Jon Kyl

Mr. KYL

Mr. KYL. Many of these constituents argue that the rule defining ``significant facilities and services'' increases the costs to their housing and tells them how to live. And that is the objection I think in addition to the complexity of complying with these HUD regulations. These individuals have complained that some senior housing complexes are being hit with unfair discrimination lawsuits because of confusion about which housing qualifies for the exemption from the antidiscrimination housing statute. Why is this bill important? Although the ``significant facilities and services'' provision was well intended--it was designed to protect families with children from discrimination in housing, which we all support, of course--the exemption has made the lives of seniors unnecessarily difficult. Fewer regulations and restrictions would allow senior communities to operate more efficiently and freely. Is it too much to ask that the seniors of our country be allowed to live without intrusion into their lives by the Federal Government? Most senior citizens I know are independent and highly capable. They do not want to pay extra to have somebody read to them. They do not want or need to be told by the Federal Government how often they have to have bingo made available to them in their housing complex. By increasing the price of rent in senior facilities, these regulations in effect discriminate against low-income seniors, as the Senator from Colorado has pointed out. There is one other thing that I would like to say because there is an argument that the Housing and Urban Development Department recognized the problems with its regulations and therefore sought to relieve some of the burden by revising and imposing a new set of regulations. I almost did not use the word ``imposing,'' but that is what it is. And I think the point of this legislation is to [[Page S 18066]] say, ``Nice try, but you still have not solved the problem.'' This most recent rule of HUD revising the ``significant facilities and services'' regulation really does not answer the problem. One of my constituents, Susan Brenton, for the 25,000 Member Arizona Association of Manufactured Homeowners Group, stated, ``The new rule is still very nebulous and leaves a lot of areas open to court decisions and each court case costs the residents of the community thousands of dollars.'' The new regulations state that communities that provide at least 2 services each from 5 of 12 categories all defined by HUD qualify for the exemption. But these services are really quite frivolous, and they raise the costs to residents. This is what the Senator from Colorado was just quoting from, Mr. President. These so-called easier regulations are really at the end of the day not much of an improvement. HUD's attempt at revising its statistics have only trivialized what qualifies as a ``significant service.'' Clearly, HUD needs some help in fixing the problem that it fully acknowledges exists--regulatory overreach in senior housing--but we think the way to solve the problem is to eliminate the ``significant facilities and services'' requirement altogether, and that is what H.R. 660 does. Mr. President, in conclusion, this legislation has received not only wide support from States like mine which have a lot of senior communities, but as you know, it has wide support around the country. It has significant support in the Senate. It passed out of our Judiciary Committee with virtual unanimity, and I am sure it will be adopted by this body in very short order, again, with virtual unanimity. What we will be saying to the senior communities of our country is that we heard you when you let us know that these regulations were too costly, too burdensome and really in a sense too frivolous, and therefore the Congress is not incapable of acting to correct a problem like this in order to make your lives a little easier. That is what we will have done when we pass this important legislation. Again, I commend my colleague from the State of Colorado for bringing the legislation forth and for getting it to the floor so that we can see this job through and get it done before the end of the year. I thank the Chair very much and reserve the remainder of whatever time I did not use. Exhibit 1

Mr. KYL

Mr. KYL. Mr. President, I rise to support the Securities Litigation Reform Act of 1995. I thank Senators Domenici, Dodd, and D'Amato for their sponsorship of this bill, and their leadership in reforming securities class actions. I am pleased to support this bill, which will reform the legal process by which injured parties can recover damages for securities fraud and negligence. It reduces abusive litigation that clogs our judicial system and results in reduced recoveries to the plaintiffs. Too often the attorneys, not the investors, are the primary beneficiaries of these securities suits. The Senate Banking Committee passed a version of H.R. 1058 by a vote of 11 to 4 this spring. The full Senate passed this version on June 28 by a vote of 70 to 29. Clearly there is a bipartisan consensus for change. I supported this bill because I believe it modernizes our securities class action litigation system by reducing the potential for frivolous securities lawsuits, while assuring that defrauded securities investors receive a greater share of the settlements or awards in their cases. H.R. 1058 contains several important reform provisions. It eliminates referral fees currently paid by some attorneys to plaintiffs who successfully recommend them to represent all the plaintiffs in a class action. It requires the courts to appoint, as lead plaintiff, the party willing to serve who has the greatest financial interest, thus doing away with the so-called professional plaintiff who shops for cases to file--frequently as the agent for a lawyer--with little financially at stake. The bill would allow the small investor to recover completely through joint and several liability. And it imposes an affirmative duty on auditors to disclose financial fraud to the Securities and Exchange Commission [SEC], unless the fraud is properly addressed by management. In many cases it is the attorneys, not the investors, who are the primary beneficiaries of these securities suits. For example, National Economic Research Associates, Inc. reported that, in a 12-month period ending July 1993, the average settlement in securities class actions amounted to $7.36 million. Attorneys earned an average of $2.12 million per settlement, roughly 30 percent of the total. Investors recovered only about 7 cents on the dollar when compared with the amount of losses alleged. Some argue that the small investor will not be able to find relief under this legislation; that, for example, the victims of the Lincoln Savings & Loan bond fraud would not have recovered their losses. This is incorrect. First, the final bill includes a provision that requires the SEC to determine whether investors who are senior citizens, or those groups with qualified retirement plans, require greater protection against securities fraud. If so, the SEC must submit a report to Congress containing recommendations on protections that the Commission determines to be appropriate to thoroughly protect such investors. Second, H.R. 1058 retains joint and several liability recovery for small investors with securities claims. Even if the Lincoln S&L investors had sued only for those claims covered under H.R. 1058, many of them would have been fully compensated. H.R. 1058 specifically provides that, if one defendant is insolvent, the remaining codefendants will remain both jointly and severally liable to investors whose net worth is under $200,000, and who lost more than 10 percent of their net worth. All of the Lincoln investors who met this standard would have been fully protected had H.R. 1058 been law. In fact, those investors may have been able to recover more under H.R. 1058. This bill imposes statutory restrictions on the size of lawyers' fees in securities actions. Perhaps, had the plaintiffs' lawyers been prevented from taking more than the $65 million in fees off the top of the settlement fund, the Lincoln S&L investors would have received full compensation for their losses. H.R. 1058 provides investors who have been injured as a result of the negligence of another the opportunity to file suit. At the same time, it reduces abusive litigation, which clogs our judicial system and hurts those plaintiffs with meritorious claims. It is important that recoveries go to the plaintiffs and not to cover court costs, attorneys' fees, and other transaction expenses. Mr. President, the Securities Litigation Reform Act will eliminate frivolous securities class actions. I urge my colleagues to support this bill.

