Jon Kyl

Mr. KYL

Mr. KYL. Mr. President, the U.S. Congress has begun the debate on legislation that will affect the way millions of Americans get their health insurance. Both the House and the Senate bills are intended to address a serious concern among millions of working Americans who currently have employer provided health insurance: the threat of losing private health insurance when they lose or change jobs or, try to obtain coverage when they have a preexisting medical condition. The Kennedy-Kassebaum bill contains some useful provisions and addresses some important problems in the health insurance market. However, I believe these problems are more effectively addressed in the health insurance reform plan passed on March 27 in the House of Representatives--and reportedly contained in the Finance Committee amendment. I believe the Kennedy-Kassebaum bill could be improved and expanded by incorporating important provisions in the House bill--and in the proposed Finance Committee amendment. These provisions more successfully address the health care problems faced by millions of Americans, such as: The Problem: An ambitious worker who wants to pursue a career opportunity, but can't change jobs because his son has cancer, and wouldn't be covered by a new employer's insurance. The Solution: The House bill guarantees that anyone with employer provided insurance can move to another job with employer provided insurance without losing coverage for a preexisting condition. The Problem: A worker is laid off, and can't get coverage for a preexisting condition in the individual market. The Solution: The House bill includes group-to-individual portability, so that when you leave a job that provided coverage for a chronic condition, you cannot be denied coverage in the individual market. The Problem: An uninsured entrepreneur who can't afford insurance as a self-employed person today. The Solution: The House bill allows the self-employed to deduct 50 percent of their premiums from their taxes. Increasing deductibility makes health insurance more affordable for self-employed individuals. The Finance Committee amendment may increase the deduction to 80 percent. The Problem: An uninsured person, out of work, who can't afford a costly individual policy because it is loaded down with State mandated benefits. The Solution: The House bill includes medical savings accounts, so that an individual can buy a high-deductible policy, with a much lower, more affordable premium. Mr. President, MSA's offer the ultimate in portability and affordability, and I want to further address this critical issue later in my remarks. The Problem: A small business employee, whose employer can't afford to purchase insurance for his five employees, because one of them has a chronic illness. The Solution: The House bill allows small businesses to group together to purchase health insurance. By grouping together, they can share risk and spread administrative costs over a larger group, lowering premiums for everyone. These ERISA regulated arrangements would be exempted from state mandated benefits and pooling prohibitions that can drive up the cost of care. The Problem: The federal tax code often discourages citizens from providing for their own health care needs. The Solution: The House bill provides for tax deductibility for long- term care insurance premiums and expenses and, tax free use of accelerated life-insurance benefits for health expenses. The Problem: Fear of frivolous lawsuits and outrageous recoveries forces many doctors to practice costly ``defensive medicine.'' The Solution: The House bill reforms medical malpractice claims. Patients who are injured as a result of malpractice deserve to be fully compensated. But in today's system, an enormous amount of money that should be dedicated to health care spending goes instead to lawyers--sometimes as much as 40 percent to 50 percent. The Problem: Fraud, waste, abuse and administrative inefficiency cost the health care system billions per year in wasted resources. The Solution: Tougher penalties for waste, fraud, and abuse along with administrative simplification through electronic billing and uniform forms. II. Mr. President, during this debate I plan to support the proposed Finance Committee Amendment. The provisions in this amendment will increase portability, tax equity, and affordability. Mr. President, it is my understanding that the following provisions will be included in the Finance Committee Amendment to the Kennedy- Kassebaum Health Care Reform Act: an increase in the self-employed health care tax deduction to 50 percent or higher; medical savings accounts providing for deposits of $2,000 for individuals and $4,000 for families; deductibility for long-term care premiums and expenses; and, tax-free treatment of accelerated death benefits for the terminally ill. Mr. President, assuming these provisions are included in the committee's amendment, it would not be my intention to offer any amendments; further, I would not object to a unanimous consent (UC) agreement. However, in the event that any of the above provisions are not included in the amendment, I will offer and support amendments to replace these provisions. III. The importance of MSAs. MSAs are one feature of the House bill-- and reportedly the Finance Committee Amendment--that will increase the portability, availability, and affordability of health insurance. MSA are a simple, low cost alternative to traditional health care insurance for the millions of Americans who cannot afford today's health insurance options or, who are not happy with available insurance options. Here is how an MSA can work: The employer purchases a high-deductible health insurance policy and places an amount of money equal to the employees' deductible in a special savings account called a medical savings account. The money in the MSA, tax-free, to cover most medical costs. The individual keeps what is not used after one year, collects interest, and the balance rolls over into the next year, when the employer makes additional contributions to the account. In addition to covering basic medical services, these funds can be used to cover services not covered by health insurance, such as elective surgery and long-term care. Money accumulated in an MSA can only be withdrawn for medical expenses as established by the Internal Revenue Code. For MSAs to receive the same tax treatment as employer- provided health benefits plans, a high-deductible plan would have to be combined with the MSA. A high-deductible plan would have a deductible of at least $1,500 in the case of an individual, and $3,000 for a family. Individuals--including the self-employed--could make tax- deductible contributions: up to $2,000 if single, $4,000 if married. The inside build-up would be tax-free. The amounts could be withdrawn from the MSA tax- and penalty-free if used for medical purposes. Employer contributions to an MSA would not be taxable to the employee on whose behalf the contribution is being made. While Congress has been considering MSAs, many companies have gone ahead on their own and have developed highly successful MSAs or MSA- type programs. A March 1995 study by the Evergreen Freedom Foundation analyzed the experience of 1037 companies nation-wide who had implemented MSAs. For instance, in 1994, the Valley Surgical Group Health Plan of Phoenix implemented an MSA plan for its 14 employees. According to the Evergreen Report, annual employer costs were reduced by $400 per employee in the first year alone. Mr. President, here is why MSAs will work: 1. Parity in tax treatment: MSAs grant high-deductible health plans-- paired with an MSA--comparable tax treatment to that of other forms of employment-based group health plans, and allow people to claim the deduction even if they do not otherwise itemize taxes. 2. Positive incentives: MSAs provide Americans the incentives to purchase health care more carefully by letting them keep what they don't spend. The current unlimited exclusion for employer-based health care encourages unnecessary spending. 3. Major medical protection: MSAs insure that the necessary coverage will be there in the event of an illness or accident. 4. The ultimate in portability: MSAs provide for real portability. Unlike other forms of employer-based health plans, medical savings in the MSA can be taken from job to job. 5. More choices for consumers: The MSAs empower people to make their own health care decisions. Funds in the MSA may be spent, on qualified medical expenses that may not be covered under high-deductible plan (e.g., prescription drugs, durable medical equipment, etc * * *). 6. MSAs Help meet long term care needs: MSAs will help people who want to protect themselves against future long-term care needs. MSA funds can be used to purchase long-term care insurance or services. 7. States are moving toward MSAs: Arizona is one of 15 states that have already passed laws granting favorable tax treatment to MSAs. The failure to establish federal tax rules regarding MSAs will inhibit innovations that many states have decided is good health policy. Mr. President, in spite of the overwhelming evidence that MSAs are a viable health insurance alternative with wide appeal, there are still a few who say MSAs favor only the healthy and wealthy. This is inaccurate. While MSAs will be attractive for the healthy, they will be equally attractive for the sick. The reason: The MSA gives individuals the ultimate freedom to choose their health care providers, thereby allowing individuals to seek out the best health care services that meet their budget. The accusation that MSAs will work only for the wealthy is also inaccurate. According to a 1996 analysis by the Joint Committee on Taxation, middle-income Americans will choose MSAs. According to the Joint Committee, one million Americans are expected to sign up for MSAs. An estimated 650,000 people who earn between $40,000 and $75,000 a year would chose MSAs., 120,000 with incomes between $30,000 and $40,000 would choose MSAs. MSAs could lower overall health care costs. Voluntarily uninsured workers might receive an incentive to obtain health insurance as a result of MSAs. Younger, healthier workers who don't purchase health insurance because they believe they will never get sick, would now have an incentive to be covered against major illnesses as a result of MSAs. This would increase the number of healthy people in the insurance pool and would lower overall health costs. Are supporters of MSAs out of the mainstream? No. As part of the Kennedy/Kassebaum bill, the Labor Committee passed a ``Sense of the Committee'' resolution that said: It is the sense of the Committee that the establishment of medical savings accounts . . . be encouraged as part of any health insurance reform legislation passed by the Senate. Also in the Kennedy/Kassebaum bill, there is a provision that allows Medicare risk HMOs to offer medical savings accounts. The Democratic support MSAs. In 1994, all the Democrats on Ways and Means voted to include MSAs in the Clinton plan. In 1994, Representative Gephardt included them in his Democratic Leadership bill. In 1992, Senator John Breaux introduced a bipartisan MSA bill. Senators Tom Daschle, Sam Nunn, Alan Dickson, Richard Shelby, David Boren co-sponsored the legislation. In 1994, Senator Paul Simon was a cosponsor of MSA legislation. Mr. President, MSAs are one of the keys to portability, affordability, and choice of health insurance for millions of Americans. I believe the Senate must pass MSAs.

Mr. KYL

Mr. KYL. Mr. President, let me begin by applauding the leadership of Senators Simpson and Hatch and the rest of the Judiciary Committee in passing out of the committee this very important immigration bill to stem the tide of illegal immigration in our country, both among those who come here illegally and those who come here legally but who do not leave our country when their visas expire. It has been said before that, according to the INS, these visa overstayers represent about 50 percent of the illegal population. The bill we are debating this week also includes provisions to crack down on criminal aliens and alien smugglers and to ensure that neither illegal nor legal immigrants come to the United States to take jobs from taxpayers or to depend upon our Nation's welfare benefits. There will be an effort on the floor to pass a sense-of-the-Senate resolution declaring that any attempt to reform laws related to legal immigration should be considered separately from illegal immigration reform. I oppose this effort and will speak against it when it is offered. I plan to offer an amendment with Senator Simpson that will provide a temporary 10-percent reduction in overall legal immigration. This is a very modest reduction, but it will at least provide a sharp contrast to the increase in immigration that will result under the bill as it was amended in the committee. It is important to make clear that immigration will not be reduced under the committee bill. Immigration will increase at a slightly lesser rate than under current law, but it will increase. Having said that, Mr. President, I move to the bill we are debating today and one of great importance to the Nation, and specifically to my home State of Arizona. Immigration and Naturalization Service figures show that illegal immigrants are entering Arizona at a faster rate than they are entering any other State. Over the past year, Arizona has surpassed even Texas in illegal immigrant apprehensions. California is the only State with higher apprehension levels, and although apprehensions have decreased somewhat in what had been the hot spot for illegal entry in Nogales, AZ, apprehensions for March 1995 to March 1996 have increased over 300 percent in the Nation's newest hot spot for illegal entry, Douglas, AZ. Mr. President, I was in Douglas, AZ, just about a week ago, in fact, a week ago yesterday, and visited with community leaders and with Immigration and Naturalization Service employees. The situation in Douglas is extraordinary, to say the least, with thousands of illegal entrants into the country every month. As a matter of fact, in the first 2 months of this year already, more people had been apprehended than in all of last year. What has happened is that as the INS has put more agents in Texas and in the San Diego area of California, the illegal immigration naturally shifted to Arizona, first the port of Nogales, where last year that was the hottest spot in Arizona. Now, with more agents having been put in Nogales the people are moving from there, east, to Douglas and crossing the border in that very small community. As a result, it is very, very important that there be additional support provided for the Immigration and Naturalization Service in the Douglas area, including the addition of more agents. I note that at the moment, there are some 60 temporary agents, but under labor union contracts they can only be assigned away from their permanent station for, I think, a period of 30 days. In any event, 60 people translates into 15 people on the ground at any given time. There needs to be an additional allocation of agents to the Douglas area. According to the Immigration and Naturalization Service, illegal immigrants comprise about 10 percent of the work force in Arizona. In addition, according to Governor Fife Symington, Arizona incurs costs of $30 million every year to incarcerate criminal aliens. The State also spends $55 million annually in Arizona taxpayer money to provide free education to persons who are in this country illegally. Clearly, illegal immigration imposes great costs on our citizens. Mr. President, I suggest the absence of a quorum.

