Jon Kyl

Mr. KYL

Mr. KYL. Mr. President, I just want to talk for a brief bit of time on the Interior appropriations bill and on some matters that are very important to people throughout this country, particularly in the West. But let me begin by making a comment about what the Senator from North Dakota has just said. In fact, he has said that he is going to threaten to bring the business of the Senate to a halt unless he gets his way, and what he wants to do is have a debate on the Comprehensive Test Ban Treaty. There are a lot of important things facing this country. But to quote from the President of the United States, who very recently gave a talk about putting first things first, it seems to me that most of the American people would like to put first things first, and that would include matters such as the continuation of the running of the Government for the next year which would require us to pass appropriations bills to fund the various Departments of the Government, not the least of which is the Department of the Interior which is what we are going to be talking about next. There will be plenty of time to debate the Comprehensive Test Ban Treaty. But in terms of the priority of this country, I think our colleagues need to understand that treaty can't even go into effect until 100 percent of the major countries of the world sign it. There are many countries that haven't signed it. It is going to be years before that treaty goes into effect. There is no rush for the United States to have to take up that treaty. To be threatened with stopping all business of the Senate until it can debate the Comprehensive Test Ban Treaty, I hope my colleague will reconsider his position on that. We talk about what I consider to be first things first, and that would be to finish our business here, which is, first of all, to get the appropriations bills passed and sent to the President for his consideration.

Mr. KYL

Mr. KYL. Thank you, Mr. President. I thank the Senator from Wisconsin and I thank Senator Thomas from Wyoming.

Mr. KYL

Mr. KYL. Mr. President, I rise today along with my colleague Senator McCain to introduce legislation creating a national conservation area on the Shivwits Plateau/Parashant Canyon area of northwest Arizona. I am introducing this legislation to conserve, protect, and enhance for the benefit of present and future generations the existing landscapes, native wildlife and vegetation as well as the prehistoric, historic, scenic, and traditional human values of the area. This is a bill about the future, and I think it is important that we recognize the unique value of this land and its link to our past. I have personally toured this area and was impressed with its vast landscapes and scenic vistas. I came away with the conviction that the area deserves additional protective status. The area is remote, yet it supports a few human activities, such as ranching, hunting, sightseeing, camping and hiking. I believe those uses can continue without threatening the natural environment or any historic or prehistoric artifacts that may be found in the area. Designation of these lands as a national conservation area will serve these goals by increasing attention to and interest in the area by both the public and the federal government. By spotlighting this area, the Bureau of Land Management will be compelled, and empowered, to increase the monetary and personnel resources allocated to this area, and better focus its management on preserving and protecting the conservation area's unique values. This bill also requires the BLM to develop and carry out forest- restoration projects on both ponderosa pine and pinon-juniper forests within the conservation area. The goal of these projects will be to restore our forests to their pre-settlement conditions. The forest- health crisis in our southwestern forests is acute, and efforts are currently underway by the BLM at Mount Trumbull to address this problem. This legislation builds on those efforts. Designation as a national conservation area may also result in the limiting of some future human activities like mining. There are no current threats to the area, so existing traditional human uses can and should be allowed to continue. In this case, protecting the environment and continuing existing uses are not mutually exclusive. This bill preserves both the land and the traditional lifestyle of the area. Proposals have been made to designate this area as a national monument. Such an action, however, would be done by presidential fiat under the Antiquities Act--that would subvert the public process. We do not want a repeat of the stealthy, election year political maneuver that resulted in the creation of the Escalante/Grand Staircase National Monument in 1996. The people of Arizona and Utah, and their elected representatives, deserve better. We must have a say in this process, including the ability to meaningfully review and comment upon any proposal to change the management of the area. It is only fair that the people who would be most affected by such a designation have that opportunity. I am addressing the need for local input into this process by introduction of this bill. The first step in seeking public input is through the legislative process itself. The legislative process will ensure that the public has a voice. The next step is the section of the bill creating an advisory committee of interested parties to assist the BLM in the land-planning process. National monument status for this area would also forever preclude any type of mining activity. This would be a totally irresponsible action. Let me stress that at this time there are no active mining activities, nor does it appear that any are planned for the foreseeable future within the proposed conservation area. However, we do not know for certain what mineral deposits may be located in the area, or in what quantity. We do know that there are some uranium and copper deposits. The nation does not currently need these resources, but prudence would dictate that we not lock up these minerals with no possibility for future extraction. While we appear to have adequate uranium resources for current needs, policy or conditions may change and our national interest may be served by allowing them to be extracted in the future. This legislation strikes a balance between the desire to preserve the land in its present state, and potential future national needs. Under the bill, the lands will be withdrawn from mineral entry under the 1872 mining law, but are subject to mineral leasing at the discretion of the Secretary of the Interior. This is consistent with the current status of other specially designated federal lands such as the Lake Mead and Glen Canyon National Recreation Areas. It is also consistent with the Secretary of the Interior's segregation of the area. Under the federal mineral leasing laws, the Secretary has broad discretion regarding whether to allow mining in a particular area; the amount of royalties to charge; the duration of the lease; environmental considerations; and reclamation. Thus, authorizing the Secretary to approve mineral leasing within the conservation area protects the national interest in these minerals while also preserving the environment. Mr. President, I am proud to introduce this important piece of legislation. I ask unanimous consent that the bill be printed in the Record.

Mr. KYL

Mr. KYL. Mr. President, I rise today along with my colleague Senator McCain to introduce legislation creating a national conservation area on the Shivwits Plateau/Parashant Canyon area of northwest Arizona. I am introducing this legislation to conserve, protect, and enhance for the benefit of present and future generations the existing landscapes, native wildlife and vegetation as well as the prehistoric, historic, scenic, and traditional human values of the area. This is a bill about the future, and I think it is important that we recognize the unique value of this land and its link to our past. I have personally toured this area and was impressed with its vast landscapes and scenic vistas. I came away with the conviction that the area deserves additional protective status. The area is remote, yet it supports a few human activities, such as ranching, hunting, sightseeing, camping and hiking. I believe those uses can continue without threatening the natural environment or any historic or prehistoric artifacts that may be found in the area. Designation of these lands as a national conservation area will serve these goals by increasing attention to and interest in the area by both the public and the federal government. By spotlighting this area, the Bureau of Land Management will be compelled, and empowered, to increase the monetary and personnel resources allocated to this area, and better focus its management on preserving and protecting the conservation area's unique values. This bill also requires the BLM to develop and carry out forest- restoration projects on both ponderosa pine and pinon-juniper forests within the conservation area. The goal of these projects will be to restore our forests to their pre-settlement conditions. The forest- health crisis in our southwestern forests is acute, and efforts are currently underway by the BLM at Mount Trumbull to address this problem. This legislation builds on those efforts. Designation as a national conservation area may also result in the limiting of some future human activities like mining. There are no current threats to the area, so existing traditional human uses can and should be allowed to continue. In this case, protecting the environment and continuing existing uses are not mutually exclusive. This bill preserves both the land and the traditional lifestyle of the area. Proposals have been made to designate this area as a national monument. Such an action, however, would be done by presidential fiat under the Antiquities Act--that would subvert the public process. We do not want a repeat of the stealthy, election year political maneuver that resulted in the creation of the Escalante/Grand Staircase National Monument in 1996. The people of Arizona and Utah, and their elected representatives, deserve better. We must have a say in this process, including the ability to meaningfully review and comment upon any proposal to change the management of the area. It is only fair that the people who would be most affected by such a designation have that opportunity. I am addressing the need for local input into this process by introduction of this bill. The first step in seeking public input is through the legislative process itself. The legislative process will ensure that the public has a voice. The next step is the section of the bill creating an advisory committee of interested parties to assist the BLM in the land-planning process. National monument status for this area would also forever preclude any type of mining activity. This would be a totally irresponsible action. Let me stress that at this time there are no active mining activities, nor does it appear that any are planned for the foreseeable future within the proposed conservation area. However, we do not know for certain what mineral deposits may be located in the area, or in what quantity. We do know that there are some uranium and copper deposits. The nation does not currently need these resources, but prudence would dictate that we not lock up these minerals with no possibility for future extraction. While we appear to have adequate uranium resources for current needs, policy or conditions may change and our national interest may be served by allowing them to be extracted in the future. This legislation strikes a balance between the desire to preserve the land in its present state, and potential future national needs. Under the bill, the lands will be withdrawn from mineral entry under the 1872 mining law, but are subject to mineral leasing at the discretion of the Secretary of the Interior. This is consistent with the current status of other specially designated federal lands such as the Lake Mead and Glen Canyon National Recreation Areas. It is also consistent with the Secretary of the Interior's segregation of the area. Under the federal mineral leasing laws, the Secretary has broad discretion regarding whether to allow mining in a particular area; the amount of royalties to charge; the duration of the lease; environmental considerations; and reclamation. Thus, authorizing the Secretary to approve mineral leasing within the conservation area protects the national interest in these minerals while also preserving the environment. Mr. President, I am proud to introduce this important piece of legislation. I ask unanimous consent that the bill be printed in the Record.

