the last few years from women-owned entrepreneurs. The Committee on Small Business is particularly pleased to champion this program. All of my Democratic colleagues from the Small Business Committee--Senators Bumpers, Levin, Harkin, Lieberman, Wellstone, Cleland, and Landrieu--have joined us in sponsoring this bill which will make the program permanent. The program is operated by SBA's Women's Business Ownership Office, which also would become permanent under the legislation. With the SBA's help, we have begun to tap the remarkable resource of women-owned businesses that has been proven to exist over the course of the last years. I know that many knew it always existed, but this pilot project has really given the evidence greater weight than it has ever had before. And I think this should pass overwhelmingly. Mr. President, women-owned businesses have been a critical component of the remarkable growth spurt we are enjoying in the country. According to the Census Bureau, women-owned businesses represent one- third of all U.S. companies, and they annually contribute more than $1.5 trillion in sales to the U.S. economy. The National Federation of Women Business Owners and Dun & Bradstreet reported that 7.7 million women-owned businesses employ more people than the Fortune 500 companies. So we must provide a strong policy that allows these women to meet their greatest potential and allow this country to benefit from the full measure of their endeavors. We know that women entrepreneurs are breaking records. Women-owned sole proprietorships have a startup rate twice that of male-owned businesses. Between 1987 and 1992, the number of women-owned businesses increased by 43 percent, while businesses overall only grew by 26 percent. During the same time, employment by women-owned firms grew 100 percent. Particularly notable, women-owned companies with 100 or more workers increased employment by 158 percent, more than double the rate for all U.S. firms of similar size. This country needs to preserve and to foster that special entrepreneurial spirit. And the Women's Business Centers Act is a great way to do that. In Massachusetts, the 147,000 women-owned businesses represent over one-third of all the companies in our State. And through the SBA's women demonstration program--the program which this bill would make permanent--the Center for Women & Enterprise, Inc., was established in Boston in 1995. In just 2 years, the center has served over 1,000 women business owners, 40 percent of which are minorities. The center offers scholarships for low-income women and provides courses, workshops, and one-on-one counseling. One hundred cities and towns in eastern Massachusetts are benefiting from the work of the center. I want to see that success continue. We can do that, and we can replicate it in State after State by making the women's business centers and the Women's Business Ownership Office permanent assets of the SBA programs. In addition to counseling, women business owners need access to capital. Women are vital players in business, and yet their access to capital for funding business enterprise has been limited, and it is still limited. The SBA is trying to meet that demand by increasing access to capital. From 1992 until 1995, the number of SBA guaranteed loans going to women quadrupled. They received $3.8 billion in SBA guaranteed loans during that period of time. And in fiscal year 1996, women-owned businesses received nearly $2 billion in loans from SBA guarantees. So access to capital is beginning to improve for women business owners, but we need to guarantee that we support programs that continue that trend. Last month, I helped kick off a national initiative undertaken by the SBA's Women's Business Ownership Office, the National Women's Business Council, and the Federal Reserve Bank in Boston, to convene workshops throughout the United States. These meetings bring together women business owners, lenders, and policymakers to discuss how to expand capital markets to meet the increasing demand of women-owned businesses. With input from the women's community, I have concluded that this issue is one that is going to be addressed at different levels. We need more micro-loans for startup businesses. We need more business development and technical assistance, more loan package counseling, and more access to venture and angel capital sources. This program is one key way to maximize women-owned businesses and to wisely use Government resources to boost the private sector's success. I join with Senator Domenici and Senator Bond in urging our colleagues to support the Women's Business Centers Act of 1997. It will provide $8 million in funding that will be used to provide matching grants for women's centers, and the bill will make the program and the Women's Business Ownership Office a permanent part of the important work that the SBA is doing to guarantee opportunity for all of those who wish to create jobs in this country. We hope to establish sites in every State to serve women entrepreneurs with the passage of this act. And I hope that our colleagues will overwhelmingly support it. Mr. President, I ask unanimous consent that Senator Specter and Senator Boxer also be added as cosponsors. Mr. President, I reserve the balance of time for other Senators wishing to speak on this bill.