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

Mr. KYL. Mr. President, I will continue on with my comments. Arizona is not the only State dramatically affected by illegal immigration. The INS estimates that there are 4 million illegal immigrants in the United States and that this number is growing by 300,000 to 400,000 each year. While the United States has always been, and should continue to be, a land of opportunity for U.S. citizens and for those who come here illegally, we simply cannot afford as a nation to continue to incur the unrestrained costs of illegal immigration--in jobs, in welfare, in education, in health care, in crime on our streets, and on our penal system. To illustrate the effect, consider that over one-quarter of all Federal prisoners are foreign-born, up from 4 percent as recently as 1980. Again, over 25 percent of all Federal prisoners are foreign-born. It was only 4 percent just 15 years ago. As we all know, yesterday was tax day. It is not fair, given our $5 trillion debt and annual $200 million in deficit spending, to ask law- abiding taxpayers to pay for those who choose to violate our laws to come to this country illegally, or even to pay for legal immigrants who, once here, quickly come to depend on our Nation for welfare and other public benefits. S. 1664 will go a long way toward eliminating those incentives. Under the bill, illegal immigrants are banned from almost all public benefits programs outright and legal immigrants will have to work 40 quarters before becoming eligible for most benefits. I was pleased that the committee passed a number of amendments I offered to deal with this general issue: these include requiring the Education Department to report to Congress on the effectiveness of a new system designed to ensure that ineligible aliens do not receive higher education benefits, and requiring the Federal Government to reimburse States for the costs of providing emergency medical services and ambulance services also passed. The latter was offered on behalf of Senator McCain. I also plan to offer an amendment during this debate to ensure that, as the House did, illegal aliens do not receive assisted government housing benefits. So that aliens do not come to this country illegally and take jobs away from law-abiding taxpayers, the bill directs the Attorney General to conduct regional and local pilot employer verification projects to ensure that employees are eligible to work in the United States. Employers are already required to fill out the I-9 form to verify the eligibility of employees. However, the I-9 system is open to fraud and abuse--participants in the new system will be, for the most part, exempt from the I-9 requirement. An improved verification system will protect employers from unintentionally hiring illegal aliens and also protect potential job applicants from discrimination. The bill specifically prohibits the establishment of any national ID card. Employee verification can only be used after an employee is offered a job, and would require a subsequent vote in Congress before a national system could be established. I was pleased that the committee passed my amendments to limit liability and cost to employers who participate in any system. Importantly, this bill will assist our Government in its primary responsibility; protecting U.S. borders and enforcing U.S. laws. After all, we are a nation of laws. We cannot turn a blind eye to those who break our immigration laws. We simply cannot afford to anymore. We must gain greater control over our Nation's borders, prevent illegal entry and smuggling, and detain and swiftly deport criminal aliens. S. 1664 will help achieve these objectives. Increasing the number of Border Patrol agents, and improving technology and equipment at the border has been one of my priorities, so I was particularly pleased that the committee adopted my amendments to train 1,000 new Border Patrol agents through the year 2000 and to require, as recommended by Sandia Labs in 1993, the construction of a triple-tier deterrence fence along the San Diego border; and to increase the number of INS detention spaces to 9,000 by the year 1997. This increase in detention space will raise by 66 percent detention space available to the INS to detain criminal aliens awaiting deportation and other aliens who are at risk of not showing up for deportation or other proceedings. The bill also requires the Attorney General to report to Congress on how many excludable or deportable aliens within the last 3 years have been released onto our Nation's streets because of a lack of detention facilities. In addition, the bill allows the Attorney General to acquire U.S. Government surplus equipment to improve detection, interdiction, and reduction of illegal immigration, including drug trafficking, and allows volunteers to assist in processing at ports of entry and in criminal alien removal. These provisions will go a long way toward effective control and operation of our Nation's borders. In addition to more effectively controlling our border, further modification of our laws is needed to create disincentives for individuals to enter the United States illegally. I plan to offer two additional amendments to deal with this issue. The first would amend section 245(i) of the Immigration and Nationality Act, so that illegal aliens who become eligible for an immigrant visa can no longer attain the visa by paying a fee that lifts the requirement to depart the United States. Section 245(i) encourages people who are awaiting an immigrant visa to jump illegally ahead of others, simply by paying a fee. Senator Hutchison and I also plan to offer an amendment that, with a number of exceptions, would exclude for 10 years those who have entered without inspection from obtaining a visa. S. 1664 also makes clear that you cannot skirt the law by entering the country legally and then overstaying a visa. Another amendment I offered that the subcommittee adopted requires individuals who have overstayed their visas to return home to obtain another visa, period. And, the last successful amendment regarding overstayers, offered by Senator Abraham and cosponsored by me, requires visa overstayers to return home for 3 years before applying for another visa. While this last amendment goes far, I plan to offer an amendment with Senator Hutchison that would, with a number of exceptions, exclude for 10 years those individuals who have overstayed their visas for more than a year. For those individuals who come to this country and commit crimes--and there are 450,000 criminal in jails and at large in this country--there are provisions in the bill to keep them off our streets and deport more quickly. I am pleased that a bill I introduced last year, to encourage the President to renegotiate prison transfer treaties so that aliens convicted of crimes can no longer choose whether or not they serve out their sentences here or in their home country, was added to the bill. Also passed was my amendment to advise the President to renegotiate these treaties so that if a transferred prisoner returns to the United States prior to the completion of a sentence, the U.S. sentence is not discharged. The committee also passed a number of amendments I cosponsored, offered by Senator Abraham, that strengthen the detainment and deportation of criminal aliens in other ways. There are a number of other provisions in this bill that are important, including provisions to streamline the system by which asylum seekers apply to stay in the United States. While refugees are still offered important protections, abuse of the system will be largely curtailed by a new system allowing specially trained asylum officers at ports of entry to determine if refuge seekers have a credible fear of persecution. If they do, then they go through the process of establishing a well-founded fear of persecution in order to stay in the United States. By allowing these especially trained officers to make decisions at ports of entry, it will be more difficult for individuals to simply fill out an asylum application, be released into the streets, and possibly never show up for asylum proceedings. The bill we are debating this week includes provisions that Senator Simpson and his staff have worked hard to develop and protect. Many of them are a response to the Jordan Commission recommendations. It includes bipartisan provisions on which Senators from both sides of the aisle have diligently worked. As we begin to consider this important bill, we have to remember that, unless we protect our borders and insist that our immigration laws are taken seriously, we undermine the law, and that undermines the United States as a land of opportunity for all--both foreign and native born. My grandparents immigrated to the United States from Holland. I think they would be concerned about how our immigration system works today. The American dream must be kept alive for citizens and for those who came here legally. A government not in control of its own borders is not serving the public well. I urge my colleagues to pass a bill that will address these important problems. Again, I very sincerely thank the chairman of the Immigration Subcommittee of the Judiciary Committee for his long years of work in this area and for his willingness to work with everybody on the committee to craft the best bill possible so that he can begin to deal with these serious problems.

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

Mr. KYL

Mr. KYL. I thank the Senator from Georgia. Ideally, Mr. President, the tax limitation amendment would be put into place after comprehensive tax reform is accomplished. This is because tax reform necessarily aims to broaden the tax base, eliminating the maze of deductions and exemptions and credits that make up the Tax Code today, and then apply one low tax rate to whatever amount of income is left. So a two-thirds majority vote requirement would make comprehensive tax reform more difficult. I would note parenthetically that the Tax Reform Act of 1986 would have met the two-thirds test because it passed both the House and the Senate with more than a two-thirds majority. So advocacy of tax reform is not necessarily a reason to oppose the tax limitation amendment at this time. But in any event, it is important that this debate begin now, Mr. President, because of course, constitutional amendments such as this are going to take a long time to get adopted. It probably will not be approved this year in the House or the Senate. It would require a two-thirds vote in both the House and Senate, and then three-fourths of the States to approve it. So the last thing I am worried about is that we will accomplish this constitutional amendment before we accomplish fundamental tax reform. I think we need to begin the debate now on the constitutional amendment, and by the time we get finished with fundamental tax reform, perhaps the constitutional amendment can then be put in place to make it difficult thereafter to change the Tax Code. I think it is also important to make three other quick points. First, the tax limitation amendment cuts no taxes. It only raises the bar on passing future tax increases. Many people, including myself, already believe that taxes are far too high. This amendment in effect says, ``Enough is enough.'' It makes Congress find a way to meet its obligations without taking more from the pockets of the American people. Understand that the average family today pays more in taxes than it does on food, clothing, and shelter combined. I would refer you to the chart, Mr. President, entitled ``Family Budget 1995'' in which you can see the amount spent on savings; recreation; transportation; medical needs; then food, shelter, and clothing; and then, finally, Federal, State, and local taxes. We pay more in Federal, State, and local taxes than we do on food, shelter, and clothing all combined. Clearly, this tax burden on the average family is too high. Let me also note that it has obviously been fairly easy for Congress to raise taxes. Here is the Federal tax burden per capita just in the last 15 years, the years 1980 through 1995. You can see that in 1980 it was about $2,286 per capita. Today it is over $5,000 per capita. Clearly, it is not hard to raise the tax burden on taxpayers. We need to make it harder. If you want to look at the macrochart, the chart that shows the Federal Government revenues from taxes since 1950, look at this chart. It clearly shows that tax increases have skyrocketed. It is not hard to raise taxes. It is too easy to raise taxes. That is why we need a two- thirds supermajority to raise taxes. What the tax limit amendment says is that it ought to be harder to raise taxes, that we are already taking too much from working American families and therefore we ought to take less. I also note that our Constitution already provides several--10 specifically--supermajority requirements. My guess is that that is because the Framers wanted a consensus to be developed to make really important changes. That is why it takes a two-thirds vote to override a President's veto, for example. My guess is the Framers would say today this is out of control. It is important enough that a broader consensus than a mere simple majority should be required in order for us to raise taxes. Mr. President, there is no small irony in the fact that it will take a two-thirds vote for us to cut taxes since the President has vetoed our tax cut proposal and yet the largest tax increase in the history of the country in 1993 was passed not even with a majority, technically, because the Senate vote was tied 50 to 50, and it took the vote of the Vice President to break that tie. It ought to be as hard to raise taxes as it is to cut them. The amendment will make it harder to raise taxes. That is the point. I know that is the objection of the opponents, but that is the whole point here. I think we would all agree that a lower tax rate would be more beneficial, not only for the American family, but for our economy. As a matter of fact, lower tax rates, research shows, results in more taxable income, more taxable transactions, and eventually more tax revenues to the Treasury. So we actually are benefited by reductions in tax rates, not increases in tax rates. The tax cuts of the early 1980's are a case in point. They spawned the longest peacetime economic expansion in our nation's history. Revenues to the Treasury increased as a result--from $599.3 billion in fiscal year 1981 to $990.7 billion in fiscal year 1989, up about 65 percent. High tax rates, on the other hand, discourage work, production, savings, and investment, so there is ultimately less economic activity to tax. That is precisely what Martin Feldstein, the former chairman of the President's Council of Economic Advisers, found when he looked at the effect of President Clinton's 1993 tax increase. He found that taxpayers responded to the sharply higher marginal tax rates imposed by the Clinton tax bill by reducing their taxable incomes by nearly $25 billion. They did that by saving less, investing less, and creating fewer jobs. The economy eventually paid the price in terms of slower growth. So increases in tax rates do not usually translate into more tax revenue. It is interesting to note that revenues as a percentage of gross domestic product [GDP] have actually fluctuated around a relatively narrow band--18 to 20 percent of GDP--for the last 40 years. Revenues amounted to about 19 percent of GDP when the top marginal income tax rate was in the 90 percent range in the 1950's. They amounted to just under 19 percent when the top marginal rate was in the 28 percent range in the 1980's. Why the consistency? Because tax rate changes have a greater effect on how well or how poorly the economy performs than on the amount of revenue that flows to the Treasury relative to GDP. In other words, how Congress taxes is more important than how much it can tax. The key is whether tax policy fosters economic growth and opportunity, measured in terms of GDP, or results in a smaller and weaker economy. Nineteen percent of a larger GDP represents more revenue to the Treasury and is, therefore, preferable to 19 percent of a smaller GDP. Requiring a supermajority vote for tax increases is not a new idea. It is an idea that has already been tested in a dozen States across the country. In 1992, an overwhelming majority of voters in my home State of Arizona--72 percent--approved an amendment to the State's constitution requiring a two-thirds majority vote for tax increases. There is a reason that the idea has been so popular in Arizona and other States. Tax limits work. According to a 1994 study by the Cato Institute, a family of four in States with tax and expenditure limits faced a State tax burden that was $650 lower, on average, 5 years after implementation than it would have been if State tax growth had not been slowed. The tax limitation amendment will force Congress to be smarter about how it raises revenue. It will force Congress to look to economic growth to raise revenue, instead of simply increasing tax rates. It will protect taxpayers from additional tax increases. We are going to have to confront this issue of raising taxes sooner or later because the burden on the American family is simply too high. It seems to me this is a good time to do it. Starting this debate on tax day, April 15, is a propitious time when people's attentions are focused on the issue. I hope that the House of Representatives later today approves the tax limitation amendment pending there. I hope that Leader Dole will be able to schedule this amendment sometime soon on the Senate floor for a vote here. I appreciate the chairman of the Judiciary Committee making time available for our hearing this morning. It was an informative hearing which certainly sustained the case that the time for a tax limitation amendment is upon us and an amendment that would make it hard to raise taxes by requiring a two-thirds vote in both the House and the Senate. Mr. President, again, I commend the Senator from Georgia for making this time available. I hope that we can get on with this prospect of making Americans' lives a little bit easier by taking less of their hard-earned income.

