Daniel Moynihan

Mr. MOYNIHAN

Mr. MOYNIHAN. Mr. President, I rise today to pay tribute to Sophie Gerson, a remarkable New Yorker who provides a superb example of how one citizen can make an important difference. In particular, she has shown how one dedicated educator can pass on a brighter future to numerous young people. Through her dedication to education, as a parent, parent association leader, teacher, school board member and president, Sophie has been an important leader for better education in the city of New York and our Nation. Sophie Gerson taught physical education and health in public junior high schools in lower income areas of New York City for over 36 years. She endured budget cuts, increases in class sizes and other adverse conditions to make sure all of her students would enjoy a healthier and more successful future. She imparted health skills, athletic skills, and the values of team work, sportsmanship, and healthy competition. She took an interest in coaching students in dance and, as a result, students were able to rise out of poverty by pursuing dance-related careers. Upon Sophie Gerson's retirement from teaching, her students composed the following tribute to her: Mrs. Gerson gave new meaning to the word protect Because she taught us to apply it to ourselves We will not be a generation whose health is wrecked And we'll put trophies she inspired on our shelves. Recently, many of her former students paid the ultimate tribute that could be bestowed on a teacher by remembering and honoring Sophie many years after she had taught them at an award ceremony by the Puerto Rican Family Institute. She shall be missed.

Mr. MOYNIHAN

Mr. MOYNIHAN. An increase in the minimum wage is long overdue, and this legislation should be sent to the President before the August recess. The value of the minimum wage has eroded due to inflation since it was last increased in 1989. It is true that an increase in the minimum wage will reduce demand for labor somewhat, although not significantly in my view. But if you are looking for a painless time to increase the minimum wage, it is now. The current economic expansion is in its 66th month. Unemployment is down to 5.4 percent. The Washington Post recently reported that labor shortages have developed around the country, so much so that some fast-food franchises are paying substantial signing bonuses to new employees. In response to concerns of some on the other side that the minimum wage increase will cause hardship to small businesses, the Finance Committee took up the small business tax package last month. We worked on a bipartisan basis to craft a small business relief bill all Senators could support. It was approved unanimously by the Finance Committee on June 12, 1996. The bill passed the Senate with broad bipartisan support by a vote of 74 to 24 on July 9, 1996. Unfortunately, many of the provisions that lent bipartisan support to the small business tax title of the bill in the Senate were dropped in conference. I will briefly mention two matters of particular importance: the tax exemption for employer-provided educational assistance, and the phaseout of the long-standing tax incentives for Puerto Rico codified in section 936 of the Internal Revenue Code. The conference agreement inexplicably limits prospective extension of the exclusion for employer-provided educational assistance to undergraduate education. Only undergraduate education is covered prospectively here, whereas both undergraduate and graduate education were extended through 1997 in the Senate bill. This provision is one of the most successful education programs the Federal Government sponsors. It encourages employees to upgrade their skills and thereby maintain and improve their productivity throughout their careers. Roughly a million persons a year are assisted by their employers with higher education expenses on a tax-free basis, a quarter of them at the graduate level. Both employers and employees benefit. Many of our most successful companies know the benefits of sending valuable employees to school to learn a new field, or a field that has developed since that person had his or her education. Employers understand the opportunities for bringing a promising young person, or middle management person, to higher levels of productivity, and pay them more in the process. This is an elegant piece of unobtrusive social policy. Second, addressing the special tax rules for Puerto Rico is a difficult subject, but the Senate approach was acceptable to the elected officials in Puerto Rico, and should have been adopted by the conference. The conference agreement fails to provide a continuing economic incentive for investment in Puerto Rico after 10 years. Puerto Rico still has significant economic problems, such as high unemployment rates and low median incomes. The island's unemployment rate is almost 14 percent. While this rate is the lowest in 20 years, we are still talking about an economy in which unemployment has routinely approached, and exceeded, 20 percent in the last two decades. It is also an economy in which the median income of the American citizens who live there is about $6,200, or half that of Mississippi, our poorest State. Section 936 of the Tax Code has been in existence for 60 years, and nearly all have come to recognize that it is time to move to the next stage. However, we have a profound responsibility to that possession, which we obtained just short of 100 years ago in the aftermath of the Spanish-American War. Under the Senate provision, adopted at the urging of this Senator, a permanent, although reduced, wage-based credit for jobs located in Puerto Rico would have remained for existing employers. This would have preserved a limited measure of Federal support for Puerto Rico after the remainder of the section 936 incentives are gone after 10 years. It was the least that should be done, given that the people of Puerto Rico--citizens of the United States--are being asked to pay for half or more of these tax cuts for small business, none of which will benefit Puerto Rico. Understanding the responsibility we have to this island and its people, I hope that at a later time, as early in the next Congress as possible, we will return to this issue and adequately address our obligations to Puerto Rico. We must work together to provide effective economic incentives for new investment in Puerto Rico to provide new jobs and job security for Puerto Rican workers. The people of Puerto Rico--who are not represented in Congress--have the right to be respected and to have their interests advanced. Thus, while I am disappointed by the resolution of the conference on the small business tax package, I will vote for the conference report because of the importance of the increase in the minimum wage. I will continue to pursue the issues that were not resolved to my satisfaction in the conference report.

Mr. MOYNIHAN. I cannot speak for the Senator from Massachusetts, who is not present. That is the case.

Mr. MOYNIHAN. If I may speak directly to the Senator--I ask unanimous consent to do--exactly.

Mr. MOYNIHAN. That is correct. My distinguished chairman, as always, has so stated the facts. But there is a small semantic issue here. Some call this the small business relief act; others on this side call it the minimum wage bill. But we will not resolve that tonight, nor need we.

Mr. MOYNIHAN. I have just so done and am informed that is the case. I see the Senator from Kansas is present, however.