Mr. KYL

Mr. KYL. I ask unanimous consent to speak as in morning business for up to 15 minutes.

Mr. KYL. I thank the Chair.

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

Mr. KYL

Mr. KYL. Mr. President, I wanted to speak this morning in response to President Clinton's address to the Nation last night regarding the sending of American troops to Bosnia. I think the President made a strong case for support for his position, but I do not think that he made a strong enough case to justify sending American ground troops to Bosnia. I would like to address that point this morning because, obviously, in the Senate and in the House we are going to begin a debate which could last a couple of weeks here. After there are hearings, after there are briefings, presumably we will be voting on the issue, and I think it is important for us to begin to lay out the various issues, to get response from the American people, to discuss the matter among ourselves, and then be able to make an informed judgment. I would note that in checking this morning I found that since we began keeping track of it in my office, we have received 400 calls against sending American troops to Bosnia and 6 calls in favor. And I spent a fair amount of time during the Thanksgiving recess speaking with groups in Arizona and appearing on various radio programs. In each case, the response was similar to the one which I just indicated. That is not dispositive, but I think it is an important indicator of the fact that the American people do not sense there is a sufficient degree of interest here for the United States to participate. It seems to me there are two basic criteria which need to be satisfied in order to justify the sending of a large number of American ground troops into a situation where, as the President and the Secretary of Defense have both acknowledged, there is certainly a danger of some casualties. The first criterion which has traditionally been applied is that there is a national security interest of the United States at stake. Sometimes it has been expressed as a vital national security interest. The second is more operational. It generally divides into about three subcategories: that there is a very clear and important mission; that the rules of engagement are clear and [[Page S 17542]] agreed to; and that there is a clear exit strategy. Let us talk about both of those in the context of the President's remarks last night. I did not really hear a justification for the first point, that is to say, that there is a vital U.S. national security interest involved here. I heard some talk about the fact that it was important for the United States as a key participant in NATO to be involved in NATO operations, and I also heard that we wanted to prevent conflict from spreading throughout Europe. Both of those have a national security element to them, but neither goes directly to the question of vital U.S. national security interests. If, for example, someone could make the case that war in Europe was about to break out, while American lives may not be directly in jeopardy, I think few of us would deny that vital interests of the United States would be at stake sufficient for us to commit to not only ground troops but other kinds of military operations to try to prevent that. But that case is not made here. The possibility that there will be some additional civil strife in Bosnia does not suggest the conflict is going to engulf Europe. The situation is very different than it was before World War I. The Austro- Hungarian Empire no longer exists. The conditions are simply not the same. So it seems to me a real stretch to say there may be some additional conflict break out, that that would necessarily engulf Europe in war and therefore at this point the United States needs to send these troops in order to conclude that. That is just not a credible argument. As to the argument about NATO, it seems to me that either NATO is a strong alliance or it is not. I believe it is a strong alliance. If the President is suggesting that the difference between NATO continuing to exist as a strong alliance and its complete failure is whether or not 20,000 of the 60,000 ground troops in this operation are U.S. troops, if that is the difference between NATO existing and not existing, then NATO is in much worse shape than I thought it was, and I think, frankly, it just is not true. NATO is strong. And since we are providing a great deal of the support for the existing NATO operation, and will continue to do so under this peace process which has been negotiated, in terms of the seapower that we have projected, the airpower, the reconnaissance, the intelligence, obviously, monetary support that we will be providing and material support and a lot of other things, since we have been doing those things and will continue to do them as part of the NATO operation, it does not seem to me that we are subject to criticism that we are not supporting the NATO operation. It is just a question of whether some of the ground troops are going to be U.S. troops or not. My understanding is that the British and French and perhaps others in NATO insisted that part of the ground contingent be United States troops. That is not a justification for saying that therefore we must go. I would have to ask our allies, why? Why is it that you insist that not only do we pay for most of the operation and that we send our ships and our cargo planes and our jet fighters and reconnaissance planes, and all of the other equipment and personnel that we have in the region, in addition to all of that, a necessary component of this is that 20,000 of the 60,000 ground troops be U.S. troops? Why is that so essential? Is it because the Europeans do not have another 20,000 troops? No. That is not it. It is because they want us to be in the operation on the ground. And my question there is, why? Why is it that that is so essential? If this matter is so important to the Europeans, then it seems to me that they would pull out all of the stops to enforce this peace settlement including providing the necessary ground troops to make it work. And surely among all of the NATO countries there are 60,000 ground troops available. So one has to answer the question I think, why do our Europeans allies insist on this? I cannot think of a satisfactory answer. So back to the first criterion. Is there a vital U.S. national security interest? The answer is no, and the President has not made the case for it. Let me contrast this with the Persian Gulf war because a lot of people have tried to say that, like the Persian Gulf war, we need to follow the lead of the President and accede to his request for ground troops. The Persian Gulf war and this situation, it seems to me, are relatively close cases, both of them, but one falls on the side of supporting the operation and