Jon Kyl

Mr. KYL

Mr. KYL. Mr. President, I ask unanimous consent to proceed as if in morning business for not to exceed 15 minutes.

Mr. KYL

Mr. KYL. Madam President, I would like to speak to this amendment and express a contrary view to that expressed by my colleague who has just spoken. With all due respect to the Senator from Indiana, who has put a lot of work into this, and who has offered the amendment, and while agreeing with much of what is in the amendment and much of what he proposes to try to do, I have to object for two reasons to the consideration of the amendment at this time. First of all, it is in reaction to--at least partially, although he has been at this for a long time, and understanding that we do need to make some changes--what has occurred with the sanctions placed on India and Pakistan. We just resolved the issue with India and Pakistan primarily because of the amendment we just passed, which eliminates the agricultural component, broadly defined, of the India/Pakistan sanctions. Therefore, to the extent that my colleague, Senator Roberts, was just speaking, and others who have talked about the impact on our farmers as a result of the imposition of those sanctions, we have solved that situation. As a matter of fact, if you analyze the other sanctions imposed as a result of their nuclear tests, it gets down to a very narrow issue of some Eximbank loans or World Bank loans primarily and, therefore, I urge us not to rush into a consideration of this amendment on this particular appropriations bill because of the need to fix something that was not done with respect to India and Pakistan, when we have already begun to solve that problem. Secondly, because of the fact that sanctions have not always worked as we have desired them, and because of the obvious deficiencies with the sanctions imposed on India and Pakistan, the majority leader has appointed a bipartisan task force, consisting of Members of both parties, with different backgrounds, to deal with this question. We had a meeting yesterday. I am somewhat shocked that the Senator from Indiana would offer this amendment today, because yesterday he said that he wanted to preserve the option of proposing this amendment at some time in the future. But he seemed to agree with the majority opinion expressed there--in fact, all but one of the Members, in one way or another, expressed a view that a September 1 deadline was somewhat unrealistic in trying to deal with this problem. The Senator did preserve his option to offer an amendment at a future date, but I am shocked that it is offered today because the task force has not had an opportunity to review this matter in any depth. Madam President, I would like to now discuss some of the things that we talked about yesterday, which I think will illustrate the fact that this amendment is prematurely offered at this time. Again, notwithstanding the fact that the goals behind it--to review broadly our sanctions policy and some of the specifics about it, and to be more careful about how we impose sanctions--are both worthwhile and, in many respects, something we can all agree on, one of the things we can't agree on is a definition of what a sanction is. There is a broad definition, according to the Senator from Indiana. I wonder whether we are really ready to apply the limitations and the tests that are called for in this amendment to foreign aid reductions, because as I read the proposal, one of the sanctions would be a reduction or elimination of foreign aid. U.S. aid is not an entitlement. We are going to make different decisions every year about how much foreign aid we may want to give to a country. Should that be subject to the limitations imposed in this amendment? How about export controls on sensitive U.S. technology? We just came from a very highly classified briefing of a committee that was specially appointed to examine the missile threat to the United States. That report is, I must say, extraordinarily concerning, I am sure, to everybody who received it. On some of the countries that pose this threat to us, we have imposed stringent export controls with respect to sensitive technology going to those countries, which could assist them in the development of their ballistic missile technology programs. Are we going to impede the President's ability and Congress' ability to impose those kinds of limitations on the sensitive export of technology to countries that we don't want to have that technology? As I read the amendment of the Senator from Indiana, that is all covered. We need to have a common definition of what a sanction is in order to apply these kinds of limitations. And there should not be a 45- or 60- day--I think it is now reduced to 45 days--waiting period. There are all kinds of things that would cause either the President or Congress to want to impose sanctions right away and not wait 45 days.