Mr. KYL

Mr. KYL. Mr. President, I would like to speak for just a moment to alert my fellow Senators and others about an important development this evening which I think we categorize as another piece of good news, in addition to the adoption of the conference report on the tax reform just concluded by the Senate. Even though the conference report is in the process of being signed and has not yet been filed, I think I can advise my colleagues that later on this evening the House and Senate Armed Services Committees will have concluded their conference report, including the important revisions of the Department of Energy which follow generally along the lines of the so-called Rudman report recommendations and the amendment that Senators Murkowski and Domenici and I filed earlier in this session to reorganize the Department of Energy. The House and Senate had both passed versions of that reform of the Department of Energy. The matter was concluded today in the House- Senate conference report of the Armed Services bill, and that is the vehicle by which the reorganization of the Department of Energy will occur. Just to recapitulate a little bit about how this came about, if you will recall, as a result of the espionage that resulted in the Chinese receiving significant secrets about nuclear weapons of the United States and the possibility that some of that information had come out of our National Laboratories, there was a great deal of study of the security at our National Labs and in the weapons program generally of the Department. The President's own Foreign Intelligence Advisory Board, the so- called PFIAB, headed by former Senator Warren Rudman, issued a report, really a scathing indictment of the Department of Energy, its past security policies or lack of security, and its inability to reorganize itself notwithstanding Secretary Richardson's efforts to begin to reorganize the Department. What it said was the Department of Energy was incapable of reorganizing itself. They reiterated a long list of things which the Department had failed to do, which it had failed to put into place, and described the whole situation at the Department as such that it was impossible to expect them to be able to do this on their own. Therefore, the Rudman commission recommended strongly the Congress do this reorganization by legislation. That is when Senators Domenici, Murkowski and I reoriented our amendment to follow closely the Rudman commission recommendations and introduced that as an amendment before this body. It was originally introduced to the Armed Services bill. It was later put on the Intelligence bill instead. But the Armed Services Committee took the amendment and has worked it now in the conference committee, as I said. As a result of their agreement tonight, there will be a reorganization of the Department, assuming the President signs the Defense authorization bill, which I am sure he would want to do. Reorganization was agreed to in principle by Secretary Richardson, although there were many things he wanted to change in the detail of it. But what it will do in a nutshell is to establish within the Department of Energy a semiautonomous agency that will have the accountability and the responsibility for managing our nuclear weapons and complex including the National Laboratories. It will be headed by a specific person, an Under Secretary, who will be responsible to the Secretary directly and to a Deputy Secretary if the Secretary so desires. While, of course, the Secretary of Energy remains in general control of all of his Department, including the semiautonomous agency, on a day-to-day basis it is anticipated this agency will be operated by the Under Secretary, who is responsible for its functions. It will involve security, intelligence, counterintelligence, all of the different weapons, the Navy nuclear program and the other things at the laboratory that relate to our nuclear weapons. To a large extent it will remove the influences of other parts of the Department of Energy over the nuclear weapons program. One of the things the Rudman commission found was that there were too many people with their fingers in the pie; that the laboratories and the weapons program people were having to get too many sign-offs from too many other people around the Department to work efficiently and effectively. The input of the field offices made it very difficult to know who was responsible, and it was hard to find out in some cases who you even had to get sign-offs from in order to get anything done. They said, in effect, it was no wonder the left hand didn't know what the right hand was doing and that is why they recommended a very clear chain of command, a very clear line of authority with accountability and responsibility with one person at the top and a bunch of people answerable to him and only him--as well as the Secretary, of course. The net result of that should be we will have a much tighter organization run much more efficiently. We will not have the influences of these other disparate people within the Department. Security can be carefully monitored and controlled and, in fact, maintained and in some cases even established. Therefore, the security of the nuclear weapons program generally and the laboratory specifically can be enhanced and we will not have the kind of espionage problems we have had in the past. That is a summary of the problem, the recommendation of the Rudman report, the recommendations Senators Domenici, Murkowski, and I introduced, and the action of the House-Senate Armed Services Committee today in approving this particular plan. I thank some people specifically involved in developing this. In addition, of course, to Senator Domenici, who was the primary mover behind this idea, and Senator Rudman and the members of his panel; Senator Murkowski added a great deal as did Senator Shelby, the chairman of the Intelligence Committee, and Senator Warner, the chairman of the Armed Services Committee in the House. Specifically, I thank Senator Warner for his patience for working with a lot of people who had different ideas about what ought to be done, bringing this to a near successful conclusion, from my point of view, and which will enable us to move forward very quickly with this reorganization. There are also some special staff people who, as always, make these things happen. In the Senate, the staffs of Senators Domenici and Murkowski; Alex Flint, Howard Useem, and John Rood did a great deal of work on this and should be complimented. Two Members of the House of Representatives, who were very active in making this work, Congressman Duncan Hunter and Congressman Mac Thornberry were really the key movers and shakers on this. So as we get ready to leave here this evening, I think it is important for us to acknowledge the work of these people and the leadership of Senator Warner and the conclusion which I hope can soon be announced, as the successful completion of the conference, at least in this one important area, making a great stride toward ensuring the security of our weapons programs and our National Laboratories.

Mr. KYL. One of the things that animated us in the Senate was the need to get on with this project, get the Department reorganized, and to begin dealing quickly with these security problems so we did not have any more problems. Reorganization of a Department, obviously, will take a lot of work and some time. Of course, time will be required to appoint the various officials who will be running it. But I ask the chairman this, just to get his ideas. There are different dates by which things are required to be done under the legislation. What is our intent with respect to moving this legislation forward and accomplishing its objectives as soon as is possible?

Mr. KYL. If I may add, I know the chairman and I share the same view that ``all deliberate speed'' means we need to get about it as soon as we can. I ask the chairman this: Is that more to be considered as a deadline for having achieved this rather than a time to begin? Time to begin, of course, when the President affixes his signature.