the other falls on the side of not supporting it. And here is why. Let us say on a scale of 1 to 10, vital national security interest being 10, Pearl Harbor created a vital national security interest for the United States to be involved in World War II. No question. That is a 10. The Persian Gulf war was a situation in which most of our oil, a majority of our oil, came from the Persian Gulf. Its supplies were threatened. A foreign country had invaded another country, was occupying it and was threatening to invade other countries. At that point, it was important for the world community to come together and say to this aggressor, ``No. Aggression will not pay. We will remove you from Kuwait, take you back to where you came from. You have got to stop threatening all the people whose oil supplies come from that region.'' That is not the same as Pearl Harbor, but clearly vital U.S. interests were involved. And, in fact, worldwide, countries came together, even other Arab countries came together, in an effort to stop that aggression. And I guess on a scale of 1 to 10, I would say that is a 6 or 7. As I said, that is a much closer call than a Pearl Harbor, but still justified our action. And a majority of our people and the Congress supported President Bush's decision to engage in military operations against Iraq. This case in Bosnia, I submit, falls on the other side of the line, if you want to say five is the middle ground. It seems to me there is only one reason why it rises to the level of maybe a three or four. That is the moral imperative. Now, a moral imperative is not the same thing as a vital national security interest of the United States, but in certain instances it may call upon the United States to do something. That is why the United States has been involved in various humanitarian missions. It is why we went into Somalia with a humanitarian mission to begin with. It is why we were not justified in changing that mission as it later was changed. The United States has done lots of things for a lot of people around the world in a humanitarian way for moral reasons. In addition to the humanitarian support that we provided, we also have supported some military operations in support of the humanitarian effort. But that is different from saying that in addition to air operations and sea operations and humanitarian operations and peacekeeping operations, in addition to all those things the United States must send 20,000 ground troops to keep the peace that has been negotiated at Wright-Patterson Air Force Base. So, yes, there is a moral imperative. That is what makes this a relatively hard case. But it does not rise to the level of a vital national security interest. It says that we ought to be doing something. And we are doing something, and we will continue to do more. I submit that the one thing that we should have been doing a long time ago is still missing from this peace agreement, and that is ensuring that Bosnia can defend itself. For a long time many of us in this body have argued for arming the Bosnians, the Bosnian Moslems, so they can defend themselves. We always believed that a rough parity would eventually be created sufficient to cause the Serbs to come to the bargaining table. What happened when Croatia, after about 3 years, was able to build up its military forces sufficient to retake some of the territory that the Serbs had taken from them? At that point, the Serbs became defensive rather than offensive in their military operations. They also came to the bargaining table because they understood that it was a losing game for them, that the longer they persisted, the more territory likely would be taken from them. So a military balance of forces of some sort was, in fact, created. That is what we have sought when we said we needed to lift the arms embargo and support rearming the Bosnian Moslems so they could defend themselves. And [[Page S 17543]] yet that commitment is not part of this particular peace agreement. So it seems to me that the one thing that we could do in this situation we have not done in this particular peace agreement. Turning for a moment from the vital national security interest, let us go to the other part of the equation, the second part. The mission has not been clearly defined. The rules of engagement have not yet been established. And, third, there is no exit strategy. Tony Lake, the National Security Adviser, was quoted in the newspapers yesterday--I think he made the statement Sunday--that our first mission is self- defense. Mr. President, the way you fulfill that mission is by not sending the people in the first place. That is not a mission. That is very muddled thinking to suggest that our first mission there is self-defense. The mission has to be stated much more clearly, and it has not been, nor have the various contingencies been defined. What happens if various kinds of military conflicts break out? We have not decided how we are going to handle those things. And that has to do also with the rules of engagement. They have been only very generally stated up to this point. As my colleague, Senator McCain, has pointed out, what is really glaringly missing is any kind of an exit strategy. A 1-year timetable is not an exit strategy. What is to prevent mission creep, and what is to define success of the mission? Most observers have said for this peacekeeping mission to really succeed, it is going to have to be a commitment of years, perhaps decades. And that gets to the next point, Mr. President. Perhaps the primary justification that the President has given for sending American ground troops to Bosnia is that if we do not do so, the war will reignite and there will be additional suffering. In other words, if you believe in war, you vote no; if you believe in peace, you vote yes. That is a false choice, Mr. President. That is a false choice. If this peace that has been negotiated is so fragile, if it is so fragile that the only thing between peace and war is that of the 60,000 ground troops, and 20,000 have to be Americans, then this is a peace which is bound to fail. It is not a peace of the heart. It is not a peace that has been committed to by the belligerents, but rather a convenience that has probably been forced upon the parties and is probably doomed to, if not failure, at least a very rocky road, which means a lot of casualties on the part of the peacekeepers. And that is a situation we need to take into account before we support the President's decision to send the troops. What is it that makes the 20,000 American ground force contingent sine qua non, to use that Latin phrase, that without which this peace agreement cannot succeed? We are already providing sea power and air power and reconnaissance and intelligence and humanitarian assistance, diplomatic assistance, monetary assistance. The President has