Frank Murkowski

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I rise to speak in favor of the conference report on the Education Savings and School Excellence Act. Mr. President, whenever I return to Alaska, the one issue I consistently hear about is the state of public education. I think it is fair to say that Alaskans and all of the American people are extremely concerned that despite annually spending hundreds of billions of dollars at the federal, state and local level, our educational system is failing. The simple fact that 78 percent of all two and four-year colleges offer remedial courses in math, reading and writing, suggests that many high school students are being short-changed in their academic preparation for adulthood. The conference report before us raises the amount that parents and grandparents can contribute to education savings accounts from $500 to $2,000. Most importantly, it allows parents to make the choice to withdraw these funds tax-free for use either in college or in grades K through 12. Although modest in scope, these education savings accounts will give real choices to lower and middle income families who believe their children's best chance for the future lies in gaining an education in a private school. Income limits insure that the benefit of these education savings accounts are focused on middle income families. Wealthy families most often do not need to use these education accounts because they can easily afford the cost of private K-12 tuition and because the tax base in wealthy communities often provides the best possible public education in the country. But middle and lower income families don't have the same choices that the wealthy have when it comes to education because they don't have adequate resources to pay private tuition. Allowing these families the choice of using funds in an education savings account for K though 12 schooling, could enable families with modest incomes to send their children to the school where they believe their child will get the best preparation for college. What's wrong with that, Mr. President? If educational savings accounts can be justified for college tuition, shouldn't they also be allowed for the education expenses that give a child the opportunity to apply to college? Mr. President, this conference report contains an important provision that will benefit many families in Alaska. Under this measure, distributions from qualified state tuition programs, like Alaska's will be tax exempt if the proceeds are used for college or graduate school expenses. Finally, Mr. President, I am pleased the bill extends until 2002 the $5,250 per year exclusion for employer-provided educational expenses. However, I would have preferred that this exclusion would have also applied to graduate student expenses. Mr. President, I would hope that this win-win education bill will be signed by the President. It promotes greater choice for families in selecting their educational options for their children at a time when families are demanding greater accountability from all of their educational institutions.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I rise to call the attention of my colleagues to the distinguished record of the United States Coast Guard Auxiliary, which today marks its 59th year of operation. Most of us know this fine group of men and women only as the civilian arm of the Coast Guard--a volunteer group of friends and neighbors who offer safe boating and navigation classes, and perform courtesy inspections to ensure that our boats are equipped the way they should be. However, Mr. President, there is far more to the Auxiliary. The Auxiliary was formed when the clouds of war threatened all the civilized world, and when war came to the United States, the members of the Auxiliary served their country well. Recently, the commander of United States Coast Guard Group San Francisco, Captain Larry Hall, spoke to Auxiliary Flotilla 5-7 on the 55th anniversary of its formation. His address is a capsule history of the Auxiliary in general, and of San Francisco's ``Diablo'' flotilla as a specific example, as well as a look at how the Auxiliary and the active-duty Coast Guard work together to keep Americans safe. Mr. President, I ask to have Captain Hall's remarks printed in the Record. The remarks follow: Remarks to Commemorate the 55th Anniversary of ``Diablo'' Flotilla 5-7 Coast Guard Auxiliary (By Captain Lawrence A. Hall, USCG). Immediate Past District Commodore Marilyn McBain, Vice Commodore Mike Maddox, District Rear Commodore Jack O'Neill, Flotilla Commander Bill Graham, Members of Diablo Flotilla 5- 7, fellow members of Team Coast Guard, and friends: You have honored me with the kind invitation to speak to you on this special occasion * * * to share this important piece of Coast Guard History--of the Coast Guard Auxiliary and the role Flotilla 5-7 played in it. Needless to say, the Auxiliary has been an important part of our Service's history during this century, and as an active-duty Coast Guard member, I'm honored to be associated with you all. I realize that many of you here tonight have personal memories of World War II, and that some of you served our country with distinction during those years of trial for our nation. Of course, I'm but a youngster, and wasn't even a gleam in my parents' eye until nine years after the war ended! I don't share any of those memories, and had to borrow from someone else. So, before I get too far along in talking about the Auxiliary's early years, let me credit Malcolm