Mr. KYL. Mr. President, I think it is. I think the Senate passed a good bill almost unanimously. The House of Representatives had a somewhat different approach. I am sure they considered it an even stronger bill. As the chairman knows better than any of us, compromise is required in that kind of situation. I think each body moved somewhat toward the other. So inevitably I think the product, as good as it was out of the Senate, is even strengthened by some of the ideas that came out of the House of Representatives. I might ask the chairman a question, if I could.

Mr. KYL. If I may interrupt for one other comment, I thank the chairman of the Armed Services Committee for his courtesies in allowing three Senators who are not members of the committee--Senators Domenici, Murkowski, and myself--to be significantly involved in discussing this and proposing suggestions and passing on suggestions that came from the other body. That is a good example of how people in different committees--in my case, the Intelligence Committee--working across jurisdictional lines can help shape the legislation. I personally appreciate that very much. I will add this with respect to our friends on the other side of the aisle. I do not know if I can assign a percentage to it, but it still seems to me that about 90 percent of this bill is the Senate bill we passed. I do not know of a single concept that deviates from the concepts within the Senate bill, even though some of the language is different. I think we protected the Senate legislative concepts very well, and I hope that in the end our Democratic colleagues will continue to work with us and certainly with Secretary Richardson to implement the legislation. I know as we go forward there are going to be hearings in different committees. The chairman's committee will have primary jurisdiction, I understand, and we will be able to continue to work on this because something as significant as the reorganization of the Department is not going to be done in one fell swoop. It will have a lot of fits and starts and oversight and ways of working together. I am sure with the chairman's leadership we will all be able to make this work in the way we intend.

Mr. KYL. May I add one more thing? I know it sounds like a recapitulation, but when the Senator mentioned Senator Domenici and the fine work our National Laboratories do, I was moved to think about how many times during these negotiations Senator Domenici, who represents two of those laboratories, Sandia and Los Alamos, made absolutely sure that the work of those laboratories was well understood by everyone and appreciated by everyone. He was very zealous in assuring that nothing in the legislation would ever detract from their operation or their success, that they could reach out and engage in new missions, that they would be protected in terms of environmental protection and funding. He was a zealous advocate for those laboratories and all the great work they can do. His leadership in that regard is one of the reasons we were able to achieve such a balanced piece of legislation. I thank the Chair.

Mr. KYL

Mr. KYL. I am happy to yield to the Senator.

Mr. KYL. Mr. President, I begin by commending the chairman of the Finance Committee, Senator Roth, and our leadership, Senators Lott and Nickles, for their tremendous work on this bill. Members have heard Senator Nickles discuss the details of the bill, the many things that have been included in this bill. Through his leadership, a lot of the things that Members of the Republican Party and people I represent who have talked to me about tax policy wanted in this bill have gotten included in the bill. I think they did a tremendous job in ensuring that the tax relief for taxpayers became a part of this tax package. I won't go over the details of the bill as Senator Nickles has just done, but I want to note that this is, as he said, the largest middle- class tax cut since Ronald Reagan was President. It is based on the same kind of progrowth, broad-based policies that will let all taxpayers keep more of their hard-earned money.