Mr. MOYNIHAN

Mr. MOYNIHAN. I am pleased to join with my colleagues in support of the Safe Drinking Water Act Amendments of 1996. This conference report represents a thoughtful, bipartisan effort which weds protection of public health with the flexibility necessary for cost-effective implementation. It emphasizes using more and better science in identifying contaminants, and training water system operators to meet the established guidelines. It will improve protection of vulnerable populations, including pregnant women, the sick, and the elderly. It creates a new Federal grant program to help water systems struggling to comply with Federal requirements. The conference report contains a provision that is of particular interest to New York State. Three upstate watersheds provide New York City with its drinking water, which has been of such high quality historically that the City has had no need to filtrate its water. In recent years, however, it has become evident that a comprehensive watershed protection program is necessary to preserve the purity of the region's water. As such, New York City and State have launched a collaborative effort to safeguard the fragile upstate ecosystem, an effort which I feel will be instructive to other cities and regions of the country. The bill will provide financial support for monitoring the success of this pilot program, which will likely prove effective for other municipalities. I also wish to praise the provisions of this conference report which will allow the Environmental Protection Agency [EPA] to consider relative costs, health benefits, and competing health risks when formulating new standards for drinking water. This is a rational approach which will help us allocate resources more effectively and efficiently. Environmental legislation places too much emphasis on risk assessment, resulting in an ineffective use of science. This perverse situation stems from directing EPA, explicitly or implicitly, to regulate environmental pollutants to safe levels of exposure. In so doing, EPA must scientifically determine what is safe. The problem is simple: the premise is false. Science cannot define safety. Decisions about what is safe--what is an acceptable risk--are based very much on personal or societal values--informed by science, yes, but based on values. Therefore, when legislation forces agencies to use science to determine safe levels of exposure, the effect is to set EPA and other agencies up for failure. Risk managers have no incentive to take any action other than to err on the side of safety. This bill enables EPA to avoid imposing costly regulations resulting in little or no benefit. It prudently allows EPA to incorporate economic, scientific, and social considerations in achieving its safe drinking water goals efficiently and effectively. It arms EPA with the best tools to address existing and potential problems with the Nation's drinking water supply, in reasoned and measured steps, and it establishes new requirements for keeping the public apprised of the quality of their water. I thank my colleagues on both sides of the aisle for their hard work and willingness to compromise on the Safe Drinking Water Act Amendments, and I strongly urge its passage.

Mr. MOYNIHAN

Mr. MOYNIHAN. Mr. President, today I am joined by Senators D'Amato and Dodd in introducing the War Crime Disclosure Act. This legislation is a companion measure to a bill pending in the House, H.R. 1281, sponsored by Representative Maloney. The measure is a simple one. It requires the disclosure of information under the Freedom of Information Act regarding individuals who participated in Nazi war crimes. Ideally, such documents would be made available to the public without further legislation and without having to go through the slow process involved in getting information through the Freedom of Information Act [FOIA]. Unfortunately this is not the case. Researchers seeking information on Nazi war criminals are denied access to relevant materials in the possession of the United States Government, even when the disclosure of these documents no longer pose a threat to national security--if indeed they ever did. With the passing of time it becomes ever more important to document Nazi war crimes, lest the enormity of those crimes be lost to history. The greater access which this legislation will provide will add clarity of this important effort. I applaud those researchers who continue to pursue this important work. I would also like to call to the attention of my colleagues the excellent work of the Office of Special Investigations of the Department of Justice. This office has a monumental task and I would not wish to add to that burden or divert its officials from their primary goal of pursuing Nazi war criminals. To that end, I would note that this legislation does not apply to the Office of Special Investigations, as it is not identified in paragraph (1)(B) of the bill as a ``specified agency.'' I would also add that there is a provision in the bill which specifically prohibits the disclosure of information which would compromise the work of the Office of Special Investigations. Mr. President, I would like to thank Representative Maloney for her original work on this subject in the House of Representatives. I would also thank Senators D'Amato and Dodd for joining me in this effort here in the Senate. Finally, I would be remiss if I did not pay special tribute to A.M. Rosenthal, whose indefatigable efforts on this subject are as admirable as they are effective. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. MOYNIHAN

