Jon Kyl

Mr. KYL

Mr. KYL. Madam President, I rise in strong support of the A Plus Accounts bill that was introduced by the Senator from Georgia, Senator Paul Coverdell. This legislation does several things. It would allow more people to save for education in tax-preferred education savings accounts. The savings could be used for higher education, as well as education at the elementary and secondary levels. The bill would extend the existing tax exclusion for employer-provided educational assistance through the year 2002, and it would provide an exclusion for distributions from qualified state tuition programs. It would also raise the small-issuer exception so that local governments can issue more bonds to finance school construction. Perhaps the most important provision of the bill is also the most controversial. I am talking about the provisions that expand the allowable uses of education savings accounts to include elementary and secondary education. And I want to take a few moments to make three brief points about that. First, I think it is important to point out that we are not talking about a new subsidy for private or parochial schools. To the contrary, we are talking about allowing families to keep more of what they earn-- after all, it is their money--to send their children to the elementary or secondary school of their choice. We already go far beyond what would be allowed by this bill when we provide federal financial assistance to students at the college level, including students who attend private or religious institutions. No one argues that such choice harms public colleges or universities. In fact, it is choice and competition that has made our nation's colleges and universities the best in the world. So I am perplexed why anyone would fear giving parents more choice and control at the elementary and secondary levels, as well. That is where the real crisis in education exists today, and it is where choice and competition will do the most good. Second, the people who stand to gain the most from this legislation are those of more modest means who might not have the same choice or opportunity without the help that the Coverdell bill would provide. Of the people opting for Catholic schools, for example, 68 percent have annual incomes of $35,000 or less. Wealthier people obviously have the means to send their children to the school of their choice whether they receive a tax break or not. Third, providing families with tax incentives for education savings will not decrease federal or state funding for public schools by a single dime. The fact is, Congress is likely to approve increases in funding for education in addition to the incentives that would come with the Coverdell bill. Frankly, Madam President, I think it is a big mistake to assume that public schools cannot compete successfully with other institutions. Many public schools have very well-regarded programs--programs that meet or exceed what is offered to students elsewhere--and it is likely that these schools would not only retain their current student body, but add to it with barriers to choice removed. And with additional enrollment would come additional funds for their budgets. It is true that failing schools would be forced to improve or face declining enrollment. But is it really our goal to force students with few financial resources to remain in a failing environment? Should they not have the same options that others have to find a school that better meets their needs? In recent Senate hearings, low-income parents questioned why the schoolhouse door is often closed to their children--why they are kept from moving their children to schools that can better meet their children's needs? Why their children cannot attend safer schools? They are right to ask these questions. They deserve--their children deserve--access to a quality education. In my opinion, the single best thing we could do to improve the quality of education in this country is give parents more choice and control over where they send their children. It is an idea with broad support among the American people. A 1997 poll conducted by the Center for Education Reform found support for school choice among the general public at 82 percent. The Joint Center for Political and Economic Studies reported support among African Americans at more than 70 percent. It is an idea whose time has come. I support the Coverdell legislation.

Mr. KYL

Mr. KYL. Mr President, I call to the attention of my colleagues an article appearing in the March 9 edition of The New Yorker magazine that offers a chilling account of Russia's offensive biological weapons program. This article is based on an extensive interview with Mr. Ken Alibek, a Russian defector who was once second in command of the Russian offensive biological weapons program. Alibek's description of the Russian BW program is generally considered authoritative by a wide range of U.S. experts. The article provides a number of startling details about the Russian offensive BW program, also known as Biopreparat. Most startling of all is just how little we in the United States knew about this program. Despite the fact that Biopreparat was established in 1973--the year after the Soviet Union signed the 1972 Biological Weapons Convention and pledged to forego an offensive BW program--and despite intelligence to the contrary, some in the U.S. scientific and arms control communities continued to maintain that Russia was not violating the treaty up to the moment that President Yeltsin admitted otherwise in 1992. Mr. President, what the Russians had accomplished by 1991 is frightening. According to Alibek, the Soviet Union had warheads for carrying biological weapons on intercontinental missiles that were aimed at the United States. These warheads could carry smallpox, plague and anthrax. The Soviets had apparently weaponized the Marburg virus--a hemorrhagic virus as gruesome as the Ebola virus--and were ready to begin large scale manufacture of the weapon as the Soviet Union was crumbling apart. Alibek is concerned that scientists may have left Russia with samples of this virus and other deadly bacteria. The possibility that Russian scientists, know-how and biological materials are available to rogue states and terrorists underscores the critical importance of improving our domestic preparedness to respond to BW attacks against the United States. We do not know the extent of the Russian biological weapons program today. There is evidence to suggest that a clandestine program continues, hidden away in military facilities run by the Ministry of Defense, which are off-limits to the West. The trilateral process, which was set up by the United States, United Kingdom, and Russia in 1992 and calls for inspections of Russian biological-related facilities, has broken down. It has been years since an inspection took place. The Russians have objected to visits to military facilities. And where inspections occurred, the inspectors faced the same obstacles as U.N. inspectors face in Iraq. Mr. President, The New Yorker article should be required reading for all Senators. I ask unanimous consent that this article be printed in the Record. I understand from the Government Printing Office that it will cost approximately $2504 to include this article in the Record.

Mr. KYL

Mr. KYL. Madam President, I thank the Senator from Florida for yielding to me and for sponsoring this amendment, which I am proud to cosponsor, and heartily urge my colleagues to support, and I also thank the other Senator from Florida, who has just made an eloquent argument in favor of this amendment as well. Madam President, there are three primary points I would like to make in support of the Mack amendment. First of all, this represents the first opportunity that we have had to repeal a portion of the 1993 tax increase that virtually every Republican--maybe every Republican; I will have to go back and look to be sure--voted against. I was a Member of the House at the time and I recall that after the so-called Clinton tax increase of 1993 there was a great uprising in the State of Arizona, especially over the 4.3-cent gas tax increase that was a part of that. I introduced a bill immediately to repeal that 4.3-cent gas tax increase. I remember a radio station asked me to go to a service station and talk to people who came by to gas up their cars and trucks. I was amazed at the reaction of the people as they drove up and heard about this increase in the gas tax. They were irate. They were very supportive of my effort to get it repealed which has, up to now, been unsuccessful. Perhaps with the sponsorship of the Senator from Florida, now it will be successful. But I must say that Republicans who voted against that tax increase in 1993 but who vote against its repeal today have some answering to do to their constituents. I think this is a symptom of Potomac fever. We oppose a tax increase, especially when it is the agenda of the opposing party, and we go back home and we rail against it. But then too many of our colleagues fail to follow up their rhetoric with action to repeal the tax. Now is our opportunity. Where will Republicans stand? I know a lot of my Democratic colleagues will continue to support the tax. They are not about to vote for this repeal, except for certain enlightened Democrats such as the Senator who has just spoken. But where will my Republican colleagues stand, those who opposed the gas tax when it was put into effect, who argued against it, who voted against it, and now have an opportunity to repeal it? Ah, but now they have an opportunity to divide up the money. The longer you are here, the more accustomed you get to spending American taxpayer dollars. After all, you get to go home and show the folks what a wonderful, magnanimous, generous person you are by giving them back some of their money. As the good Senator from Virginia just said, States like Arizona and Florida got increases in their percentage in this bill. Yes, that is true. When you start from a very low percentage and you get a good increase in the total dollars, it represents a big increase percentage- wise. But, like my colleagues from Florida, I represent a State, Arizona, which is still a donor State. Something mysterious happens. Arizonans send a dollar to Washington in gas taxes and Federal highway taxes and we get 89 cents back. Something happens to the other 11 cents. Here in Washington, DC, it's not so bad. The round trip actually earns them $2 on the $1 they send. Maybe that is because they do not send it so far. We have colleagues from other States, I will not mention them, but some colleagues are here representing constituents who send $1 and they get $2 back, or more than $2 back, and they ask us to be grateful for the fact that we get 90 cents instead of 89 cents, ``We gave you an increase.'' Madam President, it is not fair. That is the second reason I suggest we repeal this 4.3-cent gas tax. We have a policy now in the Congress called devolution. It's a fancy word for ``let's give the power back to the States and the local government and to the people.'' The Federal Government has gotten too big and too powerful. One way we could do that is by repealing this 4.3-cent gas tax. My colleagues who want to spend the money on highways, all they have to do is go back to their State legislatures and say, Folks, we just repealed the 4.3-cent Federal tax. If you want to tax the people of Montana, Virginia, New York, whatever, 4.3 cents, they will never notice the difference at the gas pump. They will be paying exactly the same for a gallon of gas today as yesterday and tomorrow. Then we can spend the 4.3 cents in Montana or New York or Virginia or whatever the State is. Actually, a lot of us would be better off because we do not lose any of that money as it makes the trip to Washington and then comes back. If my State of Arizona wanted to immediately put on a 4.3-cent State gas tax, the State of Arizona would come out very well. We would get to spend that money on our Arizona roads, and maybe the State legislature would do that, but I would rather have them decide that rather than have people here in Washington decide that we are going to retain this tax with the result that my State gets back about 89 cents or 90 cents. So that is the second reason. It is the right thing to do in terms of returning the power back to the people at the lower levels of government so they can decide for themselves how much tax they want to impose upon themselves. The third reason is that America is already an overtaxed nation. This last year the taxes, the total tax burden has now gone up well over 38 percent. It is the highest level since 1945: $6,047 for every man, woman, and child in the country. That is over $27,000 for a family of four. We are an overtaxed nation. We do not need this money. We are now in a budget surplus situation. This tax increase was designed to reduce the deficit. The deficit has been reduced and our surplus is going to be, I suggest, at least as much as the money that would be lost as a result of the imposition of this tax. In any event, it has been paid for in the sense that obligations of Government have been reduced correspondingly so it has a neutral budget effect. Madam President, I think, since this is a tax that affects every American equally, its repeal would not be for the wealthy. It would have just as much of an effect on the wealthy or the poor or the modest-income or whatever. It would be a very fair way to return some of the hard-working American families' money to them so they could decide themselves how to spend it. I urge support for the Mack amendment to repeal the 4.3-cent Federal gas tax, because, first of all, it is unnecessary, second, because it is unfair; third, because it is contradictory to our policy to return power to the States and the people, and fourth, because it adds an unnecessary tax burden to the already overtaxed families of America. I urge my colleagues to support the Mack amendment.