Mr. KYL. I thank the distinguished assistant majority leader. I agree that by including the repeal of the estate tax, sometimes called the death tax, in this legislation, we have laid down a marker and pretty well ensured that sooner or later it is going to be repealed. Obviously, for the time being, we may have to pay it down a little bit and find it is repealed in maybe the ninth or tenth year. Hopefully, by virtue of the fact we have agreed that it has to go eventually, we will repeal it, and hopefully it will be sooner rather than later because some of my friends have kidded, saying: You know, it is fine you get this repealed 9 years from now, but that means I have to hang on for another 9 years. I am not sure that is possible. Besides that, I have to do the expensive estate planning in the meantime. We prefer to get that eliminated sooner rather than later. I think it is a testament to the leadership of Senator Nickles, majority leader Senator Lott, and Senator Roth, as well as our friends in the House who were in agreement that the death tax had to go. That important provision was included in this election. Rather than describe the specifics of this program, let me note, when I turned on the television this morning I heard a report on CNN. Reporters had gone to Orange County in California. They found the average citizen on the street there really didn't like this tax relief that much. They said: Why do we need to do it? After all, shouldn't we be saving the Social Security surplus for paying down the debt or for Social Security? I say as plainly and clearly as I can: That is exactly what we do. We are not spending the Social Security surplus. Every dime of the Social Security surplus is set. It is not the subject of this tax bill. There are two kinds of surplus. First, FICA taxes fund the Social Security payments to seniors. We collect more in FICA taxes than current beneficiaries require under Social Security. So there is a surplus. We don't use that for the tax cut. Now, there are all of the other tax payment provisions of the code. We have to pay income tax, the estate tax, the capital gains tax, these other taxes. They, too, are producing more revenue than we need. We are not spending as much as we are collecting. That is the surplus we are talking about for tax relief. As Senator Nickles said a moment ago, out of the entire surplus, only 25 cents of it is going for tax relief. When some of our friends on the other side of the aisle or the President say we can't afford tax relief; we should be saving the Social Security surplus, they are fooling the American people. The truth is, the Social Security surplus is not being used for this tax relief--not a penny of it. As a matter of fact, those people who say we should pay down the national debt should understand that both under the President's plan and under our plan, any amount of the Social Security surplus that isn't necessary for Social Security is used to do what? Pay down the national debt. That is what the Social Security surplus is being used for. Let's not be confused. There are good reasons for a tax cut. The money for the tax cut is not coming out of the money for Social Security or for paying off our national debt. That is the fundamental point I wanted to reiterate. Different provisions of the bill stress the point that Senator Nickles made, which is that finally we have achieved in law--we will by the time we vote for this--that the death tax is going to be repealed. I think that sends a very important message as we continue to craft tax legislation. Should the President veto this bill, that will permit us to include that principle in whatever eventually is sent to the President and, hopefully, signed into law. The Taxpayer Refund and Relief Act, which is really the largest middle-class tax cut since Ronald Reagan was President, is based upon the kind of broad-based, pro-growth policies that will help all taxpayers and keep our nation's economic expansion on track. Mr. President, this measure really represents a departure from the kind of targeted tax cuts that we have seen in the past. Taxpayers will not have to jump through hoops, or behave exactly as Washington wants, to see relief. If you pay taxes, you get to keep more of what you earn. It is as simple as that. The marginal income-tax rate reductions in this bill refund to all taxpayers a share of the tax overpayment that has created our budget surpluses. Those in the lowest income-tax bracket will see a seven percent reduction in their taxes. Those in the highest tax bracket will see a reduction of about half that size. I would have preferred an across-the-board reduction that helped everyone more than this. But recognizing the constraints imposed on the Finance Committee by the budget resolution, I think this is a very good product. In addition to marginal rate reductions, the bill would eliminate two of the most egregious taxes imposed on the American people: the marriage-tax penalty and the death tax. There is simply no reason that two of life's milestones should trigger a tax, let alone the steep taxes that are imposed on people when they get married and when they die. Eliminating them is the right thing to do. To eliminate the marriage penalty for most taxpayers, the standard deduction for joint returns would be set at two times the single standard deduction, and the new 14 percent income-tax bracket would be adjusted to two times the single bracket, phased in over the life of the bill. This will solve the problem for most taxpayers, but we need to make clear that, although we have devoted fully 50 percent of the relief in this bill to broad-based and marriage-penalty relief, we will not have eliminated the marriage penalty entirely. We will still need to come back and address the problem for taxpayers who choose to itemize. The bill also phases out the death tax over the next several years, so that by 2009 it is completely eliminated. I would ask Senators to carefully review the details of what is proposed here, because I believe they will find that the bill offers a way for those on both sides of the aisle to bridge our differences with respect to how transfers at death are taxed. The beauty of the proposal is that it takes death out of the equation. Death would no longer be a taxable event. It would neither confer a benefit--the step-up in basis allowed under current law--nor a penalty--the punitive, confiscatory death tax. The provisions are based upon the bipartisan, Kyl-Kerrey Estate Tax Elimination Act, S. 1128, which would treat inherited assets like any other asset for tax purposes. A tax on the capital gain would be paid, the same as if the decedent had sold the property during his or her lifetime, but the tax would be paid only if and when the property is sold. If the beneficiaries of an estate hold onto an asset--for example, if they continue to run the family business or farm--there would be no tax at all. No death tax or capital-gains tax. It is only if they sell and realize income from the property that a tax would be due, and then it would be at the applicable capital-gains rate. This simple and straightforward concept attracted a bipartisan group of cosponsors, including Democratic Senators Kerrey, Breaux, Robb, Lincoln, and Wyden, and about a dozen Senators from the Republican side. If the President makes good on his threat to veto this tax-relief bill, our bipartisan initiative provides a blueprint for how we should deal with the death tax in future tax legislation. Mr. President, another important feature of this tax bill is its capital-gains tax-rate reduction. It will reduce capital-gains tax rates another two percent, so that the top rate is only about two- thirds of where it was just a few years ago. Why is another capital-gains reduction important? Let me quote President John F. Kennedy, who answered that very question: ``The present tax treatment of capital gains and losses is both inequitable and a barrier to economic growth.'' He proposed excluding 70 percent of capital gains from tax, which, if you applied the same concept today, would result in a top rate of about 11.88 percent. That is lower than the top rate of 18 percent proposed in the bill we have before us. President Kennedy explained that ``[t]he tax on capital gains directly affects investment decisions, the mobility and flow of risk capital from static to more dynamic situations, the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential for growth of the economy.'' In other words, if we are concerned about whether new jobs are being created, whether new technology is developed, whether workers have the tools they need to do a more efficient job, we should support measures that reduce the cost of capital to facilitate the achievement of all of these things. Remember, for every employee, there was an employer who took risks, made investments, and created jobs. But that employer needed capital to start. President Kennedy recognized that. He recognized that our country is stronger and more prosperous when our people are united in support of a common goal--and that we are weaker and more vulnerable when punitive policies divide Americans, group against group, whether along racial lines or economic lines. While some politicians may employ divisive class warfare to their political advantage, President Kennedy had the courage to put good policy ahead of demagogic politics. I am with him, and I support the capital-gains reduction in this bill. There are several other provisions that I want to mention briefly, because they, too, will help keep the economic expansion going: the increase in the IRA contribution limit, the alternative minimum tax relief, and the increased expensing allowance. These are things that will encourage the capital formation needed to help keep the United States competitive in world markets, producing jobs and better pay for our citizens. The bill addresses the critical issue of health care as well, providing an above-the-line deduction for prescription-drug insurance, and a 100 percent deduction, phased in over time, for health-insurance costs for people not covered by employer plans. We encourage savings for education by increasing the amount that individuals can contribute to education savings accounts. Funds in these accounts could be used for elementary and secondary education expenses, in addition to higher education. The exclusion for employer- provided educational assistance would be extended, and the 60-month limit for deducting interest on student loans would be repealed. Mr. President, a few final points before closing. Providing the tax relief in this bill will not require us to use any of the Social Security surplus in any year. In fact, all of the Social Security surplus will be reserved for Social Security. In all, about 75 percent of anticipated budget surpluses over the next decade would still be set aside for Social Security, Medicare, and other domestic priorities, including debt reduction. It is only the remaining 25 percent of the available surplus that would be refunded to American taxpayers. In other words, we are proposing to refund just 25 cents of every surplus dollar back to the people who sent it to Washington. It is a sensible and a modest initiative. Remember, the $792 billion in tax relief would be provided over a 10- year period. If you include enough years in the calculation, of course, the amount sounds large, but we are really only talking about an average of $80 billion a year. To put that into perspective, the federal government will collect $1.8 trillion this year alone. It will collect $2.7 trillion by the end of the 10-year period, in 2009. The amount of tax relief we are considering is very modest--not risky, not irresponsible at all, as the President would have us believe. Even accounting for the proposed tax cut, the debt would be reduced substantially. The Budget Committee chairman gave us the numbers last week. Publicly held debt would decline from $3.8 trillion to $900 billion by 2009. Interest costs are forecast to decline from more than $200 billion annually to about $71 billion a year. In fact we reduce debt and debt-service costs more than the President would in his budget, because President Clinton would spend nearly $1 trillion on new initiatives. According to the Congressional Budget Office, part of the President's new spending would even be funded out of the Social Security surplus. To the extent that there is any surplus in the non-Social Security part of the budget, it is because we will have already taken care of the core obligations of government--things like education, health care, the environment, and defense. It is true that we may not launch some new initiatives, or fund lower priority programs, but I believe it is appropriate to refund part of the tax overpayment to hard-working taxpayers before funding new endeavors. Mr. President, if a corner business did what the federal government is doing, it would be accused of gouging. We are charging the taxpayers too much, taking more than the government needs to fund its obligations. We ought to return this overpayment to the people who earned it, instead of thinking up new ways to spend it in Washington. Mr. President, again I commend the leaders who were able to put this package together. I intend to vote for it and encourage my colleagues to do so. I yield whatever time is remaining to the Senator from Delaware.

Mr. KYL

Mr. KYL. I ask unanimous consent that reading of the amendment be dispensed with.

Mr. KYL. I call up amendment No. 1469, and ask unanimous consent that it be modified.