Mr. KYL. Mr. President, I am sure when my colleague just referred to a ``no-brainer,'' that no one would be in opposition to it, he wasn't suggesting there is not a logical, reasonable argument in opposition to the amendment, and I would like to again try to make that and urge my colleague, if he would like, to engage in any kind of colloquy he would like to clarify what I have to say, to at least assure him that there is a reasonable argument on the other side. I want to begin by commending Senator Lugar for identifying many of the things which ought to be done with respect to the imposition of sanctions in his amendment. He has a lot of good material in this amendment. I know he has given it a lot of thought. I think, at the end of the day, we will be able to accept a lot of that. Mr. President, I also believe there are some things that are not adequately thought out here. I would like to focus on a few of those. One of the things I am pleased with is a very broad definition of national emergency, which would permit the President to essentially waive the requirements of the legislation in the event of a national emergency, which is very, very broadly defined here. In one sense, that is good. But in another sense, all of the good that we are trying to achieve here could be easily undone, simply because the President decided to go forward and waive in the interests of national security. If the national security definition were a little tighter, then what we are seeking to accomplish here could probably be done, and the President would not be able to undo it easily through the invocation of a national emergency waiver. So I want to begin this part of the debate by acknowledging that some of what the Senator from Indiana is seeking to do clearly is going to gain wide acceptance here. In some cases, we are not going to want to let the President easily get out from underneath these requirements, which the definition of national emergency, in my view, would allow him to do. I also want to begin by making a point that one of my colleagues made, and that is to establish bona fides with respect to this. I have been getting a lot of calls from commercial associations seeking support for this, in the name of free trade. I have always supported fast track and do to this day, and I hope we will take fast track up again this year and pass it. I have supported GATT. I have supported NAFTA. I will proudly call myself a free trader, too. So my comments are not made from the perspective of someone who has not supported trade. In terms of business support, I certainly provided that. But we also have a national security obligation as Members of the Senate, and what I do not see adequately addressed in this amendment is the careful balancing between support for economic considerations on the one hand, and national security on the other. Those interests have to be very carefully calibrated. I think, with some additional work on the amendment of the Senator, we might be able to help achieve that calibration, but not if we have to vote on that today. Third, I mentioned the definitions problems, and I would like to get into that in detail now. I would like to read from the amendment of the Senator, the very first definition of what we are talking about when we talk about a unilateral economic sanction. Here is the definition. I am quoting: The term ``unilateral economic sanction'' means any prohibition, restriction or condition on economic activity, including economic assistance, with respect to a foreign country or foreign entity. . . Et cetera, et cetera, et cetera. That means foreign aid, for example. So before we do a foreign aid bill here, are we going to have to go through the requirements of this legislation? Before we reduce a country's foreign aid, is the President going to have to give the Federal Register notice for 45 days? Is the Congress going to have to wait for 45 days before we can reduce that aid? Is that reduction going to be in force only 2 years and then we would have to revisit it? Something as simple as foreign aid--we raise and lower a country's foreign aid every year for lots of different reasons. We may apply a little more money to the foreign aid budget and be able to increase aid, or we may reduce it and have to increase aid. It has nothing to do with whether we are trying to sanction somebody or punish somebody or prohibit trade. Yet, that would be implicated because of the breadth of the definition of ``economic sanction'' contained in the legislation. What about some of the other actions that we may take? I mentioned before export controls on sensitive U.S. technology. I think it is absolutely incredible that restrictions of U.S. trade, technical assistance, or any other way in which the United States would provide assistance to another country with respect to sensitive matters would be deemed subject to the requirements of this legislation. This legislation may well be appropriate for the kind of sanctions that we would apply against a country that doesn't agree with us on a particular human rights policy, for example, or something of that sort or perhaps with whom we have a trade dispute. But it certainly should not apply to the limitations that this country imposes upon U.S. businesses wanting to transfer technology to another country. There are good and sufficient reasons we have an entire regime of export controls in place. To show just exactly how far this legislation goes--and I think this is critical before Senators vote in favor of this amendment--they had better understand the following: We have just had exposed a tremendous technology transfer to the country of China that occurred because a couple of U.S. companies may--may; they are under investigation for it--allegedly have violated U.S. law with respect to technology transfer. When a missile blew up and destroyed a satellite, information was provided to the country of China. That may have been in violation of U.S. law. It may well have compromised our national security. Yet, the kind of things that we impose upon companies that are going to do business with a country like China to limit the transfer of that highly sensitive technology would be implicated because of the breadth of the definition of this legislation. Would we be able to limit the kind of technology transfer that has gone on to China that we are trying to stem? Would we be able to require defense monitors to accompany this equipment? Would we be able to preclude reports being issued to the Chinese Government on what went wrong with a particular launch? Would we be able to require an export license for the kind of satellites being exported here or the kind of technology that is being transferred in aid of the launch of U.S. satellites to make sure the rockets themselves don't blow up? Would we be precluded from putting those kind of technology transfers on a munitions list? Would we be precluded from requiring reviews by the Justice Department? This morning I talked with the Attorney General in a hearing of the Senate Judiciary Committee, and I said, ``Even though you had this matter under direct investigation, pending investigation, and Sandy Berger, the National Security Adviser, was advised that it could significantly adversely impact the judicial process of the prosecution of people who would be indicted for having possibly violated the law, for the President to grant a subsequent waiver, notwithstanding that the President granted the waiver,'' and I asked the Attorney General, ``did you object to that in any formal way?'' She said, ``No, there is nothing in the law today that permits or requires that, and there is not even any procedure for that.'' I said, ``Do you think there should be?'' Her answer was, ``We are working right now on recommendations that would get the Justice Department into the loop here.'' What I am saying, Mr. President, is that with regard to the transfer of highly sensitive technology that could jeopardize the national security of the United States, we do impose limitations, and as I read the definition of ``unilateral economic sanction,'' many of the kind of activities in which we engage here would be implicated by this definition. I know, or at least I firmly believe, that the Senator from Indiana would not want to jeopardize our national security and that it would not be his intention to have that kind of technology transfer limited, or the limitations on that kind of technology transfer limited by his amendment. Yet, as I read his amendment, that is exactly what occurs, because, again, the definition is: Any prohibition, restriction or condition on economic activity. Clearly, all of the things that we imposed on Loral and on Hughes are restrictions and conditions on their economic activity with China, and for a good reason: to prevent the transfer of technology that we think might harm our national security. Are we saying today, are we willing to vote for an amendment that essentially says, with respect to that kind of condition, we are going to treat that as a sanction and we are going to put all kind of limitations on whether or not it can be done? One of the answers is, ``Well, there's a section in here that permits the President to waive any of this if there is a national security interest involved in that case.'' Mr. President, it seems to me that we simply ought to make an initial determination that there are certain kind of things that we do not deem to be economic unilateral sanctions and they ought to be excluded in the legislation in the first instance, because otherwise we are going to have an extraordinarily cumbersome procedure where thousands of things that this Government does, in either the executive or the legislative