Mr. KERRY

Mr. KERRY. I thank the Senator from New Mexico. I want to thank the distinguished Senator for his leadership on this issue and also the Senator from Missouri, the chairman of the Small Business Committee. I am delighted to join with both of them. I think this will have an enormous, positive impact, and their leadership is greatly appreciated. I am pleased to stand in support as we introduce the Women's Business Centers Act of 1997. Nine years ago, when we first established a demonstration program for helping women-owned businesses attain capital and assistance in business development, a lot of people had some doubts about it. The legislation brought together the SBA and independent organizations in order to deliver assistance to women-owned businesses. Nine years ago, Mr. President, many people in the country were skeptical about the need for women-owned business assistance. There was a kind of perception problem with respect to whether or not it was needed and whether or not a lot of women in the country were going to take advantage of it and, in some cases, doubts even by some about whether or not they could. Everything in the years since then has destroyed the stereotypes. It changed attitudes and has proven that the people who believed in this effort were correct. The program has matured since its creation. And, to date, nearly 50,000 American women have been served by 54 sites in 28 States and the District of Columbia. The bill that we introduce today is really only underscoring a small part of the many contributions that women make to the economy of this country. One of the reasons that we are currently enjoying such a significant economic boom is because of the contributions in the last few years from women-owned entrepreneurs. The Committee on Small Business is particularly pleased to champion this program. All of my Democratic colleagues from the Small Business Committee--Senators Bumpers, Levin, Harkin, Lieberman, Wellstone, Cleland, and Landrieu--have joined us in sponsoring this bill which will make the program permanent. The program is operated by SBA's Women's Business Ownership Office, which also would become permanent under the legislation. With the SBA's help, we have begun to tap the remarkable resource of women-owned businesses that has been proven to exist over the course of the last years. I know that many knew it always existed, but this pilot project has really given the evidence greater weight than it has ever had before. And I think this should pass overwhelmingly. Mr. President, women-owned businesses have been a critical component of the remarkable growth spurt we are enjoying in the country. According to the Census Bureau, women-owned businesses represent one- third of all U.S. companies, and they annually contribute more than $1.5 trillion in sales to the U.S. economy. The National Federation of Women Business Owners and Dun & Bradstreet reported that 7.7 million women-owned businesses employ more people than the Fortune 500 companies. So we must provide a strong policy that allows these women to meet their greatest potential and allow this country to benefit from the full measure of their endeavors. We know that women entrepreneurs are breaking records. Women-owned sole proprietorships have a startup rate twice that of male-owned businesses. Between 1987 and 1992, the number of women-owned businesses increased by 43 percent, while businesses overall only grew by 26 percent. During the same time, employment by women-owned firms grew 100 percent. Particularly notable, women-owned companies with 100 or more workers increased employment by 158 percent, more than double the rate for all U.S. firms of similar size. This country needs to preserve and to foster that special entrepreneurial spirit. And the Women's Business Centers Act is a great way to do that. In Massachusetts, the 147,000 women-owned businesses represent over one-third of all the companies in our State. And through the SBA's women demonstration program--the program which this bill would make permanent--the Center for Women & Enterprise, Inc., was established in Boston in 1995. In just 2 years, the center has served over 1,000 women business owners, 40 percent of which are minorities. The center offers scholarships for low-income women and provides courses, workshops, and one-on-one counseling. One hundred cities and towns in eastern Massachusetts are benefiting from the work of the center. I want to see that success continue. We can do that, and we can replicate it in State after State by making the women's business centers and the Women's Business Ownership Office permanent assets of the SBA programs. In addition to counseling, women business owners need access to capital. Women are vital players in business, and yet their access to capital for funding business enterprise has been limited, and it is still limited. The SBA is trying to meet that demand by increasing access to capital. From 1992 until 1995, the number of SBA guaranteed loans going to women quadrupled. They received $3.8 billion in SBA guaranteed loans during that period of time. And in fiscal year 1996, women-owned businesses received nearly $2 billion in loans from SBA guarantees. So access to capital is beginning to improve for women business owners, but we need to guarantee that we support programs that continue that trend. Last month, I helped kick off a national initiative undertaken by the SBA's Women's Business Ownership Office, the National Women's Business Council, and the Federal Reserve Bank in Boston, to convene workshops throughout the United States. These meetings bring together women business owners, lenders, and policymakers to discuss how to expand capital markets to meet the increasing demand of women-owned businesses. With input from the women's community, I have concluded that this issue is one that is going to be addressed at different levels. We need more micro-loans for startup businesses. We need more business development and technical assistance, more loan package counseling, and more access to venture and angel capital sources. This program is one key way to maximize women-owned businesses and to wisely use Government resources to boost the private sector's success. I join with Senator Domenici and Senator Bond in urging our colleagues to support the Women's Business Centers Act of 1997. It will provide $8 million in funding that will be used to provide matching grants for women's centers, and the bill will make the program and the Women's Business Ownership Office a permanent part of the important work that the SBA is doing to guarantee opportunity for all of those who wish to create jobs in this country. We hope to establish sites in every State to serve women entrepreneurs with the passage of this act. And I hope that our colleagues will overwhelmingly support it. Mr. President, I ask unanimous consent that Senator Specter and Senator Boxer also be added as cosponsors. Mr. President, I reserve the balance of time for other Senators wishing to speak on this bill.