Mr. KYL. Mr. President, I begin today by thanking Senator Roth, the chairman of the Senate Finance Committee, for recognizing that there is a place for estate-tax relief in this bill. The measure reported by the Finance Committee includes a variety of changes: a one-time reduction in the top death-tax rate, converting the unified credit to a true exemption, and raising the annual gift exclusion. These are all steps in the right direction. The problem is, at the end of the day, the Roth bill leaves the death tax in place. By contrast, the bill that the House of Representatives passed last week phases out the death tax over a 10-year period, and then implements a version of the bill I introduced back in May with Senator Bob Kerrey and a bipartisan group of 19 other Senators. The amendment I am offering today is based upon that bipartisan initiative. I would replace the death tax with a tax on the appreciated value of inherited assets to be paid when the assets are sold. In other words, the tax would be imposed when income is actually realized from inherited property. Death would no longer be a taxable event. This amendment represents an effort to find bipartisan consensus about how to deal with the death tax, and I hope all Senators will consider it with an open mind. It is an approach that Senators Moynihan and Kerrey actually suggested to me during a hearing before the Finance Committee two years ago. Bill Beach of the Heritage Foundation discussed its merits at the same hearing. The more I looked into the idea since then, the more sense I thought it made. The essence of it is very simple: It takes death out of the equation. Whether an asset is sold by the decedent during his or her lifetime, or by someone who later inherits the property, the gain is taxed the same. Under this approach, death neither confers a benefit, nor results in a punitive, confiscatory tax. This is an approach that I believe both Republicans and Democrats should be able to accept. We know that many Americans are troubled by the estate tax's complexity and high rates, and by the mere fact that it is triggered by a person's death rather than the realization of income. For a long time, I have advocated its repeal, because I believe death should not be a taxable event. Others agree that the tax is problematic, but are concerned the appreciated value of certain assets might escape taxation forever if the death tax is repealed while the step-up in basis allowed by the Internal Revenue Code remains in effect. That is a legitimate concern. We try to reconcile these positions in this amendment by eliminating both the death tax and the step-up in basis, and attributing a carryover basis to inherited property so that all gains are taxed at the time the property is sold and income is realized. The concept of a carryover basis is not new. It exists in current law with respect to gifts, property transferred in cases of divorce, and in connection with involuntary conversions of property relating to theft, destruction, seizure, requisition, or condemnation. In the latter case, when an owner receives compensation for involuntarily converted property, a taxable gain normally results to the extent that the value of the compensation exceeds the basis of the converted property. However, section 1033 of the Internal Revenue Code allows the taxpayer to defer the recognition of the gain until the property is sold. This amendment would treat the transfer of property at death--perhaps the most involuntary conversion of all--the same way, deferring recognition of any gain until the inherited property is sold. Small estates, which currently pay no estate tax by virtue of the unified credit, and no capital-gains tax by virtue of the step up, would be unaffected by the basis changes being proposed here. The estate tax would be eliminated for them, and they would still get the benefit of the current law's step-up. The basis changes would apply only to estates valued at over $2 million. There are four problems I see with the underlying bill's death-tax provisions. First, the bill tries to make palatable what is fundamentally indefensible. Taxing death is wrong. Second, because it leaves the death tax in place, the need for expensive estate-tax planning also remains. Some people will have to divert money they would have spent on new equipment or new hires to insurance policies designed to cover death-tax costs. Still others will spend millions on lawyers, accountants, and other advisors for death- tax planning purposes. But that leaves fewer resources to invest, start up new businesses, hire additional people, or pay better wages. Third, the higher exemption proposed in the committee bill provides some relief, but I believe it also serves as an artificial cap on small businesses' growth. To avoid the death tax, an entrepreneur merely needs to limit the growth of his or her business so it does not exceed the $1.5 million exemption amount. That means fewer jobs, and less output. I believe it would be better to eliminate the tax and, if there is a need to impose a tax, impose it when income is actually realized--that is, when the assets are sold. That is what this amendment would do. I want to stress to colleagues, particularly colleagues on the Democratic side of the aisle, that we do not allow appreciation in inherited assets to go untaxed, as other death-tax repeal proposals would do. We are merely saying that if a tax is imposed, it should be imposed when income is realized. Earnings from an asset should be taxed the same whether the asset is earned or inherited. The question has been posed at various times during debate on this bill whether the American people want tax relief. Let me answer that question with respect to the issue at hand. Although most Americans will probably never pay a death tax, most people still sense that there is something terribly wrong with a system that allows Washington to seize more than half of whatever is left after someone dies--a system that prevents hard-working Americans from passing the bulk of their nest eggs to their children or grandchildren. Seventy-seven percent of the people responding to a survey by the Polling Company last year indicated that they favor repeal of the death tax. When Californians had the chance to weigh in with a ballot proposition, they voted two-to-one to repeal their state's death tax. The legislatures of five other states have enacted legislation since 1997 that will either eliminate or significantly reduce the burden of their states' death taxes. The 1995 White House Conference on Small Business identified the death tax as one of small business's top concerns, and delegates to the conference voted overwhelming to endorse its repeal. Outright repeal received the fourth highest number of votes among all resolutions approved at the conference. A couple of other points to consider about the death tax. it is one of the most inefficient taxes that the government levies. Alicia Munnell, who was a member of President Clinton's Council of Economic Advisors, estimated that the costs of complying with death-tax laws are of roughly the same magnitude as the revenue raised. In 1998, that was about $23 billion. In other words, for every dollar of tax revenue raised by the death tax, another dollar is squandered in the economy simply to comply with or avoid the tax. The tax hurts the economy. A report issued by the Joint Economic Committee in December of 1998 concluded that the existence of the death tax this century has reduced the stock of capital in the economy by nearly half a trillion dollars. By repealing it and putting those resources to better use, the Joint Committee estimated that as many as 240,000 jobs could be created over seven years and Americans would have an additional $24.4 billion in disposable personal income. So much for the contention that this is a tax that touches only a few. It appears that the chairman of the Finance Committee will raise a point of order against this amendment. I think that is regrettable. If there is a way to improve this amendment, I am willing to work with Chairman Roth on any ideas he might have. But if the point of order is intended to preserve the death tax as a permanent part of the Tax Code, we have a very significant difference of opinion, and I think he should allow the Senate to work its will, rather than use a parliamentary point of order to block it. This is a good amendment; the policy it proposes is sound, and fair. Its time has come. I urge my colleagues to support the amendment. As I say, this amendment would repeal the estate tax, the so-called death tax. According to the Joint Tax Committee, under scoring, it cannot occur until the eighth year or until 2007. But at that point it replaces the death tax with a tax on the sale of the assets, usually a capital gains tax, if and when the property is sold. In other words, it is a very fair compromise between those who believe there should be some tax on the sale of assets and those who believe that death itself should not be a taxable event. I am advised that a point of order will be made that this amendment is not germane. If that is done, I believe that to be very unfortunate. But because Senator Kerrey would prefer that we not proceed with a vote on the point of order, I will not contest the ruling of the Chair. I believe that repeal of the death tax enjoys more than majority support and am confident that in the conference committee, we will be able to accept the House version or something close to it which repeals the death tax along the lines of the Kyl-Kerrey approach. I urge my colleagues to support repeal of the death tax. If a point of order is made, I will not contest it.