Mr. KYL

Mr. KYL. Mr. President, I would like to announce for the public that a hearing has been scheduled before the Subcommittee on Water and Power, of the Energy and Natural Resources Committee, to consider S. 1515, a bill ``To amend Public Law 89-108 to increase authorization levels for State and Indian tribal, municipal, rural, and industrial water supplies, to meet current and future water quantity and quality needs of the Red River Valley, to deauthorize certain project features and irrigation service areas, to enhance natural resources and fish and wildlife habitat, and for other purposes.'' The hearing will take place on Tuesday, March 31, 1998, at 2:30 p.m. in room SD-366 of the Dirksen Senate Office Building. For further information, please call James P. Beirme, Senior Counsel, (202/224-2564) or Betty Nevitt, Staff Assistant at (202/224-0765).

Mr. KYL

Mr. KYL. Mr. President, I might be shorter than that time, in recognition of the desire of the Senator from West Virginia to address the Senate as well.

Mr. KYL. Thank you, Mr. President. I thank the distinguished majority leader for recognizing me this morning to speak on a subject which he addressed the Senate on last week. I think that I may need 15 or 20 minutes. I ask unanimous consent to speak for 15 to 20 minutes this morning.

Mr. KYL

Mr. KYL. Mr. President, we are well aware that an agreement was struck this week by the Secretary General of the United Nations, Kofi Annan, and the Iraqi Government, led by Saddam Hussein, with respect to the sites that Iraq agreed would be open to unfettered inspection at the conclusion of the gulf war. Let me give a little history first. Remember that the United States and the allied forces were prepared to carry the battle further, perhaps even to Saddam Hussein himself, but the President of the United States judged that the battle could be called off if the Iraqi Government would agree to a series of commitments to abide by the rule of law in the future. As a result, we stopped our military campaign against the Iraqi Army, and an agreement was entered into between the Iraqi Government and the allied forces under the jurisdiction of the United States in which the Iraqi Government made some very specific promises. The key promise was not to develop any weapons of mass destruction and to destroy everything that they had. To implement that commitment, an inspection regime was established, and the Iraqi Government agreed to allow unfettered inspection of its country in order to assure that it was abiding by the agreement not to develop and, indeed, to destroy any weapons of mass destruction that it might already have. From the day that agreement was signed, it has been violated repeatedly by the Iraqi Government and Iraqi authorities, and it has been literally, Mr. President, a cat-and-mouse game between the U.N. inspectors under UNSCOM and the Iraqi Government. It seems that unfettered inspection has been permitted until the inspectors get warm--like the old child's game, ``Am I getting warm yet?''--and as soon as the inspectors would get warm, then there would be delay and deception and denial and, if it were serious enough, outright barring of inspectors from a site or facility until the offending material had been whisked literally out the back door, in some cases, and then when the site was clean, the front door would open, the inspectors would be invited in and they would find, of course, nothing. That game went on for a long time. Finally, the U.N. inspector said, ``Enough, this isn't going to work; every time we get warm, he stops us and we have to find a way to enforce the agreement that Saddam had entered into.'' That is when the United States began to consider a bombing campaign as a means of at least attempting to degrade the weapons of mass destruction that Iraq had developed. A lot of people felt it probably wouldn't succeed because it is difficult to find those caches of weapons, except for the ones that were disclosed when Saddam Hussein's son-in-law defected to Jordan for a while and indicated where this material was and our inspectors were able to go in and find it as a result of that, Saddam Hussein all of a sudden remembering that he had forgotten to tell us that that existed. Except for that instance, we have been unsuccessful in being able to identify much of these stocks. So it was problematic as to whether a bombing campaign would actually result in the destruction of this material. As a result, a lot of people were pushing the administration prior to that bombing campaign to develop a broader strategy that would consist of a wide array of actions that over time could result in addressing the real problem here, which everyone agrees is Saddam Hussein himself. That broader strategy might consist of a series of actions that would destabilize his regime, would put more pressure on him and would eventually perhaps result in a replacement of his Government, not by assassination, which is contrary to American policy, but by means of the assistance of the people of Iraq. Since the agreement by the U.N. Secretary General, the need for a resolution from the Congress supporting military action has been, in effect, put on hold, but I suggest that it is only on hold, that there will come a time, sooner or later, when the United Nations will, again, be faced with the question, and the United States as the primary actor here, as to whether or not it is necessary to take some additional action. As sure as we are here today, Mr. President, the Iraqis will violate the terms of either the most recently agreed-upon regime for inspection or the remaining principles of inspection which apply to other than the so-called eight Presidential sites in Iraq. That would probably happen if, that is to say, we begin again to get warm, if our inspectors find something that they want to get into further. At that point, we will begin to again see denial and deception by the Iraqi Government. At that point, it is going to be relevant again whether or not the American people, the world community and the Congress support action by the administration to deal with the then most recent crisis. If the administration has developed a broad strategy, the bombing campaign only being a part of that strategy, and everyone recognizing that it by itself is not going to solve the problem, but as a part of an overall strategy can contribute to a solution, then the President, I think, will have the support he needs to proceed with the execution of that plan. But the development of that plan is critical, and that is why I think during this interregnum, this period in which at least nominally inspections will be permitted and pressure of immediate military action has receded, it is important for us in the Congress to work with the administration to help it develop the outlines of such a policy. That is not our job, and I don't suggest that the Congress be the one to develop that broad strategy. That is the administration's prerogative; it is the administration's responsibility. It is its responsibility, and because many in Congress feel the administration has abdicated a significant part of that responsibility in the past, I think we have the opportunity and we have the responsibility to share ideas with the administration that it could put together in a broader strategy. If it does that, it will have the support of the Congress if and when that time comes. That is why I think it is important for us to talk a little bit about the agreement that was entered into and about some alternative proposals that have been suggested, including one which I will submit for the Record. A letter sent to the President by 28 prominent--prominent--American citizens offers their suggestions as to what might be done, most of which have also been offered by Members of the Senate. Before I close with that, let me indicate that when the majority leader took the floor last week to criticize the agreement that had been entered into between the Secretary General and Saddam Hussein, I supported the remarks that he gave and I have said that ever since, because I think some criticism of this agreement is warranted. It is a fact that our Government was put in a box when the President and the Secretary of State, in effect, ceded this element of policy to the United Nations. It was a foregone conclusion we would have to then accept the agreement and attempt to abide by it; we had no choice at that point; and as a result, the administration has to go forward with it and has to nominally at least support it. Richard Butler, the chief inspector, has to support it. He is a man of significant qualifications and eloquence. In describing how this is going to work, he says he can make it work, but it is all predicated on the assumption that Saddam Hussein will abide by the agreement. That is what Richard Butler himself says. There are a lot of criticisms of the agreement, about the precedent that it sets, about the fact that it puts the United Nations literally in the driver's seat and reduces the UNSCOM inspectors, the professionals, and the United States, which has been a primary country backing the agreement, to a secondary position. There has been significant question about whether the inspections themselves will be compromised by the inclusion of a lot of diplomats which are essentially to act as chaperones to the inspectors at these eight Presidential sites. Part of the problem of the inspections is that Saddam Hussein has always seemed to have been aware of where we wanted to go and has been one step ahead of us. That is because his Government has significantly penetrated the operations and has information in advance of the inspections. If the diplomats are involved in this, and some of them are from countries which are clearly supportive of the Iraqi regime, it certainly is open to question as to whether or not the inspections will be compromised in the future. So a lot of questions that the majority leader raised about this agreement, I think, remain as significant and ought to instruct us in the future as to how not to go about business. But it is done. And for the time being, we are going to have to at least abide by it. The key point about the agreement that I think I will make is this: We should have no illusions that it will be abided by. At some point, the Iraqis will, if we get close to finding something, prevent either the full inspection under the new agreement or revert to form under the current policies that apply to all of the sites other than the eight Presidential sites. In either case, we have the responsibility to act. Now, the administration has the view that this will actually make it easier for us to engage in military action in the future because in the past we did not have support from the world community, but this time if Saddam Hussein violates it, the world community will be with us. Well, unfortunately, the world community appears to have an almost infinite capacity for rationalization not to take an action against Saddam Hussein because we cannot even get a resolution through the Security Council that says the ``severest'' consequences will result from a violation of the agreement. Instead, we argue about words--of whether it will be very severe consequences. This clearly means that our allies are not going to be backing us in terms of the kind of military action that we will want to take if and when that becomes necessary. So concluding on this point, Mr. President, I think it is important for us to look at some of the suggestions that are being made and for the administration to begin to develop this broader policy. I want to put two things in the Record at this point. I will ask unanimous consent to do so. One is a letter, an open letter to the President, signed by 28 prominent Americans, calling upon the President to consider a variety of specific actions that should be taken; and the other is a statement by Paul Wolfowitz who is the Dean of the Paul H. Nitze School of Advanced International Studies at Johns Hopkins University for the House Committee on International Relations on February 24. Since that was a House hearing, I thought it would useful for our Members here in the Senate to have it. So I ask unanimous consent that those two documents be printed in the Record.

Mr. KYL. Fine. Mr. President, I know I can conclude these remarks in the time allotted. Mr. President, I want to change the subject in this remaining 2 or 3 minutes to discuss the issue of balancing the budget for American families.