Mr. MOYNIHAN. I rise in support of the Health Insurance Portability and Accountability Act of 1996. It makes elemental and much-needed improvements in health care coverage for Americans by guaranteeing ``portability'' of health insurance for employees who change jobs, and by eliminating the current practice of denying coverage to persons with preexisting health conditions. These were the areas in which there was by far the greatest consensus when the President's health care legislation was considered in the Finance Committee in 1994, and I am pleased that agreement has been reached to make these changes. However, I am not pleased with the resolution of another issue in this bill: the provision to prevent persons from renouncing their American citizenship and moving abroad in order to avoid U.S. taxation. That dubious practice has come to be called ``expatriation'' among members of the tax bar, although that is not a very illuminating term. The word expatriate derives from the Late Latin expatriare, to banish. Ex, out of. Patria, native country. Perhaps a term that better reflects the tax consequences of the issue will emerge in time. The conference report on the health legislation before us today contains as a revenue offset the House expatriation version, rather than the Senate provision. The Senate provision also was included in the small business tax relief legislation marked up by the Finance Committee on June 12, but it was later dropped in the conference on that legislation. I am convinced that the House proposal will leave in place a continuing tax incentive to renounce citizenship in order to evade taxes. This issue gained notoriety in late 1994, when expatriation by several very wealthy individuals was widely reported. On April 6, 1995, shortly after the issue arose for the first time in Congress, I introduced S. 700, a bill to close the loophole in the Tax Code that permits ``expatriates,'' as they have come to be called, from escaping U.S. taxation. Although expatriation to avoid taxes occurs infrequently, it is a genuine abuse. The Tax Code currently contains provisions, dating back to 1966, intended to prevent tax-motivated relinquishment of citizenship, but these provisions have proven difficult to enforce, and they are easily circumvented with the assistance of resourceful tax counsel. One international tax expert described avoiding them as ``child's play.'' Under current law, individuals may, by renouncing their U.S. citizenship, avoid taxes on gains that accrued during the period in which they acquired their wealth--and while they were afforded the many benefits and advantages of U.S. citizenship. Even after renunciation, these individuals are permitted to keep residences and reside in the United States for up to 120 days per year without incurring U.S. taxes. Indeed, certain wealthy Americans have ``expatriated'' while still maintaining their families and homes in the United States. They need only take care to avoid being in the United States for more than 120 days each year. Meanwhile, ordinary Americans who remain citizens continue to pay taxes on their gains when assets are sold, or when estate taxes become due at death. I regret to say that the expatriation issue has been and, in light of the decision taken by the conferees on the health insurance reform bill, may continue to be the subject of more controversy than it probably deserves. In the interest of making the record complete, I will briefly review the history of the issue's consideration in the Congress. On February 6, 1995, the President announced a proposal to address expatriation in his fiscal year 1996 budget submission. Three weeks later, on March 15, 1995, during Finance Committee consideration of legislation to restore the health insurance deduction for the self- employed, I offered a modified version of the administration's expatriation tax provision as an amendment to the bill. My amendment would have substituted the expatriation proposal for the repeal of minority broadcast tax preferences as a funding source for the bill. The amendment failed in the face of united opposition by members of the majority on the committee. The vote against the amendment was 11-9. Later in the markup, Senator Bradley offered the expatriation provision as a free-standing amendment, with the revenues it raised to be dedicated to deficit reduction. Senator Bradley's amendment was adopted by voice vote. After the Finance Committee reported the self-employed health deduction bill, but before full Senate action and before our conference with the House, the Finance Committee held a hearing to review further the issues raised by expatriation. At our hearing, we heard criticisms of some technical aspects of the provision, as well as testimony raising the issue of whether the provision comported with Article 12 of the International Covenant on Civil and Political Rights, which the United States ratified in 1992. Section 2 of Article 12 states: ``Everyone shall be free to leave any country, including his own.'' Robert F. Turner, a professor of international law at the U.S. Naval War College, testified that the expatriation provision was problematic under the Covenant because it constituted a legal barrier to the right of citizens to leave the United States. The State Department's legal experts disagreed, as did two other outside experts who provided written opinions to the committee: Professor Paul B. Stephan III, a specialist in both international law and tax law at the University of Virginia School of Law; and Mr. Stephen E. Shay, who served as International Tax Counsel at the Department of the Treasury under the Reagan administration. Given this division in authority, it seemed clear that the Senate should not act improvidently on the matter. Genuine questions of human rights under international law, and the solemn obligations of the United States under treaties, had been raised. We therefore sought the views of other experts. Opinions concluding that the expatriation provision did not violate international law were received from Professor Detlev Vagts of Harvard Law School and Professor Andreas F. Lowenfeld of New York University School of Law. The State Department issued a lengthier analysis supporting the legality of the provision, and the American Law Division of the Congressional Research Service reached a like conclusion. However, there were contrary views, most notably the powerful opinion of Professor Hurst Hannum of the Fletcher School of Law and Diplomacy at Tufts University, who first wrote to me on March 24, 1995. This is where things stood when the House-Senate conference met on March 28, 1995. At that time, the weight of authority appeared to support the validity of the provision under international law, yet very real questions remained unresolved. The underlying bill had to move at great speed. As my colleagues well know, the legislation restoring the health insurance deduction for the self-employed for calendar year 1994 had to be passed and signed into law well in advance of the April 17, 1995 tax filing deadline, so that self-employed persons would have time to prepare and file their 1994 tax returns. The conference committee had to decide immediately whether to retain the expatriation provision. There was no time for further inquiry into its validity under international law. We accordingly chose not to risk making the wrong decision, which might violate international law and human rights. We elected not to include the provision in the conference report. The conferees instead adopted a provision directing the Joint Committee on Taxation to study the matter and report back. That