Mr. KYL

Mr. KYL. To reiterate, the bill includes a tax break for the renovation of historic homes. That is great, if you intend to engage in such a renovation and you have a historic home. But if you don't have that kind of a home, it is not going to do you much good. People with foreign addresses would have their frequent flier miles exempted from the 7.5-percent passenger ticket tax. Generation of electricity from chicken litter would earn a tax break. If you are fortunate to get certain scholarship, you could be excluded from a tax. These four provisions alone, which may well have merit, have a combined revenue impact of about $4 billion over 10 years--money I would prefer to put toward the kind of relief Senator Gramm has been proposing. That is why I support his amendment. Let's take one of the provisions of his amendment, whereas, the committee bill attempts to spread relief. Out of about 130 different parts of the Tax Code, the Gramm amendment focuses on just 5 particular areas, using the surplus to finally correct some of the most unfair and egregious provisions of the law. For example, it eliminates the marriage tax penalty. The Finance Committee proposal goes a long way toward working on that marriage penalty, but it does not eliminate it. The Gramm proposal would do that. It is not fair that we overtax families just because they are married. The impact is estimated to cost the average couple an extra $1,400 a year. About 21 million American couples are affected. It is no wonder both spouses in the family are having to work. One, in effect, is working for the family, and the other is working to pay off the taxes. They are upset with this marriage tax penalty. I support that provision. While we deal with the death tax in the Finance Committee proposal, we don't eliminate it. It ought to be eliminated. The Gramm proposal eliminates it along the lines of the Kyl-Kerrey bill. I appreciate Senator Gramm including our provision in his amendment. The death tax is the most unfair tax of all. Death should not be a taxable event. If you want to tax people because they make some economic decision to spend money, to take money out of an account, to sell an asset, then tax that economic decision. They understand going in what the consequences are going to be. But nobody chooses to die. Why their heirs should have to pay a tax because of a death is beyond most of us. It brings in about 1 percent in revenue. It is not worth it. An awful lot of small businesses and farms, which have all of the assets tied up in equipment and the capital of the business itself, end up having to sell their assets in order to pay the taxes. The idea that it was to prevent the accumulation of wealth no longer works. In today's world, when you have to sell the business, you usually sell to some big conglomerate that then takes it over. So the death tax is unfair. Our proposal, which in effect converts it to a capital gains tax on the sale of the assets if and when they are ever sold, is a much fairer proposal. It still permits the Government to recover some of the money, but it is not based upon the death of the individual, it is based upon the sale of the asset when the people want to sell it. There are three other components I will touch on briefly. First, it reduces the marginal income tax by 10 percent across the board. In other words, all taxpayers would see their taxes reduced, proportionate to how much they pay, as the Senator pointed out. It is probably the fairest way of returning the tax overpayment. The amendment would index capital gains for inflation, recognizing that the Treasury should not reap the benefit of inflationary policy. Finally, it would provide a full deduction for health insurance for the self-employed, something I think everybody would like to see done. We can afford to do those things, and we ought to do those things in this amendment. I will vote for the Gramm amendment. If it is defeated, I will vote for the underlying bill in order to get it to conference where it can be improved. I will reserve judgment on whether to support the conference report until I see whether it comes closer to the approach Senator Gramm has taken. Mr. GRAMM addressed the Chair.

Mr. KYL. Mr. President, I have heard the name of the Federal Reserve Board Chairman, Alan Greenspan, invoked in this debate as if the Chairman would oppose the tax-relief bill. That is not my understanding of where Mr. Greenspan stands on the issue. I want to include for the Record at the end of my remarks a copy of a Wall Street Journal editorial on the subject that ran on July 27, 1999. When Chairman Greenspan testified before the Banking Committee last week, he said that he would delay tax cutting and apply the surplus to debt repayment--but here is the part of the quote that many in the media have failed to report. He said he would defer tax cuts: . . . unless, as I've indicated many times, it appears that the surplus is going to become a lightening rod for major increases in outlays (emphasis added). That's the worst of all possible worlds, from a fiscal policy point of view, and that, under all conditions, should be avoided. Mr. Greenspan went on to say, ``I have great sympathy for those who wish to cut taxes now to pre-empt that process, and indeed if it turns out that they are right, then I would say moving on the tax front makes a good deal of sense to me.'' Mr. President, Chairman Greenspan's view is important because opponents of this tax relief bill claim that the Federal Reserve will respond to its enactment by raising interest rates to the cool economy. But Mr. Greenspan's remarks make it clear that the real threat to continue prosperity is bigger government, not tax relief. And if the tax overpayment is not returned to taxpayers, I think it is clear that it will be spent long before it can be applied to debt reduction. Just consider that President Clinton is proposing new spending amounting to $826 billion--more than the 10-year cost of the tax-relief bill that is before us. Remember, too, that our tax bill accounts for only about 25 percent of the available surplus. In other words, we are only proposing to refund about 25 cents of every surplus dollar to the people who sent it to us--hardly a risky or irresponsible thing. Seventy five cents of every surplus dollar would be dedicated to preserving Social Security and Medicare, and funding other domestic priorities. Remember, to the extent that there is a surplus, we will have taken care of our core obligations already--things like education and health care, running our national parks, and providing for the national defense. It may be true that refunding the overpayment will mean we cannot fund some low priority programs, but that is the point: taxpayers ought to be able to decide how to spend their own hard-earned money before Washington wastes it. Critics of the tax-relief bill also claim that it cannot be justified because projected surpluses may never materialize, that Congress and the President will be unable to live within the spending limits we agreed to on a bipartisan basis only two years ago. In other words, they contend that spending the surplus is a preordained outcome. To me, that is not a reason to defer tax relief. It is the very reason we need to pass tax relief--before Washington can find new ways to spend the tax overpayment. Mr. President, I think it is important to clarify that we are talking about what to do with the non-Social Security surplus. Our plan saves all of the Social Security surplus for Social Security. President Clinton says that it is his goal as well, but his budget would actually spend $158 billion of the Social Security surplus on other programs. If our colleagues on the other side of the aisle would end their filibuster against the Social Security lockbox bill, we could pass it and make sure the Social Security surplus is not spent. Let me turn for a few moments to the specific provisions of the tax- relief bill that is before us today. I want to begin by commending the chairman of the Finance Committee for producing a bill that fully meets the instructions of the budget resolution we passed earlier this year and provides a full $792 billion in tax relief over the next decade. But I must say that I would have written the bill very differently. It seems to me that there are too many provisions that are targeted too narrowly. For example, the bill includes a tax break for the renovation of historic homes. That is great if you intend to engage in such renovation. But if you do not have the means to own a historic home, or do not want one, you get no relief. People with a foreign address would have their frequent flyer miles exempted from the 7.5 percent air passenger ticket tax. Generation of electricity from chicken litter would earn a tax break. And if you are fortunate enough to get certain scholarships, your award would be excluded from tax. These four provisions alone--and each may have merit in its own right--have a combined revenue impact of about $4 billion over 10 years--money that I would prefer to put toward broad-based, growth- oriented tax relief that help all taxpayers. While there are many worthwhile provisions in the Finance Committee bill, a better approach is embodied in an amendment that will be offered by Senator Phil Gramm of Texas. Whereas the committee bill attempts to spread relief among some 130 parts of the Tax Code, the Gramm amendment would focus on just five areas, using the surplus to finally correct some of the most unfair and egregious provisions of the law. The Gramm amendment would, for example, expand on the provisions of the underlying bill to completely eliminate the marriage-tax penalty. What rationale can there possibly be for imposing such a penalty? All of us say we are concerned that families do not have enough to make ends meet--that they do not have enough to pay for child care, college, or to buy their own homes. Yet we tolerate a system that overtaxes families. According to Tax Foundation estimates, the average American family pays almost 40 percent of its income in taxes to federal, state, and local governments. To put it another way, in families where both parents work, one of the parents is nearly working full time just to pay the family's tax bill. It is no wonder, then, that parents do not have enough to make ends meet when government is taking that much. It is just not right. The marriage penalty alone is estimated to cost the average couple an extra $1,400 a year. About 21 million American couples are affected, and the cost is particularly high for the working poor. Two-earner families making less than $20,000 often must devote a full eight percent of their income to pay the marriage penalty. The highest percentage of couples hit by the marriage penalty earns between $20,000 and $30,000 per year. Think what these families could do with an extra $1,400 in their pockets. They could pay for three to four months of day care if they choose to send a child outside the home--or make it easier for one parent to stay at home to take care of the children, if that is what they decide is best for them. They could make four to five payments on their car or minivan. They could pay their utility bill for nine months. The Finance Committee bill goes a long way toward resolving the marriage-penalty problem, and I thank the chairman of the Finance Committee for that; but since we have the resources to solve it fully once and for all, we should. The death tax is just as wrong, and we ought to do something about it, too. The Gramm amendment includes the provisions of the Kyl-Kerrey bill, as modified by the House, that would eliminate the death tax outright. Although most Americans will probably never pay a death tax, most people still sense that there is something terribly wrong with a system that allows Washington to seize more than half of whatever is left after someone dies--a system that prevents hard-working Americans from passing the bulk of their next eggs to their children or grandchildren, or even their local charities. Liberal Professor of Law at the University of Southern California, Edward J. McCaffrey, put it this way: ``Polls and practices show that we like sin taxes, such as on alcohol and cigarettes.'' ``The estate tax,'' he went on to say, ``is an anti-sin, or a virtue, tax. It is a tax on work and savings without consumption, on thrift, on long term savings. There is no reason even a liberal populace need support it.'' Economists Henry Aaron and Alicia Munnell reached similar conclusions, writing in a 1992 study that death taxes ``have failed to achieve their intended purposes. They raise little revenue. They impose large excess burdens. They are unfair.'' In fact, 77 percent of the people responding to survey by the Polling Company last year indicated that they favor repeal of the death tax. When Californians had the chance to weigh in with a ballot proposition, they voted two-to-one to repeal their state's death tax. The legislatures of five other states have enacted legislation since 1997 that will either eliminate or significantly reduce the burden of their states' death taxes. Talk to the men and women who run small businesses around the country and you will find that death taxes are a major concern to them. The 1995 White House Conference on Small Business identified the death tax as one of small business's top concerns, and delegates to the conference voted overwhelmingly to endorse its repeal. Remember, this is a tax that is imposed on a family business when it is least able to afford the payment--upon the death of the person with the greatest practical and institutional knowledge of that business's operations. Although the death tax raises only about one percent of the federal government's annual revenue, it exerts a disproportionately large and negative impact on the economy. In fact, Alicia Munnell, a former member of President Clinton's Council of Economic Advisors, estimates that the costs of complying with death-tax laws are roughly the same magnitude as the revenue raised. In 1998, for example that amounted to about $23 billion. In other words, for every dollar of tax revenue raised by the death tax, another dollar is squandered in the economy simply to comply with or avoid the tax. Over time, the adverse consequences are compounded. A report issued by the Joint Economic Committee last December concluded that the existence of the death tax this century has reduced the stock of capital in the economy by nearly half a trillion dollars. By repealing the death tax and putting those resources to better use, the Joint Committee estimates that as many as 240,000 jobs could be created over seven years and Americans would have an additional $24.4 billion in disposable personal income. Unlike the Finance Committee bill, which leaves the death tax in place indefinitely, the Gramm amendment would repeal the tax--pull it out by its roots. The House has already passed similar provisions, and the Senate should, as well. Death-tax repeal is a must. Mr. President, there are three other components of the Gramm amendment that I will touch on only briefly. First, it would reduce marginal income-tax rates by 10 percent across the board. In other words, all taxpayers would see their tax bills reduced, proportionate to how much they pay. This is probably the fairest way of returning the tax overpayment. Second, the amendment would index capital gains for inflation, recognizing that the Treasury should not reap the benefit of inflationary policies. Third, it would provide a full deduction for health insurance for the self employed. Mr. President, the Gramm amendment would provide broad-based relief, and would do so in a way that is not only fair, but which would keep the economy growing and providing a better standard of living for all Americans. I will vote for the Gramm amendment. If it is defeated, I will vote for the underlying bill in order to get it to conference where the bill could be improved. I will, however, reserve judgment about whether to support the conference report until I can see if it comes close to the Gramm amendment or the House bill. Before concluding, I ask unanimous consent that the Wall Street Journal editorial from July 27, 1999, which I mentioned at the beginning of my remarks, be printed in the Record at this point.