Mr. KYL. Now, this document that the 28 advisers--let me indicate who some of these people are, people like former Secretary of Defense Frank Carlucci; and Caspar Weinberger; and Judge William Clark, former National Security Adviser; Doug Feith, former Deputy Assistant Secretary of Defense; Fred C. Ikle, former Undersecretary of Defense; Bill Kristol; Robert Kagan; Bernard Lewis; Don Rumsfeld, former Secretary of Defense; and Paul Wolfowitz, as I said; and Richard Perle. They are all, I think, eminently qualified to offer this kind of advice. I urge the President to consider the suggestions that are made here, which revolve around preliminarily the principle that military action alone will not force Saddam to comply, that he is the problem, that is, no coup d'etat is likely to succeed in this country and therefore the way to get him out is to create a series of conditions which will enable the Iraqi people themselves to provide the insurrection that will eventually depose him. This might include the following: Recognizing a provincial government; restoring safe-haven both in the northern and southern portions of Iraq so that the people there can actually declare themselves free of his influence and control; lifting the sanctions in those areas so that the people can benefit from the economic end, of course, that would result; release frozen Iraqi assets to the Iraqis in exile; facilitating broadcasts from U.S. transmitters to the people of Iraq; removing vestiges of Saddam's ``legitimacy'' by considering, for example, whether the United Nations should indict him as a war criminal; an air campaign could be a part of this, launched against the Republican Guard divisions which prop him up; and tightening down on the embargo. Right now we know the sanctions are of primary concern to him. And if we tighten down on the embargo so that the black market oil sales cannot continue to provide him with significant oil revenues, it will squeeze him further. All of these things could eventually create conditions under which the Iraqi people could retake the Government of Iraq from Saddam Hussein. So, Mr. President, my concluding point is this: The administration now has some time to develop a strategy which had not been developed prior to the time that it was asking for Congress to support a bombing campaign. If that program is developed, with the help of the Congress-- and it makes sense as a broad strategy to deal with Saddam Hussein--the President will have all of the authority and the backing that he needs and deserves in taking action against Saddam Hussein, I would say, when, not if, that is called for, as a result of probable Iraqi violation of some part of the international inspection regime. It is a serious business, Mr. President, for us to decide to move beyond a policy of containment to a policy of rollback. It is one which ought to be debated by this body and by the administration. But the time for it has come because, as we have seen, neither the American people nor the Congress were willing to support a half-measures kind of action against Saddam Hussein. We felt something more was required to really deal with the problem. As we learned in Vietnam, and as we have learned elsewhere, halfway measures--calibrated bombing attacks, and the like--do not seem to solve the problem. When you go to war, I think the maxim from the gulf war, from the Vietnam war, and the new thinking of military strategists in this country is: When you go to war, you'd better mean it; you have to be able to succeed at what you are doing. That probably requires the imposition of overwhelming force and it requires a broad strategy that will get you where you are going. That is why the administration needs to develop this policy, with the assistance of the Congress, and be able to implement it if and when the time for action comes. Mr. President, I ask, how much of that remaining time do I have, because I have one more thing I would like to say?

Mr. KYL

Mr. KYL. Mr. President, I want to speak for a few moments today on the subject of bankruptcy reform. It is an issue that we will be dealing with shortly in the Judiciary Committee. The House of Representatives could vote on a reform bill as early as next month. Mr. President, bankruptcy filings have been skyrocketing. We have seen a nearly 60 percent increase in personal filings around the country during the last two years, resulting in a discharge of about $40 billion in debt. In Arizona alone, Chapter 7 filings have increased a staggering 81 percent during the same period. The number of bankruptcy cases filed in my home state last year exceeded the previous record that was set back in 1990, when our real estate market was in serious trouble. What is particularly alarming about the number of filings today is that they are occurring in relatively good economic times. Now let me say at the outset that there are obviously some people who legitimately need the relief that Chapter 7 was set up to provide. A serious illness or death in the family may have wreaked havoc on the family finances. Maybe there has been a fire or flood that has wiped out the family business or home. In cases like that, where there is extraordinary hardship, there ought to be an opportunity to seek relief and a fresh start. No one disputes that. And I suspect that most creditors are willing to work with someone when such tragedy strikes. The problem is, too many people appear to be abusing the system of late. A recent study conducted in Phoenix found that a significant number of people who file for relief under Chapter 7 actually have the ability to pay back some, or even all, of what they owe. Let me say that again: they actually have the ability to repay some or all of their debts. A study by Michael Staten of the Georgetown School of Business suggests that as many as 25 percent of Chapter 7 filers could pay at least 30 percent or more of their non-housing debt. But filing under Chapter 7 allows them to escape all of such debt, regardless of their ability to repay. Now I know defenders of the status quo prefer to put the blame on creditors, suggesting that they extend credit far too easily, even to individuals who may have difficulty repaying their debt. But let us keep a few points in mind. First, the vast majority of people--an estimated 96 percent--pay their bills on time. So creditors must be doing something right. I am sure that if there were a way for creditors to weed out more of the riskiest accounts, they would do so. Second, no one is forced to open a credit account, take a loan, or buy something on credit. In fact, millions of hard-working Americans make due without many of the things they would like to have because they cannot afford them--even on credit. Many others delay a purchase until they are better situated to repay. Third, and perhaps this is the most important point I would make: The people who need credit most are not the wealthiest Americans, but those with moderate or low incomes. If creditors tighten up credit too much, it will be the people closer to the margins--those who need it most-- whose access to credit will be impeded. In my view, the issue really boils down to this: personal responsibility. If someone freely accepts the terms of a credit account, he or she ought to abide by those terms when it comes time to meet the obligations and pay back what is owed. If extraordinary circumstances strike, debtors ought to work in good faith with their creditors to establish a reasonable repayment plan, assuming they have the means to do so. The irresponsible thing is for people to take something on credit that they have no intention of paying for. And our laws should not sanction that sort of behavior. Mr. President, let me turn for a moment to a few different cases that illustrate the point I am making here. These are cases that were profiled in recent news reports. First, there was the case of a New York couple with three children. The husband was on disability. They could easily have qualified for a Chapter 7 discharge of their debt, but they did not want to walk away from their obligations. They chose to repay what they could under a Chapter 13 payment plan, and they are now paying $375 of their $2,125 monthly income to satisfy part of their debt. An Arizona teacher ended up with $45,000 worth of credit-card debt, but she was determined to find a way to avoid bankruptcy altogether. She put it this way: ``When I signed my name, that was my promise.'' She found a consumer-credit counseling service to help her through tough times, and she is now on her way to paying back her debt and restoring her credit. Compare the New York couple and the Arizona teacher to debtors who reportedly used credit to buy several thousand dollars worth of computer equipment, furniture, and an entertainment center. Shortly after buying the goods, they sold them, pocketed the proceeds, and without applying anything toward their bills, filed for Chapter 7 to erase their debts. In another case, a couple allegedly ran up more than $2,000 on a charge card at the very time they were involved in foreclosure proceedings on their home. They apparently knew they could not avoid the foreclosure or pay off the credit-card charges they were incurring. Yet they went ahead and ran up their charge cards with the expectation that they could escape the obligation to repay their debt under Chapter 7. Mr. President, in the first two instances, we had individuals who stepped up to the plate and tried to make good on their obligations. In the latter two cases, we have individuals who seem to be abusing the system, running up debt they had no intention of repaying. And the way the law works now, it is the abusers who benefit most. And that abuse costs those who responsibly pay their bills as much as $400 per household a year. What is fair about allowing people who have the ability to pay back some of their debt to walk away free and clear, while the vast majority of people pay their bills on time? What is fair about letting some people avoid their obligations for no good reason, while others who experience credit problems make some effort to repay? I want to emphasize that we need to find a way to deal with people who have the ability to repay their debt, not those who are in such dire straights that their lives are totally upended. Probably the best thing we could do would be to establish a simple, up-front means test to direct bankruptcy filers to the chapter of the Bankruptcy Code that best meets their needs. I am talking about setting up an objective, administrative test to separate those who are in severe financial straits and truly need complete relief under Chapter 7 from those who are able to repay some or all of their debts. Here is how this front-end approach would work. People who have annual incomes of less than 75 percent of the national median family income could choose between a Chapter 7 discharge and a Chapter 13 repayment plan, just as they could now. It would be their choice. In other words, there would be no change at all for people with modest incomes. But for people who have higher incomes, a second test would be applied: could they repay all of their secured and priority debts and at least 20 percent of their unsecured debts over five years? If so, they would have to establish a repayment plan. If not, they could still get protection under Chapter 7. It is as simple and straightforward as that. We should also create an incentive for people who have a pretty good idea that they are running into financial trouble to avoid running up additional debts they will not be able to repay. We could do that by making sure that debts run up on the eve of bankruptcy filings--within 90 days of the filing--are non-dischargeable. A longer period of time for higher income debtors to pay off their debts is also worth considering, as is a stop to the so-called ``cram downs'' of goods to values below which any other American would have to pay. Mr. President, if someone has the ability to repay, he or she should have to do so. Bankruptcy protection ought to be reserved for those who truly need it. I intend to work in the Judiciary Committee with Senators Hatch and Grassley to craft common sense bankruptcy-reform legislation that addresses these and other concerns. I hope my colleagues will join this effort to ensure that a reform bill can be enacted this year.