Mr. KYL. Mr. President, I begin by thanking the Senator from Georgia for conducting this particular discussion on tax policy on this day, a day which we might paraphrase will live in infamy at least in the lives of many Americans. By midnight tonight, millions of Americans will have completed their tax returns and may agree with T.S. Eliot who characterized April as the cruelest month of all. I am not sure this is what he had in mind, but perhaps it applies. According to estimates by the Internal Revenue Service, individuals will have spent about 1.7 billion hours on tax-related paperwork. Businesses will have spent another 3.4 billion hours to comply with their Tax Code preparations this year. The Tax Foundation estimates that the cost of compliance will approach $200 billion. If that is not evidence that our Tax Code is one of the most inefficient and wasteful ever created, I do not know what is. Money and effort that could have been put to productive use solving problems in our communities, putting Americans to work, putting food on the table, or investing in the Nation's future are instead devoted to wasteful paperwork. It is no wonder that the American people are frustrated and angry, as I found in the townhall meetings and other visits with constituents in the last 2 weeks in Arizona. They are demanding real change in the way their Government taxes and spends. There are, of course, a number of proposals that have been generated for comprehensive tax reform. Senator Richard Shelby and House Majority Leader Dick Armey have proposed a flat tax. Versions of the flat tax have also been suggested by Steve Forbes and Senator Phil Gramm. Former HUD Secretary Jack Kemp has issued a report at the request of Speaker Gingrich and Majority Leader Dole which recommends a single rate simpler tax system. The chairman of the House Ways and Means Committee has recommended that the income tax be pulled out by its roots and replaced with a national sales tax. Senator Lugar has proposed a sales tax as well. The Senate Judiciary Committee just concluded a hearing on a proposal to change whether we move to some version of a flat tax or sales tax or some other alternative. Indeed, it is a change that should be made whether comprehensive tax reform occurs or not. I am talking about a change that requires a two-thirds vote in both the House and Senate in order to approve tax increases. The House of Representatives is scheduled to vote on its proposal later on this evening. The tax limitation amendment it is called. The tax limitation amendment, which I proposed in the U.S. Senate, with the support of 20 other Senators, would require a two-thirds vote of approval in both the House and the Senate in order to increase the tax base or to increase any tax rate. The two-thirds supermajority that many of us believe should be added to the U.S. Constitution was recommended by the National Commission on Economic Growth and Tax Reform, as I said, appointed by Senate Majority Leader Dole and Speaker Gingrich and chaired by former HUD Secretary Jack Kemp who testified at this Judiciary Committee hearing this morning, along with former Governor of Delaware Pete du Pont and a host of other experts on tax policy. This Commission that Secretary Kemp chaired advocated the supermajority requirement in its report on how to achieve a simpler single tax rate to replace the existing maze of tax rates, deductions, exemptions, and credits that make up the Tax Code as we know it today. In fact, in the words of the Commission, and I am quoting: The roller-coaster ride of tax policy in the past two decades has fed citizens' cynicism about the possibility of real, long-term reform, while fueling frustration with Washington. The initial optimism inspired by the low tax rates of the 1986 Tax Reform Act soured into disillusionment and anger when taxes subsequently were hiked two times in less than 7 years. The commission believes that a two-thirds super-majority vote of Congress will earn Americans' confidence in the longevity, predictability, and stability of any new tax system. That is the end of the quotation from the Kemp Commission report. In the 10 years since the last attempted comprehensive tax reform, the Congress and the President have made some 4,000 amendments to the Tax Code--4,000 amendments. In the future, without the protection of the tax limitation amendment, taxpayers will be particularly vulnerable to tax rate increases, particularly if the tax reform eliminates many of the deductions and exemptions and credits in which they sometimes find refuge today. In short, Mr. President, the tax limitation amendment will make it more difficult for Congress to raise taxes, and it will also help restore confidence, stability, and predictability to the Tax Code. Mr. President, I have more of the statement which I would like to present. I wonder if, in view of the hour, it would be appropriate for the Senator from Georgia to ask for an extension of time. Mr. COVERDELL addressed the Chair.

Mr. KYL

Mr. KYL. Mr. President, I rise in opposition to this bill to increase the public debt limit. Twice last year, Congress passed legislation that properly coupled a debt limit increase with the steps necessary to balance the budget and thus preclude the need for additional debt limit increases in the future. Twice, the President vetoed the bills. Let us be clear. If there is any possibility that the Federal Government will default on its obligations, it is a result of the President's insatiable appetite to spend the taxpayers' money. President Clinton opposed the Balanced Budget Amendment last year. He vetoed the Balanced Budget Act--the first balanced budget to have passed the Congress in 26 years. He vetoed appropriations bills that comply with the strict budget limits for the current fiscal year. It is the President's spending plan that, more than anything else, threatens to bankrupt the Nation and condemn future generations to a forever declining standard of living. Mr. President, there is nothing in this bill that will ensure progress toward a balanced budget. The only reason the debt limit increase is going to pass is that it has been coupled with an increase in the Social Security earnings limitation and regulatory reform for small businesses. Senior citizens and small businesses should not be held hostage to a debt limit increase. We should not have to vote to lead the Nation down the road to bankruptcy in order to ensure that seniors can keep more of their hard-earned income or to relieve small businesses of the regulatory burden that is hindering them. My constituents know where I stand on the earnings limitation. I have cosponsored legislation in the past to repeal it. I voted four times last year on proposals relating to the repeal or raising of the earnings test, most recently on November 2, 1995. No American should be discouraged from working, yet that is what the earnings limitation is specifically designed to do. The policy violates the very principles of self-reliance and personal responsibility on which America was founded. It is wrong. Not only does the earnings limit deny seniors the opportunity to work and supplement their retirement incomes, it denies American businesses a lifetime of expertise that many seniors bring to their work. The earnings limitation ought to be repealed. The regulatory relief provisions of this bill passed the Senate just last week by a vote of 100 to 0. The vote was unanimous. It was unanimous for a reason: small businesses are being overwhelmed by federal rules and regulations. Obviously, the regulatory relief measure could stand on its own merit. The only reason to include it here is that it will help win votes for the passage of the debt limit increase. Mr. President, senior citizens, and small businessmen and women deserve better than to be made scapegoats for another debt limit increase. The earnings limit and regulatory reform provisions should be stripped from this bill and passed on their own merit. We should not, however, agree to any further increase in the debt limit until we first put the budget on a path to balance, and obviate the need for future debt limit increases.

Mr. KYL

Mr. KYL. Mr. President, I commend the chairman of the Senate Energy and Natural Resources Committee for the statement he just made and for the effort he has brought to the Senate floor to get this important legislation through. I join him in regretting it has not been possible. I, too, hope in the future it will be possible. the walnut canyon national monument boundary modification Mr. President, I rise today to speak in favor of the omnibus lands bill, an amendment in the nature of a substitute to H.R. 1296. This bipartisan legislative package includes the Presidio bill and more than 50 other park and public lands bills, most of which have already been reported by the Energy and Natural Resources Committee. The vast majority of these bills are not controversial and deserve to be passed as part of this package. I realize a few of the provisions in this legislation are controversial. Most notable is the title addressing Utah wilderness. The groups involved have worked for many years to strike a compromise. I support the Utah delegation in its effort to bring some finality to this situation. I believe Senators Hatch and Bennett have made significant concessions, particularly in increasing acreage, and modifying the controversial hard release language. The people of Utah have wrestled with wilderness for over 20 years at a cost of $10 million. This issue needs to come to closure. I also want to speak about an issue closer to home: Walnut Canyon. On November 9, 1995, the Energy and Natural Resources Committee held a hearing on this legislation and on December 6, the committee voted unanimously in favor of reporting the legislation to the full Senate. Throughout the legislative process, this issue has had the full support of the House, the Senate, and the affected communities in Arizona. This legislation, introduced by Senator McCain and me, is based on a consensus reached last year among interested parties, including the city of Flagstaff, the Coconino County Board of Supervisors, the Grand Canyon Trust, the National Parks and Conservation Association, the Hopi Tribe, the Navajo Nation, the National Park Service, the Forest Service, and numerous private individuals. I read this list only because I am proud that such diverse parties in Arizona could come together to support this important endeavor. S. 231 is similar to the original legislation drafted last session by Representatives Karan English and Bob Stump, who deserve a great deal of the credit for bringing the parties together. This session, Representative J.D. Hayworth introduced a House companion bill, H.R. 562, which was approved by the House by an overwhelming vote of 371 to 49. I hope that we are able to match that here in the Senate. Walnut Canyon National Monument is an Arizona treasure that we must protect. This legislation will expand the boundaries by exchanging Park Service land for Forest Service land, adding approximately 1,200 acres to the monument. Currently, the monument encompasses numerous Sinaguan cliff dwellings and associated sites. Walnut Canyon includes five areas where archaeological sites are concentrated around natural promontories extending into the canyon, areas that early archaeologists referred to as forts. Three of the five forts are within the current boundaries of the monument, but the two others are located on adjacent lands administered by the Forest Service. By exchanging Park Service land for this Forest Service land, the two outside forts will be within the monument and receive the protection that those resources need and deserve. It is a simple and commonsense way to make the monument whole. Mr. President, again, I urge my colleagues to put partisan differences aside and pass the omnibus parks bill.