committed to some additional monetary assistance. We are already providing a lot of things to promote peace in the region. Our European allies have said we need a ground contingent of 60,000. They are willing to support that with 40,000. What is it that makes the additional 20,000 required to be American troops? Why cannot they be European? Is the President saying that if all 60,000 are European, the agreement will fail? That is what he said in effect. What is the magic of 20,000 of those being American? ``Well, America has prestige, and American prestige is necessary to enforce this agreement.'' American prestige will be demonstrated every time a U.S. fighter jet passes overhead. It will be demonstrated every time you look out to sea and see one of our carriers or destroyers cruising in the Adriatic. It will be present with the diplomatic presence of the United States, the power of the U.S. Presidency and our support for NATO, and demonstrated in 100 ways. What is it that is so magical about one-third of the ground troops being American? Sure, that will demonstrate an additional presence, but is it absolutely essential? It is the difference between war and peace, the President says. If it is--and I doubt that it is--but if it is, then this peace is too fragile, in the first place. We already have signs that that is true with some of the Serb leaders saying in effect, no, never, that blood will be spilled, that they are not going to go along with this. So, if the basic criterion, as the President laid out, was that there would be peace, and we would simply be implementing the peace, one questions whether that condition will even exist when our troops hit the ground over there, if they do. There has been another justification, and I think that this is perhaps one of the most difficult for us to deal with because all of us support, not only the President, but the office of the Presidency. We generally try to defer to the President and the executive branch in foreign policy matters to a large extent, anyway. But the Senate has certain constitutional prerogatives. We have the advice-and-consent prerogative. We have the ability to ratify treaties, and so on. The President, in effect, has invited the Congress to decide whether or not to support his action or not. So I do not think there is any question that we need to make an independent judgment here of whether or not the sending of these troops is a good idea. But the argument of the President in this regard goes something as follows. Up until the time that the agreement in Dayton was initialed, we were not supposed to debate the issue because, after all, there was not anything to debate. We had not decided what to do. Well, the reality was the President had already committed to send the 20,000 troops, but we were not supposed to debate that because the agreement was not clear yet. So we did not. We basically deferred. There were many of us here, myself included, who wanted to speak much more specifically about it, to ask a lot of questions, and perhaps to lay down some conditions for the peace agreement, but we did not do that out of deference to the President. But now the argument goes, once the agreement was initialed, ``You would be pulling the rug out from under the Presidency, indeed from under U.S. foreign policy, if you did not approve my commitment to send 20,000 American troops.'' That is a catch-22, Mr. President. You cannot argue about it before the treaty is initialed and as soon as it is initialed, it is too late to argue about it. So when are we going to have the debate as to whether or not this is good policy? It is true, if the Congress turned its back on the President at this point, there would be some embarrassment to the United States. The question we have to ask ourselves is: Is the risk of casualties and is the precedent which is being set to send these troops outweighed by some temporary embarrassment to the United States? I submit at this point, at least I have concluded that the answer to that is no, that the Congress has to make it clear to the President that he cannot simply go around making premature commitments without the advice and consent of the Congress, commitments which some of us believe not to be wise, and then justifying the support for that on the basis that the commitment was made and, therefore, cannot be questioned anymore. Either you consult with the Congress in advance and have some sense that you have the support of the Congress and the American people and then argue, once the commitment is made, that it is too late to argue about it, or at least I think you have been estopped, to use a legal phrase, to argue there should not be a robust debate about it after the decision has been made. My point is, there is no argument to say, ``I made the commitment to send the troops and now it would be embarrassing to the United States, it would diminish the leadership role of our country if I were not backed up in that commitment,'' to use the President's argument. My point is very simple. The President should have thought of that before he made the commitment. He made a commitment, and I think at this point we have to debate it. The bottom line is this: The President has not demonstrated a vital national security interest of the United States involved, nor has there been a [[Page S 17544]] clear delineation of the operational aspects, its mission, the rules of engagement, and the exit strategy. Until those cases are made, I think the President is asking too much of us to commit U.S. ground troops to this operation. Therefore, Mr. President, it would be my hope that after we have had a full debate, after there have been hearings, after there have been briefings by the administration, and after we have had an opportunity to consider within this body and the House has had an opportunity to consider it, that we would have a vote on the matter; that we be able to express ourselves either to support the President's request or to reject it. At this point, my own view is that we reject it. I invite any debate and any rationale that can be expressed in support of the President's position. As I said, at this point, I think it is far too serious a matter for the United States Congress to support the President's request that 20,000 ground troops be sent to Bosnia, in addition to all the other things which we have already done and which we continue to do. I close with this point. Nobody wants this tragedy to continue. Everybody wants peace to succeed. We all commend the President and those who negotiated on his behalf for this peace agreement, and I would want to do everything we could to support that agreement, short of the commitment of these ground troops. They are not the necessary ingredient to make it work. If they were, it would be destined to fail. Mr. LEAHY addressed the Chair.