Mr. KYL

Mr. KYL. Mr. President, Milton Friedman once said he would rather have a $1 trillion budget that is way out of balance than a $2 trillion budget that is in balance. I think his point is even more poignant now than when he made it several years ago. If we manage to balance the unified budget this year--and most recent revenue trends suggest we will--we will do so by taxing and spending at a level of about $1.75 trillion. That is a level of spending that is 25 percent higher than when President Clinton took office just 5 years ago. Despite the claim President Clinton made in his State of the Union Address that we have the smallest Government in 35 years, the fact is that the Government has never been bigger--never. And it will continue to grow by leaps and bounds if Congress approves the myriad of new spending proposals that President Clinton is proposing in his latest budget. It seems to me that although we may have succeeded in balancing the budget, we still have two very different visions of where we should be headed in this country. Is it a balanced budget that is the paramount goal, even if it comes with substantially higher taxes and more spending? Or is the real goal of a balanced budget to be more responsible with people's hard-earned tax dollars--to limit Government's size and give the people more choices and more control over their lives? Before we try to answer those questions, let us give them a little context. As I mentioned, the Federal Government has grown 25 percent larger in just the last 5 years. It spends the equivalent of $6,700 for every man, woman, and child in the country every year. And that is the equivalent of nearly $27,000 for the average family of four. But all of that spending comes at a tremendous cost to hard-working taxpayers. The Tax Foundation estimates that the median income family in America saw its combined Federal, State, and local tax bill climb to 38.2 percent of income last year--up from 37.3 percent the year before. That is more than the average family spends on food, clothing, and shelter combined. Put another way, in too many families one parent is working to put food on the table while the other is working almost full time just to pay the bill for the Government bureaucracy. Perhaps a different measure of how heavy a tax burden the Federal Government is imposing would help shed some light here. Consider that Federal revenues this year will claim about 19.9 percent of the Nation's income, its gross domestic product. Next year, the tax take will climb to 20.9 percent, according to the administration's projections. That would be higher than any year since 1945. It would be only the third year in our Nation's entire history that revenues have exceeded 20 percent of the national income. As if taxes were not high enough, President Clinton is proposing to raise them again. He is proposing a tax increase of $98 billion, which would more than offset the modest amount of tax relief that we approved just 7 months ago. It is worth noting that the new taxes the President proposes are not needed to balance the budget. We have more than enough revenue to do that given the economy's performance in the last year. The tax increases are intended to finance dozens of new spending programs--$125 billion worth of new spending over the next 5 years. More taxes, more spending, and more Government. That is just the opposite of where I believe we ought to be headed. For me, there is no great achievement in balancing the budget if it means that hard-working families continue to be overtaxed. There is no great achievement in a balanced budget if the Government continues to grow, seemingly without limits, taking choice and freedom away from the people in the process. Mr. President, this is the point that I think Milton Friedman was making. A balanced budget is not the only goal, or even the highest goal. A balanced budget is merely the means of right-sizing the Government so that it is more respectful of hard-working taxpayers' earnings and their desire to do right by their own families. That is where our paramount concern should be--with families. To those who are suggesting we abandon plans for another tax relief bill this year, I say this: Let us not lose sight of our true objective. Families are overtaxed. The Government is still too big. We were sent here to help hard-working families, not to keep them saddled with high taxes or to add to that burden with more spending and more taxes. We will do the right thing by limiting the size of Government so that families have more freedom and more income left in their pockets. Mr. President, thank you. And I thank the Senator from West Virginia for being patient. I yield the floor. Mr. BYRD addressed the Chair.

Mr. KYL

Mr. KYL. Mr. President, I have stated before that I believe there are many things Congress should do to reform the way campaigns for federal office are financed. Last year's hearings by the Senate Governmental Affairs Committee, chaired by Tennessee Senator Fred Thompson, confirmed that the first thing is to ensure enforcement of existing laws. The Committee investigated what appear to be an orchestrated campaign in the last Presidential election to evade restrictions on foreign contributions, and an apparent effort by Communist China to illegally influence our electoral process. It is already illegal to ``launder'' contributions and accept campaign contributions from foreign sources. The first step Congress should take, therefore, is to ensure that current campaign finance laws are vigorously enforced. But we can--and should--do more. I believe any reform of our electoral process should be based on some key principles. Specifically, our laws should: be clear, simple, and enforceable; maximize disclosure of who contributed what to whom; place public interest over special interest; ensure voluntary participation for all; and most importantly, protect our constitutional right to free speech--unregulated by the government. Politicians must never be able to define the times, methods or means by which their constituents can criticize them. Specifically, I support the following campaign finance reforms in the McCain-Feingold bill: requiring more timely and detailed disclosure of campaign funding and spending; toughening the penalties for violations of campaign law; tightening the restrictions on fundraising on federal property; strengthening the restriction on foreign money; prohibiting campaign contributions from minors (which often mask attempts at ``double donations'' by adults); and, curbing the advantages of incumbents by prohibiting mass mailings at taxpayer expense during an election year. Additionally, I support several reforms not included in the bill, such as: requiring candidates to raise a majority of their campaign contributions from within their state, ensuring local support over national special interests; insisting that all political activities be funded with voluntary contributions and not coerced through mandatory union dues. The two primary reasons I have not supported the current version of McCain-Feingold are (1) its failure to ensure that all political contributions are voluntary, and (2) its provisions unconstitutionally limiting free speech. Concerning free speech, the McCain-Feingold bill in the view of many constitutional experts would effectively prohibit so-called ``issue- ads'' that mention a candidate's name within 60 days of a federal election. The bill would force groups that now engage in issue advocacy such as non-profit entities organized under 501(c)(3) and (c)(4) of the IRS Code to create new institutional entities--PACs--to be able to ``legally'' speak within 60 days before an election. Separate accounting procedures, new legal costs, and separate administrative processes would be imposed on these non-profit groups, merely so that their members could preserve their First Amendment rights to comment on a candidate's record. I believe this violates free speech guaranteed by the First Amendment. Elected politicians should not be given the right to regulate or forbid criticism by constituents during a campaign. While there was an attempt to modify certain provisions of the McCain-Feingold ``speech specifications'' during the debate on campaign finance reform, the proposed compromise still placed unconstitutional restrictions on free speech about politicians by allowing congressional control over the timing and funding sources of communications merely because they contained the name of a member of Congress. In short, the compromise was not truly a ``compromise'' but rather a constitutional infirmity infringing on free speech about politicians. While I believe McCain-Feingold is motivated by the best of intentions, and I have commended my colleague John McCain for his effective leadership on this difficult issue, I cannot support legislation that in my view does not protect our constitutional rights nor guarantee voluntary participation in the political process for all.

Mr. KYL

Mr. KYL. Mr. President, in his State of the Union Address last month, President Clinton urged Congress to approve his request to pump billions of dollars into the International Monetary Fund (IMF) to help stabilize Asian economies. He justified his request by saying that ``preparing for a far off storm that may reach our shores is far wiser than ignoring the thunder 'til the clouds are just overhead.'' There is something to be said for trying to deal with problems before they grow too large--before they engulf us. We will have a debate about the propriety of the IMF request in the weeks ahead. But I would suggest that it is not just the IMF that is attempting to deal with an approaching storm. Mr. President, millions of Americans are also looking ahead to be sure they can cope with unforeseen threats to their own family's future financial security. Some people are trying to create a nest egg for their retirement years. Some take out a life-insurance policy or buy an annuity to ensure that a spouse or child is taken care of when they are gone. Others are looking for a way to pay death taxes without creating too much hardship for their families. Whatever the coming storm might be, they are trying to find a way to prepare. And most of us would consider that to be good planning--something the federal government would want to encourage. Unfortunately, while the Clinton administration eagerly argues the benefits of pouring billions of dollars into the IMF to help other countries, it cannot seem to see a benefit in helping our own citizens to ward off their own personal storm clouds. I am referring to the provisions in the President's proposed budget that would impose significant tax increases on people who try to save and invest for the future, including people who take out life insurance or buy annuities to protect themselves and their families. President Clinton's budget calls the existing tax treatment of life insurance and annuities ``unwarranted.'' But the Washington Post has identified the President's proposed changes as an effort to ``slam [the] middle class.'' Let us put this issue in context. Personal savings rates in our country have been on the decline since 1981, when they stood at 9.4 percent. Some say that was respectable by international standards. By 1992, the savings rate had declined to 6.2 percent, and it has plunged during the Clinton years. As of last November, the personal savings rate stood at 3.8 percent--the lowest since the Great Depression. In other words, people are not setting much aside for their future needs, including retirement. Add to that the problems we all know are coming in the Social Security system. The experts are telling us that Social Security recipients currently receive, on average, benefits equal to 43 percent of their pre-retirement earnings. But then they point out that only 70 percent of that amount is fully funded for future retirees, which means that unless taxes are raised substantially or additional funding is found, retirees in the future will only get a benefit that amounts to less than 30 percent of their pre-retirement income. In other words, retirees in the future are likely to experience a significant decline in their standard of living unless they find some way to supplement their Social Security benefits. That means saving and investing more, contributing to an IRA, buying an annuity, or taking out a good life insurance policy. We ought to make it as easy as possible for people to do that. However, the Clinton budget means to take us in the opposite direction. For example, it would impose new taxes on individuals who substitute one insurance policy for another policy that better meets their needs. We are talking here about new taxes, primarily on households with incomes under $75,000. Many people in this group work for employers who do not offer, or who have terminated, a retirement plan. So unless they find some other way to protect themselves, they could be out in the cold when they retire. The proposed budget would make it harder for businesses to protect themselves with business life insurance. It seems to me entirely reasonable that a business would want--and need--insurance to minimize the costs that would result from the death of a key employee. That is particularly true of small businesses, whose size means that so much of its success depends upon a few individuals. The Clinton budget would overturn so-called Crummey powers, making it harder for moderate income families to even pay death taxes. That alone sets up a major confrontation with many of us in Congress who believe that death taxes ought to be eliminated altogether. These substantive problems with the Clinton plan come on top of what many of us consider a reneging by the President on last year's budget agreement. Only seven months after entering into that agreement, which provided for very modest tax relief--relief amounting to $95.3 billion over five years--the President is proposing a net tax increase of $98.1 billion. In other words, the entire amount of tax relief approved just seven months ago would be reclaimed in one fell swoop. Not only does that back track on the promise to provide tax relief, but it comes at the same time that the President is proposing to bust the spending limits that were established in last year's agreement. Spending levels would exceed the agreed-upon limits by more than $37 billion. Mr. President, the federal government is collecting record amounts of tax revenue, primarily as a result of robust economic growth. We do not need another tax increase, let alone a tax increase that singles out the very tools people need to protect themselves against threats to their personal security. We must reject the unwarranted tax increases proposed in this budget, and instead consider tax policies that will make it easier for people to save and invest. Families need tax relief, not new burdens.