Willoughby's book The Coast Guard in World War II, published in 1957 by the U.S. Naval Institute. It's an excellent reference. Let me start at the beginning * * * The forerunner of the Coast Guard Auxiliary, originally called the Coast Guard Reserve, was created on June 23, 1939. Its missions were to: Promote safety of life at sea and upon navigable waters, Disseminate information relating to the laws, rules and regulations concerning motorboats and yachts, Distribute information and knowledge concerning the operation and yachts, and, Cooperate with the Coast Guard It seems that we were just yesterday celebrating the Auxiliary's 50th anniversary--I know we're not getting any older, but shudder to think that somehow time's flown, and next year we'll actually be celebrating the Auxiliary's 60th! To continue * * * With war underway in Europe, on February 19, 1941, Congress passed the Auxiliary and Reserve Act. The Act in effect created a real military Coast Guard Reserve as we have today, added the uniformed but unpaid Coast Guard Temporary Reserve, and gave you, the civilian arm of the Coast Guard, your present name. Then war broke out * * * and you jumped into action. I've read that Seattle flotillas actually commenced patrols on the evening following the Pearl Harbor Attack. Many patrols were quickly established elsewhere, with Auxiliarists putting in countless hours patrolling in their own vessels. By June 1942 the Auxiliary had grown to about 11,500 people, with 9,500 boats organized into 44 flotillas. At first any Auxiliary member could volunteer the services of his boat, himself, and crew for temporary service in the Temporary Reserve. In this way, the Coast Guard drew on trained Auxiliarists for the performance of regular Coast Guard duties afloat on a military basis, and the Auxiliary became chiefly a source of military supply. The program for temporary reservist on full-time duty with pay was originally established to aid the acquisition of badly needed reserve boats and people from the Auxiliary because the need for small craft in the early days was extremely urgent. Men were enrolled for temporary duty for specific periods such as three or five months, and usually assigned to their own vessels. They were not transferred from their particular boat or out of District. Their duty was chiefly with the Coastal Picket Fleet from June through November 1942, when this type of duty was discontinued. As the war tempo increased and port security responsibilities grew, the Coast Guard leadership realized that the Auxiliary's civilian status prevented their effective wartime use. Not only did Auxiliarists lack military authority, but when going out on anti-submarine warfare patrol, they risked, if captured, being executed as spies! The need for militarization was obvious, the result being that the majority of Auxiliarists were eventually enrolled in the Coast Guard Temporary Reserve. This final setup for the Temporary Reserve, enacted on 29 October 1942, included Auxiliarists in a part-time no-pay status. The Temporary Reserve gradually took over patrol responsibilities from the Auxiliary, with Auxiliary patrols finally being discontinued in 1 January 1943. In the various configurations of the Temporary Reserve, the Auxiliary provided a nucleus of men well-qualified in small boat handling, along with their boats. This force, which by war's end numbered 30,000 Temporary Reservists and 1,000 boats recruited from the Auxiliary, allowed our more able-bodied men to be sent to the combat theaters, and performed a service on the home front which was vital to our national security. So, it was in this context that the Diablo flotilla was created in 1943. Though I don't have access to much in the way of Flotilla historical records, your Flotilla Commander Bill Graham tells me that, depending on how you count it, the Diablo flotilla was either the sixth flotilla--or one of the first nine flotillas--formed in the Northern Region of the Eleventh District. I'm sure that your predecessors in this Flotilla had a large part in patrolling the lower Sacramento and San Joaquin Rivers as well as the upper San Francisco and San Pablo Bays. People from Diablo Flotilla undoubtedly gave their service to the Temporary Reserve, making a vital contribution to the security of the Bay and Delta areas. I have to think this was no insignificant task, given the strategic sites at the Naval Weapons Station and Port Chicago, Mare Island Naval Shipyard, and the oil refineries of the area. This, and they still performed all their usual boating safety functions. Now I'll fast forward from the forties to modern times. Flotilla 507 has been an active force in promoting safe boating in the Delta. I note that: In 1994, under Jack O'Neill's leadership, you were lauded as the District Eleven (Northern Region) outstanding flotilla. In 1996, with Michael Hays as Flotilla Commander, you were given the award as Outstanding Flotilla in Division 5. In 1997, led by Tim Martell, you collected two of seven District awards for flotillas, for public affairs and for highest number of vessel examinations. Looking at recent Auxiliary Management Information System (AUXMIS) reports, which I thank your Immediate Past Commodore and District Staff Officer for Information Systems, Marilyn McBain for making happen, I see you're still building good numbers: I see strength in your membership--77, which includes 14 Auxiliary Operators! I see strength in your public education: two Boating Skills and Seamanship (BS&S) and three Sailing and Seamanship (S&S) courses in 1996; four BS&S, one S&S and four Boating Safely courses given in 1997; and 19 class sessions in various courses given so far this year. I see strength in your vessel examination program: 20 examiners conducting 459 CME's in 1997, up from 210 in 1996-- and you've already completed 210 exams so far this year. I see strength in your Marine Dealer Visit Program, with between five and seven Marine Dealer Visitors making 66 visits in 1996, 88 visits in 1997, and still building numbers this year. In these and all your other programs--Operations, Public Affairs, Member Training--you show that the Diablo Flotilla is active, is connecting with the public, is making a difference. I hope you still have room on your trophy shelf, since you'll no doubt be adding more ``hardware'' to it! This brings us to today. I stand here as the Group Commander within whose area of responsibility you spread the gospel of safe boating. I'm here to tell you that I am your partner in serving the public--the Coast Guard's customers in the lower Delta and Suisun Bay. Our safety missions are mutually dependent, and firmly linked together. Since taking command of Group San Francisco last Summer, I have embarked the Group on the strategy of community interaction. Yes, we in the Group do exist to provide critical search and rescue resources to the citizens of Central California and to enforce Federal laws where necessary. But the greatest of our missions is in protecting the safety of recreational boaters in the area we serve. I see the recreational boater's life as a continuum, starting when they buy and equip their vessel, continuing hopefully with some good education. Then comes the voyage, which usually, hopefully ends safely, but sometimes ends in a search and rescue case or an adverse Coast Guard boarding. In the past we at the Group dwelled too much on that far end of the continuum, especially in our huge number of law enforcement boardings--and I'm sure you read about it in the local maritime press. Where I am guiding our efforts now is to the start of that continuum--before the boater gets underway. To that end, I've directed Group personnel to steer their efforts at meeting and getting to know the boaters: We're walking the docks, boat ramps, and marinas, seeing the boaters with their vessels, answering their questions, giving advice, steering them toward the products you offer-- vessel exams and boating safety courses. We're making more public appearances: at boat shows, yacht clubs, service clubs, and schools. We're making friendly contacts with boaters on the water, commending them for safe boating practices, for wearing their personal floatation devices (PFDs), for being conscientious. We're listening to the boaters, constantly looking for better ways we can serve them. Finally, to show my regard for your vessel exam program, I have directed Coast Guard crews to not conduct random boardings on recreational vessels showing a current Courtesy Marine Examination sticker. We'll still board all vessels, including those with current CMEs, any time we can articulate a valid reason, such as for unsafe operation. But again, we will not randomly board vessels showing the sticker--proof of their commitment to equip their boats properly. I believe in your vessel exam program, and want to give boaters all possible motivation to let you aboard! In all our efforts, while we won't ever give up our responsibility to enforce boating safety law when necessary, we're out to show the boating public that we're a partner with them in maximizing success and enjoyment in their boating experience. In face-to-face contact I want them to see that we're real people, just like them, who have an important job to do. Now, here's where our fortunes really are linked. It's no surprise that we all have been searching for good measures of effectiveness in our boating safety programs--for ways that we can relate our hours of effort into the desired outcome of safer boating. Knowing that the Commandant has established a goal that we save at least 90 percent of distressed boaters after Coast Guard notification, I think we can make a difference there. To that end, I am measuring the number of person hours and personal contacts made by Group San Francisco people. This hopefully will translate in the next couple years to an increase in the number of people coming to you for vessel examinations and registering for safe boating courses--whether Coast Guard Auxiliary or U.S. Power Squadron. Finally, increased vessel exams and boating course students should translate to both a reduction in search and rescue cases among recreational boaters and better outcomes for the cases we do respond to. We're making the effort to encourage boating safety, and hope that our future numbers bear it out. With this, I ask a couple things of you, the Diablo Flotilla. First, keep up the great work. You've got a rich tradition, going back to earliest days of the Auxiliary. You've got the strength in numbers to keep it going. Second, work to ensure that the quality of your vessel exam and public education programs is second to none, along with your Marine Dealer Visit Program, which is yet another way that we can direct boaters to the services we offer. I'm depending on it and I'm doing the same with the services that we in Group San Francisco perform. In closing, I'm extremely proud to call you partners, members of Team Coast Guard and Team Group San Francisco. Be proud of where your Flotilla has come from, of the missions you've performed, and of your excellence yet to come. We'll be there with you. May we all be--Semper Paratus. Thank you.