decision, which was the only prudent one at the time, was met with some not very pleasant criticism in the Senate. This was surprising, since I believed it was axiomatic, particularly on our side of the aisle, that Government should proceed with great care when dealing with human rights--particularly the rights of persons who are despised. The persons affected by the expatriation proposal-- millionaires who renounce their citizenship for money--certainly fell into the category of persons who are easy to despise. Since that time, a general consensus has developed that the Senate provision does not conflict with the obligations of the United States under international law. Professor Hannum, after receiving additional and more specific information about the expatriation tax, wrote a second letter on March 31, 1995 stating that he was ``convinced that neither its intention nor its effect would violate present U.S. obligations under international law.'' And in the interim, there has been time to consider other approaches to the problem. On June 1, 1995, the Joint Committee on Taxation published its report on the tax treatment of expatriation. Shortly thereafter, on June 9, 1995, Chairman Archer introduced an expatriation bill that adopted a different approach than S. 700, which was the bill introduced by the Senator from New York. A second Finance Committee hearing on expatriation was held on July 11, 1995 to consider the two competing approaches. The Senate thereafter incorporated in its version of the Balanced Budget Act of 1995 a slightly modified version of the bill I introduced. The Senate bill adopted the accrued gains approach rather than the House alternative as the superior response to the problem. However, the House prevailed in conference and a version very similar to the Archer bill was included in the final Balanced Budget Act of 1995, which was later vetoed by President Clinton. That same House provision has now been incorporated in the conference agreement before us on the health insurance reform bill. Adoption of the House expatriation proposal rather than the Senate proposal is being justified, in part, based on the fact that the Joint Committee on Taxation has scored it as raising substantially more revenue than the Senate version. These revenue estimates are difficult to believe, because almost any member of the tax bar would concede that the Senate proposal would deter tax-motivated expatriations far more effectively than the House proposal. In contrast to the Joint Tax Committee, the Treasury Department estimates that the Senate proposal would raise substantially more revenue than the House version. This comports with the views of most tax experts. Here is why I believe the House provision is unsatisfactory. Under the Senate provision, an expatriate with a net worth of over $500,000 (or average annual tax liability in excess of $100,000) generally would be taxed on his asset appreciation existing at the time of expatriation. Alternatively, an expatriate could elect to continue to be taxed as if a U.S. citizen--i.e., to be subject to worldwide tax on his assets until their disposition. The provision also offers alternatives for delayed payment of the tax on accrued gains, with interest. Rather than impose a tax on accrued gains, the House bill attempts to build on the current law approach of taxing only a portion of the income generated by assets of expatriates during the 10-year period following expatriation. This approach will fail to eliminate the very substantial tax advantages that currently inure to persons willing to give up their citizenship. Under the House proposal, several categories of taxpayers would continue to owe no tax at all should the IRS be unable to prove a ``tax avoidance motive'' for expatriating. As under current law, patient taxpayers would avoid all tax on accrued gains by simply holding their assets for ten years. Gains recognized after that period would never be taxed by the United States. A wealthy expatriate needing money during the 10-year period could simply borrow money using his or her assets as security. Under the House provision, no tax at all would be owed on income or gains from foreign assets following expatriation, as under current law. Given the enormous incentive to own foreign assets, experienced tax practitioners would continue to find ways to convert U.S. assets into foreign assets in order to avoid tax on the income earned during the 10-year period. The House approach also would risk nonpayment of amounts owed, as it relies on the voluntary payment of taxes for 10 years following expatriation, well after the taxpayer has moved beyond the reach of U.S. courts. In contrast, the Senate version generally would not require looking beyond the facts at the time of expatriation, making it much more likely that taxes owed would be collected. Further, taxpayers would be required to provide security for delayed payment of taxes. Another flaw in the House bill is that it will unilaterally override existing tax treaties. In its report on expatriation, the Joint Tax Committee staff stated that the House version may ultimately require that as many as 41 of our 45 existing tax treaties be renegotiated and that it might be necessary for the United States to forego benefits to accomplish renegotiation. As the first Senator to have introduced legislation to end tax avoidance by so-called expatriates, and as one who urged that it be acted upon expeditiously, I am disappointed that the expatriation changes I have sought, and that have been passed by the Senate on three separate occasions, have been set aside in favor of far less effective measures. I believe the honor of the tax-writing committees is at issue here. The action taken today will allow this issue to fester for some time to come because the new rules will not measurably reduce the tax advantages of expatriation. On another matter, I also wish we could have addressed the issue of mental health parity in this conference report. In April, I voted for the Domenici-Wellstone amendment to the Senate version of the underlying bill. It would simply have required health plans to provide coverage of mental health services equal to that provided for acute medical services. The amendment got 65 votes. Subsequent scoring of the amendment by the Congressional Budget Office determined that it would be relatively expensive. Senators Domenici and Wellstone then prepared a scaled-down version of their amendment which would have required health plans to provide equal treatment only of annual and lifetime limits. This alternative would have cost approximately one-tenth of what the original amendment would have cost. Unfortunately, this modest revised proposal was also unacceptable to the majority members of the conference. Subsequent proposals by Senator Domenici to scale back the parity requirement even further were also rejected without the benefit of consideration by Senators appointed to the conference, or even by our staffs. After the initial meeting of the conference in the Ways and Means room on July 26, 1996, the conferees were never assembled to discuss this or any of the elements of the final conference agreement. For these reasons, I chose not to sign the conference report on this legislation. We could have done better on expatriation, and on mental health parity. Even so, I am prepared to vote for this legislation because its central features--the health insurance reforms--are important and overdue. I congratulate Senators Kennedy and Kassebaum for their hard work and persistence on this legislation, and I urge its adoption. The Presiding Officer. The Senator from Kansas.