Mr. KYL

Mr. KYL. Mr. President, I want to commend the chairman of the Senate Finance Committee, Senator Bill Roth, for the very thoughtful and determined way that he has handled the Internal Revenue Service (IRS) reform effort. Had he simply bowed to calls from some on the other side of the aisle to sweep problems with the IRS under the rug and rush the IRS reform bill to a vote, we probably would not have had the chance to shed light on the serious abuses that innocent spouses have experienced at the hands of the IRS. And we certainly would not have the chance to ensure that an effective fix for innocent spouses is included in the IRS reform legislation. I think it is important to say at the outset that most IRS employees are law-abiding and professional, and most of them deal fairly with taxpayers. It is important to remember, too, that the IRS has been given the difficult and thankless task of administering a Tax Code that is exceedingly complex, filled with contradictory provisions, and open to differing interpretations. But since the IRS has been given such tremendous power--power that can bankrupt families, put people out of their homes, and ruin lives--any abuse of that power cannot be tolerated. Mr. President, last December, I hosted a Town Hall meeting and a series of other events in Arizona to solicit public comment about how best to reform the IRS. One of the people I heard from was a woman who divorced in late 1995. While she paid her taxes in full and on time during the last two years of her marriage, her husband did not. The IRS ultimately came after her for the taxes that her former spouse did not pay. About two weeks after hearing from her--on December 19--I sent Chairman Roth a letter identifying ways of improving the IRS reform bill, and on that short list was a recommendation to make innocent- spouse relief easier to obtain, and to make it available retroactively, or at least to all cases pending on the date of enactment of the bill. So obviously, I am delighted that the Finance Committee has focused on the issue of innocent-spouse protection. The hearing held by the Committee just yesterday revealed just how seriously people can be abused. The Committee heard from several separated or divorced women who, like my constituent, had been pursued by the IRS for tax debts run up by their former husbands. Mr. President, husband and wife are equal partners in a marriage. Financial obligations are a shared responsibility, and appropriately so. We need to be careful not to undermine the commitment that people have made to each other, or we may unintentionally create new incentives for couples to divorce merely to limit their tax obligations. That is how the marriage penalty was born--something we will need to fix later this year. But there are unique circumstances that arise from time to time that make it inappropriate to hold one spouse liable for taxes that are primarily attributable to the other spouse. Those circumstances seem to arise far more frequently than one might think. One estimate by the General Accounting Office suggests that the IRS tries to collect taxes from the wrong spouse after a separation or divorce in at least 50,000 cases a year. One of the women who testified before the Finance Committee yesterday was a fourth-grade teacher from Florida who divorced back in 1995. Her husband--himself a former field auditor for the IRS--has reportedly failed to file the couple's tax returns for 1993 and 1994. When he did later file joint returns, he allegedly forged her signature. The IRS has now put a lien on her home, while he is apparently paying just $200 to $300 per month toward the debt. A widowed mother of five who has been on and off food stamps testified before the Committee. The IRS said she owes more than $527,000. A disabled nurse has a lien put on her home for taxes dating back to the 1960s, even though her divorce decree explicitly stated that she was not responsible for her former husband's debts. The problem is that, while the IRS is targeting these women, it is apparently failing to pursue their former husbands with equal vigor. There are cases where men, too, are the primary focus of the IRS's collection efforts, but this is predominately a problem that affects women. Nine out of 10 innocent spouses are women. Maybe that is because they are more likely to pay up when confronted by the IRS. Maybe it is because women sometimes have fewer resources available to defend themselves. In either case, singling out women for abusive collection efforts is just plain wrong. One solution might be simply to repeal the joint liability rules. Maybe liability ought to be proportionate to each spouse's earnings during the marriage. I understand the Committee is looking at a range of options. One way or the other, though, we have got to solve this problem and get the IRS off the backs of women whose only offense is that they took their husband's word that their finances were in order. And we ought to be sure that whatever we do extends back retroactively. Mr. President, I am obviously very appreciative of the fact that Chairman Roth and the Finance Committee have focused on this very important issue. And again, I want to thank Chairman Roth for resisting calls from the other side to merely rush ahead with an IRS reform measure before the Committee could deal with the innocent-spouse issue. I look forward to working with the Committee to ensure that an effective solution to this problem is included in the IRS reform bill before final passage.

Mr. KYL

Mr. KYL. Mr. President, I do not doubt Dr. Satcher's competence as a physician, scholar, and medical researcher. However, serious questions on two important issues have arisen during Senate debate on his nomination to be U.S. Surgeon General. I am concerned about Dr. Satcher's position on partial birth abortion. The vast majority of Americans (84 percent, according to a 1996 Wirthlin poll), a majority of the Senate and U.S. House, and the American Medical Association support banning partial birth abortion. Former Surgeon General C. Everett Koop has said that there is ``no way to see partial birth abortion as a medical necessity * * *'' It is clear that Dr. Satcher's view on this controversial procedure is out of the mainstream of public and medical opinion. Since Dr. Satcher is apparently willing to subordinate mainstream medical judgment to politics in this instance, I have concerns that he may do so on other important health issues as well. I am also troubled that, as administrator of the Centers for Disease Control, Dr. Satcher approved a questionable medical research project in Africa and Asia. The researchers gave one group of HIV-infected pregnant women placebos while another group received AZT, a drug known to decrease by 67 percent the probability that the unborn children would be infected by the HIV virus. A September 18, 1997 editorial in the New England Journal of Medicine concluded that this research was ``unethical.'' The editorial explains that the reason the code of medical ethics is unambiguous with regard to the investigators' primary responsibility to care for the human subjects of scientific testing ``is due to the strong temptation to subordinate the subjects' welfare to the objectives of the study.'' The editorial concludes that the ``research community must redouble our commitment to the highest ethical standards, no matter where the research is conducted.'' As the ``nation's doctor,'' the U.S. Surgeon General should embody the highest professional and ethical standards. He or she should clearly reflect the views of a majority of Americans and the medical community. Because Dr. Satcher's views on these two issues raise doubts in my mind--and because, after three years without a Surgeon General, it is unclear whether the position is necessary--I have decided to resolve my doubts against his confirmation. If the president strongly believes the country needs a Surgeon General, I am sure there are thousands of well-qualified candidates whose nominations would not raise these issues.

Mr. KYL

Mr. KYL. Mr. President, with the federal government apparently on the verge of running its first unified budget surplus in nearly 30 years, many people are beginning to ask what comes next? What should happen to the budget surplus when it materializes? Should we spend it? Should we begin to pay down the national debt? Or should we provide hard-working Americans with meaningful, long overdue tax relief? Before we try to answer those questions, it would be worthwhile to recall how we got here. Remember, it was not that long ago--in fact, it was as recently as February of 1995--that President Clinton submitted a budget that would have locked in annual deficits in the range of $200 billion for the foreseeable future. A unanimous Senate rejected the Clinton budget on May 19, 1995. And from that point on, the debate took a fundamental turn from whether to balance the budget, to how to balance it. During the last three years, we have begun to slow federal spending growth. We eliminated 307 mostly small federal programs. But perhaps the most decisive factor has been what we did not do. We did not impose another large tax increase on already overtaxed families and businesses. And that gave people enough room to do things to invigorate the economy. In fact, the economy has outperformed just about everyone's expectations, producing tens of billions of dollars in unanticipated revenues to the Treasury to close the budget gap. When the budget agreement passed last year, for example, unified budget deficits were projected to go from $67 billion in fiscal year 1997 to $90 billion in fiscal year 1998. But as it turns out, the fiscal year 1997 deficit came in at only $22 billion, and it is projected to amount to just $5 billion in the current year. The unexpected turnaround is due almost entirely to the economy's performance, and it comes in spite of the substantially increased spending allowed by the 1997 budget agreement. Whatever we ultimately decide to do with a unified budget surplus-- and I would caution that projections of a surplus are just that, projections--we ought to be sure that it sustains the economic growth that has gotten us to where we are today. Mr. President, the suggestions that have been made about how to handle a budget surplus generally fall into four categories: Apply it to new or existing federal spending programs; use it to strengthen and improve Social Security for future generations; apply it toward the national debt; or return it to the American people in the form of tax relief.

Mr. KYL

Mr. KYL. Mr. President, I ask unanimous consent to speak for 15 minutes in morning business.

Mr. KYL. Mr. President, I want to begin by thanking my colleague from Nebraska for the eloquent remarks that he just made, to say that I totally agree with his analysis of the situation. He is a student of this, both because of his committee assignments and the way in which he has dedicated himself to study these issues. I think he has contributed significantly to the debate that we in Congress are going to have to have on this subject. I commend him for devoting that time this morning to this important subject. I would like to speak to a different subject today.