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I would like to announce for the public that a field hearing has been scheduled before the Committee on Energy and Natural Resources of the Senate. The hearing will take place in Kenai, Alaska at the Kenai Visitor and Convention Bureau on Friday, August 21, 1998, at 9:00 a.m. The Kenai visitor and Convention Bureau is located at 11471 Kenai Spur Highway, Kenai, Alaska. Those who wish to submit written statements should write to the Committee on Energy and Natural Resources, U.S. Senate, Washington, D.C. 20510. For further information, please call Amie Brown or Mark Rey at (202) 224-6170.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, today I, and my fellow Senator from the State of Alaska, Senator Stevens, and my good friends and colleagues from the State of Hawaii, Senator Inouye and Senator Akaka, are introducing a very important measure--one that would unlock and open the door to many first-time home buyers. As we are all aware, it is often the downpayment that is the largest impediment to home ownership for first-time home buyers. The Federal Housing Administration (FHA) began a pilot program two years ago to help families overcome that impediment by lowering the downpayment necessary for an FHA home mortgage. Mr. President, I am pleased to say that the pilot program, which is located in Alaska and Hawaii, has reported great success. This pilot program is effective because it accomplishes two feats: (1) it lowers the FHA downpayment, making it more affordable; and (2) it makes the FHA downpayment calculation easier and more understandable for all parties to the transaction. The pilot program, commonly called the ``97 percent Loan-to-Value Program,'' requires--on average--only a minimum cash investment of three percent for home buyers. Our bill amends section 203(b) of the National Housing Act by changing the current multi-part formula to a single calculation formula. The simplified formula creates a lower, more affordable downpayment while simultaneously simplifying the current, cumbersome loan calculation formula. Our bill would extend this lower and simplified downpayment rate to perspective home buyers across the country. Mr. President, the pilot program is a win-win situation: affordable homes are made available to responsible buyers without any increase in mortgage default rates. Here's what mortgage lenders have reported: There is no indication of increase in risk. The loans we have made to date have been to borrowers with excellent credit records and stable employment, but not enough disposable income to accumulate the cash necessary for a high downpayment.--Richard E. Dolman, Manager, Seattle Mortgage, Anchorage Branch. Is the 97% program working? The answer is a resounding YES! . . . In this current day, it takes two incomes to meet basic needs. To come up with a large downpayment is increasingly difficult, especially for those just starting out. The 3% program is a good start . . . I do no believe that lowering the downpayment increased our risk. . .-- Nancy A. Karriowski, Alaska Home Mortgage, Inc., Anchorage, Alaska. We have experienced nothing but positive benefits from the FHA Pilot Program Loan Calculation in Alaska and Hawaii.-- Roger Aldrich, President, City Mortgage, Corporation, Anchorage, Alaska. We support the new loan calculation, as this has provided a step toward the goal of homeownership for everyone . . . We do not feel that there is a greater risk with the borrower putting 3 percent down rather than using the calculation under the standard program . . .--Lorna Gleason, Vice President, National Bank of Alaska. Home buyers under the pilot program agree. Vicki Case of Palmer, Alaska is a single parent and a mortgage lender who earned too much to qualify for any of the low-income mortgage programs. She would have been unable to purchase her home had it not been for an FHA loan with the reduced down payment. In fact, but for the pilot program, approximately 70 percent of the FHA loan applications processed in Vicki Case's office would be rejected. simply because the buyer could not afford the downpayment. Mr. President, thanks to this pilot program, more and more deserving Alaskans are becoming home owners. Mr. President, our legislation has the support of the Mortgage Bankers Association of America, the National Association of Realtors, the National Association of Home Builders and the U.S. Department of Housing and Urban Development. They believe, as I do, that borrowers in all states should benefit from the simplification of the FHA downpayment calculation. I firmly believe that helping American families realize their dream of home ownership is vital to the Nation as a whole. Our bill, by creating a lower FHA downpayment, does much to assist families in owning their first home--thereby making the American dream of home ownership a reality. Mr. President, for details on how the new calculation works in comparison to the current calculation, I ask unanimous consent to submit into the Record a downpayment calculation comparison sheet. And I ask that my colleagues join Senator Stevens, Senator Inouye, Senator Akaka, and me in supporting this important legislation.