Mr. MOYNIHAN

Mr. MOYNIHAN. Mr. President, I am not sure that I am managing the time. I am ranking member of finance here. I yield, in sequence, the Senator from Minnesota as much time as he requires.

Mr. MOYNIHAN. Mr. President, yesterday, after the President announced he would sign this legislation, I said: ``The President has made his decision. Let us hope that it is for the best.'' Today, I continue to hope for the best, even if I fear the worst. As I have stated on this floor many times, this legislation does not reform aid to families with dependent children; it simply abolishes it. It terminates the basic Federal commitment of support for dependent children in hopes of altering the behavior of their mothers. We are putting those children at risk with absolutely no evidence that this radical idea has even the slightest chance of success. In our haste to enact this bill--any bill--before the November elections, we have chosen to ignore what little we do know about the subject of poverty. Just 2 days ago, on July 30, 11 of the Nation's leading researchers in this field issued a statement urging us not to do this. Among them were seven current and former directors of the Institute for Research on Poverty at the University of Wisconsin established in the aftermath of the Economic Opportunity Act of 1964. Scholars of the stature of Sheldon Danziger of the University of Michigan; Irwin Garfinkel of Columbia University; Eugene Smolensky of the University of California at Berkeley; and Edward Gramlich of the University of Michigan. They write: As researchers who have dedicated years to the study of poverty, the labor market, and public assistance, we oppose the welfare reform legislation under consideration by Congress. The best available evidence is that this legislation would substantially increase poverty and destitution while doing too little to change the welfare system to one that provides greater opportunity for families in return for demanding greater responsibility. Real welfare reform would not impose deep food stamp cuts on poor families with children, the working poor, the elderly, the disabled, and the unemployed. It would not eliminate the safety net for most poor legal immigrants, including the very old and the infirm. It would not place at risk poor children whose parents are willing to work but are unable to find unsubsidized employment. It would not back up work requirements with the resources needed to make them effective. We strongly support an overhaul of the nation's welfare system. But the pending legislation will make a troubled welfare system worse. It is not meaningful welfare reform. It should not become law. I repeat what these social scientists have concluded: ``The best available evidence is that this legislation would substantially increase poverty and destitution.'' What is the evidence? Dr. Paul Offner, the distinguished Commissioner of Health Care Finance for the District of Columbia, summarized it nicely last week. Respected research organizations such as the Urban Institute here in Washington, and the Manpower Demonstration Research Corporation in New York have, over the years, undertaken careful evaluations of various welfare reform demonstration projects. As Offner recounts, they found that welfare caseloads were reduced in only 4 of the 23 welfare demonstrations they studied. Dr. Offner points out that even the program in Riverside, CA, which is regarded by many experts as the most successful ever, has achieved caseload reductions of less than 10 percent. This should not surprise us; it is not easy to change human behavior. Notwithstanding this fact, the premise of this legislation is that the behavior of certain adults can be changed by making the lives of their children as wretched as possible. This is a fearsome assumption. In my view. It is certainly not a conservative one. If we acknowledge the difficulty in bringing about the transition from welfare to work, we must recognize that putting people to work on a large scale would require a large-scale public jobs program, and that would require a great deal of money. Let me say that Democrats were the first to fail in this regard. In the company of Sargent Shriver and Adam Yarmolinsky, I attended the Cabinet meeting in the spring of 1964 where we presented the plans for a war on poverty. Our principal proposal, backed by Secretary of Labor Willard Wirtz, was a massive jobs program, along Works Progress Administration lines, to be financed by a cigarette tax. President Johnson listened for a moment or two; announced that in that election year we were cutting taxes, not raising them. He thereupon picked up the telephone attached to the Cabinet table, called someone, somewhere, about something else, and the war on poverty was lost before it began. This legislation is even worse. In fact, this legislation provides some $55 billion less over the next 6 years. There are work requirements in the bill, but we seem tacitly willing to admit they will never be met. Dr. June O'Neill, Director of the Congressional Budget Office, has been most forthcoming on this subject. The CBO report on this bill bluntly states that Given the costs and administrative complexities involved, CBO assumes that most states would simply accept penalties rather than implement the [work] requirements. What else does the evidence show? It shows quite clearly that the central feature of this legislation, the time limit, will affect millions of children. CBO estimates that ``under current demographic assumptions, this provision could reduce cash assistance rolls by 30 to 40 percent'' within the decade. I should say that again: 30 to 40 percent of the caseload will be cut off in less than 10 years' time. Let me put that in terms of how many children will be cut off. According to the Urban Institute, 3,500,000 children will be dropped from the rolls in 2001. By 2005, 4,896,000 children will be cut off. The Urban Institute has also estimated, in a report released just last Friday, July 26, that this bill will cause 2.6 million persons to fall below the poverty line; 1.1 million of those impoverished will be children. To say nothing of those persons already living in poverty. They will be pushed even further below the poverty line; The average loss in income for families already below the poverty line will be $1,040 per year. I note that the Urban Institute's estimates are based on quite conservative assumptions, so the actual impact could well be even worse than predicted. I cite this evidence because it is important that we cast our votes with full knowledge of the consequences. This information has been widely available, and I have made these arguments on the floor previously, so I believe we are all on notice of the implications for children. The implications of this legislation for our State and local governments are another matter. These are not widely known, but they will be very real indeed. On Thursday of last week, 2 days after the Senate passed its version of this legislation, I received in the mail a four-page letter from the Honorable Rudolph W. Giuliani, mayor of the city of New York. He wrote of his concern that the major provisions of the bill would impose huge new costs on New York City totaling some $900 million per year. The mayor listed the added costs to New York City as follows: $380 million for child care for welfare recipients; $290 million for aid to legal immigrants; $100 million to support persons dropped from Federal rolls due to time limits; $100 million for work programs. Mayor Giuliani wrote that the bill's ban on Federal assistance for legal immigrants was of particular concern to New York City, where 30 percent of the population is foreign-born. The sum of $900 million a year is a lot of money. New York City's total annual budget is $33 billion. And other, smaller local governments will also be hit hard. The total additional cost to New York State will be in the neighborhood of $1.3 billion per year. We estimate the loss of Federal funds to some of our larger counties as follows: Albany County $15 million; Erie County $75 million; Monroe County $60 million; Onondaga County $30 million; Westchester County $45 million. These are sums that New York State and New York City simply cannot afford. It will be ruinous for us. In March of this year, the New York State Financial Control Board reported that ``the city's finances continue to deteriorate.'' The board said that over the next 4 years, the growth in New York City's spending will be more than double the growth in its income. Spending will grow by approximately 2 percent per year, while revenues will grow by less than 1 percent. In the absence of this welfare legislation, the gap between the city's outlays and revenues will increase by $400 million annually. With the new additional costs imposed by this bill, the annual increase in the shortfall will more than triple. New York will not be alone in this, of course. Senator Feinstein said on the floor last week that the bill will cost California $17 billion over 6 years, or about $3 billion annually. Other States--Illinois, Texas, Florida--will also bear immense new burdens. I wonder if they are ready for what is coming. More importantly, I wonder if the Nation is ready for the social change this legislation will set in motion. There are great issues of principle at stake here, as leaders of the religious community have said with such clarity and force. Bishop Anthony M. Pilla, president of the National Conference of Catholic Bishops, wrote to the President on Friday to urge that this bill be vetoed. Quoting St. Matthew's Gospel, Bishop Pilla wrote that ``the moral measure of our society is how we treat `the least among us.' '' I know what the outcome will be today, but before we cast our votes, I hope Senators will ask themselves how this legislation will treat the least among us. I began these remarks with a comment on language. The conference report before us is not welfare reform, it is welfare repeal. It is the first step in dismantling the social contract that has been in place in the United States since at least the 1930's. Do not doubt that Social Security itself, which is to say insured retirement benefits, will be next. The bill will be called the Individual Retirement Account Insurance Act. Something such. John Westergaard points out that this legislation breaks the social contract of the 1930's. We would care for the elderly, the unemployed, the dependent children. Drop the latter; watch the others fall. Fred C. Ikle has coined the fine term ``semantic infiltration'' to describe the technique in international relations whereby one party persuades another to use its terms to discuss the issues being negotiated. We now have its domestic counterpart in egregious display. Recalling George Orwell's essay, ``Politics and the English Language,'' we would do well to be wary. Henry Friedlander has reminded us recently of the stages by which genocide evolved from the soothing and supportive notion of euthanasia. And so to one other matter of language. We are told that this legislation is a defeat for liberals. We are assured in private, and it is hinted at in print, that many of the President's most liberal advisers opposed this legislation. Liberals are said to have lost. This is nonsense. It is conservatives who have lost. For the best part of 2 years now, I have pointed out that the principal--and most principled--opponents of this legislation were conservative social scientists who for years have argued against liberal nostrums for changing society with the argument that no one knows enough to mechanistically change society. Typically liberals think otherwise; to the extent that liberals can be said to think at all. The current batch in the White House, now busily assuring us they were against this all along, are simply lying, albeit they probably don't know when they are lying. They have only the flimsiest grasp of social reality; thinking all things doable and equally undoable. As, for example, the horror of this legislation. By contrast, the conservative social scientists--James Q. Wilson, Lawrence Mead, John DeIulio, William Bennett--have warned over and over that this is radical legislation, with altogether unforeseeable consequences, many of which will surely be loathsome. All honor to them. They have kept to their principles. Honor on high as well to the Catholic bishops, who admittedly have an easier task with matters of this sort. When principles are at issue, they simply look them up. Too many liberals, alas, simply make them up. Mr. President, I thank the Senate for its courteous attention. I thank my friend from Minnesota for reserving this time for me, seeing to it I was able to speak, and I yield the floor. Mr. DOMENICI addressed the Chair.