branch, from foreign aid decisions of the Congress to highly sensitive national security technology transfer limitations, are going to be deemed to be sanctions that have to go through the processes of review and delay and sunset, and so on, of this legislation, or else be exempted by a waiver that the President would then have to specifically invoke with respect to each one of those particular actions. That doesn't make sense. That is why I say this one-size-fits-all kind of approach is not the right approach. The kind of things the Senator from Indiana should be dealing with are a fairly narrow range of economic activities and limitations on those activities that either the President or the Congress has imposed in the past but that don't have anything to do with foreign aid, that don't have anything to do with national security technical assistance limitations and the like. That is the third point I want to make. I should also note that there are other things that could be deemed conditions or restrictions on economic activity, like denials of visas, cuts in taxpayer-funded export credits such as from OPIC or Eximbank. Are those things implicated by this? I think clearly they are. Is that the intent of the Senator from Indiana? And, if so, how are we going to get around those with a national security waiver? There are some things that I don't think we want this to apply to for which the national security waiver isn't going to be available. There, again, the one- size-fits-all approach to this just isn't going to work. I will conclude this third point by reiterating what I said before. One of the things the Senator from Indiana is trying to do here is to be sure, before we invoke sanctions, we think it through, we analyze the impact, and we have a set of standards by which to measure whether it is effective or not and we have a mechanism for ending the sanction that forces us to, in effect, focus on whether or not it has been effective and we want to continue it or not. All of those are valid propositions. My guess is, before we are done with this, that kind of approach will be adopted by the Senate. I am not arguing against those things, but what I am doing is reiterating the argument of the Senator from Connecticut, the Senator from Kentucky, and expanding on a point that I made earlier, and that is that just as we are getting into this issue with the first meeting of the sanctions task force--a bipartisan task force--yesterday to identify exactly what we want to cover by the kind of reforms and others that the Senator from Indiana is proposing, just as we are beginning this process, we have placed on the desk an amendment that is going to do it all and do it with a definition that is so broad that it would cover virtually any condition or limitation on economic activity. That is not, I think, what the sanctions task force views as the proper approach. I urge my colleagues to slow this process down just a little bit. We don't have to have this amendment on this appropriations bill today. I am sure that if the Senator from Indiana will work with us, if there is deemed to be a necessity to put something in place fairly soon, and certainly before the end of this legislative year, we can come up with a good set of criteria, such as those the Senator has in his bill, for imposing sanctions--a good review process, some mechanisms for revisiting the sanctions after a point in time to ensure we still want them in place. All of those things that Senator Lugar's amendment goes to I think we can include in a piece of legislation. But I also think we are going to want to take a look at these definitions carefully and modify them to some extent so in one case it does not go too far and embrace just too many things, and in another case it perhaps does not go far enough. Finally, I will close with this point, Mr. President. Sanctions--and because of the breadth of the definition of sanctions here, I think we are literally talking about any kind of action the United States might take--can be in response to all kinds of different things. We have the Jackson-Vanik sanctions that were imposed upon the Soviet Union when it would not allow the immigration of Jews from the Soviet Union. We have sanctions that were imposed on South Africa to try to change that country's behavior. We have sanctions that were imposed upon the Soviet Union after it invaded Afghanistan. We have sanctions in aid of various treaties or agreements that are hard to enforce unless you can impose some kind of sanction. The NPT, Non-Proliferation Treaty, and other kinds of treaties that we have signed, some bilateral, some multilateral, have to provide some kind of enforcement. As Senator Lieberman pointed out, you do not want to have to turn to the military option right off. So all you have are economic or diplomatic activities. Now, diplomatic activities sometimes work; sometimes they do not. They more frequently work if you have some other kind of hammer behind it, like a military or economic card to play. What it boils down to is that an economic limitation can sometimes be very important. But I do not think we ought to blame sanctions necessarily when things do not go right. The best example of a failed policy is one which we have all dealt with here very recently, and that is the automatic sanctions that were imposed upon India and Pakistan--for doing what?--for nuclear testing. Mr. President, I submit that the problem here is not sanctions per se. The problem is that the policy that was put in place was a failed policy to begin with, and to attach sanctions as the only way to respond to that was simply wrong. Congress was in error for doing that. We are now rushing to correct that error. But we are doing it in the wrong way. Let us understand that the problem with the sanctions on India and Pakistan go back to the fact that as a nation we should have recognized that, just like China, Russia, and France, these nations are going to do what they think is in their best national interest, which may include testing nuclear weapons, and that they are going to do that irrespective of world opinion or economic sanctions. Their own internal country opinion was more important to them. In both cases, they were willing to suffer the consequences economically that might result from sanctions being imposed. In fact, I think in both countries there was a certain sense of pride that they did this and that they could stand up to the rest of the world. So for us to have had to impose economic sanctions was folly. It was never going to work. These countries were going to do what they felt was in their best interest, and we were not going to be able to stop them with economic sanctions. All we did was hurt a couple of countries that have been friendly to the United States--in the case of Pakistan, a country that is really hurting economically. And the last thing I think we really wanted to do is hurt the people of Pakistan with these sanctions; nor did we want to hurt our own country's agricultural interests. The problem was not sanctions per se. The problem was in ever thinking that we could, by the use of something like sanctions, prevent them from doing what inevitably they were going to do. Let us not blame sanctions; let us blame a failed policy embraced by the U.S. Congress. Sanctions sometimes do work; and, as Senator McConnell said, sometimes they do not work. Our record has been inconsistent in this regard. I know that is one of the things that Senator Lugar is trying to address here. But that should animate our thinking here--not that sanctions are per se wrong and, therefore, they have to be used only in very, very limited situations, and so on, as some of the language in this amendment suggests. I agree with that as a general proposition. We ought to be careful how we use sanctions because in some cases they are never going to be effective because the underlying policy is not a valid policy. But by the same token, in the interest of satisfying our commercial constituents, I do not think we should rush to judgment here and literally throw out the baby with the bathwater by making it very difficult to impose or retain sanctions in the future when, in point of fact, there are certain areas, like national security, for example, where we very definitely want to have conditions or limitations on economic activity--the definition in the bill--that have nothing to do with the ordinary understanding of sanctions. For that reason, I urge my colleague from Indiana to withhold for a few days or a few hours or some point in time where we can sit down and try to rework the definitions and rework some of the other language so that we are not applying a one-size-fits-all solution to what is, as Senator Lieberman pointed out, a very complex situation. We were going to address this through the task force and take quite a bit of time to do it. If there is any reason to rush to judgment here, let us at least take enough time to narrow what we are doing and try to make it apply in a fairly restricted way to achieve whatever short- range objective we have here until we have time to think it through more thoroughly to impose a policy that would cover all of the different kinds of limitations that, as a country, we may wish to impose. Mr. President, I urge that this amendment not be supported, that if a motion is made by Senator Stevens, that we support that motion, and that we not consider the amendment at this time. I certainly, as a member of the sanctions task force, will work with Senator Lugar to try to take many of the good ideas he has in this legislation and pull them into a bill I think all of us can support at the appropriate time. Thank you. Mr. BRYAN addressed the Chair.