Mr. KERRY

Mr. KERRY. Mr. President, I am pleased to join my colleague, the chairman of the Banking Committee, in introducing the Fair ATM Fees for Consumers Act of 1997. Today, in the Banking Committee, representatives of the U.S. General Accounting Office discussed the findings of their report on the growth of ATM surcharges. It is a fascinating report, and I recommend our colleagues take a look at it. I will highlight some of the findings, especially as they pertain to my home State. I will tell you, Mr. President, it is not often in the Banking Committee that passions run this high on a financial services issue. I have heard from officials of large banks who tell me that prohibiting ATM surcharges is tantamount to nationalizing our banking industry. Mr. President, I do not believe that it is the business of the U.S. Senate to set prices and fees at banks and other financial institutions. I am a great believer in the free market--not the Federal Government--dictating fee structures. But there is a general sense of fairness that is being violated in this surcharge. When a depositor opens an account, he or she knows the fees associated with transactions. It is current federal law--found in statutes like the Electronic Funds Transfer Act, the Truth-in-Savings Act, and the Truth-in-Lending Act--that mandates fees to be disclosed to the consumer. So, when we open a bank account, we know how much each transaction will cost. But now, with this new surcharge, we are left in the dark. In the absence of disclosure law dealing with surcharges, we don't find out, in many cases, how much it will cost to use an ATM machine not associated with our particular bank until our statement appears in the mail, long after the ATM transaction is completed. That is bad for consumers and it is bad precedent. And, as the GAO report testifies, the trend is not favorable. Historic mergers, consolidations, and acquisitions have taken place in the financial service industry. Bank lobby hours have been curtailed so drastically, and so many human tellers replaced by machines, that we are forced to use ATM's. This is the undeniable direction of the industry. Mr. President, some of the biggest banks argue that ATM fees are an outgrowth of the convenience consumers derive from using ATM's. But I suspect that other forces are at play. Commercial banks posted record profits last year, surpassing the previous record-breaking year. This new fee is not needed to ensure that banks are profitable. Mr. President, last year, a constituent of mine from Dorchester, MA, testified before the Banking Committee on this issue. He owns a profitable bank with one ATM machine. He runs the bank well and serves the community. But his small bank is no match for far bigger competitors. He contends that these surcharges are designed by the big banks to draw customers away from community banks. This may not be an issue of establishing prices and fees; this has all the coloration of an antitrust issue. I want to set the marker down clearly--the Congress needs to do a better job in monitoring and preventing the trend of consolidation from running the smaller banks out of business. In Massachusetts, the two largest banks own more than 62 percent of the ATM's in the Commonwealth. The GAO report tells us that, nationally, one-third of all ATM's are owned by large banks. So, Massachusetts has double the national concentration. And that is a critical measure, Mr. President. The GAO report found that ATM surcharges are more prevalent among larger banks, 98 percent of which own ATM's. Fifty-four percent of large institutions assessed a surcharge as opposed to 32 percent of smaller institutions. That is the static measure, which is significant enough, but the trend is even more disturbing. The number of ATM's assessing a surcharge has risen 320 percent in the past 13 months. The highest surcharge found was $3 and the average surcharge is $1.14, up from 99 cents last year. I will say that I appreciate the fact that BankBoston--one of the two large banks in Massachusetts--does not impose surcharges at all. I also know that the Massachusetts Bankers Association is grappling with this issue, trying to find some accommodation, and I am willing to listen to its arguments on this issue. My mind is certainly open to alternatives to the current draft of our legislation. But, Mr. President, I must say that the findings of the GAO report do little to dissuade me that we must move forward to prohibit these surcharges. I thank my friend, the chairman of the Banking Committee, for his leadership.