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

Mr. MOYNIHAN

Mr. MOYNIHAN. Mr. President, yesterday, by unanimous consent the Senate confirmed the nomination of Magistrate Judge Nina Gershon for the position of U.S. District Judge for the Eastern District of New York. I recommended Judge Gershon to President Clinton on July 11, 1995 and the President nominated her on October 18, 1995. The Senate has confirmed a judge of impeccable credentials. She has been a magistrate court judge since 1976 and was chosen chief U.S. magistrate judge for the Southern District in January of 1992. Indeed, Judge Gershon has the distinction of being the first chief magistrate judge for the Southern District. Nina Gershon has shown herself to be an extremely able and well-respected magistrate. And I am confident that she will serve the Eastern District of New York with equal dedication. Throughout the nomination process she has had bipartisan support and I thank the leaders for bringing her nomination forward.

Mr. MOYNIHAN

Mr. MOYNIHAN. I thank the chairman, as well. Renewable and Conservation Resources

Mr. MOYNIHAN. The Department should at least explore the options available to them. The private sector may be able to present a bid that would speed-up the clean-up of the Tonawanda site in a cost-effective manner. Maybe it cannot. The problem is the Department of Energy is reluctant to even find out.

Mr. MOYNIHAN. If I may add, the citizens of Tonawanda, through their elected officials, have engaged our offices and have asked Senator D'Amato and me to request that the Congress give direction to the Department of Energy in order to start the process towards removal and disposal of this waste. We both agreed that we would do what we could to relieve the town's burden. Now, Mr. President, this is a daunting task requiring many tens of millions of dollars. We do not believe for a moment that it will be easy. However, we are here today to ask the chairman's assistance with the next step.

Mr. MOYNIHAN

Mr. MOYNIHAN. Mr. President, today the Senate will confirm the nomination of our dear colleague, Claiborne Pell, as the U.S. representative to the 51st session of the U.N. General Assembly. Senator Pell's career and accomplishments were what the Framers of the Constitution probably had in mind when they created the position of U.S. Senator. For 36 years Claiborne Pell has graced the United States Senate, providing thoughtful leadership on an exceptional range of issues. Millions of Americans have been able to attend college because of his historic role in creating the program which the Congress, in an unprecedented honor for a sitting Senator, named Pell grants in 1980. Thousands of American communities have been immeasurably enriched by the National Endowment for the Arts and the National Endowment for the Humanities, which he helped create in 1965. Champion of international environmental concerns and nuclear disarmament treaties, crusader for human rights, primary sponsor of legislation to assist the handicapped, originator of the High-Speed Ground Transportation Act; his vision has helped transform this country he loves in so many tangible ways. But in light of his pending nomination, it is appropriate to speak of Claiborne Pell's first real job. In the spring and summer of 1945, millions of us left military service. Most of us went back, as I did, to the schooling or jobs we had left to fight for our country. Claiborne Pell did something a little different. He helped change the world. In June 1945, he went to San Francisco as a member of the International Secretariat of the U.N. Conference on International Organization, the conference that drafted the U.N. Charter. In all, 282 delegates representing 50 countries took part in drafting the U.N. Charter, though the bulk of the work was accomplished by the 1,058 persons working for the International Secretariat. He may be the only government official of those participating in the organizational conference who is still in public office anywhere on this planet--young Claiborne Pell on assignment from his beloved Coast Guard. As Assistant Secretary of Conference III, the Enforcement Arrangements Committee, he helped draft articles 43, 44, and 45 of the United Nations Charter that gave the Security Council the right to take military action to prevent aggression. He collected the ballots at the vote to confirm the Charter. And to this day he is never caught without a copy of the Charter in his pocket. We in the Senate are honored to have the beloved former chairman of the Senate Foreign Relations Committee, Claiborne Pell, counted among those who were present at the creation of the Charter. He has lived the promise of the United Nations Charter for 51 years-- on State Department assignment in Eastern Europe during the harshest early days of the cold war; and as a private citizen organizing the rescue of over 100,000 Hungarian refugees after the betrayal of the 1956 revolution against Soviet rule. In his efforts to enhance environmental protection, he is one of the few persons--the only United States Senator--who attended both the 1992 United Nations Conference on Environment and Development [UNCED] in Rio, and its predecessor, the 1972 Conference on the Human Environment in Stockholm. He has championed the adoption of an international legal regime for the peaceful use of the seas. As such he has participated in the creation of the Law of the Sea Convention. Beginning on September 29, 1967 he introduced three Senate resolutions urging the President to negotiate such a measure. Those resolutions and a draft treaty that Senator Pell proposed in 1969 led first to the Seabed Arms Control Treaty, prohibiting nuclear weapons and other weapons of mass destruction from the ocean floor, ratified by the Senate in 1972. The Law of the Sea Convention would not be opened for signatures for 10 more years until 1982. Senator Pell's long efforts in this regard are reflected in the achievements contained in the Convention which codifies, among other things, freedom of navigation rights, and the exclusive use of marine resources by countries within 200 miles of their shores. Claiborne Pell is a Senator for the ages. We in the Senate shall miss him. He will no doubt serve with distinction as the United States Representative to the 51st session of the United Nations General Assembly. I congratulate Senator Pell for his numerous achievements and wish him well in his future endeavors.