Mr. KYL

Mr. KYL. At the conclusion of his remarks.

Mr. KYL. It refers only to the Medicare contracts, and the organizations pursuant to obtaining the Medicare contract.

Mr. KYL. For each leader and manager, I will amend the request. I am sorry. I misread that--each leader and manager.

Mr. KYL. Madam President, I ask unanimous consent that Senator Domenici have 30 seconds to close, and the Senate then proceed to vote on the motion to waive without further action or debate.

Mr. KYL. I object.

Mr. KYL. If the Senator from New Jersey wishes to speak, I will reserve the right, but I intend to object until Senator Hatch arrives.

Mr. KYL. Thank you.

Mr. KYL. If I can.

Mr. KYL. Madam President, let me get back to the issue before us, which is the objection to the point of order that has been made to certain provisions of this bill. Madam President, we ought not to waive this provision. We should not have to waive the provision because there is nothing violative of the Byrd rule in the antitrust provisions of the Medicare part of the Balanced Budget Act of 1995. Let me go back a little bit to set the stage here. The whole theory of our Medicare reform, how we are beginning to strengthen Medicare and save it from bankruptcy, is to create more choices in the marketplace so that competition will drive costs down while also ensuring quality of care. Now, in order to create those choices, we allowed for the creation of a couple [[Page S 17320]] of new products in this legislation. One of the products is the medical savings account whereby people would have an incentive not to spend all of the deductible amount that they did not have to spend, and we provided that tax free. As a result of a Byrd problem on that provision, the inside buildup-- that is to say, the part that you do not spend--is now going to be taxed. One of the products is not going to be nearly as attractive as it was when we wrote our bill. The other new product is the hospital and physician organization, a new type of entity, somewhat similar to an HMO, but not really the same because here instead of having an insurance company or some kind of administrative organization that runs the whole program you simply have physicians and hospitals in a community getting together to offer their services on a capitated basis for the people who would be eligible for Medicare benefits. It is believed the creation of these organizations by cutting out the middleman and creating a new product would, in fact, create that kind of choice and therefore the competition in the marketplace would cause costs to be reduced. The two products, together, along with existing Medicare and the HMO option that currently exists would therefore create lower costs, thus allowing us to save the $270 billion over the 7 years that is needed in order to prevent the bankruptcy of the system. Madam President, as I said, the medical savings account part of this is now jeopardized because of the Byrd rule. If we also cripple the physician-hospital organizations because of the Byrd rule, we will have largely failed to create the two new products and therefore the competition, the choice, and the competition in this, and I fear, Madam President, that our entire Medicare reform will fail. And the commitment that we have made to our seniors, as a result of the Democrats raising the objection here, will cause our Medicare reform to fail. Madam President, I will say this as clearly as I can. If and when that happens, the American people, and in particular the seniors of this country, ought to know precisely where the blame lies. Because we have an opportunity this evening to save the Medicare system. But if people do not vote down this point of order, it is in serious jeopardy of going bankrupt because our system will not have within it the two key products that would be created to create this competition and choice. What exactly happens here? Why are we so concerned about this? For the doctors and the hospitals to get together to create this kind of organization, they have to talk to each other and they have to talk about prices and how they are going to treat patients. When that happens, lawyers are going to say, you are violating the antitrust laws. Under a per se rule, which means ``in and of itself,'' that would be true. The mere fact that you sit down and talk about it violates the law. So we have said in here, let us substitute the rule of reason, a rule of antitrust law that says we will consider it under the circumstances. If what they did is really wrong and violative of the antitrust laws, then we are still going to prosecute them. But if, under the circumstances of creating this new product, and only for the purpose of contracting with Medicare, they get together and talk about these things, things such as prices, then it would be OK. But the Justice Department, FTC, still would look at this under a rule of reason, as Senator Hatch pointed out. There are two main points, and this is what I will close on. The CBO allegedly has not scored this--excuse me, has said it would have no budgetary effect. That is not true. The CBO has never said that, so that basis for a parliamentary ruling would simply be in error. Quite the opposite is true with respect to the physician-hospital networks. Second, the conclusion is that the antitrust provisions are merely incidental. In this regard, two contradictory arguments are made. One, that this is such a big deal that all kinds of doctors are going to get together and fix prices and it is going to affect the market far beyond the Medicare market. The other is that it is merely incidental. Both cannot be true. The fact of the matter is, the antitrust provisions are critical to the creation of this product. It is going to be very hard for them to work without the antitrust exemption. So it is not merely incidental. It is there for the sole purpose of enabling these organizations to operate. If they cannot operate, then the cost savings are not there because they cannot compete in the marketplace, and our system is destined to fail. It is only for Medicare contracts. Madam President, I will conclude it this way. If this provision comes out, if these antitrust modifications, just to the rule of reason, come out of the bill, then I am going to predict that this could easily fail. If it does, the people who vote against this this evening are the ones who should be held responsible. I hope that Democrats and Republicans alike will join us in defeating this objection and in sustaining the waiver to the budget point of order.