Mr. KYL. Yes. I thank the Chair. I thank my colleague from Alaska. Privilege of the Floor I ask unanimous consent that John Rood be admitted to the floor during the pendency of this amendment and other amendments on which he may desire to be present under my supervision.

Mr. KYL. I am sorry, I am not aware of the amendment the Senator from Mississippi is talking about.

Mr. KYL. We will get back to that because I am not sure--if that is the intent of the Senator, I will have to see whether or not, in fact, it is effectuated. Let me get to another national security issue. We have, I think, come to the conclusion--most of us, but not all in this body--that it would be a mistake to put an explicit time limit, for example, on our presence in Bosnia, or an explicit time limit on certain other kinds of military activities or threatening national security activities because, of course, what that does is enable the party against whom the action is being taken to simply ride it out and to understand if they can just get by the next 60 days or 6 months, then they will not have to worry about that. So we have always taken the position that when it comes to this kind of thing--national security--our actions should be somewhat open-ended to ensure that the other party begins acting in the way that we would like to have that party act. Obviously, when you have a 2-year sunset on these kinds of sanctions, you eliminate that flexibility. I think that is one of the reasons why most of us have tended to want to support the kind of review and analysis about which the Senator from Indiana is talking. Clearly, that kind of thing should be done. But there should be a mechanism for the Congress and the President to, in effect, pull the plug on a sanction whose time has run rather than to have an arbitrary time limit for its imposition. If the Senator from Indiana would like to respond, I am happy to yield.