Mr. KYL

Mr. KYL. Mr. President, I wish to associate myself with the excellent comments of my good friend, the Senator from California, and also look forward to working with the chairman and ranking member of the subcommittee to resolve the funding disparity in the State Criminal Alien Assistance Program (SCAAP). Before I begin my comments about this important program and the level of funding in the Senate Commerce-Justice-State Appropriations bill, I want to state my full support for what I have been told will be a $585 million funding level for SCAAP in the House FY 2000 bill. I would also like to insert for the record a copy of a letter from the U.S./Mexico Border Counties Coalition (which consists of 18 county governments located on the Southwestern border) that describes why an adequate funding level for SCAAP is so important to these border ares, many of which are facing very difficult fiscal situations. Through the Crime Control Act of 1994, the Congress created SCAAP to reimburse states and localities for the costs they incur incarcerating criminal illegal aliens. Such costs, it has been made clear, are the responsibility of the federal government. SCAAP is authorized at $650 million, although total expenditures of the states exceed $2 billion per year. Though the financial burden of criminal illegal aliens overwhelms the criminal justice budget of many states and localities, SCAAP has never even been allocated its full authorization. In 1996 and 1997, SCAAP was allocated $500 million and last year, states and localities received a total of $585 million. Frankly, the Congress would be fully justified in increasing the authorization level to $2 billion annually. In 1998, the taxpayers of Arizona spent $38 million incarcerating criminal illegal aliens, including $26.8 million in state facilities, $406,000 in Cochise County, $9 million in Maricopa County, $136,000 in Mohave County, $534,000 in Pinal County, $450,000 in Santa Cruz County, and $401,000 in Yuma County. In turn, the state received a reimbursement of $15.1 million in SCAAP funds--less than half of what Arizona should have gotten, and that was when SCAAP was funded at $585 million overall. To reduce the total 1999 SCAAP fund by more than 80 percent for fiscal year 2000, to $100 million, is absolutely unacceptable. Should funding be reduced to $100 million, all 50 states, D.C., and the 244 local jurisdictions, which currently receive 39 cents on the dollar, would be reimbursed a mere seven cents on the dollar, even though such costs are a clear federal responsibility. This situation is especially disturbing, considering incarceration is only one component of the overwhelming cost incurred by states and localities when processing criminal illegal aliens--and one for which the federal government promised to provide reimbursement in the Crime Control Act of 1994. In Santa Cruz County, Arizona, the overall costs of both processing and incarcerating illegal criminal aliens takes up 39 percent of the county's criminal justice budget. And that is just one county in my state. The combined costs to jurisdictions all over the country are staggering, and the SCAAP program only reimburses states for the incarceration portion of these onerous costs. Unless Congress appropriates sufficient funds for SCAAP, at the very least, Arizona and other state and local governments will continue to shoulder billions of dollars of the expense of incarcerating and processing criminal illegal aliens. Mr. President, I very much hope that Senators Gregg, Hollings, Feinstein and I can work to resolve these issues before this bill is signed into law.

Mr. KYL. Once again, I thank the distinguished Chairman. warden offender nomitoring system

Mr. KYL. I thank Senator Gregg for entering this colloquy with me about a program which is particularly vital to the law enforcement personnel in my own state of Arizona. As you know, the Byrne Grant is a key source of federal financial assistance for state and local drug law enforcement efforts. It funds a wide variety of activities ranging from task forces and drug education to apprehension and prosecution. In Arizona, numerous counties and agencies rely on Byrne Grant funds to pay the salaries of nearly 300 law enforcement and prosecution personnel; rural counties especially benefit from Bryne Grant funds for their law enforcement activities.

Mr. KYL. Mr. President, I rise to enter into a colloquy with the distinguished Chairman of the subcommittee, Senator Gregg, regarding the importance of the Byrne Grant.