Mr. KYL

Mr. KYL. Mr. President, I think it is time for some of us in the Congress, particularly some of us who have spent a lifetime in the judicial process, to comment upon what has been occurring in the last few days with respect to the special counsel investigating the matter of the President and various affairs in which the President may or may not have been involved. This is a most serious matter and I think the time has come for people who believe in the judicial process, who believe in the rule of law, and who believe ultimately in our justice system in this country, to speak out against those who are deliberately attempting to undermine that process. We have something going on today which runs counter to the entire history of the United States of America, a country which is based upon the rule of law, which has established a three-branch Government in which each branch respects the other and in which we support each other because we understand that an attack on one of these branches is, in effect, an attack on the entire Government. We have established certain processes for attempting to deal with wrongdoing in our country. One of them is the process of investigating potential crimes in high places through the independent counsel statute, a statute that has not been without controversy in the past but which has been used to probe potential conflicts of interest and criminal behavior in each of the last administrations, many times resulting in indictments or prosecution. I will get back to the point in a moment, but some of us have tried to improve the way that statute works. But the way to do that is to do it in the legislative process with calm and deliberate debate, to ensure that justice in the end is always done. What we have today, instead of an effort to look at the independent counsel statute to see where it might need to be modified to operate more appropriately, we have the same kind of tactic being employed by the highest levels of the White House that is employed in typical murder or rape or assault cases where the person charged attempts to defend himself by attacking the prosecution, by attacking the corrupt police, or by attacking the victim's credibility and reputation. That is what is happening today by key defenders of the President, including the President's lawyer. Rather than coming out with the President's version of the facts--and he alone knows what the facts are in their entirety, with respect to the matters that have been recently carried in the press, the administration--rather, his lawyers, have chosen to tell him to keep quiet while they attack the judicial process that is underway to try to determine the facts and to bring to justice whoever needs to be brought to justice. The most recent deliberate attempt here is to specifically attack the reputation and credibility and actions of the Special Counsel, Judge Kenneth Starr. Judge Starr cannot defend himself because he is under orders not to talk about what he is doing. The very thing that the President's lawyers accuse him of doing, of talking too much, he cannot, and he is not. Someone has to stand up and say the process, the judicial process, and the people who are doing their best to make that process work, need to be defended. I rise today to say it is time to stop attacking Judge Starr publicly and in the media. If you have a beef with him, go to his supervisor, in this case Attorney General Reno, or to the judges who can determine whether or not there is any improper activity within his office. But don't use as a defense in the case an attack broadly upon the prosecutor and his individual reputation and credibility. Because he cannot defend himself. I said I had a background in law. I practiced law for 20 years, including practice in the United States Supreme Court. One of my law partners was a former Solicitor General of the United States, someone who, as a matter of fact, was well acquainted with Judge Kenneth Starr, who also was a Solicitor General of the United States. That is the highest position that a lawyer can achieve in this country with the exception of being appointed to the bench or being the Attorney General of the United States. He is the Government's lawyer in the Supreme Court. That is what Kenneth Starr was. Then he himself was elevated to the bench. He has had a solid reputation all his life as a moderate, intelligent, capable and fair person. But now, because he is investigating the President, the President's own lawyer and his attack dogs in the media programs have decided to go after the reputation of this man who, as I said, can't defend himself. Those of us who have spent our careers in the law understand that you cannot undermine the law repeatedly and expect to end up having justice in this country. That is why lawyers are taught to respect the judiciary and not to attack it directly. If you have a complaint, as I said, you go into court and try to prove your case. If you can, fine. But if you can't, then you should not be talking about it in public. What has been happening recently? The President's lawyer, David Kendall, and people like Paul Begala, connected to the administration, have accused Independent Counsel Judge Starr of leaks. One of the things that was done recently is the filing of a letter by David Kendall, released to the public on Friday, which makes several bold allegations. Let me repeat what some of them are. He says the leaking of the past few weeks is ``intolerably unfair.'' He continues, ``These leaks make a mockery of the traditional rules of grand jury secrecy.'' And who does he attribute the leaks to? He says Mr. Starr's office is ``out of control. . . . The leaking by [Mr. Starr's office] has reached an intolerable point.'' These are unfair and unfounded accusations and somebody needs to respond to them. As I said, Kenneth Starr is very limited in what he can say publicly. He did respond in a letter to attorney Kendall and what he said in that letter, essentially is as follows. He said, first, and I am quoting from his letter to Mr. Kendall: First, you elevate mere suspicion to specific accusation without any facts other than the press's often misleading attribution of sources. I would make the point that is precisely what administration spokesmen are asking us to be careful about doing, and why personally I have absolutely refrained from responding to press inquiries about whether I believe these charges or do not believe them or what might have happened. Because I don't know. All we have is what has been reported in the media and I cannot judge whether that is true or not, and I should not express it publicly before the process is complete. The administration has been urging us to withhold our opinions until we do know. Well, I have been abiding by their admonishment, but they have not been doing it with respect to Ken Starr. As he says, they have ``elevated mere suspicion to specific accusation without any facts,'' other than what has been reported in the media. Second, [Kenneth Starr says] the timing of your letter-- arriving in the midst of what appears to be an orchestrated plan to deflect and distract this investigation--undermines your expression of outrage. Certainly I think anyone would have to agree with that, given the fact that it is now an acknowledged fact that the administration has been orchestrating a campaign to discredit Ken Starr. I refer you to the New York Times newspaper today, Headline, ``President's Aides Expand Offensive to Counter Starr. Prosecutors Denounced As Corrupt and Accused of Leading a Witch Hunt.'' Somebody has to defend this process. The third thing that Mr. Starr said in his letter in response to Mr. Kendall was: [W]e are aware that as of several days ago, the President's defense attorneys had most if not all of the material information (whether true or not) set forth in [Friday's] New York Times article. This had to do with the leaks. In other words, what Judge Starr was saying is that the President's own lawyers had talked to the people who had testified in the grand jury, at least those people who were connected in any way with the administration, and knew what had been said in the grand jury. The implication, of course, is that it is the White House and its lawyers themselves who could be just as likely the leakers as anyone in the special prosecutors office. When a witness testifies before the grand jury the witness is not constrained as to what he or she can say thereafter. And you have seen some witnesses go in, testify, and they come out and talk to the press about what they said. So these leaks could be coming from all number of people, from the witnesses themselves to the very people in the White House and the White House lawyers' group who are complaining about the leaks today. In fact, I would suggest it is most unlikely that the source was Judge Starr's office. He continues: In my service as independent counsel, particularly with regard to secrecy of the grand jury, I have insisted on a high commitment to professional conduct. I have expressed this commitment to you repeatedly. From the beginning, I made the prohibition of leaks a principal priority of the office. It is a firing offense, as well as one that leads to criminal prosecution. In the case of each allegation of improper disclosure, we have thoroughly investigated the facts and reminded the staff that leaks are intolerable. Then Mr. Starr makes clear he has no reason to suspect anyone in his office of leaks after those investigations by saying: I have no factual basis, as you likewise do not have, even to suspect anyone at this juncture. You do an extreme disservice to these men and women and to the legal profession and the public by your unsupported charges. Mr. President, I agree with Judge Starr that this does a disservice, both to the people who are doing their best to uphold the laws of the United States and to his effort generally to get at the truth here. He is supervised by the Attorney General of the United States, and he is supervised by a three-judge court, the members of which have been appointed by Presidents Johnson, Nixon and Reagan. If there is any wrongdoing, they can see to it that it is stopped and the appropriate people punished in whatever way is appropriate. But instead, the White House has chosen to make this a media campaign rather than to focus on how any leaks might be stopped within the judicial process. As a matter of fact, we know, because recently Lucianne Goldberg, one of the people who had access to the tapes, disclosed the fact that she herself had leaked a lot of this information. She had the tapes from Linda Tripp, which were given then to the special prosecutor. So it does not follow that simply because leaks occurred that it had to come from the special prosecutor's office. Indeed, she herself said, ``I told people about this. It wasn't Kenneth Starr.'' So why then do we have this concerted effort on the part of the President's own lawyer to discredit Judge Starr and his investigation? The reason ought to be obvious. Do anything you can to undermine the prosecution in order to cast discredit upon its efforts so that if anything ever comes of the independent counsel's investigation and the President actually has evidence presented against him in this matter, it will be previously discredited information. As I said, I think it is time for those of us who have some respect for the judicial process and for this individual himself, Judge Kenneth Starr, to make it clear to the American people that the judicial process must be respected, must be supported and must be upheld if we are to ensure that justice prevails in this country and that it ought to discredit the people who are attacking that system if the way in which they do it is so clearly designed to affect public opinion, as it appears to have been done in this case, rather than to get at the facts. As I said, there is a process available, if you have evidence that someone in the prosecutor's office has engaged in conduct, to take that to the appropriate authorities, make your case and have them act in the appropriate, responsive fashion. It is not at all certain that that is what the administration is attempting to do in this case. Let me conclude with this point, Mr. President. I think all of us in the Senate are impressed with the awesome responsibility that we have under the Constitution to withhold our own independent judgment because of the fact that at least, theoretically, there is a potential for an impeachment proceeding in any case involving accusations of the type that have been made in this case. As I said, I have withheld my judgment, because I have no idea whether these things are true or not, and I am not going to indicate whether I think they are true or not. In fact, I am going to wait until, in effect, the information is presented to us, if it ever is. I think that others need to make that same commitment. Let's see how the facts come out here. The same thing should be done with respect to Judge Starr. When people say he hasn't produced very much, his investigation has run amok, he is leaking, he can't defend himself. We don't know whether any of those things are true, and he is owed the same sense of justice that the President and anyone else accused is owed; namely, the opportunity to present the facts when the process provides that opportunity. In due time, Judge Starr will be able to present those facts. At that time, we will know precisely what he has. Until then, I think it is incumbent upon all responsible people in this process to treat the independent counsel as they would treat any other person involved in law enforcement or the judicial process, with the respect and the dignity that the office carries. While I appreciate the fact that defense lawyers will sometimes stoop to any tactic to get their client off, it demeans the Office of the Presidency in this case for his lawyers to use the same kind of tactics that the lowest kind of defense lawyers would use in defending a party who is probably guilty of a heinous crime when there is no other defense than to attack the victim's credibility or to attack the prosecutor. That demeans the Office of the Presidency. It is time for this administration to treat the prosecutor with the same respect that they are demanding to be treated. I think that those of us who believe in our rule of law and in the system of justice in this country need to stand up and speak out and make that point. Mr. President, I thank you for the opportunity to speak to this matter this morning.