Mr. KYL. If I could, Madam President, go to another point; that is, the failure to discriminate among or between different kinds of sanctions. The amendment, as I read it, treats all sanctions alike. It does not differentiate between sanctions imposed for the transfer of nuclear technology, for example, or the exploding of nuclear devices in violation of treaties, and sanctions imposed for less dangerous activities, for example. In a sense, when one reads it, it appears to condone sanctions which have as their goal the promoting of trade but severely restricts sanctions for other purposes. I understand that the Senators from farm States have been very concerned about limitations on exports of agricultural products. As I say, I think we are all pleased to support the amendment which enables India and Pakistan to import American agricultural products. But I think we ought to examine this in a balanced way and understand that many of the sanctions are imposed for national security reasons. I think most of us understand that national security has to take a front seat to other considerations of a lesser degree of priority, if, in fact, it has gotten to the point that the country, either the President or the Congress, thinks it is in our national interest to impose sanctions. Yet, under the sweeping definition of a sanction here to mean literally ``any restriction or condition on economic activity,'' it appears there is no differentiation to account for the differences in reasons why we impose sanctions. For example, as I said before, we may have a reason to sanction a particular country, or a particular kind of trade activity, because of the national security implications of that. With respect to China, for example, we require a special waiver for certain kinds of technology transfers, or the launching of satellites, just to cite one example. It seems to me that is an entirely different kind of sanction than the typical kind of trade sanction on imports or quotas that we might apply for some other reason. I think it is very important for us to try to come to some agreement on a definition of just exactly what is a sanction before we begin applying across the board a set of rules that would automatically sunset sanctions after 2 years; that would require a 45-day time period before sanctions could be implemented; that would change the rules of the Congress, in effect, after first stating that it is our policy that these things should be done, and changing the rules of the Senate to ensure that policy is affected. It seems to me that we have time to deal with this now since we have dealt with the immediate emergency. The leader has appointed a task force, and we have identified this as one of the things that we need to do in this task force so that we are clear about the differentiation between the different kinds of sanctions before we begin identifying what kind of limitations should be placed upon each of them, and, therefore, that consideration of this amendment at this time is premature notwithstanding the fact that many of the ideas in the Senator's amendment might well be the kinds of things that we would adopt for certain kinds of sanctions when we end up actually adopting legislation. But, clearly, this is not something in which there is an easy one- size-fits-all solution. I fear that is what we are doing by trying to rush this matter. I will be happy to yield the floor at this time. I will have other things to say, but I know the Senator from Kentucky, who chairs the task force, wants to speak to the issue as well.

Mr. KYL. Madam President, I will give the Senator my understanding of it, but I would be pleased, also, to refer that question to the Senator from Indiana. As I read it, that kind of sanction would, of course, be controlled by the 45-day limit, and the rules of the Senate that would apply, and so on. I think the Senator from Indiana should defend his own proposal.

Mr. KYL. I am happy to yield.

Mr. KYL

Mr. KYL. Madam President, I rise in strong support of the Internal Revenue Service reform bill that is before us today. Mr. President, last fall, the Finance Committee held a series of hearings to expose problems in the Internal Revenue Service's dealings with taxpayers. Although we all knew that there were serious problems with the way the IRS does business, it is safe to say that all of us were truly shocked at what we learned from the hearings. As Senator Roth put it at the time, we found that the IRS far too often targets vulnerable taxpayers, treats them with hostility and arrogance, uses unethical and even illegal tactics to collect money that sometimes is not even owed, and uses quotas to evaluate employees. It is behavior that is not only unacceptable, but reprehensible. Madam President, the IRS reform bill begins to address the kind of problems that were uncovered by the Finance Committee's hearings. For example, it shifts the burden of proof in tax disputes from the taxpayer to the IRS, and increases penalties for IRS violations of taxpayer rights. It provides relief for innocent spouses from tax liabilities incurred by individuals from whom they have been divorced, legally separated, or living apart for at least 12 months. It provides relief in certain interest and penalty situations. And it extends greater taxpayer protection in the audit process. These are important changes, and they deserve our support today. There is no excuse for not reforming an agency that has too often abused innocent taxpayers. The House passed the IRS reform bill on June 25 by the overwhelming vote of 402 to 8, and my hope is that it will pass by a similarly resounding margin here. I predict that it will. But I also predict that even a good IRS reform bill will not solve the myriad problems that exist. Our nation's Tax Code, as currently written, amounts to thousands of pages of confusing, seemingly contradictory tax-law provisions. We need to reform the IRS, but unless that reform is followed up with a more fundamental overhaul of the Internal Revenue Code itself, problems with collections and enforcement are likely to persist. If the Tax Code cannot be deciphered, it does not matter what kind of personnel or procedural changes we make at the agency. Complexity invites different interpretations of the tax laws from different people, and that is where most of the problems at the IRS arise. Replacing the Tax Code with a simpler, fairer, flatter tax would facilitate compliance by taxpayers, offer fewer occasions for intrusive IRS investigations, and eliminate the need for special interests to lobby for complicated tax loopholes. There are a variety of approaches to fundamental reform that are pending before Congress: a flat-rate income tax, a national sales tax, and the Kemp Commission's simpler single-rate tax, to name a few. Each has its passionate advocates in Congress and around the country, and any one of these options would be preferable to the existing income-tax system. But the fact is, there has not yet emerged sufficient public consensus in favor of a sales tax over a flat tax or some alternative. And it is likely to take a public consensus, the likes of which we have not seen in recent years, to drive a tax-overhaul plan through Congress and past the President. Realistically, it is probably going to take several more years to develop the kind of support that will be necessary to pass tax reform into law. Until then, we can continue to lay a solid foundation for reform. We can continue to cut taxes every year. Last year, we cut taxes for families with children, for young people trying to get a college education, and for seniors who were looking for relief from heavy death taxes and taxes on capital gains. Another modest increment of tax relief is provided in the IRS reform bill today. It will give senior citizens more opportunities to participate in Roth IRA plans. It will simplify the capital-gains tax by eliminating the 18-month holding period that was added to last year's bill at the last minute without any debate. Madam President, this legislation is not an end in itself. It is a step--a step in the direction of fundamental tax reform. Let us pass it and move on to the next stage in addressing the American people's desire for tax relief and a simpler, fairer Tax Code. Madam President, I suggest the absence of a quorum.