Mr. KYL

Mr. KYL. Finally, Mr. President, on behalf of the leader, to simply announce that Senators should be alert that the cloture vote will be at approximately 10:30 this morning. Mr. COVERDELL addressed the Chair.

Mr. KYL. Mr. President, on behalf of the leader, I ask unanimous consent that the quorum be waived with respect to the cloture vote this morning on the Murkowski substitute amendment; and further, that Senators have until 10:30 this morning in order to file second-degree amendments to the substitute in accordance with rule XXII.

Mr. KYL

Mr. KYL. Mr. President, I want to comment briefly this morning on welfare and Medicaid, because the majority leader has indicated that these are going to be two of his priorities after the recess. We are going to bring these bills to the floor in an effort to get them passed yet again and to get them signed by the President. It seems we are in a campaign mode now. Everyone is focused on the Presidential election. It does not seem like it was just 4 years ago that President--candidate then--Bill Clinton was going around the country saying we need to end welfare as we know it. People might ask what has happened in the last 4 years? The President seemed to be committing himself to ending welfare as we know it. Yet, during the first 2 years of his administration, when the Democrat Party controlled the House and Senate, nothing was done. When Republicans finally came in and it was part of the Contract With America, however, something did get done. We passed bills for welfare reform, and they not only reformed the essence of the welfare program to put more focus on people working, on providing incentives to families, and to reducing the costs of welfare, but also returned much of the decisionmaking to the States under the theory that the States and local governments would have more connection with the specific people on welfare and would know better how to run the programs for the benefit of the people in their individual States. We, therefore, passed a Balanced Budget Act that included significant welfare reform and sent that bill to the President on November 17. He vetoed the bill on December 6 and said that he wanted a different welfare bill. So we sent him another welfare bill. This time the Senate voted on a separate welfare bill, and the vote was 87 to 12. That is about as bipartisan as you can ever get in the U.S. Senate. Yet the President rejected that as well. In fact, in his State of the Union speech he said, ``I will sign a bipartisan welfare bill if you will send it to me.'' We have already done that by a vote of 87 to 12. Democrats and Republicans alike understood the need for real welfare reform, and we sent that to him. But it still was not good enough. So, the Nation's Governors got together, Democrats and Republicans, and unanimously agreed on welfare reform and on Medicaid reform, which I will speak to in just a moment. Initially, it seemed like we had an opportunity, not only to get the legislation passed through the House and Senate--that would be fairly easy--but to get the President to sign it, which is required in order for it to become law. But now, once again, it appears the President will not take yes for an answer, or he got cold feet or something, because now Secretary Shalala, for example, is saying she does not really like the idea of a block grant. As everybody knows, the block grant is fundamental, it is essential, it is the central point here of our Medicaid and welfare reform. In other words, instead of having Washington decide what to do, we send the money directly back to the States for them to make the decision how best to operate the program in their State with a few general national guidelines, the rest of the decisions being made at the State level. So, once again, we proposed a specific idea, this time with all of the Nation's Governors in support. The administration is still saying no. It makes you wonder whether this President is really committed to welfare and Medicaid reform. Will we, in this Presidential campaign, once again be debating an issue that was debated 4 years ago, about which we all thought we were in agreement? Let me quickly turn to Medicaid because the majority leader also indicated that he thinks, and I agree, that we need to have these two issues both sent to the President for reform because they both involve the same general element of return of control to the State. Medicaid is growing at roughly 10 percent annually. This is the program of health care for our indigent citizens. Obviously, without reform, that program is going to be in trouble. As a matter of fact, the Federal Government will spend over $1 trillion between 1995 and the year 2002 on Medicaid. Without reform, the States will spend $688 billion of their own money on Medicaid between 1996 and the year 2002. This represents 8 percent of the States' non-Federal revenue and an increase of 225 percent between 1990 and the year 2002. Obviously, this system must be reformed. The legislation that we put together recognizes that there is a need for Federal support, there is a need for Federal standards, but the States can run these programs. My own State of Arizona was the first to get a waiver and, from the very beginning, it ran a program it calls ACCESS, which provides medical services to the poor and has done so at a cost that the State of Arizona could afford. The bottom line of the reform that we have put together on Medicaid-- and here, again, the Governors have been in agreement on this--is that the program will continue to grow, but just not as fast as it has in the past, because the States would be given more latitude to run the programs on their own. Total Federal and State spending of Medicaid under these programs we have designed would, over the next 7 years, be at least $1.36 trillion. The Federal portion of this amount would exceed $780 billion. Federal spending for Medicaid would increase at an average annual rate of 5 percent, between 1996 and the year 2002. It would grow from just over $157 billion in 1995 to at least $220 billion in the year 2002, which represents an increase in spending of more than 40 percent, Mr. President. That is not a cut, lest anybody suggest that it is. The key, as I said, is to allow the States greater flexibility to restructure the benefits of Medicaid to suit their own State's beneficiaries. Again, the National Governors Association has reached an agreement on Medicaid as well as on welfare. The point of our comments this morning is to try to stress the fact that the Congress has been willing, the Nation's Governors and legislatures have been willing, but there is only one person who stands in the way of Medicaid and welfare reform. His name is Bill Clinton. He is the President of the United States. He said he was for reforming these two programs when he ran for President 4 years ago. But it has been 4 years and nothing has happened and nothing did happen until Republicans gained control of the House and Senate. It should be very clear to our colleagues and the American people, this Republican Senate and the Republican House, the Nation's Governors, and many of our Democratic friends in the House and Senate are in agreement on what needs to be done. Will the President of the United States get that message before this next Presidential campaign? If he does not, my suggestion is that the American people will send that message loud and clear, because we should not have to wait until 1997 to reform welfare and Medicaid.

Mr. KYL

Mr. KYL. Mr. President, the Line-Item Veto Act is a good bill, but one that should not be necessary. Congress should always have the good sense to spend taxpayers' hard-earned money wisely, for the benefit of all citizens. Mr. President, British historian Alexander Tytler once said: A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilization has been 200 years. Alexander Tytler makes an excellent point, but perhaps the American people have wisdom and foresight that he could not understand. The American people recognize the burden that a spendthrift government can impose on them, their children, and their grandchildren. And that is why they have been so adamant about demanding change. Demanding less Government spending, lower taxes, and a leaner Government--before Tytler's prophecy comes to pass. The American people began to change the face of Congress in the last election. And of course, electing fiscally responsible individuals to the Congress is probably the most powerful and effective weapon that the American people can wield in the fight against pork-barrel spending. It is more effective than a line-item veto can ever be. The line-item veto itself is not a cure-all. It will not result in a balanced budget. There is not enough pork that can be deleted from the budget to accomplish that. But, if properly exercised by the President, it can make it easier to get to balance. Make no mistake about it, this bill will shift a great deal of new power to the President. I do not relish that prospect because the potential for abuse by the President is great. He can use the veto power to reward or punish Members of Congress, depending upon whether they support or oppose other policies of his administration. Most Presidents, however, will be responsible about how they use this awesome new power. That is because all eyes of the American people will be on the President if he abuses it, or if he fails to properly delete wasteful spending from appropriations bills. By signing this bill into law, President Clinton will be accepting significant new responsibilities from the American people to safeguard their hard- earned tax dollars. I have no doubt that they will hold him accountable if he fails to use the new power wisely. Mr. President, just a few weeks ago, the nonpartisan taxpayers' organization, Citizens Against Government Waste, released the 1996 Congressional Pig Book Summary. The good news is that the organization certified that, in 1995, Congress produced the first pork-free appropriation bill ever--the legislative branch appropriations bill. Unfortunately, however, not all of the news was good, and that is one reason why the line-item veto is still necessary. Citizens Against Government Waste found a total of $12.5 billion in pork-barrel spending in eight other fiscal year 1996 appropriations bills that have been signed into law. Among the projects that the group identified were rice modeling at the Universities of Arkansas and Missouri; shrimp aquaculture; brown tree snake research; the International Fund for Ireland; and the Iowa communications network, to name a few. These are the kinds of projects that are likely to be the target of a line-item veto, projects that are typically hidden away in annual spending bills. They're enough to demonstrate the ability of certain legislators to ``bring home the bacon'' and curry favor with special interest groups back home. But, they don't amount to enough to cause Congress to reject an entire bill or prompt the President to veto a bill and bring large parts of the Government to a standstill. The line-item veto is designed to bring accountability to the budget process. Instead of forcing the President to accept wasteful and unnecessary spending in order to protect important programs, it puts the onus on special interests and their congressional patrons to prove their case in the public arena. It subjects projects with narrow special interests to a more stringent standard than programs of national interest. The special interests would have to win a two-thirds majority in each House. Programs of national interest would merely require a simple majority. That is the shift in the balance of power which the line-item veto represents. It is a shift in favor of the taxpayers, and that is why I intend to support it. If the Government were running a surplus, the taxpayers might be willing to tolerate some extra projects. But the Government is running annual deficits that are far too high, and there is no extra money to go around. There is not even enough to fund more basic needs. Mr. President, when you find yourself in a hole, the first rule of thumb is to stop digging. Let us begin climbing out of the hole we have dug for ourselves and future generations. Let us pass the line-item veto. emergency spending provisions