Mr. KERRY

Mr. KERRY. Mr. President, I am pleased to join my colleague, the chairman of the Banking Committee, in introducing the Fair ATM Fees for Consumers Act of 1997. Today, in the Banking Committee, representatives of the U.S. General Accounting Office discussed the findings of their report on the growth of ATM surcharges. It is a fascinating report, and I recommend our colleagues take a look at it. I will highlight some of the findings, especially as they pertain to my home State. I will tell you, Mr. President, it is not often in the Banking Committee that passions run this high on a financial services issue. I have heard from officials of large banks who tell me that prohibiting ATM surcharges is tantamount to nationalizing our banking industry. Mr. President, I do not believe that it is the business of the U.S. Senate to set prices and fees at banks and other financial institutions. I am a great believer in the free market--not the Federal Government--dictating fee structures. But there is a general sense of fairness that is being violated in this surcharge. When a depositor opens an account, he or she knows the fees associated with transactions. It is current federal law--found in statutes like the Electronic Funds Transfer Act, the Truth-in-Savings Act, and the Truth-in-Lending Act--that mandates fees to be disclosed to the consumer. So, when we open a bank account, we know how much each transaction will cost. But now, with this new surcharge, we are left in the dark. In the absence of disclosure law dealing with surcharges, we don't find out, in many cases, how much it will cost to use an ATM machine not associated with our particular bank until our statement appears in the mail, long after the ATM transaction is completed. That is bad for consumers and it is bad precedent. And, as the GAO report testifies, the trend is not favorable. Historic mergers, consolidations, and acquisitions have taken place in the financial service industry. Bank lobby hours have been curtailed so drastically, and so many human tellers replaced by machines, that we are forced to use ATM's. This is the undeniable direction of the industry. Mr. President, some of the biggest banks argue that ATM fees are an outgrowth of the convenience consumers derive from using ATM's. But I suspect that other forces are at play. Commercial banks posted record profits last year, surpassing the previous record-breaking year. This new fee is not needed to ensure that banks are profitable. Mr. President, last year, a constituent of mine from Dorchester, MA, testified before the Banking Committee on this issue. He owns a profitable bank with one ATM machine. He runs the bank well and serves the community. But his small bank is no match for far bigger competitors. He contends that these surcharges are designed by the big banks to draw customers away from community banks. This may not be an issue of establishing prices and fees; this has all the coloration of an antitrust issue. I want to set the marker down clearly--the Congress needs to do a better job in monitoring and preventing the trend of consolidation from running the smaller banks out of business. In Massachusetts, the two largest banks own more than 62 percent of the ATM's in the Commonwealth. The GAO report tells us that, nationally, one-third of all ATM's are owned by large banks. So, Massachusetts has double the national concentration. And that is a critical measure, Mr. President. The GAO report found that ATM surcharges are more prevalent among larger banks, 98 percent of which own ATM's. Fifty-four percent of large institutions assessed a surcharge as opposed to 32 percent of smaller institutions. That is the static measure, which is significant enough, but the trend is even more disturbing. The number of ATM's assessing a surcharge has risen 320 percent in the past 13 months. The highest surcharge found was $3 and the average surcharge is $1.14, up from 99 cents last year. I will say that I appreciate the fact that BankBoston--one of the two large banks in Massachusetts--does not impose surcharges at all. I also know that the Massachusetts Bankers Association is grappling with this issue, trying to find some accommodation, and I am willing to listen to its arguments on this issue. My mind is certainly open to alternatives to the current draft of our legislation. But, Mr. President, I must say that the findings of the GAO report do little to dissuade me that we must move forward to prohibit these surcharges. I thank my friend, the chairman of the Banking Committee, for his leadership.