Mr. MOYNIHAN

Mr. MOYNIHAN. I yield the floor.

Mr. MOYNIHAN. I do not claim that this is something easily done or we would have done it long since. But I think that it is something which can be done. I think the Republic of South Korea is so little interested in how we feel about matters of Burma, there are ways to suggest to the Republic of South Korea that it might well reconsider its position. Not for nothing do we have the United States Army divisions in Korea. If they think that is not really in their interest, that can be arranged, too. I do not dispute the Senator's point. I simply make the argument that a matter of principle is at stake here. If it is costly, so be it. Principles are precious.

Mr. MOYNIHAN. Yes.

Mr. MOYNIHAN. Mr. President, I would like to speak to the amendment offered by the Senator from Maine as a substitute to Section 569 of this bill regarding sanctions against the regime in Burma. Section 569 is similar to a bill, S. 1511, offered by the distinguished Senator from Kentucky, which I have had the honor to cosponsor, and others have done as well. This is very simply a test of how we will respond to democracy denied. For the longest while now, from the time, I would suppose, of Woodrow Wilson's ``Fourteen Points,'' the United States has actively encouraged the spread of democracy and democratic institutions in the world, rightfully thinking that the world would be a safer and better place. We have seen in the course of this century events that would not have been thought possible at the outset. Here at the end of the century, we see events that would not have been thought possible. Russia has had two presidential elections, the first in Russian history. Mongolia has had free elections. The distinguished Senator from Virginia was on the floor speaking just the other day about his experience as an observer in Mongolia. Not only did Mongolia have a free election, but they had observers from around the world and, principally, the United States to attest to that fact. The movement towards democracy is not universal. It has never taken strong hold on the continent of Africa, and yet it now appears in Eurasia and in South Asia. The Republic of India has just had its 11th, I believe, national election since independence, an unbroken sequence of democratic elections, with one interval of national emergency but it was for a relatively short period of time and ended with the constitution intact. The Government of Bangladesh has just had a free election between two formidable women political leaders who are descendants, in one form or another, of leaders previously deposed and shot, events that are too common in post-colonial nations. But they have had a free election and picked an impressive new Prime Minister to form a government. British India, as it was called, extended down to the Bay of Bengal on the eastern side and included not only Bangladesh but what is now Myanmar, formerly Burma. The choice between the term Burma and Myanmar is a choice of languages, Myanmar is a Burman term. It is a multiethnic state, with eight major ethnic groups, as all those states are, each with many languages--though none at the level of India itself. Burma has four principal languages and historically has had very strong disagreements on the periphery with the governments at the center in what was Rangoon. The name has been changed, which is a perfectly legitimate thing to do, by the military regime whose initials form the unenviable acronym SLORC, as if ``SLORCing'' out of the black lagoon. This is a regime which has not simply failed to move toward a democratic government, but has overthrown a democratic government, imprisoned the democratically elected leaders, a Nobel Prize-winning Prime Minister, sir. Burma is largely a Buddhist nation. Tensions between the numerous ethnic groups resulted in a long and not happy post-colonial experience. I was once our Ambassador to India, and I remember visiting Mandalay, where we had a one-man consulate. I was being driven around. I came to the area of the city where there were Chinese language signs. I asked the Burmese driver, ``Are there many Chinese here in Mandalay?'' He said, ``Well, not many now, but before independence, the Indians and the Chinese owned everything around here. And that's why we had to have socialism.'' It was simply a form of expelling persons, moving in the general melee of the 19th century colonial Asia. After a series of decent enough governments, possibly too passive from one event to another, the army seized control. Twenty years of a hard dictatorship followed, with a military junta headed by a general playing golf in the shadow of a pagoda, while a nation, a potentially rich nation, all but starved. It is an experience we have seen before, nothing new, but it was cruelly inappropriate to Burma. I visited it at that time. Clearly, a land capable of great agricultural product, an industrial-capable people, ruined by government. They stayed ruined a long time, until they rose and realized, no, and in 1990, a free election at long last was held in Burma. The National League for Democracy won 82 percent of the vote, but the military junta did not step down. This was not the beginning. This did not just happen suddenly. There was a movement for a democratic government that has been out in the jungles for a generation. I think if I had one photograph that would say to me more than anything else about our century, it would be a jungle clearing, I expect it would be up in the Shan state, where some 60 or so young men, aged 18, 19, 20--and this is at a time, about 15 years ago, when Ne Win was still in power. Senator Kennedy and I had made efforts such as Senator McConnell is leading today. There in perfect English, perfectly formed letters, a white sign with black letters, script that must have been 30 feet long--these young men were holding this sign which said, ``Thank you Senators Kennedy and Moynihan.'' They were out in the jungle and they knew, and it mattered that they knew. It kept them going. What we think matters so much in the world on these matters. The military regime that overthrew the democratic government--having stepped aside, then a coup immediately followed. The results of the election have not yet been implemented. The Prime Minister elected, Aung San Suu Kyi, has been released from house arrest, but only just barely. She has, you might say, a patio and a bit of garden, a front yard. The world is watching. We are going to hear today--and we will not hear wrong--that if we impose these sanctions, American firms will lose opportunities, and European firms or Asian firms will take advantage of them. And that may be true. But I wonder for how long, and I wonder in the end at what profit. If our firms are strong and competitive and international, it is because of the principles the United States has stood for in this century, and should continue to stand for. It is one thing when we find we cannot move a nation closer to democracy. Not many external forces can do that. It comes when the time is ready, then so often not even then. But when a democratic regime has not emerged, overwhelmingly supported by an oppressed people who have resisted that oppression, who have understood it, who looked abroad for any signs of support and seen in the United States, in this Senate Chamber, such support, emboldened, encouraged, and have risen to claim their rights as a people, only to have it crushed by a military regime, SLORC? No, sir. This is the time for the United States to stand for what is best in our Nation, in our national tradition, what is triumphant in the world. This is not a time to allow the overthrow of the democracy. This is no time to beat retreat. This is a time for the McConnell provision for sanctions on Burma. And I thank the Chair for your courtesy. I yield the floor.