Mr. KYL

Mr. KYL. Mr. President, I support the conference report of the Product Liability Fairness Act. This is a historic day in the effort to enact meaningful civil justice reform. For the first time in more than two decades, the Senate and the House of Representatives have debated and passed product liability reform. Product liability reform was part of the Contract With America. According to the Luntz Research Co. survey released in March 1995, ``83 percent of Americans believe that our liability lawsuit system has major problems and needs serious improvements.'' Now, all that remains is for the President to do his part to make product liability reform a reality. I commend the efforts of my colleagues from Washington and West Virginia, Senators Gorton and Rockefeller, for their 15-year effort to bring needed reform to the Nation's product liability laws. Historically, America's economic strength has been in manufacturing, where much of our wealth has been created. It is essential that the Congress move to protect our Nation's manufacturing base from unreasonable litigation. Although product liability law is a small area of tort law, it is also a critical area in which America is losing its competitive edge. Mr. President, the conference report contains many important provisions which were contained in the original Gorton-Rockefeller bill. The alcohol and drug defense would create a complete defense created if the claimant was more than 50-percent responsible for his or her injury. The bill also provides for a reduction in damages by the percentage of the harm resulting from claimant's misuse or alteration of a product. The bill provides for a punitive damages cap that limits recovery to $250,000 or 2 times compensatory damages, whichever is greater. Exceptions are established for small business--under 25 employees--and individuals with a net worth of less than $500,000. With these two exceptions, the limit is $250,000 or 2 times compensatory, which ever is lesser. The bill's statute of limitations requires that suits be filed within 2 years after the harm and the cause of the harm was discovered, or should have been discovered. The bill provides for joint and several liability for all economic damages, but several liability only for noneconomic damages. The bill provides that biomaterial suppliers who furnish raw materials, but are not manufacturers or sellers, are protected from liability when the supplier is not negligent. Further, a product seller can be held strictly liable as a manufacturer only in two circumstances: where the claimant can't get service of process on the manufacturer, or where the judgment is unenforceable against the manufacturer, as is the case when the manufacturer is judgment-proof. During the product liability floor debate, I offered three amendments. Amendment 1, which passed by a vote of 60 to 39, struck out provisions in the original Senate bill that penalized, with attorney fees and court costs, only defendants, but not plaintiffs who refused to enter into ADR. Under State law, ADR provisions are equally applicable to plaintiffs and defendants, and we should keep it that way. Amendment 2, which was tabled by a vote of 56 to 44, would have limited non-economic damages to $500,000 in medical malpractice cases. Amendment 3--which was tabled by a vote of 65 to 35--would have limited attorneys' contingency fees to 25 percent of the first $250,000. The amendment also provided that 25 percent of a punitive damage award is rebuttably presumed to be ethical and reasonable. Although the House bill had both a non-economic damages cap of $250,000 in medical malpractice cases and an attorney-fees limitation provision, neither of these two provisions were included in the conference report. I will continue to work to see that these provisions are enacted into law. However, one important provision from the House version that was included by the conferees shortens the statute of repose from 20 to 15 years, thus reducing the time period during which a claimant may bring a product-liability action after taking delivery of a durable good. The conferees also limited the ``additur'' provision contained in the original Senate bill. Thus, in a case of egregious conduct, a judge may raise the claimant's punitive damage recovery no higher than the amount proposed by the jury, unless State law provides otherwise. I want to note some other important provisions contained in the House bill that unfortunately were dropped by the Senate-House conferees. The ``loser pays'' provision, which would discourage frivolous lawsuits, was dropped. The ``FDA defense,'' which would prohibit the imposition of punitive damages upon a manufacturer of a product that has received FDA approval, was also eliminated. And, as I mentioned earlier, the conferees also dropped the $250,000 cap on non-economic damages in medical malpractice actions. Moreover, the conferees dropped provisions that would have extended the punitive damage cap and joint and several liability reform to all civil cases. I regret that these provisions are not in our bill. In spite of the narrow scope of the conference report, President Clinton has indicated that he will veto this bill. And this is despite the fact that back in August 1991, Governor Clinton was leader of the National Governor's Association when it approved--unanimously--Federal product-liability reform. Also as Governor, Mr. Clinton twice supported NGA resolutions calling for product-liability reform. The President's track record on this issue caused the Washington Post, in a March 14 editorial, to predict that the bill should be ``accepted by both houses and signed by the President.'' The veto decision prompted another Post editorial 5 days later, this one entitled, ``Trial Lawyers Triumph.'' Mr. President, I could not agree more, and it is a real shame. The limited reform in this bill will be an important first step, but only a first step. Ultimately, the Congress and a more responsive President must go beyond product-liability reform and must comprehensively overhaul the entire civil justice system. We must repeal the regressive ``tort tax'' that depletes our economy, raises prices, destroys jobs, stifles innovation, and reduces exports. The ``tort tax'' created a capricious legal lottery that divides neighbor from neighbor, and causes doctors to add billions to our national health-care costs each year by practicing defensive medicine. In Arizona, for instance, medical malpractice premiums have increased by nearly 200 percent since 1982. Attorneys' fees and transaction costs are an increasingly large part of this increase in litigation expenses. The U.S. Department of Commerce has estimated that only 40 cents of each dollar expended in product-liability suits ultimately reaches the victims. A Rand Corp. study showed that 50 cents of each liability dollar does not go to victims, but to attorneys fees and other transaction costs. It is clear that the Product Liability Fairness Act is a small but critical step toward the goal of national legal reform. It is my understanding that this body will consider more comprehensive legal reform legislation later this year, including Senator Hatch's Civil Justice Reform Act of 1995, and Senator McConnell's, Lawsuit Reform Act of 1995. I am also hopeful that the Senate Judiciary Committee will hold hearings on S. 11, the Medical Care Injury Compensation Act of 1995, a bill I introduced on the first day of the 104th Congress. This legislation caps non-economic damages such as pain and suffering at $250,000; imposes a limit on attorneys' fees of 25 percent of the first $150,000 recovered and 15 percent of any amount in excess of $150,000; provides for periodic payments where damages for future economic loss exceed $100,000; provides for mandatory offsets for damages paid by a ``collateral source''; and reforms ``joint and several'' liability. Mr. President, I would like to close by addressing one of the arguments used by the President in his veto message. this argument asserts the unconsitutionality of the preemption of State liability laws under the commerce clause of the U.S. Constitution. It is clear that no individual State can solve the problems created by abusive litigation. This is particularly true in the case of product-liability litigation: a product is frequently manufactured in one State, sold in a different State, and causes injury in a third State. In fact, Government figures establish that, on average, over 70 percent of the goods manufactured in one State are shipped out of State for sale and use. It is clearer that a national solution is justified by the fundamentally interstate character of product commerce. The threat of disproportionate, unpredictable, punitive damage awards exerts an economic impact far beyond the borders of any individual State. This threat reduces investments, dampens job creation, and prevents new products from reaching the marketplace. In an increasingly integrated national and international economy, the confusing, inconsistent patchwork of State liability awards has cut deeply into America's economic strength. Unfortunately, since the signing of the Constitution, the commerce clause has been stretched and contorted to authorize virtually every activity Congress chooses to regulate--except interstate commerce. Opponents of legal reform profess concern about the preemption of State law and interference with States' rights. And yet it was many of the same interests that favored intrusive Federal regulations imposed on the States by OSHA, FDA, EPA, and other Federal regulators. In truth, States' rights is not what is being defended here, but rather, the status quo. Otherwise, why is the litigation industry the only segment of the economy that opponents of legal reform believe should remain beyond the reach of Federal law? Mr. President, legal reform will not cause the creation of a single new Federal program or the expenditure of a single new appropriation; Legal reform will not impose new taxes or regulations on our citizens. Legal reform will simply create clear, consistent legal standards covering civil actions brought in State and Federal courts. Mr. President, legal reform will enhance the essential principle of due process. As the U.S. Supreme Court has said many times, due process, criminal and civil, is fundamental to our concept or ordered liberty.

Mr. KYL

Mr. KYL. Mr. President, I rise today in support of S. 1459, the Public Rangelands Management Act of 1995. Rangeland reform is important both for the health of our public lands and the ranching industry in the Western States. I commend my colleague from New Mexico, Senator Domenici, for his work in bringing this bill to the Senate floor. Let me make clear up front, S. 1459 is not an attempt to weaken existing environmental laws applicable to grazing. All major environmental laws continue to apply as written. This bill provides for better rangeland management by establishing standards and guidelines at the State or regional level, so that rangeland policy can take regional differences into account. Nothing is more important to me than the preservation of these multiple-use lands for present and future generations. I would not, and could not support anything to the contrary. There continues to be debate about what is an appropriate fee for grazing on public land. It is important that the Government realize a fair return for the use of Federal lands. This legislation prescribes a new formula for calculating grazing fees. Under this formula, fees would rise approximately 30 percent over the present level. For those who make their living from the land, and who put food on the table for all of us, we want to offer some certainty for the future. We must protect rancher's private property rights, provide stability on grazing allotments, and offer sufficient incentives for sound long-term resource management practices. Critics have suggested that S. 1459 provides for grazing and livestock activities as the dominant use on the allotments. That is simply not true. The bill explicitly provides that the public lands will continue to be accessible to all multiple-use activities. It has also been suggested that this legislation will curtail public participation in the decisionmaking process. The public's opportunity to participate in the NEPA and FLPMA processes is not affected by this legislation. It does, however, address the problem of who can appeal allotment management decisions by limiting appeals to persons who have affected interests. This will enable Federal land managers to review appeals more expeditiously and will shorten the delays in achieving a final implementation plan. This process will allow permittees and lessees to carry out their business without the heavy financial losses usually associated with lengthy delays. Most importantly, this legislation provides for periodic monitoring of rangeland resource conditions. The Secretaries of Agriculture and the Interior have the ability to amend allotment plans where resource conditions dictate. I believe that the bill therefore reflects a wide variety of environmental and user concerns; and I urge its favorable consideration. Mr. CAMPBELL addressed the Chair.

Mr. KYL

Mr. KYL. That was the original bill as introduced that they were writing about, not the amendment of the Senator from Montana.