Mr. KYL. Will the Senator yield a moment?

Mr. KYL. My understanding is that it applies to both Federal and State.

Mr. KYL. The request is that at the conclusion of Senator Leahy's remarks, Senator Domenici have 30 seconds to close and we then proceed without any further debate to a vote on the motion to waive.

Mr. KYL. Madam President, I further ask unanimous consent that, if the motion to waive is not agreed to and the point of order is sustained, that the [[Page S 17323]] Senate proceed immediately to vote on the motion to concur with the Senate amendment to the House amendment with no further action or debate, other than 5 minutes for each leader or manager, and that the vote be limited to 10 minutes.

Mr. KYL. Right now. I am sorry----

Mr. KYL. I amend the unanimous consent request.

Mr. KYL

Mr. KYL. Mr. President, I made a pledge to the people of my State last year that I would fight hard in the U.S. Senate to limit Government spending, reduce taxes, and cut the size of Government. I did not say that just to get elected. I did not say it just to compromise once I got to Washington. I meant what I said. Mr. President, our government has been spending the Nation into bankruptcy. It has been taxing our people into mediocrity. By trying to do too much for all of us, it has--in the words of former Education Secretary Bill Bennett, ``created inefficiency, sapped individual responsibility, and intruded on personal liberty.'' The people of Arizona--the people of the United States--did not send us here to split the difference with the President when it comes to limiting spending, cutting taxes, or balancing the budget. In fact, they tossed out the Members of Congress whose only solution was the President's solution: to tax more, spend more, and expand Government. They did not send us here for more of the same. The American people sent us here to make the difficult decisions to put our Nation's fiscal house in order, and they expect us to do it. As of this morning, calls and faxes to my office were running 10-to-1 in support of our staying the course. The great majority know this is crunch time; that it is no time for weak knees and hand-wringing. Mr. President, this is the fourth day of the Government's partial shutdown, and do you know what? The sky has not fallen. The economy has not collapsed. People have not stopped sending their kids to school, volunteering in their communities, or doing their part to clean up the environment. I suspect that many people haven't even noticed that the Government has been shut down. Now I know the shutdown has caused hardship and anxiety for many Federal employees. We did not ask for that to happen. Congress passed legislation earlier this week to keep them on the job and keep them paid. The President vetoed that bill and sent them home. We passed a second bill yesterday to try to get Federal employees back to work--to process Social Security claims and VA widows' benefits, to pay our military, and fund educational and environmental clean-up activities. The bill will ensure that these employees are paid before the holidays, but the President has said that he will veto it, too. In fact, President Clinton is threatening to keep parts of the Government shut down, ``even if it is 90 days, 120 days or 180 days.'' Talk about blackmail: it is the President who is holding the Government hostage until Congress gives him more of the American people's money to spend. If President Clinton is so bound and determined to prolong this suspension, maybe we should ask ourselves why he thinks he can get away with it. The President's own Office of Management and Budget has determined that 67 percent of the Commerce Department's staff was ``non-essential'' and sent them home. OMB determined that 99 percent-- that is right, 99 percent--of the staff at the Department of Housing and Urban Development was non-essential. It determined that 89 percent of the Education Department's staff was non-essential. That is according to President Clinton's own Office of Management and Budget. If the President makes good on his pledge to keep the Government shut down for 90 to 180 days, I guess the Nation will have a chance to see if he is right that the great majority of his own Commerce, HUD and Education workers are non-essential. Maybe we do not need all of those people after all. Maybe the President is on to something. We will have a chance to examine that later. Mr. President, what can it be, though, that the administration objects to in the latest spending? President Clinton said he would accept no riders. There are none in this bill. There is nothing in here about tax cuts, nothing about Medicare, nothing about the environment. This is a clean bill that represents a good-faith effort to get Government operating in the [[Page S 17358]] short term. Yet, he still says he will veto it. I will tell you this, Mr. President. For me, this measure represents my bottom line. In return for giving President Clinton the money to reopen the Government, we are asking for one simple thing: for the President to commit to a balanced budget in 7 years using real numbers. That should be easy. It is something he says he wants anyway. Just Tuesday of this week, he said: ``Let me be clear: we must balance the budget.'' In 1992, he pledged to balance the budget in just 5 years. Since then, he has said he could support a plan to balance the budget in 10 years, 9 years, 8 years and 7. So, if he really means what he says, he should be able to support a balanced budget in 7 years, as we are proposing. In his State of the Union message in 1993, he promised to judge the scope of the problem by the very same criteria that Congress uses, so that together we can find viable solutions. Here is what he told the American people on February 17, 1993 in his State of the Union message: Well, you can laugh, my fellow Republicans, but I will point out that the Congressional Budget Office was normally more conservative in what was going to happen and closer to right than previous presidents have been. He went on to say: In the last 12 years, because there were differences over the revenue estimates, you and I know that both parties were given greater elbow room for irresponsibility. This [that is, using CBO numbers] is tightening the rein on the Democrats as well as the Republicans. Let us at least argue about the same set of numbers so the American people will think we are shooting straight with them. I hope the President will remember his words and how important it is to use credible numbers to get to a balanced budget. It is important because, according to a recent Wall Street Journal report, his own Treasury Department just ``tweaked'' its economic forecasts to show $475 billion more in Government revenue by the year 2000. Mr. President, tweaks will not get us to a balanced budget. That is the same irresponsible approach that has kept the deficit in the range of $200 billion for so many years. And it is why the Congressional Budget Office projects that President Clinton's so-called ``balanced budget'', a budget the Senate unanimously rejected on two separate occasions this year--will result in $200 billion deficits for the foreseeable future. Let me say that again, President Clinton's budget did not get the vote of any Senator, even from his own party. Even our Democrat colleague from North Dakota, Senator Dorgan, candidly said in this Chamber on October 24 that: ``The President did not propose a budget that calls for a balanced budget.'' So, there is nothing partisan in recognizing that President Clinton has never proposed--never sent to Congress--the balanced budget he claims he wants. Two days ago, President Clinton appeared on a news program and talked about how he would veto the balanced budget because he knows what is best for the country. Well, that is the problem, Mr. President. The American people do not want Washington--they do not trust Washington-- to decide what is best for them. In a poll just conducted by the Behavior Research Center in Arizona, 58 percent of people said that they put their trust in the people of their own communities. Only 10 percent indicated their confidence in the Federal Government. The American people know what is best for them. They do not need a national nanny in the White House to make every decision for them--to decide how to spend the money they work hard to earn. This balanced budget is about empowering American families to make their own decisions about how to lead their lives and make their communities better places. A balanced budget will save the average family of four an estimated $2,791 per year. It means lower mortgage payments, less money paid out on car loans and student loans. It means more jobs. It means that our children and grandchildren will have an opportunity to do more than just work hard to pay the interest on the debt we are accumulating today. So this is the bottom line. I supported this latest short-term spending bill. But I will not support any further stop-gap measures that do not, at a minimum, commit to a balanced budget in 7 years using real numbers. We can compromise on how to get there, but I will not compromise on the fundamental principle of a balanced budget. The Nation's economic security is too important to delay any more.