Mr. KYL

Mr. KYL. Mr. President, millions of Americans, myself included, listened intently to what President Clinton had to say about Social Security in his State of the Union address. What we heard--or what we thought we heard--was a plan by the President to reserve any budget surplus that might emerge in the next few years to shore up Social Security for future generations. It was a plan that drew widespread praise from the public. But now it turns out that what we heard is not, according to White House spokesmen, what the President really meant. The Washington Post put it this way in a February 4 report: ``the ringing simplicity of Clinton's call to `save Social Security first' gave way to a fog of bewildering budget-speak from the administration's top economic advisers.'' Here is what OMB spokesman Larry Haas had to say: ``People who think it [President Clinton's proposal] shores up Social Security were not listening closely.'' Testifying before the Senate Budget Committee, Treasury Secretary Robert Rubin admitted that the Clinton budget does not include any mechanism that would transfer surpluses to the Social Security trust fund. Mr. President, why the intricate game of words? Is Social Security first or not? Let us take a look. Next year--the year covered by President Clinton's proposed budget-- Social Security itself will run an estimated surplus of about $93 billion. Remember, the system is currently generating surpluses that are intended to build up until about the year 2016, when we will have to begin using them to pay retirement benefits to 75 million baby boomers. But the Clinton budget does not set aside this $93 billion Social Security surplus. The Clinton budget spends every penny of it on general operating expenses of the federal government. The practice of using the Social Security nest egg to mask overall government deficits dates back to President Lyndon Johnson. Colleagues from both sides of the aisle have condemned it for years. It is only because President Clinton employs this sleight of hand--counting the Social Security surplus in the unified federal budget--that he is able to show an overall surplus of $9 billion for next year. If Social Security's $93 billion surplus and the surpluses held in other federal trust funds were removed from the calculations, the Clinton budget would actually show a deficit of $95.7 billion. Even the relatively small surplus that is created by commingling all of the funds--that is, after mixing Social Security with the rest of the federal budget--is shrunken considerably from what it would have been if the President reserved the entire amount for Social Security, as he said he would. That is because he devotes the bulk of the resulting surplus to a host of new spending initiatives. Here are just some of the new programs that President Clinton is proposing: a new clean water initiative for about $37 million; two new farm programs for $14 million; $170 million for new mandatory empowerment zones and enterprise communities; a new program called the Community Empowerment Fund, which will cost about $400 million; a new $10 million Indian land consolidation pilot program; $47 million on a new community adjustment program to help areas adversely affected by trade agreements; at least eight new education programs totaling over $1.8 billion; a new Medicare buy-in program costing $1.5 billion over five years; $4.5 billion for five new child-care related programs; a new smoking cessation program for $87 million; and two new law-enforcement initiatives for $200 million. The cost of these new programs is estimated to be about $120 billion to $130 billion over the next five years, and that does not even count the myriad increases he proposes for other existing federal programs. In other words, some $120 billion to $130 billion of anticipated unified budget surpluses are not reserved for Social Security at all, but are used to create brand new programs. Granted, many of these proposals are appealing, and some address real needs in our communities. Granted, some of the spending for these new programs is designed to come from the proposed tobacco settlement. But if President Clinton is sincere in his desire to reserve 100 percent of the surplus for Social Security, how is it that there is so much money for so many new programs? Why is the tobacco money not used to boost the size of the surplus that could be devoted to Social Security? Given the programs I just mentioned a few moments ago, it is obvious that Social Security is not really first on President Clinton's list of anticipated uses of any unified budget surplus. It is not second or even third. It does not make the top 10 list. It is number 26 on the President's list, after all of these other new programs are created. Remember, too, that President Clinton is proposing to spend the entire $93 billion surplus that the Social Security system will itself generate--spend it on other things. So what did President Clinton really mean when he spoke of Social Security in his State of the Union? Here is what he said: I propose that we reserve 100 percent of the surplus--that is every penny of any surplus--until we have taken all the necessary measures to strengthen the Social Security system for the 21st century. His budget clearly spends the surplus, so what hidden meaning could there possibly be in his apparently very carefully crafted words? Treasury Secretary Rubin explained to the Budget Committee that the President was merely declaring his opposition to using surpluses, should they materialize, for any purpose other than paying down the national debt until Congress and the President have agreed on a long- term solution that ensures the solvency of the Social Security program. In other words, nothing may ever be set aside specifically for Social Security. Mr. President, I am confused, as I think most Americans are, about President Clinton's intentions with respect to Social Security. John Rother, chief lobbyist for the American Association of Retired Persons, told The Washington Post that many of his members are also confused and mistakenly assume the surpluses will be used to pay future Social Security benefits. Crafting next year's budget, let alone tackling the coming problems in the Social Security system and the many other important problems facing this administration and the country, requires straight talk and straight answers. Either Social Security is first or it is not. Either we reserve any surplus for Social Security or we do not. Tell the truth, and the American people will support what needs to be done. Senior citizens deserve better than to be treated as a political football by this President.

Mr. KYL

Mr. KYL. Mr. President, I thank my colleague from Georgia and, of course, second the remarks just made by my colleague from Texas. Mr. President, with the Federal Government apparently on the verge of its first unified budget surplus in nearly 30 years, many people are beginning to ask what comes next, what should happen to the budget surplus if and when it materializes. Should we spend it? Should we begin to pay down the national debt? Should we provide hard-working American families with some meaningful and, I would say, long overdue tax relief? Before we try to answer those questions, I think it is worthwhile to recall how we got here. Remember, it was not that long ago--in fact, it was as recently as February of 1995--that President Clinton submitted a budget that would have locked in annual deficits in the range of $200 billion in the foreseeable future. A unanimous Senate rejected the Clinton budget on May 19, 1995, and from that point on the debate took a fundamental turn from whether to balance the Federal budget to how to balance it. During the last 3 years, we began to slow Federal spending growth. We have eliminated 307 mostly small Federal programs. But perhaps the most decisive factor has been what we did not do. We did not impose another large tax increase on already overtaxed families and businesses. And that gave people enough room to do the things that they would naturally do to result in an invigoration of our economy. In fact, the economy has outperformed everyone's expectations, producing tens of billions of dollars in unanticipated revenues to the Treasury which has helped to close this budget gap. When the budget agreement passed last year, for example, deficits were projected to go from $67 billion to $90 billion. The budget agreement allowed for substantial amounts of new spending before starting down the path to balance in the year 2002. It was the expectation of deficits in the interim that were higher, not lower, that contributed to my decision to oppose last year's budget deal. It now turns out that the 1997 budget deficit came in at only $22 billion and is projected to amount to about $5 billion in the current year, all because of the economy's robust performance and it comes in spite, I would note, of the substantially increased spending allowed by the 1997 budget. So what ultimately we decide to do with the surplus--and again I caution that projections are just that, projections--we ought to be sure that it sustains the economic growth that has gotten us to where we are today. And that is why of the three possible approaches to utilizing this budget surplus, it seems to me the one that makes the most sense is to return what we do not need to spend at the Federal Government level back to the hard-working families who earned it so that they can make the decisions in their own lives as to how to spend that surplus, thereby enabling us to continue the long term of economic growth which this country has been on now for the last many months and to ensure that robust economic growth continues to produce more revenues to the Treasury in the future that can help us sustain both the Federal budget and ensure that we do not have deficits in the future. The President, of course, has taken a political road here. He is suggesting that we should use the surplus for Social Security purposes. As Senator Gramm pointed out, there is no indication as to how he would do that, and as a matter of fact since the money going into the Social Security trust fund amounts to an IOU to the Social Security trust fund because it is then immediately spent by the Federal Government, we do not put Social Security money in a shoe box here at the Federal Government level. What the President in fact is saying is simply allow that money to be spent by the general fund of the U.S. Government, and I think that is unacceptable. The other thing the President has said is, let's spend about $130 billion on new programs. That is not what to do with the budget surplus that may or may not materialize, and that in any event would put us on a road to spending that money every year in the future. Clearly, we cannot sustain forever the kind of economic growth we have today, and as a result we should not be embarking on new spending programs that we are going to have to find new sources of revenue to support in the future. Another thing we can do is to begin to pay down the national debt. Given the fact we are paying almost $1 billion a day on interest on the national debt, it makes sense for us to do that. So to the extent we do not need the revenues for other purposes, we can devote part of that to paying down the national debt. But I suggest that the best way to ensure that we can continue to have a robust economy, continue to gain the receipts that we need to pay for Federal Government programs and also to ensure that American families continue to receive some benefit from this economy is to provide that hard-working American family with tax relief to the extent that the budget surplus permits us to do so. Clearly, the most effective from an economic point of view, what Alan Greenspan testified to the other day, if we are going to provide tax relief, it should be in terms of marginal relief for all Americans. But to the extent that politically we are not able to do that this year and that we need to do something in a targeted fashion, I think most of us agree the most beneficial kind of tax relief would be aimed at eliminating the current marriage penalty which in effect has the Government of the United States supporting a policy which encourages people who are living together, working but who are not married, to continue to stay unmarried because, after all, if they marry, then the second person's income is immediately put into the top bracket and they end up paying a lot more in taxes than they would if they remained unmarried. It should not be Government policy to be fostering that kind of family situation, and as a result the marriage penalty ought to be one of our first targets for elimination to the extent we can spend any of this surplus for tax relief. I use the word ``spend,'' Mr. President, and in closing I want to make this point. That is the term that the budgeteers use, that the people inside the beltway use when they talk about a surplus and putting it to ``good use.'' They talk about spending as if it were Federal Government money. And in the beneficence of the Federal Government we are going to give it back to the American people. The truth of the matter is we should not have taken it from the American people in the first place because, as it turns out, we did not need it and as a result the only right thing to do is for the Federal Government to return it to the American people in the form of tax relief. Again, I conclude by saying the benefits of that are twofold and significant. No. 1, American families are already way overtaxed, and this enables them to provide more for their families in a way that they deem most effective rather than somebody here in Washington, DC. But secondly, because there is more family income at their disposal, to be spent, to be saved, and in saving to be invested in the American economy, we can ensure that the economy continues to perform as it has with the result that not only do we all have a better standard of living but, of course, the Federal Government continues to get more revenues because we have not changed basic tax rates. As long as those rates remain where they are, a robust economy is going to continue to allow the Federal Government to do just fine in terms of its collections of revenue. That is why we can ensure that we can balance budgets in the future, we can have plenty of money to begin paying down that Federal debt, and we can provide tax relief to families and encourage a robust economy if we will use whatever surplus exists to return to the American people so that they can then spend it as they see fit. These are the options. I think that the Republican plan, which focuses on debt reduction and tax relief, is the right way to go and that the President's ideas for more spending, while they will get a courteous listen here on Capitol Hill, are in the end not the best way to deal with the surplus that we might have and ultimately will have to be rejected by the Congress. I thank my colleague from Georgia for making this time available to discuss these important issues and look forward to our continuing discussions.

Mr. KYL

Mr. KYL. Thank you, Mr. President.