Mr. KYL. Mr. President, I would like to comment on some of the things that have been said so far. I say to the Senator from California, Senator Feinstein, and the Senator from Nevada, who has just been speaking about their presentation, this is a rather complex issue. I certainly would begin by noting this is a matter on which reasonable people can differ. In this case I do differ, but certainly the arguments they have made are legitimate points to debate. I would like to get on with that prospect right now. The Senator from Montana has revised the original version of the bill as introduced, as I just pointed out to the Senator from Nevada, and has presented what I think now represents a division of the ninth circuit of appeals that would make a lot more sense than proposals that had earlier been made. As the Senator from Montana knows, there have been numerous hearings and numerous substitutions as to how to divide the circuit, hearings being conducted almost every 5 years, 1984, 1990, 1995, not to mention the hearing of the Hruska Commission back in 1993. I am sure the Senator from California winced a little bit when the Senator from Nevada said that Hruska recommended dividing the State of California into two parts. In any event, to the first point. The Senator from Nevada said that this would be a rather odd looking circuit, stretching from the tip of Alaska to the southern boundary of Arizona. I would note that that is exactly what the north and south boundaries of the ninth circuit today are. It stretches from the northern tip of Alaska to the southern boundary of Arizona. This new circuit would be precisely the same. What it would not have is the extreme western part of the trust territories, the States of California and Hawaii. The States of Arizona and Alaska, those would be made part of the new twelfth circuit. The remainder of the ninth would remain the same, but be part of the new twelfth circuit. So it does not seem to me that represents some strange division, but rather a commonsense way of dividing the circuit in order to operate more efficiently. What we are talking about is a caseload which would be split roughly 60 to 40, with the States of California, Hawaii, and the Trust Territories. Mr. President, to show you how much the State of California dominates the ninth circuit today, it dominates it by virtue of the fact that it has by far and away the largest amount of the caseload and the largest population. The ninth circuit itself represents by far and away the largest circuit in the country. It spans nine States and two territories, covering 1.4 million square miles, serving the population of 45 million people. The next circuit in size by way of illustration is the sixth circuit, serving fewer than 29 million people. Every other circuit serves fewer than 24 million. Mr. President, the Census Bureau estimates by the year 2010 the population of the ninth circuit will be more than 63 million, a 40- percent increase. That is in just 15 years. Everyone who studies the issue understands that sooner or later that the size of the ninth circuit will have to be dealt with. As long ago as 1993 the Hruska Commission was suggesting a division of the circuit. In the ninth circuit there are 28 judgeships there today, and 13 active senior judges. The court has asked for 10 additional judgeships, which would make 38 --excuse me--I think there are about 10 senior circuit judges right now. So in addition to the 28 existing, and 13 senior judges, the court has asked for an additional 10, which would put it close to the 50 mark in terms of the number of judges that would be deciding cases when those additional 10 are granted. As a result of the large number of judges in the circuit, there are divisions within the circuit unlike other circuits. It is impossible for all of the judges to know what each of the judges is deciding. It is also impossible for the court to sit en banc, as the Senator from Nevada noted. I will state from the beginning, that I think that the ninth circuit has done a good job and the presiding judges of the ninth circuit have done a good job under very difficult circumstances in managing the caseload of the circuit. They have tried to institute efficiencies which have enabled it to do its job notwithstanding the huge amount of area and population under its jurisdiction and the large number of cases coming to it as a result. So my discussion of the court's handling of its caseload is in no way meant to be a criticism, Mr. President. If anything I would take my hat off to the presiding judges, who have done a good job under the circumstances. But facts are facts. This is a circuit that has never been able to have an en banc hearing because the number of judges are simply too great. You do not have all 26 judges or 28 judges sitting down at the same time to hear a decision or an argument based on a decision of the 3-judge panel, which is what the courts ordinarily sit on. As a result of the ninth circuit, you end up with 11-judge en banc hearings, unique among all of the other circuits. What that means is essentially by a luck of the draw, your decision is reviewed not by the entire circuit but by 11 judges in the circuit. I will come back to that point in just a moment. One of the questions about the splitting of the circuit is whether it would make much of a difference. I think that depends on what you define the problem as. A part of the problem is the large caseload. The Senator from Nevada makes the point that until we add more judges, we will not know whether that problem has been resolved. But that is not the only problem, Mr. President. As a matter of fact, size itself is just part of the problem. As I noted, adding more judges might help to resolve more cases, but it does not do anything about the problems that are cropping up in this large circuit as a result of judges not being able to keep track of what each other are doing and what the various 3-judge panels are doing. This has created opportunities for intracircuit conflicts. It has also meant there are more per curiam decisions. Judges usually write opinions. And an average is more than a fourth of the cases result in opinions being written. In the ninth circuit, it is down to about 19 percent of the cases that actually have opinions written. So with that low number of cases in which opinions are written, it is difficult for the judges to keep up with the decisions that have been made by the other three-judge panels, and it is not always the case they can clearly follow or clearly determine the circuit's precedent has been followed when cases are simply decided without the benefit of an opinion. This is also rather maddening for the litigants and for the lawyers. It is, I am sure, understandable that if litigants spend thousands of dollars to take a case to the circuit and say, ``You win in the lower court and take it on appeal to the ninth circuit,'' and they reverse without opinion--all they say is, ``The case is reversed.'' You do not know why they reversed the case. It is more than maddening because you ordinarily have to make decisions based on what the law is. If the court has not told you why it reversed, then you are not going to know what you have to do in the conduct of your business or other affairs to comport with what the law theoretically is. It is difficult when you do not have an opinion telling you what you should be doing. That is one of the problems that lawyers have told me has caused them to be unclear about advice that they give their clients with respect to the question of whether or not to appeal in a case. This is very difficult for clients because you may lose a case at the lower level and wonder whether you should expend the time, energy and money to take the case to the circuit court. If it is unclear what the law is going to be, it is kind of a crap shoot, to use the phrase that a lawyer in Arizona used with me. He said, ``With so many judges, it is a crap shoot as to what kind of a panel you get.'' In a circuit that has six judges, as mentioned earlier, you have a pretty good idea of who will be sitting on your panel or what its likely composition will be. If you have a number of possibilities, as exists in this particular circuit, you have no idea what the composition of the court is going to be. There are 3,276 possible combinations of panels on this court-- 3,276. It is impossible for a litigant to have any idea who the judges will be and, therefore, what to expect. Given the broad range of ideology within this particular circuit, therefore, a lawyer hardly knows how to advise his clients. Assume you have a decision from a three-judge panel. The question is, do you try to take it en banc? But you have no idea who the 11 en banc will be and whether it will be a fair reflection of the circuit. Since there are not as many written decisions as there are in other circuits, you also find it more difficult to follow the precedence of the court. It is more difficult for lawyers to advise their clients on whether to take an appeal or not in the ninth circuit than it is in most of the other circuits. Much has been made, Mr. President, of the length of time that it takes for a case to get to hearing, and the ninth circuit is the worst or second worst, depending on how you count in this regard. There has been a statistic cited, and I think cited by both the Senator from Nevada and the Senator from California, that suggests, actually this court is fairly quick. That is the time from the time the judges get the case to the time their decision is published. That is the only area of the nine areas in which this circuit does particularly well. There is a reason for that: They do not write as many opinions. It is fairly easy once you decide the case to notify the litigants of the decision if you do not have to write an opinion expressing your view. I suspect that is the reason why that particular statistic is one in which the ninth circuit looks good. Otherwise, the ninth circuit is the slowest from filing of the last brief to the hearing or submission of a case. It takes about 4 months longer to complete an appeal compared to the national median time. It is over 14.3 months, as I understand. In the other indicia of speed, the court does not fare well compared to the other circuits. That is something that more judges would do something about. You have to wonder how many judges in number you get to for the court still to function adequately. At the hearing we held a few months ago on the subject, judges from the nine-county circuit were asked that question, and they acknowledged there was a point at which, obviously, the court would have too many judges. It would be too big and have to be split. There was disagreement, as you might imagine, on exactly what the appropriate number is. I mentioned the fact that there is inconsistency between the panels, which results from the fact that there are so many different possible combinations in the ninth circuit. That is the thing that worries the attorneys for the litigants so much. I also think it is instructive, Mr. President, to determine how the Supreme Court has dealt with the opinions from the lower circuits, from the circuit courts in the lower courts. It may be some evidence of a court that is overburdened that it is reversed frequently, and in this regard it is interesting that the ninth circuit has one of highest reversible rates of any of the circuits. For example, last year in the cases that the U.S. Supreme Court decided in the term ending June 29, 1995, according to the Court's records, 82 percent of the ninth circuit cases heard by the Court were reversed--82 percent. That is not a very good standard of success, I suggest, Mr. President. Now, lest people jump to the conclusion that this means that the ninth circuit cannot get it right 82 percent of the time, let me hasten to note that this is of the cases that the Court takes. By definition, the cases that the U.S. Supreme Court takes on review are the more difficult, the more controversial cases. So we should not believe that being wrong 82 percent of the time represents the full caseload of the court. That is not the case. We are talking about the number of cases that the court has been reversed in by the U.S. Supreme Court, of those cases taken by the Supreme Court. Again, by definition, those are going to be the more difficult cases. Still, being reversed 82 percent of the time is not a particularly good record. I suggest that an article recently appearing in the Wall Street Journal may indicate a reason why this is so. It may be that some members of some of the courts do not have the high regard for precedent that we would like to see in our circuit court judges. It may also be, as I noted, that this court simply is particularly burdened. Just a few day ago, last Friday, March 15, the Wall Street Journal carried an article I found fascinating but also very troubling. The headline of the story is, ``Bench Pressure: Federal Appeals Judge Embraces Liberalism in Conservative Times,'' and a subheading, ``Ninth Circuit's Reinhardt Discovers New Rights That Appeal to the Left.'' The story, written by Paul Barrett of the Wall Street Journal, discusses a most recent ruling in which Judge Reinhardt was the author of a lengthy opinion, according to the Wall Street Journal, announcing that the terminally ill now have a right to die with the help of a doctor. According to the Wall Street Journal, ``The mammoth 109-page ruling struck down a Washington State ban on assisted suicide--the first such action by a Federal appeals court.'' They quote the author of the opinion, Judge Stephen Reinhardt, as saying, ``I think this may be my best ever.'' The article goes on to discuss the record and career of this very bright, very intellectual and, according to the article, very liberal lawyer-judge, who the article says is widely respected by friend and foe as a crafty advocate for his left-leaning views. Mr. President, I do not know Judge Reinhardt or the degree to which his views may inform his decisions, but one indication that the ninth circuit might be overruled as often as it is could be reflected in the reported comments of Judge Reinhardt about the current U.S. Supreme Court, and suggests that there is perhaps not enough respect for the precedent coming from the U.S. Supreme Court. Remember, Mr. President, that the judges on the circuit courts are supposed to be not making new law but simply applying the precedents of the U.S. Supreme Court. According to this article, after discussing the fact that Judge Reinhardt has been somewhat criticized by some of his opinions, he says it has happened many times that he has been reversed by the Supreme Court, and then is quoted as saying, ``There's nothing I can do if that court is run by reactionaries.'' ``There's nothing I can do if that court''--meaning the U.S. Supreme Court--``is run by reactionaries.'' Mr. President, I hope that Judge Reinhardt was kidding if he is suggesting that the U.S. Supreme Court is run by a bunch of reactionaries because those who have defended the current composition of the ninth circuit have correctly said that the circuit courts should not reflect the attitude of just their own area. That is not really how circuit judges should be selected because, after all, they are not supposed to declare the law just for their area; they are supposed to be declaring the law of the United States as enunciated by the precedence of the U.S. Supreme Court, the Constitution of the United States, and the laws of the United States. Those are not defined by any kind of regionalism. So they correctly note that the judges are supposed to be declaring the law, informed by those three sources. Yet, here is a judge who at least is quoted in the Wall Street Journal last Friday as apparently referring to the current members of the U.S. Supreme Court as ``a bunch of reactionaries.'' As I said, I hope he was kidding. It is probably not a very judicious thing for him to have said, and I hope that, in retrospect, he will reflect upon that and perhaps pronounce himself chagrined that that perhaps off-the-cuff comment found its way into print. I hope that will be his reaction. But, as I said, it might illustrate why this circuit has been reversed as many times as it has been. There are stories, which I cannot confirm, that many of the opinions from this particular judge in this particular court are in some sense red-flagged for their review. The high percentage of cases reversed from the ninth circuit may suggest that that is true, and we may have a suggestion of why that is so. Now, that does not suggest that the answer to this is the split in the circuit. I do not make that claim here. But I do find it interesting that the opinion written by Judge Reinhardt in this particular matter, this right-to-die case, was written for an en banc panel which was hardly representative of the court as a whole--which illustrates the problem with an en banc hearing of less than the entire membership of the court--unique to the Ninth Circuit Court of Appeals and only the case because the court is too big to have all of the judges sitting by themselves. The calculations have been done here, and what we find is that in this particular decision, the limited en banc panel was comprised of six Democratic appointees and five Republican appointees. The ninth circuit has 15 Republican appointees and 9 Democrat appointees. So the limited en banc panel in the right-to-die case had 5 of the 15 Republican appointees and 6 of the 9 Democratic appointees. Now, Mr. President, I am not suggesting that being appointed by a Democrat or a Republican President will dictate how you decide a case either. But I do suggest that of all of the indicators of how a case might be decided--the State from which a judge comes, the age of the judge, the sex of the judge, the race of the judge, the color of hair of the judge, or whatever criteria you may want to look at--the party of the President appointing the judge probably has more to do with the decisions of that judge, day in and day out, than any other single factor. Therefore, it is not irrelevant to look, in this particular case, at the political composition of the panel. Again, I am not suggesting that that is what caused the decision in this case. But it is a most controversial decision, the first of its kind ever, and, I suspect, the kind of case the Supreme Court will want to take a look at. My point in all of this, Mr. President, is that a court that gets so big that you cannot even have an en banc hearing of all of the judges, which can result in a skewed composition of en banc panels, can result in skewed decisions, can result in overruling in many, many cases. That is what we have found with respect to the Ninth Circuit Court of Appeals. So it is not just the fact that we have not given them the 10 additional judges they want that creates a problem with a court of this size. Let me dispel some of the other notions that have crept into this debate so far. One is that this is going to be costly. I find it interesting that a Congress that frequently spends money like it is going out of style is suddenly concerned about cost. But let us put that in perspective. Justice, of course, should be one of the highest priorities of this Congress. I, for one, Mr. President, do not want to skimp when it comes to providing for justice. I have voted against a lot of appropriations bills since I have been in the Congress, but I cannot recall a bill that I voted against that funded the judiciary. I believe strongly in enforcing the laws of our country and ensuring the judiciary has what it needs. The cost of this particular bill, according to the General Accounting Office, for the construction of the new offices that would be necessary, is $18 million--$18.1 million to be precise. That is just 0.68 percent, which is less than 1 percent, slightly over half of 1 percent of the annual budget of the judiciary last year, about $2.5 billion. Next year, we are looking at $3.1 billion. So in the year it will occur, it will be much less than 1 percent of the budget. There would be a small start-up cost of about $3 million, but that would be a one-time-only cost. It has been noted that the chambers in San Francisco and Pasadena have recently been renovated and that they could accommodate more judges. The fact is that judges of the ninth circuit today sit in, have chambers in, and argue cases throughout the circuit--in Phoenix, in San Francisco, in Pasadena, in Portland, in Seattle. That is the way it is done today. I think it would be nice if the judges moved to the site of the headquarters of the circuit and sat there and had their chambers there, but they fly around the country today. That is why you only have 5 chambers in San Francisco, even though it is the headquarters of the circuit with 28 sitting judges, with 10 more requested. In addition, there are eight offices in Pasadena, the other place of primary headquarters of the circuit. So you have a situation that could accommodate additional judges as they are appointed, and, certainly, at least half of the 10 judges that have been requested would have to be assigned to California. Apparently the headquarters there could accommodate those judges. It is also noted that the bar associations of most of the States, and the Federal Bar Association itself, oppose the split of the circuit. That is not surprising, although I note that in my State of Arizona, there is very definitely a split. The so-called organized bar, the political organization, has written a letter in opposition. Of the lawyers and judges I have talked to, I find a real split, depending upon their point of view. I do not want to suggest that we should, however, simply follow the advice of the lawyers and the States on this. While I have not taken a poll of all of the lawyers in Arizona-- for my sake anyway--I do not think that would be the determining factor, in my view. I understand the point others have made that bar associations may oppose it. I do not find that to be a persuasive reason to not support the amendment of the Senator from Montana. Another question is that Phoenix is kind of out of the way. Those of us in Phoenix do not really think that. In any event, it is about $38 or $39 to fly from Las Vegas, NV, to Phoenix, the home of my colleague from Nevada. It is pretty cheap on at least three or four of the airlines to get to Phoenix. It does not take very long at all. The point here, I think, is missed, and that is that cases are argued throughout the circuit. That would remain the case whether the circuit is split or not. It is also the case that the law would remain the same. I think the Senator from Nevada made a good point in noting that his own State did not have a law school and that many of the lawyers there are educated in California. It is important that the law remain the same. It should be noted here that when the fifth circuit was divided into the fifth and eleventh circuits, they made the decision, correctly, to keep the law of the previous circuit. That has been done. Our hearing indicated, and people who testified at our hearing indicated, that it worked very well. Of course, that is the way it would be done here, as well. We would not have to dictate that result. The judges on the circuit themselves would correctly make the decision as a result, even though the court would be split into two parts. The law that had been built up from the ninth circuit would, of course, continue to be the law governing the new twelfth circuit as well. That should not be a factor. Mr. President, there are several other things I think we can say about this. But let me simply conclude with this point. This is not judicial gerrymandering, because the amendment of the Senator from Montana would result in a division that just about evenly divides the judges on the court, and they could go wherever they wanted to between the ninth circuit and the twelfth circuit. If you go by their State of origin, presumably half would go to California and the other half would remain or would go to the twelfth circuit in the States from which they come. So you would have a division geographically that is almost identical to the division that you had today. And, by the way, for those who are interested, the division politically would be almost identical as well. So both circuits would end up with just as many Republicans and Democrats and percentage as the court today has. And, in any event, as I said, this is not an effort to put all of the conservatives in one court and all of the liberals in another. I think that is illustrated by the fact that perhaps at least from public accounts one of the most conservative leaders on the ninth circuit and one of the most liberal leaders on the ninth circuit would both remain in California under the divisions imposed here. So there is not an effort at judicial gerrymandering. It is an effort to do finally what countless studies have suggested; that is, sooner or later this circuit is going to have to be divided--going back well over 20 years. I suppose we could have another study, and I am sure it would be informative. But I question whether the Senate and the House would act on the study--at least would any time soon. And, therefore, at least this legislation is an attempt to get the ball rolling and make something happen so we do not continue to have the circumstance we have today. A study, by the way, is also I think prone to the same kind of thing that has occurred in the past where you have people doing the studying themselves. I would suggest that, if there is going to be a study, it should not be done by the very people who are involved; that is to say, the judges on the ninth circuit. There is a certain incestuousness that develops over time and a desire to do it the way we have been doing it, and liking the way it is done. It seems to me, if there is going to be a fresh look at this, it ought to be done by people who can with some expertise view the situation from some distance as well as relying upon the expertise of those who are on the inside. I think also that it should be composed of people who are not just the judges by also litigants, members of the bar who practice before the circuit, and perhaps people who have other expertise to bring to bear. But in the end, as the Constitution requires, it is the U.S. Congress that has the responsibility here to decide on the composition of the so-called lower courts. So it is our responsibility to make this decision, Mr. President. I simply want to conclude by complimenting the Senator from Washington, Senator Gorton, and also the Senator from Montana, Senator Burns, for bringing this matter to the attention of the Congress, and for getting the bill through the Judiciary Committee. I urge our colleagues to review the report of the committee. It is a good report, a good description of the issue I think, and they can all benefit by reading that report and then determine whether additional study is necessary, or whether it is time to take action now. I hope that in the comments that I have made I have made two or three things clear. No. 1, that I am not criticizing the court or its administration. As I said about four times, it has done admirably well under the circumstances. The circumstances are what bring the difficulty. I am suggesting that adding more judges is not just the answer to this problem. So we should not think that simply funding more judges will solve the problem here. The problem here is the point at which any circuit becomes too large to function in the way intended. Virtually everybody who has talked about this--opponents and proponents alike--agree that there is a point beyond which the court is too large. Many have determined that that point has now been reached. Others think it is around the corner a bit. But in any event, we all understand that that is a problem which this Congress has to address. So whether it is done by this legislation, or whether it is done by a committee, clearly one of the probable recommendations has to be a division. And the third and final point is that of all of the ways that have been considered to divide the court--dividing California in the middle, cutting off Arizona and sending it to the tenth circuit, allowing Nevada, California, Hawaii, and the trust territories, and perhaps others to constitute another circuit--a lot of different iterations have been proposed. The only one that has made sense to the people with whom I have discussed the issue in Arizona--judges, lawyers, and litigants--is the proposal that the Senator from Montana has presented to us today. And it is, therefore, that proposal and only that proposal which I am willing to support, and urge my colleagues, therefore, to consider that proposal as really the only viable alternative to the situation that we have today. amendment no. 3533