Mr. KYL

Mr. KYL. Mr. President, I rise today in strong support of the Lugar amendment, which will restore funding for the National Endowment for Democracy (NED). Since its inception in 1983, NED has been a cost- effective means of ensuring that American democratic principles have the opportunity to flourish around the world. NED works on a bipartisan basis in over 80 countries in every region of the world to help build stable, peaceful democracies. This, in turn, furthers America's national security interests, since working to support secure, strong democracies is one of the most effective means of combating the spread of weapons of mass destruction, terrorism, and destabilizing refugee problems. NED enjoys strong, bipartisan support, receiving the support of each administration and the bipartisan congressional leadership since its inception. In a recent editorial in the Wall Street Journal, former President Jimmy Carter and Ambassador Paul Wolfowitz, President Bush's Under Secretary of Defense, wrote: ``The creation of the NED in the 1980s reflected a bipartisan belief that the promotion of freedom is an enduring American interest and that nongovernmental representatives would best be able to help their counterparts build democracy in other countries.'' NED has a strong track record, developed through involvement in virtually every critical struggle for democracy of the past decade-and- a-half. NED provided vital support to the movements that brought about peaceful transitions to democracy in Poland, Chile, and South Africa. Indeed, as a recent New York Times editorial noted: ``It is hard to think of a dictatorship whose opponents have not benefited from the endowment.'' NED uses its funds efficiently and effectively. A recent audit conducted by the U.S. Information Agency's Inspector General looked at fiscal years 1994-1999 and did not question a single cost related to the management of NED's grants. NED's independence is the key to its success. Without the restoration of NED's funding as a separate, congressionally mandated line item, NED will have to be funded through the State Department's foreign aid process. This would undermine NED's independence, and therefore its effectiveness. If NED were to be too closely associated with the Department of State, then NED might be seen as merely a mouthpiece for whatever administration currently occupies the White House. This would dilute its effectiveness. NED must be allowed to continue to make decisions about where to provide its vital assistance without having first to clear those decisions through the State Department bureaucracy, which may not always share NED's agenda. The United States carries out high-level diplomatic relations with a number of nondemocratic regimes, such as China. The State Department might be tempted to scale back NED's democracy-building activities in such countries if the Department viewed those activities as interfering with the Department's diplomatic agenda. This must not be allowed to happen, and keeping NED independent is the only way to ensure that it does not. The Lugar amendment restores funding for this vital organization while ensuring its independence. I urge my colleagues to support this amendment.

Mr. KYL

Mr. KYL. Mr. President, I am proud that S. 1217, the Commerce, Justice, and State Appropriations Bill contains an amendment by Senator Coverdell and me, securing $1.8 million for drug-free workplace programs. It has been a pleasure to have worked with Senator Coverdell in obtaining funding for this critical program. Our amendment is a victory for business and the fight against drugs. Last year Senator Coverdell and I authored the Drug-Free Workplace Act, which became law. It provided grants to organizations in order to assist small businesses in starting drug-free workplace programs. The Act was designed to encourage partnerships between small businesses and organizations that have experience in tackling the problem of drugs in the workplace. Many small business are reluctant to implement drug testing or employee-assistance programs, because they lack expertise in crafting such programs. As we all know, sustaining a competent, able work force hinges on our ability to keep drugs out of the workplace. Funding was needed to continue this instrumental program. Securing $1.8 million for FY 2000 is a victory, considering the Administration chose to not fund this effort at all. Statistics confirm that drug-free workplaces are more productive and efficient than those where some employees abuse drugs. For instance, 47 percent of workplace accidents are drug-related. Moreover, U.S. businesses lose $176 billion annually to substance abuse for costs due to accidents, absenteeism, and increased health care costs. Drug and alcohol abusers utilize 300 percent more medical benefits than non- abusers. This amendment will enable small businesses to combat an evil that plagues their work forces, drug abuse. amendment no. 1311 (Purpose: To amend provisions relating to the implementation of the June 3, 1999 Agreement of the United States and Canada on the Treaty Between the Government of the United States of America and the Government of Canada Concerning Pacific Salmon and for other purposes) S. 1217 is amended as follows: At page 59, line 12 strike ``$20,000,000'' and insert in lieu thereof ``$18,000,000''. At page 59, line 14 strike ``Alaska'' and insert in lieu thereof ``$20,000,000 is made available as a direct payment to the State of Alaska''. At page 59, lines 22 and 23 strike the comma and the phrase ``subject to express authorization''. At page 60, lines 2 and 3 strike the comma and the phrase ``subject to express authorization''. At page 76, line 11 strike the comma and the phrase ``subject to express authorization''. At the appropriate place in ``TITLE VI--GENERAL PROVISIONS'' insert the following new section: ``Sec. __. (a) To implement the June 3, 1999 Agreement of the United States and Canada on the Treaty Between the Government of the United States of America and the Government of Canada Concerning Pacific Salmon (the ``1999 Agreement'') $140,000,000 is authorized only for use and expenditure as described in subsection (b). (b)(1) $75,000,000 for grants to provide the initial capital for a Northern Boundary and Transboundary Rivers Restoration and Enhancement Fund to be held by the Pacific Salmon Commission and administered jointly by the Pacific Salmon Commission Commissioner for the State of Alaska with Canada according to a trust agreement to be entered into by the United States and Canada for the purposes of research, habitat restoration, and fish enhancement to promote abundance-based, conservation-oriented fishing regimes. (2) $65,000,000 for grants to provide the initial capital for a Southern Boundary and Transboundary Rivers Restoration and Enhancement Fund to be held by the Pacific Salmon Commission and administered jointly with Canada by the Pacific Salmon Commission Commissioners for the States of Washington, Oregon, and California according to a trust agreement to be entered into by the United States and Canada for the purposes of research, habitat restoration, and fish enhancement to promote abundance-based, conservation-oriented fishing regimes. (3)(i) Amounts provided by grants under paragraphs (1) and (2) may be held in interest-bearing accounts prior to the disbursement of such funds for program purposes, and any interest earned may be retained for program purposes without further appropriation by Congress. (ii) the Northern Boundary and Transboundary Rivers Restoration and Enhancement Fund and Southern Boundary and Transboundary Rivers Restoration and Enhancement Fund are subject to the laws governing federal appropriations and funds and to unrescinded circulars of the Office of Management and Budget, including the audit requirements of Office of Management and Budget Circular Nos. A-110, A-122 and A-133; and (iii) Recipients of funds from the Northern Boundary and Transboundary Rivers Restoration and Enhancement Fund and Southern Boundary and Transboundary Rivers Restoration and Enhancement Fund, which for the purposes of this subparagraph shall include interest earned pursuant to subparagraph (i), shall keep separate accounts and such records as may be reasonably necessary to disclose the use of the funds as well as facilitate effective audits. (c) The President shall submit a request for funds to implement this section as part of his official budget request for the Fiscal Year 2001.''

Mr. KYL

Mr. KYL. Mr. President, obviously that is in response to the amendment. But I think that is the general idea. I also add one other point. In the second sentence of the amendment it provides that the Director of the Agency for Nuclear Stewardship is responsible for implementation of the Secretary's security counterintelligence and intelligence policies within the new Agency. I think, while that is true, since it follows the Secretary, the sentence previous to it, which talks about departmentwide policies, there is an implication in the second sentence, again, that he has to implement all of the departmentwide policies without exception. I think we have to make it clear that the second sentence is what we are talking about, and the third sentence as well.