Mr. MOYNIHAN. Was devastated.

Mr. MOYNIHAN. Yes.

Mr. MOYNIHAN. Yes. Both Taiwan and South Korea have now established freely elected governments. If they were suddenly to be overthrown by a military coup, our position would have to be, in my view, very different. But it is just such a situation in Burma. I have a letter here from the Office of the Prime Minister of the National Coalition Government of the Union of Burma, which says: Dear Senator Moynihan: I have been closely following the Burma sanctions bill on the Senate floor and I am extremely alarmed about the proposal put forth by Senator Cohen. As you are no doubt aware, the Senate vote is crucial because it will send a signal to both the prodemocracy movement and the military junta about how people in the United States view the struggle for democracy in Burma. Mr. President, I ask unanimous consent this letter be printed in the Record.

Mr. MOYNIHAN

Mr. MOYNIHAN. Mr. President, the Senate faces a moment of profound moral choice. We are dealing here with the proposal of the Senator from Kentucky, joined by others, to place the United States emphatically on the side of the freely elected democratic regime of Burma, which was elected with 82 percent of the vote and then instantly overwhelmed by a military coup. The restoration of a military regime, which had earlier, in 1962, crushed the nascent democratic society of Burma. Before that Burma had succeeded through a succession of elections beginning with one for a constituent assembly prior to independence, and then three free elections thereafter. As I say, this all ended in 1962 and was followed by 25 years of atrocious government and oppression under General Ne Win. The country never submitted to this. The resistance was always widespread, emphatic, admirable to a degree that Americans can only imagine, given our long and stable history. Now, the issue has become an international issue. Our Senate was the first to raise this issue in 1988, and we have persisted in the matter. The proposition is to isolate the military regime, to deny it the recognition of the free world and to make clear that such denial has consequences in the economic development of that potentially rich and prosperous and happy society. I speak with some knowledge of Burma, not enough, but enough to know how important this is to the whole movement toward democracy in Asia. We have just seen Russia conduct two democratic presidential elections, the first in their history. We have just seen Mongolia conduct a free election and choose a democratic government. The Senator from Virginia and former Secretary of State Baker were both in Mongolia as election monitors. There are many such nations in the early stages of a democratic transition. We must associate with them and stand by them. And when democracy is threatened we must make our objections known. Just this June, the European Parliament has risen up and stated that the time has come for the whole of the European Union to boycott this regime. Most American firms have already done so. Most American observers have urged us to act. The Wall Street Journal, in an editorial of May 30 this year, put it this way: Throughout the world, foolishness and greed are sometimes draped with a veil of respectable sounding phrases like ``constructive engagement,'' based on the promise that by doing business in a country like Burma you expect to change it. The problem is that once companies and governments climb into the boat with dictators, they are very reluctant to rock it, lest their deals go overboard. The request for this embargo, the proposition, has been endorsed by Secretary of Commerce Kantor who stated last month with regard to Serbia, South Africa, Libya, and Iran, ``There are times when economic restrictions done in an appropriate fashion can be very helpful. With regard to Burma, I'm in favor of taking effective action with regard to the actions of this regime.'' Witnesses from South Africa, who benefited to a degree no one could imagine from American leadership in just this mode, Nelson Mandela and Bishop Tutu, have told us to have faith in our own experience. Burma will yield if the democracies stay together and the United States leads. Most emphatically and importantly, the elected Prime Minister, an extraordinary person, a winner of the Nobel Peace Prize, Aung San Suu Kyi, asks us to do this. She has sent videotaped to the European Parliament last week with a statement supporting sanctions. She said, ``What we want are the kind of sanctions that will make it quite clear that economic change in Burma is not possible without political change.'' That is the record of the past three decades. A country that could be prospering today is all but prostrate because of the military regimes that have succeeded, one after the other. She went on to say, ``We think this is the time for concerted international efforts with regard to the democratic process in Burma.'' That, I respectfully suggest, is what is at issue in the vote we are soon to have. I hope chairman McConnell will prevail. I hope democracy will prevail. I cannot doubt it will if we but keep to a firm line of principle and conviction. I thank the Senator for his time, and I yield the floor.