Mr. KYL. Would my friend yield for one quick question or comment on my behalf in relation to what the Senator just said?

Mr. KYL. I appreciate my colleague yielding. I want to make it clear, since you were quoting from my hometown newspaper editorializing against the bill, it was not the bill that is before us today.

Mr. KYL

Mr. KYL. Mr. President, the second subject I address today deals with the subject of defense and specifically the threat of missile attack on the United States or our allies or our troops deployed abroad. Today, the Washington Times carried a story reporting on testimony that was given yesterday to the House National Security Committee, the equivalent to the Senate Committee on Armed Services. Yesterday, the former CIA Director, James Woolsey, according to this story, told a House committee that the recent intelligence estimate on the missile threat to the United States was flawed and it should not be used as the basis for defense policy. James Woolsey is an extraordinarily qualified source to speak to this. He served as the CIA Director for 2 years under President Clinton, and missile defense proliferation of weapons of mass destruction were one of his primary interests while serving in that capacity. What Mr. Woolsey said, according to this news report, is that the conclusions of this recent National Intelligence Estimate, called the NIE, that says that no long-range missiles could threaten the 48 contiguous United States for at least 15 years, would be a faulty basis upon which to base U.S. policy. He urged that the United States set up a special team of outside experts to explore just how we should develop ballistic missiles and defenses to ballistic missiles in response to this threat. He said--and I am quoting from the article: I would bet that we would be shocked at what they could show us about available capabilities in ballistic missiles. He also is reported to have said that if the President extrapolated a general conclusion from the very limited threat assessment of the NIE, ``I believe that this was a serious error.'' That is precisely what happened. Based on this NIE, which a lot of experts have now said appear to have been politically driven--at least is not based upon the best intelligence data, or is skewed in its conclusion because of the assumptions behind it based on that document--the administration has drastically revised the spending priorities of the Congress and has said simply that it is not going to spend money that we have appropriated pursuant to a defense authorization to develop two antiballistic missile systems on the schedule that we dictated. We are not talking here even about a national missile system to protect the continental United States, but rather the theater systems called THAAD and the so-called Navy Upper-Tier Program. In both cases, the administration, through Secretary Perry, has said they are going to delay that spending. I submit that is an unconstitutional action on the part of the administration when the Congress has specifically authorized and appropriated the money pursuant to a schedule which requires expenditures to meet certain goals at certain points in time. The administration based that decision on faulty intelligence estimates. Why do we say faulty? Not only is CIA Director James Woolsey saying they are faulty, but previous administration spokesmen have disagreed with the assessment. You have to look at it carefully to see what they are saying. What the assessment may be saying is that no country is going to begin from scratch and totally indigenously develop an intercontinental ballistic missile system that could threaten the 48 contiguous States in less than 15 years. That may be true, but it is largely irrelevant because virtually no state today is attempting to indigenously develop a weapon. They are not starting today. Iran, Iraq, North Korea, Syria, China, Russia, other countries in the world have used systems developed by others--except for the country of Russia--and have built on those systems by acquiring components from, I am sad to say, Western countries, including the United States. We know Saddam Hussein was within 18 months of having a nuclear weapon, or close, based on components he purchased from Germany, Italy, France, the United States, and others. He had the missiles which he had acquired from Russia, so- called Scuds. He had them modified to carry a payload, a longer range than the original Scud. That is how the countries do it. So if you say no country is starting from scratch today, using a strictly indigenously developed program is going to have an intercontinental missile hit the 48 contiguous States may be right, but it is irrelevant. You should not change American defense policy based on that. The 48 contiguous States are not really the relevant factor. You have Alaska and Hawaii, both of which are going to be within range of missiles from North Korea in the relatively not-too-distant future. How soon? Well, taking the testimony of Admiral Studeman, the Acting Director of the CIA in between Jim Woolsey and now John Deutch. Last April, he testified that his analysis indicated that the Taepo Dong I or Taepo Dong II--the missiles that North Korea is developing--were 3 to 5 years away, maybe less. John Deutch himself testified on August 11, 1994, that the Taepo Dong II may be able to strike U.S. military by the end of the decade. By U.S. territory, we mean including Hawaii or Alaska. We are talking now 4 years from now. These statements, obviously, were based upon the U.S. intelligence community's 1995 missile threat assessment. I leave the point at this: Our intelligence community has said that these countries using components purchased elsewhere will have missiles that can reach U.S. territory, not necessarily the contiguous 48 States, in the not-too- distant future--3, 4, 5 years--meaning we have to get moving on a missile defense system. None of the administration's actions will achieve that objective. That is why the Congress has said we should get moving with these programs. We focused on the theater threats initially because some of those theater threats could be deployed in such a way as to deal with the threats that are probably most timely, rather than the large intercontinental ballistic missile threat against the continental United States. Navy upper-tier is a program which is deployed using existing missiles and existing radar on Navy Aegis cruisers by deploying the cruisers in the appropriate places in the Pacific, and in that vicinity of the world, we would be able to help defend against a North Korean missile threat, but not unless we get moving with the program as the Congress has directed. That is why the administration's holdup on that program, based upon a faulty intelligence estimate, is so dangerous, both to the United States, our people, our forces deployed abroad in places like South Korea and Japan, for example, and also to our allies who might want to depend on our help. Mr. President, I ask unanimous consent an article from the Washington Times dated March 15, 1996, be made a part of the Record at the conclusion of the remarks.