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, today I, and my fellow Senator from the State of Alaska, Senator Stevens, and my good friends and colleagues from the State of Hawaii, Senator Inouye and Senator Akaka, are introducing a very important measure--one that would unlock and open the door to many first-time home buyers. As we are all aware, it is often the downpayment that is the largest impediment to home ownership for first-time home buyers. The Federal Housing Administration (FHA) began a pilot program two years ago to help families overcome that impediment by lowering the downpayment necessary for an FHA home mortgage. Mr. President, I am pleased to say that the pilot program, which is located in Alaska and Hawaii, has reported great success. This pilot program is effective because it accomplishes two feats: (1) it lowers the FHA downpayment, making it more affordable; and (2) it makes the FHA downpayment calculation easier and more understandable for all parties to the transaction. The pilot program, commonly called the ``97 percent Loan-to-Value Program,'' requires--on average--only a minimum cash investment of three percent for home buyers. Our bill amends section 203(b) of the National Housing Act by changing the current multi-part formula to a single calculation formula. The simplified formula creates a lower, more affordable downpayment while simultaneously simplifying the current, cumbersome loan calculation formula. Our bill would extend this lower and simplified downpayment rate to perspective home buyers across the country. Mr. President, the pilot program is a win-win situation: affordable homes are made available to responsible buyers without any increase in mortgage default rates. Here's what mortgage lenders have reported: There is no indication of increase in risk. The loans we have made to date have been to borrowers with excellent credit records and stable employment, but not enough disposable income to accumulate the cash necessary for a high downpayment.--Richard E. Dolman, Manager, Seattle Mortgage, Anchorage Branch. Is the 97% program working? The answer is a resounding YES! . . . In this current day, it takes two incomes to meet basic needs. To come up with a large downpayment is increasingly difficult, especially for those just starting out. The 3% program is a good start . . . I do no believe that lowering the downpayment increased our risk. . .-- Nancy A. Karriowski, Alaska Home Mortgage, Inc., Anchorage, Alaska. We have experienced nothing but positive benefits from the FHA Pilot Program Loan Calculation in Alaska and Hawaii.-- Roger Aldrich, President, City Mortgage, Corporation, Anchorage, Alaska. We support the new loan calculation, as this has provided a step toward the goal of homeownership for everyone . . . We do not feel that there is a greater risk with the borrower putting 3 percent down rather than using the calculation under the standard program . . .--Lorna Gleason, Vice President, National Bank of Alaska. Home buyers under the pilot program agree. Vicki Case of Palmer, Alaska is a single parent and a mortgage lender who earned too much to qualify for any of the low-income mortgage programs. She would have been unable to purchase her home had it not been for an FHA loan with the reduced down payment. In fact, but for the pilot program, approximately 70 percent of the FHA loan applications processed in Vicki Case's office would be rejected. simply because the buyer could not afford the downpayment. Mr. President, thanks to this pilot program, more and more deserving Alaskans are becoming home owners. Mr. President, our legislation has the support of the Mortgage Bankers Association of America, the National Association of Realtors, the National Association of Home Builders and the U.S. Department of Housing and Urban Development. They believe, as I do, that borrowers in all states should benefit from the simplification of the FHA downpayment calculation. I firmly believe that helping American families realize their dream of home ownership is vital to the Nation as a whole. Our bill, by creating a lower FHA downpayment, does much to assist families in owning their first home--thereby making the American dream of home ownership a reality. Mr. President, for details on how the new calculation works in comparison to the current calculation, I ask unanimous consent to submit into the Record a downpayment calculation comparison sheet. And I ask that my colleagues join Senator Stevens, Senator Inouye, Senator Akaka, and me in supporting this important legislation.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I would like to announce for the information of the Senate and the public that a full committee hearing has been scheduled before the Committee on Energy and Natural Resources. The hearing will take place on Thursday, June 25, 1998 at 9:30 a.m., in room SD-366 of the Dirksen Senate Office Building in Washington, DC. The purpose of this hearing is to consider the nomination of William L. Massey to be a member of the Federal Energy Regulatory Committee. For further information, please contact Gary Ellsworth of the Committee staff at (202) 224-7141. subcommittee on investigations