Mr. KYL

Mr. KYL. I am advised that the study has been objectively perfomed. As a result, it confirms what the Senator from Oklahoma and I and others have been saying for some time: The Navy's AEGIS system can contribute significantly to protecting the United States against missile attack--and do so relatively quickly and inexpensively. Weeks and months have now gone by, the DoD authorization bill is nearly at the end of the legislative process and the delay has kept Members in the dark about an important opportunity we have for adding promptly and cost-effectively to our Nation's defense.

Mr. KYL. Notwithstanding the pending business, I ask unanimous consent that I be permitted to enter into a colloquy with some members of the Armed Services Committee.

Mr. KYL. Mr. President, I thank the Senator from Oklahoma and the Senator from Virginia for their strong leadership on this matter. Mr. GRAMM addressed the Chair.

Mr. KYL. I would like to enter into a colloquy with the distinguished manager of the Defense Authorization bill and several other members of the Armed Services Committee who share my concerns about the Pentagon's failure to date to respond to a requirement established first by the Committee in its action on last year's DoD bill, and then by the conferees on that legislation. The first of these requirements was for the Defense Department to provide a study of the contribution that the Navy's Upper Tier--or Theater Wide--anti-missile defense program, based on the AEGIS fleet air defense system, could make to protecting the United States against long-range ballistic missiles. The due date for this report was February 15, 1998. The conferees added to this requirement by directing the Department to report by that same date on ``the feasibility of accelerating the currently planned Navy Upper Tier deployment date of fiscal year 2008'' including an estimate of ``the cost and technical feasibility to options for a more robust Navy Upper Tier flight test program, the earliest technically feasible deployment date and costs associated with such a deployment date.'' Mr. President, many of us believe that the AEGIS Option may be the most expeditious, capable and cost-effective way to begin providing ballistic missile defense--not only for our forces and allies overseas but for the American people, as well. This is the case because the Nation has already spent nearly $50 billion building and deploying virtually the entire infrastructure we need to field the first stage of a world-wide anti-missile system.

Mr. KYL. It is my understanding that this study has been complete for some time--well over a month. In fact, in early May, the President's key NSC staffer in the defense and arms control field, told a public meeting that it was ``in the mail.'' The staffer seemed to be saying that his office as well as the Defense Department had finished reviewing it and would be providing it promptly. Lt. Gen. Lyles did brief me on the study, and he has kept a dialogue open with my staff, but our preference is to receive the report.

Mr. KYL

Mr. KYL. Mr. President, I rise to thank my colleagues for their support of the Kyl-Murkowski amendment which is intended to foster increased missile defense cooperation between the United States and our key allies in the Asia-Pacific region. U.S. forces and allies in the Asia-Pacific region face a growing missile threat from China and North Korea. China has embarked on a program to modernize its theater and strategic missile programs and Beijing has shown a willingness to use ballistic missiles to intimidate its neighbors. During Taiwan's national legislative elections in 1995, China fixed six M-9 ballistic missiles to an area bout 100 miles north of the island. Less than a year later, on the eve of Taiwan's first democratic presidential election, China again launched M-9 missiles to areas within 30 miles north and south of the island, establishing a virtual blockade of Taiwan's two primary ports. North Korea's missile program is also becoming more advanced. According to a recent Defense Department report, North Korea has deployed several hundred Scud missiles that are capable of reaching targets in South Korea. The North has started to deploy the No Dong missile, which will have sufficient range to target nearly all of Japan, and is continuing to develop a longer-range ballistic missile that will be capable of reaching Alaska and Hawaii. North Korea's missile program shows no signs of slowing down. In fact, Pyongyang recently stated that it would continue to develop, produce, and sell ballistic missiles unless the U.S. lifts economic sanctions and compensates the regime for lost earnings from missile exports. On June 16th, the official Korean Central News Agency announced, ``We will continue developing, testing, and deploying missiles. If the United States really wants to prevent our missile export, it should lift the economic embargo as early as possible and make a compensation for the losses to be caused by discontinued missile export. Our missile export is aimed at obtaining foreign money, which we need at present.'' Theater missile defenses are vitally needed to protect American forces and allies in the Asia-Pacific region. This amendment would require the Administration to conduct a study of how the U.S. could best cooperate with key allies in the region such as Taiwan, South Korea, and Japan to establish and operate effective theater missile defenses. I would also note that missile defenses are purely defensive items and can only be used to intercept incoming missiles. Therefore, in may view, the sale of ballistic missile defenses to Taiwan is consistent with the provisions of the Taiwan Relations Act, which states that ``the United States will make available to Taiwan such defense articles and defense services in such quantity as may be necessary to enable Taiwan to maintain a sufficient self-defense capability.'' Mr. President, in closing I would like to thank Senator Murkowski for working with me on this initiative and would like to thank my colleagues again for their support of this amendment, which I hope will lay the groundwork for effective cooperation with our allies to confront a real and growing missile threat in the region.