Mr. KYL. Mr. President, I have several unanimous consent requests on behalf of the majority leader. Mr. President, all of these requests have been cleared by the Democratic side.

Mr. KYL. Mr. President, I think the Congress must be much more assertive in making certain we have basic policy on correct intelligence estimates, that the country proceed with the development of an adequate ballistic missile defense program, and that the administration abide by the law passed by the Congress and signed into law by the President of the United States--that it cannot ignore the law. Statements based on the U.S. intelligence community's 1995 missile threat assessment concluded: First, the proliferation of ballistic missiles is significant and growing, both in terms of numbers of missiles and in terms of the technical capabilities of those missiles; Second, the trends in missile proliferation is toward longer range and more sophisticated ballistic missiles; Third, a determined country can acquire an ICBM in the future, and with little warning, by means other than indigenous development; and, Fourth, the North Koreans may deploy an ICBM capable of reaching the continental United States within 5 years. The new CIA letter was apparently based on the most recent national intelligence estimate [NIE] for 1996 which concludes that, while several countries continue to seek longer range missiles, the North Korean ICBM system is now reassessed as having a ``very low'' probability of being operational by the year 2000. In addition, the NIE assumes it is extremely unlikely any nation with ICBMs will be willing to sell them. Finally, the NIE states that U.S. warning capabilities are sufficient to provide notice many years in advance of indigenous development of ICBM's. You might wonder, as I did, what exactly has changed since the 1995 assessment? What has changed is, not the facts, but the interpretation of the data. Either the intelligence community has adopted a new methodology to determine the extent of a threat, or outside--maybe even political--influences are at play. In either case, I intend to pursue this matter through the Senate Intelligence Committee. To conclude my first point, I believe that its failure to support a viable, sustainable, and sensible ballistic missile defense program will be recorded as one of the major mistakes of the Clinton administration national security strategy. A second major error is the failure to maintain a strong, coherent, nonproliferation policy. I conclude on one other item, Mr. President. Within the last 3 weeks, Majority Leader Bob Dole and other Members of this body sent a letter to the President complaining about this very matter and indicating to him that if the administration did not proceed with the development of these two missile systems as directed by the Congress and as signed into law, that the Congress would have to take whatever means it could to ensure that the law be complied with. There are now mechanisms for forcing compliance with that law under consideration by people in this body. I suspect that we will have to take those actions very soon if the administration does not change its position. I hope that people from the administration will consider this offer to try to cooperate so that we do not have to take action that they will find unpalatable. I ask unanimous consent to have printed in the Record the letter to the Secretary of Defense from Majority Leader Bob Dole and other Members of the Senate on this subject.

Mr. KYL

Mr. KYL. Mr. President, I now ask unanimous consent that the Senate proceed to the conference report to accompany H.R. 956, the product liability bill. THE PRESIDING OFFICER. The report will be stated.

Mr. KYL

Mr. KYL. Mr. President, I would like to speak for a moment about the bill which is before us, the omnibus appropriations bill, which started out $1.8 billion over the spending levels that we considered just a few months ago in the balanced budget we sent to the President on November 17 and which he vetoed on December 6. The previous versions of the Commerce, State, Justice, VA-HUD, Labor- HHS, and Education bills, all of which are part of the omnibus appropriations bill that we are considering now, were all within the limits of the budget at that time needed to get into balance by the year 2002. In other words, all three of those appropriations bills satisfied our requirement to meet each year for the next 7 years the objective of those years, the goal which, at the end of 7 years, would have us achieve a balanced budget. During the consideration of this omnibus appropriations bill, in addition to the $1.8 billion that had started out above that level, we have added $2.4 billion as part of an amendment that was primarily for the purpose of more educational spending. That was not paid for by legitimate offsets, in my view, but rather by one-time asset sales which were already included as offsets in our balanced budget passed on November 17. In other words, in effect, we are trying to count savings twice. I am on the Energy and Natural Resources Committee. The provisions of the offset were all developed by our committee as a means of achieving some savings for the next fiscal year or the year after that, depending upon when they took effect. They were asset sales, some of which would not realize benefits until 2 years hence. But three of those particular asset sales were used as the offsets for this $2.4 billion increase in expenditure. There are a couple things wrong with it. First, we have already used that money to achieve our balanced budget. So, in effect, it is a double counting. Second, it is a one-time sale of an asset that we will never have again to use. The sales are a good idea, by the way, but these are ongoing authorizations for activities, educational expenditures, that will occur each year. To pay for them the first year out of an asset sale and leave undecided how we are going to pay for them in the future, in particular when it is in the context of a plan to try to balance the budget over 7 years, is not fiscally responsible. Ongoing expenses, expenses that we know will occur each year, should be paid for out of an ongoing revenue source that we identify can meet those expenses each of those years. If you have a one-time expense, then it makes sense to pay for it with a one-time sale. So, using asset sales to finance these ongoing job training and education programs, I think, is not good fiscal policy. So, on one hand, we do not have legitimate offsets. On the other hand, we are adding another $2.4 billion on top of the $1.8 billion. In addition to that, we are considering right now an amendment that would add another $400 million-plus for a variety of programs, including the so-called volunteer AmeriCorps project. AmeriCorps is a program that the GAO says is costing the taxpayer $26,654 per volunteer. Let me repeat that, Mr. President. President Clinton has sold this program to the American people on the basis we should have more volunteers to do worthy projects in our society. I wholeheartedly agree with that. We have a lot of volunteers, from grade school kids, high school kids, to people working in the community, working for charities, working for governmental programs, all kinds of volunteer programs. They do this free of charge. But it costs the U.S. taxpayer $26,654 per AmeriCorps volunteer, according to the General Accounting Office. We are going to be increasing that program by, I have forgotten the amount of money, but it is over $100 million. The total cost of the amendment that is before us currently is over $400 million. We have other pending amendments that would also increase the cost of the bill. In addition to that, in addition to all of these things, the bill includes another $4.8 billion in so-called contingency appropriations, which represents more spending on several of the administration's pet projects. It is true that this additional spending is conditioned on the President and Congress reaching a broader budget agreement, but the fact of the matter is, such an agreement would not represent the tight, fiscally responsible budget requirements that we passed on November 17, but rather is beginning to rely, in my opinion, on the same kind of smoke and mirrors characterized by previous budget agreements. How many times have we voted--either the House or the Senate--on agreements in the past that were going to result in a balanced budget? I can remember my colleagues, in 1990, coming to me in support of the Bush administration agreement that was reached at Andrews Air Force Base, saying, ``You have to do this for President Bush.'' And I said, ``I don't think this is going to result in a balanced budget. I don't like the tax-increase aspect of it.'' ``Oh, yes, it guarantees we're going to have a balanced budget.'' I remember the President's Chief of Staff and his budget officers all visiting with me about that subject--guaranteed to happen. Of course, it did not happen. It did not happen on any of the previous occasions, and it has not happened on the one subsequent occasion either. The fact of the matter is, we get to a political point in these negotiations where we leave the fiscally responsible way of doing it, which is what we crafted and what we passed on November 17 and what the President vetoed on December 6. It becomes so hard to make that stick that we finally begin to compromise, and we reach an agreement which, in our heart of hearts, we realize will never really result in a balanced budget. It will make sense for a year or two, but it never gets us to the end. In 7 years who cares? That is somebody else's problem. Under the Clinton proposal, which we are largely meeting here, if we spend this $4.8 billion-plus, the other billions, it adds up to almost $8 billion more. What we are getting is a commitment to make most of the discretionary savings in the last 2 years. And 95 percent of the discretionary savings in the President's proposal would have to be achieved in the last 2 years. Mr. President, you and I both know that is an impossibility. We are having a hard enough time doing about one-tenth of it in the first year. That is about how much we would be trying to do here in the last years. It is not even one-seventh over 7 years. Even the Republican proposal puts more of it in the last 2 years than I think most of us would like. The years 2001 and 2002, the sixth and seventh years, are after Bill Clinton will have left the Presidency, even if he is reelected to a second term. It is beyond the time when many of us would still be serving in the Congress. ``A problem deferred is a problem solved'' is the slogan of many. It is not the way to ensure a balanced budget. Frankly, I am about to come to the conclusion that if we adopt this omnibus appropriations bill, we will be pretending to have achieved a balanced budget in 7 years. The President will pat himself on the back, we will pat ourselves on the back, and in 7 years we will look back on this and say, ``Well, we didn't quite get it done then, did we?'' It did not work out that way. I am simply trying to make the point right now that is the way it will turn out. It may not be the popular thing to say, Mr. President, but I think that is the way it is going to turn out. So I am at this point not inclined to vote for this legislation. The problem is that in making the compromise this first year, having the lack of courage to do what is right even in this first year, we will never have the courage to do what is right in those last couple of years when it will be much more difficult, the choices will be much harder to make, because there will be a lot more special interests who will be heard at that time or claim that they are being heard. I believe this bill moves in the wrong direction. I think virtually all the amendments that added money move in the wrong direction. My own view is we should vote down these amendments that add more money to the program. The House of Representatives barely passed a bill which is much more narrow. In conference I do not think we can expect the House to accept any of the add-ons that we have done. Yet, the President says he will veto a bill that does not include these add-ons or at least many of them. So it seems to me that we are still at the impasse that we were at shortly after Christmastime, Mr. President, and that is simply a philosophical difference between the President who wants to spend about $8 billion more than the Congress wants to spend. We moved a long way in his direction during these budget negotiations. But I am not sure we can ever both satisfy him and also meet the requirement of a balanced budget. It may technically meet the balanced budget, but in reality, politically, we know we will never get there. I do not think that is being honest with the American people. So, as it stands right now, I am disinclined to vote for this appropriations package, especially if more of these amendments are adopted. I guess my own prediction is that either we will have a responsible bill, which the President will inevitably veto, or further down the road we will not have a responsible bill in terms of achieving a balanced budget in the year 2002. Mr. President, at this point, I ask unanimous consent to speak for no more than 10 minutes as in morning business.

Mr. KYL

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