Mr. KYL

Mr. KYL. Mr. President, there are a lot of things wrong with our nation's Tax Code, but two things in the code that have always struck me as particularly egregious are the steep taxes imposed on people when they get married and when they die. While it will probably take some time to build the kind of public consensus that will be necessary to overhaul the Tax Code in its entirety, there is broad public support for us to do something in the short term about these taxes--the notorious marriage penalty and the death tax--and in the process take two meaningful steps closer to a tax system that is simpler and more fair. Mr. President, what rationale can there possibly be for imposing a marriage 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. A constituent of mine from Tucson, Arizona put it this way: ``We need your help as young married middle class Americans to plan our family's future. We need help to plan our retirement, our children's education, our dignity. Please help get rid of the marriage tax.'' Mr. President, this constituent is simply asking that a young family be able to keep more of what it earns. Taxing marriage is wrong. It is bad social policy and bad economic policy. We ought to do away with it this year. And with that in mind, I have joined Senators Faircloth and Hutchison and 35 of our colleagues who have cosponsored S. 1285, the Marriage Tax Elimination Act. A similar bill on the House side, H.R. 2456, has 233 cosponsors. Given the broad support the initiative enjoys in both chambers--and around the country--I think we stand a good chance of getting this done this year. We should. The death tax is just as wrong, and we ought to do something about it, too. It is wrong to make grieving families face the funeral director and the tax collector in the same week. And it is wrong to break up family-owned businesses just to extract an additional tax from someone one last time before he or she is laid to rest. The death tax imposes a heavy toll on families, as well as the communities in which they live. Maybe that is why 15 states have repealed their state death taxes since 1980. Mr. President, in its January 12 edition, the Wall Street Journal carried a story about the impending sale of America's largest African- American newspaper chain, Sengstacke Enterprises, Inc. The chain's pioneering leader, James Sengstacke, passed away last May, and the chain is now faced with the daunting task of raising enough cash to pay the estate tax--something that is more commonly known as the death tax. I do not know the Sengstacke family, but their story is compelling, and I hope our colleagues will listen closely as I read a few lines from the Journal's report. The article begins by noting that the newspaper chain is comprised of the daily Chicago Defender and three weeklies--the New Pittsburgh Courier, the Tri-State Defender, and the Michigan Chronicle. And then it goes on with the extraordinary story of the family business: Founded by Robert Sengstacke Abbott in 1905, the Chicago Defender helped ignite the Great Migration--the move of tens of thousands of Southern black sharecroppers northward to Chicago and other cities. When Mr. Abbott's nephew, John Sengstacke, took over in 1940, the Defender grew from a weekly to a daily, printing stories that challenged discrimination on nearly every front, from the U.S. Army to the baseball field. Mr. Sengstacke was instrumental in persuading Brooklyn Dodgers owner Branch Rickey to hire baseball's first black player, Jackie Robinson. For several decades, the Defender was viewed as the most important training ground for aspiring black journalists. Mr. President, the tragedy is that the death tax may force the Sengstacke family to part with this treasured piece of their heritage-- a family-owned company that has, among other things, worked hard to try to stamp out the scourge of discrimination around the country. Contemplating the thought of the chain being taken over by outsiders, the founder's grandniece, Myiti Sengstacke, said, ``No one--black or white--is going to understand and cherish the vision my uncle had for starting the company other than someone in his family.'' Other families around the country have similar stories to tell. Here is what a good friend and constituent of mine wrote in a letter to me last year: Since my father died, our lives have been a nightmare of lawyers and trust companies with the common theme, ``you have to protect the family business.'' It was hard enough trying to recuperate after my father's long illness, and then adjusting to the reality he was gone. This family in Arizona built up a printing business from just one employee 39 years ago to over 200 employees today. The founder--the family patriarch--was one of the most generous people I have ever met. He gave to just about every charitable cause in our community, and he made our community a much better place in the process. Mr. President, hard work and thrift, creating jobs, and contributing to the community are among the last things we ought to penalize. And so I sponsored the Family Heritage Preservation Act, S. 75, to repeal the cruel death tax. Twenty-nine of our colleagues have joined me as cosponsors of that measure, and the companion House bill, which was introduced by Congressman Chris Cox, has 166 cosponsors. A recent poll commissioned by the seniors group, 60 Plus, found that fully 77 percent of Americans are supportive of death-tax repeal. We took some important steps in the direction of death-tax relief last year when we approved a phased increase in the unified credit and new protections for a limited number of family-owned businesses. Unfortunately, the ``family-business carve-out'' made what is arguably the most complex portion of the Tax Code even more complicated. Here is what representatives of small businesses told the House Ways and Means Committee on January 28. The National Federation of Independent Business told the committee that even though the 1997 Taxpayer Relief Act gave small-business owners some relief from the unfair death tax, small-business owners should not be paying this tax at all. Jack Faris, the President of NFIB, said that the organization continues to fight for complete elimination of this onerous tax. The Small Business Council of America described last year's changes this way. ``The new Qualified Family-Owned Business Interest Exclusion is now the most complex provision in the Tax Code. At best, it will help less than five percent of family businesses facing sale or liquidation from the death tax.'' These sentiments are consistent with the message we heard from delegates to the 1995 White House Conference on Small Business, who placed death-tax repeal fourth among their 60 recommendations to Congress and the President. And with good reason. The death tax is gradually destroying family enterprise, first by slowing business growth, then by forcing companies to restructure through mergers or sales. According to the Heritage Foundation, repeal of the death tax would free capital resources for more productive investment, leading to an average of $11 billion per year in extra output, an average of 145,000 additional jobs created, and personal income rising an average of $8 billion per year above current projections. So not only would death-tax repeal be good for families, it would help the economy as well. Mr. President, repealing the marriage penalty and the death tax should be among our top priorities this year. Together, these two steps will get us closer to the kind of Tax Code we all say we want--one that is fairer, flatter, and simpler. Let us do this for America's families.

Mr. KYL

Mr. KYL. Mr. President, I want to provide a brief update for my colleagues this morning on the Medicare Beneficiaries Freedom To Contract Act. This is the bill which has 46 cosponsors in the Senate, 150-some cosponsors in the House, led by the chairman of the House Ways and Means committee, Bill Archer, to restore the freedom to America's senior citizens to seek the medical care they desire rather than to be dictated to by the Medicare Program to only receive that care under Medicare that they may desire. Here is the situation as it evolved. Mr. President, up until January 1st of this year, senior citizens in this country had always had the right under Medicare to go to the doctor of their choice, and if they wanted to be treated outside of Medicare they could do that. Of course, Medicare couldn't pay the bill. But that freedom always existed. As of a couple of years ago, the administration began to threaten physicians saying that they had to submit all bills for senior citizens to Medicare. The rationale was that anybody over 65 was ``Medicare eligible'' because they were 65, and if they were ``Medicare eligible'' then a doctor had to submit the bill to Medicare. So physicians began being concerned that they couldn't treat people outside of Medicare even though that had always been the patient's right and the physician's right. To ensure that situation wouldn't continue, I introduced an amendment last year during the negotiations--during the time we were negotiating the balanced budget amendment--and it passed here under a vote of 64 to 35 to ensure that patients had the right to ``privately contract,'' as it is called, and go to the doctor of their choice; not necessarily to go to Medicare, if they didn't want to. That amendment passed. It became part of the Medicare portion of the balanced budget amendment. But in the middle of the night some negotiators from the House and Senate caved in to the President's demands that if the Kyl amendment stayed in then the entire balanced budget amendment would be vetoed and, therefore, caved into his demands that a special limitation be placed on any physician providing this care; namely, that the physician had to get rid of all of his or her Medicare patients for a 2-year period in advance or you couldn't treat the person outside of Medicare. That is what went into effect January 1st. This legislation that I just reported on will remove that 2-year requirement so that the patient has the freedom to go to the doctor of his or her choice. Even though you are over 65 years old, you don't have to be treated under the Medicare system if you do not want to be, and the physician has the right to take care of you without getting rid of his or her other Medicare patients. When did this situation arise? There are a lot of different situations. Take for example the psychiatric patient who doesn't want the records in Medicare to reveal the kind of treatment that patient has been receiving. Under the current administration plan--Medicare or no care--you either do it under Medicare or you don't get the treatment. No doctor can take care of you. Our bill would say no. You can go outside of Medicare and be treated. Again, you have to pay the bill--not the taxpayer. But you can do it. Another case: You are in a small town. There are not that many specialists. You need specialty care. You go to a doctor who says, ``I am not taking any more Medicare patients. The President and the Congress have cut our payments so much that it don't pay me anymore. In fact, I lose money on every one. I will take care of the ones that I have, but I am not going to see any more new Medicare patients.'' This enables the patient to say, ``Fine. Just bill me. I will pay you. We will save Medicare the money.'' And that will be the end of it. Another situation: You want to go to that specialist. Maybe it is a person who is on a university faculty who is not taking Medicare patients, and you want to be treated by that person because it is the one person that can save your life or your spouse's life. You ought to have the right to do that in this country. Under the current law that wouldn't be possible. So our legislation restores the right of senior citizens--and all the rest of us have this right--to go to the doctor of their choice, and if they want to be treated outside of the Medicare system have the right to do that. It does not enable the doctor to charge more money to Medicare. Whatever the doctor charges they have to pay outside of the Medicare Program. So this is not going to be used very often, I suspect. But in those situations where people really want to take advantage of their freedom in contract they ought to have the right to so. Mr. President, in conclusion, this is not something that is just of concern for America's senior citizens, because all of us should be concerned about a fundamental right being taken away from us--the right to provide the health care that we want for ourselves or our families. As the President is talking about making Medicare available to more and more people at younger and younger ages, I would have to ask them: Is it such a good deal to buy into Medicare when the first thing that happens when you do that is you give up a basic right that you have today--that every one of us has today--but doesn't exist for somebody who is 65 years old or older because they are Medicare eligible? It is not a good bargain. So what I am hoping is that the Finance Committee will hold hearings later this month--those hearings have already been set, I understand, by Senator Roth--and that there will be legislation coming to the floor, and our bill coming to the Senate floor very soon thereafter. And sometime in the early spring we can pass on to the President a bill which will restore the right of all seniors in this country to go to the doctor of their choice without being told by Medicare that they can't do that; that, in effect, it is either Medicare or no care. That is un-American. It is wrong. It denies the basic right of all Americans. And we need to ensure that we can correct that problem through the passage of the Medicare Beneficiaries Freedom Contract Act. In closing, if any one of my colleagues who have not done so already would like to sponsor the legislation, please see me because we will be moving forward on this very quickly. Thank you. Mr. GRAMM addressed the Chair.

Mr. KYL

Mr. KYL. Mr. President, at this time I ask unanimous consent that immediately following the vote at 2:15 and confirmation of the two additional nominations, there be a period of morning business with Senators permitted to speak for up to 5 minutes each. I further ask unanimous consent that at 3 o'clock p.m. today Senator Coverdell be recognized as under the previous order for 90 minutes, to be followed by Senator Daschle or his designee for 90 minutes.