Mr. KYL

Mr. KYL. Mr. President, I rise today as a member of the Senate Energy and Natural Resources Committee to call attention to newly enacted legislation in my state of Arizona that stands as a model for opening electric power markets to competition and customer choice. Under the Electric Power Competition Act signed into law May 29 by Arizona Governor Jane D. Hull, Arizona's public power utilities must open 20 percent of their markets to competition by December 31 of this year and 100 percent to competition by December 31, 2000. Residents, businesses, and multi-national corporations served by companies like the Salt River Project, a public power and water utility serving 670,000 customers in the greater Phoenix area, will gain more control over where they spend their energy dollars. Customers will be able to shop for savings among sources of electricity, ultimately choose billing and metering providers, and still depend on their local utility to provide reliable electric delivery and power backup services. The Arizona legislation requires affected utilities to reduce rates for smaller customers at least 10 percent, as measured over a 10-year period, and caps rates for larger customers who choose to stay with their local utility. To protect consumers against deceptive marketing practices, power marketers can enroll customers only through written, signed contracts--a provision specifically aimed at stopping the notorious ``slamming'' and ``cramming'' abuses that have occurred with telephone deregulation. Strict enforcement measures are included for companies that fail to comply. The legislation also mandates that Arizona public utilities develop and pay for comprehensive public education programs to inform customers about their choices. While the new law does not apply to investor-owned utilities under jurisdiction of the Arizona Corporation Commission, it creates a relatively uncomplicated means for opening Arizona's entire electric market to competition. It will encourage the transition from monopoly to competitive services within a reasonable timeframe, and will allow utilities to recover costs of past investments made to meet growth needs, but that could become ``stranded'' in a competitive market. Improved services, economic efficiencies and new technologies should be among outcomes. At the same time, the legislation offers Arizona electric customers and suppliers a far less burdensome way of achieving choice than the costly plan adopted by California with effects that, so far, have slowed the development of competition. By contrast, Arizona's legislation strikes a balance between benefits stemming from free markets and the public interest in maintaining an economically secure, environmentally responsible electric infrastructure. Arizona's Electric Power Competition Act was passed with support of major industries, consumer groups, low-income advocates, and the state's largest investor-owned utility, Arizona Public Service Company. It puts Arizona in the forefront of the nation's move to electric competition and establishes a policy that other states would do well to consider.

Mr. KYL

Mr. KYL. The Senator just mentioned the denial, or the reported denial, of visas for three people from Radio Free Asia who, as I gather, wanted to be part of the trip to China and to accompany the President's entourage to report on defense. Do I understand that to be the news report that the Senator from Arkansas was just referring to?

Mr. KYL. The headline is ``Beijing Pulls Visas of Three U.S. Reporters; Move Targets Radio Free Asia.'' Deep in the article, it is noted that the three reporters were not all American citizens, but that is really irrelevant to the point here. The point is that the Chinese Government, apparently, uses the granting or denial of visas as a way to effectuate aspects of its foreign policy. It would be difficult, therefore, it seems to me, for the Chinese Government to argue that there is anything wrong with the United States Government using that same kind of visa authority to make points with respect to our foreign policy. My question is this: If it is United States policy that the kind of forced sterilization and abortion policy China has is inimical to the human rights and freedoms that we enjoy here in the United States and have urged upon the Chinese people, then why would it be inappropriate for the United States Government to use the very same--let me rephrase the question. What would lead us to think that the Chinese Government would have any right to object to the use of visa policy, since the Chinese Government itself has used visa policy to effectuate their foreign policy considerations? Why would there be any objection, per se, to the use of visa policy by the United States?

Mr. KYL. Right. It seems to me--and this is the predicate for my second question--many of us are uncomfortable with some of the sanctions that we have automatically initiated. I personally have some concern about the sanctions on India and Pakistan, for example, notwithstanding the objection, of course, to what they did. The question has been asked: If not sanctions, then what? I remember when I was in the House of Representatives asking the question of the then-Secretary of Defense, what kind of foreign policy options do we have diplomatically, economically, militarily, and so on, if we are not going to invoke sanctions, trying to affect policies in other countries that we have deep disagreement with, including the kind of policies the Senator from Arkansas was talking about. One of his answers was that there are literally hundreds of decisions each week that are made by various Departments of the U.S. Government, as well as private entities, that have some impact on our relationships with another country. One of the things I recall having been mentioned was visa policy, for example. Now, the Chinese Government appears to be using the granting or denial of visas to make points with respect to their foreign policy. If the Senator from Arkansas is correct--and I recall the news report this morning--they are actually denying the visas of three people whom they have a beef with because they have been involved in sending signals, radio transmissions about freedom, to their country, and apparently they don't like that. One way of dealing with it is to deny the visas of these three people--at least, if I have that correct. My question to the Senator from Arkansas is: Is it his view that policies such as dealing with visas of people wanting to travel from another country to China are perhaps another more focused, more targeted, more sophisticated way to deal with some of these policy issues than just slapping on sanctions--although there are appropriate sanctions--depending on what the situation is?

Mr. KYL. May I ask one other question?

Mr. KYL. Will the Senator yield for two questions?