Mr. KYL

Mr. KYL. Mr. President, this morning I was asked by a reporter from a radio station why the President and Congress cannot work out this budget impasse, why the Government has to shut down. That is a good question, and it deserves an answer. Of course, the answer is we will work it out, but it is going to take a little time, and here is why. Yesterday, my offices received about 600 telephone calls from constituents, and they were running about 10 to 1 in favor of the Congress staying the course to achieve a balanced budget in 7 years. The letters and the phone calls, all had a common theme: Do not give in. Do this for our grandchildren. We need a balanced budget. We have to get the fiscal house in order. Do not cave in to the President. Those were the general sentiments of the people who were calling my office yesterday, and today, just before I came to the floor, I noted the same general theme and the same relationship of numbers in these calls. So many of us, particularly those of us who were elected in the last election and heard the message from the people that they want to stop business as usual in Washington, DC, and get the Federal budget balanced, are committed to achieving a balanced budget in 7 years. I do not understand why the President will not concede that point. I think part of the reason why it is taking time is that the President is looking good in the polls and op-ed pieces, and so on. He is finally standing firm for something, and so he is getting a lot of press. So there is not a great deal of pressure on the President to concede anything at this point, and that is why we have the impasse. We feel the pressure from our constituents to stay the course and have a balanced budget and, on the other hand, the President is not willing to agree to a balanced budget. The first thing the President said when he vetoed the bill which would allow the Government to keep on operating was that he did it because we had Medicare cuts in the legislation. That is not true. The Medicare legislation which we included with the bill to keep the Government running, because we knew the President would veto it if it was part of our reconciliation bill, called the Balanced Budget Act of 1995, that bill provides for precisely the same percentage of premium payment for part B Medicare as you have today and you have had for the last 5 years. The President would like, he says, to reduce that to 25 percent of premium instead of 31 percent. But that is the difference between the two of us as to the percent. We are not increasing the percent of premium. It is at 31.5 percent today. It will be 31.5 percent under our bill, and so that is not true. I submit, by the way, that in the end the President will have to agree with us that it is fair to ask the seniors who are paying voluntarily for part B Medicare benefits to pay 31 percent of it after our children and our grandchildren are paying the other 68 or 69 percent. I submit that it is an unfair burden to ask them to pay any more of the part B Medicare. So the bottom line here is the balanced budget. The President has said he agrees with the balanced budget, but he just does not agree with the numbers we would use to calculate it. And yet the numbers are precisely the numbers he asked us to use in his State of the Union speech, the Congressional Budget Office numbers. He said those were more accurate. We said, OK, we will use them. Now that we have used them, he said, no, he wants to use a different set of numbers. And some people have said it is the rosy scenario numbers which would enable us to get a balanced budget without making some of the tough decisions which we have tried to make. Let me conclude by noting why it is so important for us to have a balanced budget. If we can achieve this balanced budget by the year 2002, we will have reduced interest rates by about 2 percent in this country, and that means that a family of four with a $75,000 home mortgage, for example, a $15,000 car loan, an $11,000 student loan, could save about $2,000 a year in interest costs. My grandson Jonathan was just born this year, and he immediately took a burden of $187,000 just to pay the interest on the national debt during his lifetime. That is unfair. What this debate is all about is stopping the spending in Washington, DC, that creates this kind of liability for our children and grandchildren. It is time to stop handing the blank credit card to the big spenders in this city. And so what this impasse between the President and the Congress is all about is getting to a balanced budget in the year 2002, reducing interest rates so that our citizens can enjoy the savings that are achieved as a result and stopping this additional spending which requires our children and grandchildren to continue to pay for our debts. Mr. President, I find it ironic that at the very time we are trying to get to this balanced budget in the year 2002, the President is talking about committing an additional $2 billion to the quagmire in Bosnia without congressional authorization of any kind in direct violation of the principle that the Congress and the President should both consult before we commit United States troops to this kind of an operation. And so I find it ironic that that is the action the President is taking at the same time that he shut the Government down by vetoing the legislation and refusing to agree with us to balance the budget in 7 years. It is time to get serious about balancing the Federal budget. Mr. DORGAN addressed the Chair.

Mr. KYL

Mr. KYL. Reserving the right to object, the Senator from Wisconsin was here before I was, but I would like to add to that request that I be recognized following the Senator from Wisconsin.

Mr. KYL

Mr. KYL. Mr. President, I rise to introduce the Kyl-Faircloth State Fair Housing Laws Recognition Act of 1995. I thank Senator Faircloth for his cosponsorship of this bill, and his leadership in States rights issues. I am pleased to introduce this amendment which will prohibit the Department of Housing and Urban Development [HUD] from enforcing a complaint of discrimination on the basis of a housing provider's occupancy standard, and thereby transferring from HUD to the States and localities the authority to set occupancy standards. Mr. President, an occupancy standard specifies the number of people who may live in a residential rental unit. In July of this year, HUD general counsel Nelson Diaz issued a memorandum which, in effect, supplants the traditional two-per-bedroom occupancy standard, and may force housing owners to accept six, seven, eight, or even nine people in a two-bedroom apartment. HUD should not be establishing national occupancy standards. HUD was created in 1965 with the best of intentions: To build and fund housing for the poor. But the agency's regulations have gone far beyond the scope of that intent. Housing is first and foremost a local issue. The Federal Government should play a limited role in it. State officials are closer to the situation and can tailor standards to meet the needs of their communities. HUD has accepted a two-per-bedroom standard as reasonable in enforcing fair housing discrimination laws under the Fair Housing Act. Most public housing units subscribe to that standard. That is, until Henry Cisneros became Secretary of HUD. Secretary Cisneros and his then Deputy, Roberta Achtenberg, disagreed with the traditional occupancy standard, arguing that it discriminates against larger families. The new HUD standard is without factual foundation. Mr. Diaz has used the Building Officials and Code Administrators [BOCA] Property Maintenance Code as a foundation for his occupancy standard. The BOCA code, however, is a health and safely code specifically drafted by engineers and architects to provide guidance to municipalities on the maximum number of individuals who may safety occupy any building. It was never intended to alter the minimum number of family members HUD could require owners to accept under fair housing law. The code was adopted without any consultation, public hearings, or analysis of its impact on the Nation's rental housing industries. That is wrong. Secretary Cisneros, through HUD's general counsel, has circumvented the Federal Government's rulemaking process by imposing this standard through an advisory without public hearings. Mr. President, the Manufactured Housing Institute, Arizona Association of Homes and Housing for the Aging, and the Arizona Multihousing Association endorse the bill. Arizona Gov. Fife Symington, speaker of the Arizona House of Representatives Mark Killian, and president of the Arizona Senate John Greene have sent me a letter in support of this bill. I ask unanimous consent that their letter be printed in the Record. States and localities should establish occupancy standards, not a Federal bureaucracy. Several States have an occupancy standard including my own home State, Arizona. And it has worked well. It is time we begin returning a certain amount of authority back to the States. Public housing laws are a good place to start. That is why I introduce this bill which blocks HUD's attempt to set a national occupancy standard, and transfers that authority to the States and cities. I urge my colleagues to cosponsor this bill. I ask unanimous consent that the full text of the bill be printed in the Record.