Mr. KYL

Mr. KYL. Mr. President, I would like to say a few words on the subject of telemarketing fraud. In particular, I will discuss the severity of telemarketing fraud, the House and Senate telemarketing fraud bills, and the United States Sentencing Commission's recently proposed amendments to the sentencing guidelines. At the outset, I would like to commend Representative Goodlatte for his sponsorship of H.R. 1847 and for his leadership in combating telemarketing fraud. Telemarketing Fraud is a Serious Problem Mr. President, I would like to take a few minutes to describe the severity of the problem of telemarketing fraud. According to Maryland Attorney General J. Joseph Curran, Jr., telemarketing fraud is probably the fastest growing illegal activity in this country. Senior citizens appear to be the most vulnerable to chicanery of this kind. Fred Schulte, an investigating editor for the Fort Lauderdale Sun-Sentinel and an expert on telemarketing fraud, has pointed out that senior citizens are often too polite or too lonely not to listen to the voice on the other end of the line. As one telemarketing con man who has worked all over the country put it: ``People are so lonely, so tired of life, they can't wait for the phone to ring. It's worth the $300 to $400 to them to think that they got a friend. That's what you play on.'' These criminals prey on the vulnerable of our society. In one case, Nevada authorities arrested a Las Vegas telemarketer on a charge of attempted theft. The telemarketer was accused of trying to persuade a 92-year-old Kansas man who had been fraudulently declared the winner of $100,000 to send $1,900 by Western Union in advance to collect his prize. Another example: a Maine company showed real telemarketing creativity. For $250, the so-called Consumer Advocate Group offered to help consumers recover money lost to fraudulent telemarketers--but it provided no services, according to Wisconsin Attorney General James Doyle, who sued the Maine firm plus four other telemarketers. In 1996, more than 400 individuals were arrested by law-enforcement officials working on Operation Senior Sentinel. Retired law-enforcement officers and volunteers, recruited by AARP, went undercover to record sales pitches from dishonest telemarketers. Volunteers from the 2-year- long Operation Senior Sentinel discovered various telemarketing schemes. Some people were victimized by phony charities or investment schemes. Others were taken in by so-called premium promotions in which people were guaranteed one of four or five valuable prizes but were induced to buy an overpriced product in exchange for a cheap prize. One of the most vicious scams preyed on those who had already lost money. Some telemarketers charged a substantial fee to recover money for those who had been victimized previously--and proceeded to renege on the promised assistance. By the time the dust settled, it took the Justice Department, the FBI, the FTC, a dozen U.S. attorneys and state attorneys general, the Postal Service, the IRS, and the Secret Service to arrest over 400 telemarketers in five states, including my home state of Arizona. Clearly telemarketing fraud is on the rise. It is estimated that eight out of ten households are targets for telemarketing scams that bilk us of up to $40 billion annually. There are many seniors in my state and across the country who must be protected against this type of fraudulent activity. According to Attorney General Reno, it is not uncommon for senior citizens to receive as many as five or more high- pressure phone calls a day. Mr. President, malicious criminal activity like this must be punished appropriately. The House- and Senate-Passed Bills The House and the Senate have passed bills which direct the U.S. Sentencing Commission to increase penalties for those who purposefully defraud vulnerable members of our society. The House bill, which passed by a voice vote, increases sentences by four levels for general telemarketing fraud, and by eight levels if the telemarketing fraud either victimized ten or more persons over age 55 or targeted persons over age 55. The Senate-passed bill, which was approved unanimously, requires the Sentencing Commission to ``provide for substantially increased penalties'' for those convicted of telemarketing fraud offenses. I repeat: ``substantially increased penalties.'' This language was carefully chosen; a two level increase is not substantial. The Senate- passed bill also requires the Commission to ``provide an additional appropriate sentencing enhancement if the offense involved sophisticated means, including but not limited to sophisticated concealment efforts, such as perpetrating the offense from outside the United States.'' Further, the Senate-passed bill requires the Commission to provide an additional appropriate sentencing enhancement for cases in which a large number of vulnerable victims . . . are affected by a fraudulent scheme or schemes.'' These provisions were carefully crafted to ensure that those perpetrating telemarketing scams would be severely punished. The Sentencing Commission's Proposed Enhancements The United States Sentencing Commission recently issued an amendment that would increase by two offense levels--the smallest possible increase--the penalties for fraud offenses that use mass-marketing to carry out fraud. The amendment would also provide a two level enhancement in the fraud guideline if (i) the defendant relocated, or participated in relocating, a fraudulent scheme to another jurisdiction to evade law enforcement or regulatory officials; (ii) a substantial part of a fraudulent scheme was committed from outside the United States; or (iii) the offense otherwise involved sophisticated concealment. These proposed amendments are a step in the right direction, but the step is too small. In addition to these enhancements, the Sentencing Commission should, as the Senate-passed bill says, substantially increase the penalties for telemarketing fraud. Conclusion Telemarketing fraud is a serious problem. The Sentencing Guidelines should reflect this but they do not. From the House- and Senate-passed bills, it should have been clear to the Sentencing Commission that Congress wanted significant increases in the guidelines, not the minor ones included in the Commission's proposed amendments.

Mr. KYL

Mr. KYL. I thank the Chair. I suggest the absence of a quorum.

Mr. KYL

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