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I ask unanimous consent, on behalf of the leader, that at 5 p.m. today the Senate proceed to a vote on or in relation to the Reed amendment No. 2702 regarding tobacco advertising. I further ask unanimous consent that Senator McCain have 5 minutes and Senator Reed have 5 minutes for closing remarks just prior to the vote.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, last Thursday, before Secretary of Treasury Robert Rubin began testifying before the Senate Finance Committee, it is interesting to reflect on the status of the Japanese yen. At that time, it was trading at 141 to the dollar. During the hearing, I had an opportunity to ask Secretary Rubin whether or not the United States would intervene to stabilize the yen, and Secretary Rubin correctly observed that with the hundreds of billions, if not trillions of dollars and yen trading around the world on a daily basis, central bank intervention can only stabilize a currency for a very short period of time. It is further interesting to note, upon the completion of the Secretary's comments the yen fell to 144 to the dollar. So clearly there is a question of confidence. On Friday, the Government of Japan announced that the Japanese economy had met the standard definition of a recession; that is, two- quarters of negative growth. Unemployment in Japan is at its post-1950s record of 4.1 percent, which in Japan is extraordinarily high, with youth unemployment exceeding 9 percent. As of this morning, the yen has fallen through the 146 level. The Japanese stock market was within 2 percent of a 52-week low. Moreover, the stock markets--Hong Kong, India, Malaysia, South Korea and Thailand--have all hit 52-week lows. Mr. President, it is clear that Asia has yet to turn itself around from the crisis that started well over a year ago, and the biggest reason Asia is tumbling is because the Japanese Government has failed to face up to the realities of its crumbling economy, especially the dismal state of its banking sector. So long as Japan fails to take decisive action in the banking sector, the yen is very likely to plunge further as lack of confidence prevails, carrying with it the threat to all Asian economies of deflation and further currency devaluations. I think you would agree that all Americans should be very concerned about this crisis in Asia, and particularly in Japan. Japan is the second largest economy in the world and imports more than $66 billion in goods from the United States. Moreover, Japan is a major importer from the rest of Asia, and if its economy continues in recession, the rest of Asia will remain mired in economic decline which could lead to political instability, not unlike what we recently witnessed in Indonesia. The reality of the yen decreasing in value is very simple, Mr. President. Eighteen months ago, the yen was about 80. A year ago, it was a little over 100. At that time, it took 80 yen to buy a U.S. lamp. Today, it takes 146 yen. As a consequence, we are not selling any lamps or much of anything else in Japan. Alan Greenspan recently noted: Without first fixing its banking sector, Japan has little hope of fueling economic recovery. An editorial in today's New York Times, commenting on Japan's recession, states: The first priority for Japanese officials must be to save the country's sick banking system. Ever since the so-called bubble economy burst in Japan 7 years ago, the banking system has been carrying bad loans on its books from the days of heady land and financial speculation. As a former banker with 25 years of experience in commercial banking, I can tell you what happens when these loans become nonperforming. When the payments cannot be made, of course, the interest can't be paid as well. More often than not, the bank simply adds the past-due interest to the principal and brings the loan current, and the loan appears current on the books when, in reality, it is a nonperforming loan and, in many cases, a loss. Since 1991, the Japanese Government has promised time and time again to reform financial sectors within the country, but it has yet to fulfill its promise. Instead, I believe that the Government has always believed it could say one thing and do another or, in this case, simply rely on exports to stimulate the economy. The reality is that it will not and has not worked in the past. In January, Japan's Ministry of Finance announced that the number of problem loans was $577 billion, of which at least $85 billion had already gone bad or were insolvent. The remaining, nearly $500 billion, had the potential to go bad as well. Some analysts believe the value of the problem loans today in Japan is closer to $700 billion. Following this report, the Japanese Government announced a large bank bailout, but since then almost nothing has been done to implement it. The sick banks stay open and the economy continues to hemorrhage. In Japan today, short-term interest rates are at their lowest level ever since economic statistics have been recorded. Short-term loans carry interest rates--interest rates, Mr. President--below 1 percent. Imagine that the yield on a long-term, 10-year Japanese Government bond is an incredible 1.3 percent. With interest this low, it is hard to imagine why Japan is sinking into a recession. Yet, in a recent poll, 95 percent of Japanese companies interviewed complained about the difficulty of receiving loans from Japanese banks. The explanation is simple: The banks are fearful of making new loans. There is a credit crunch in Japan because of the overhang of all the bad debt that is being carried on the banks' books already. So long as this overhang continues, Japan will continue to fall further into recession. Mr. President, the Japanese can learn a valuable lesson from our bad experience with the failed savings and loans in the United States. When the S&L crisis first began to be felt in 1985, it was debated at great length here on this floor. Congress and the President refused to face the crisis and did not provide the sufficient funds to close the failed S&Ls. This only prolonged the crisis and ballooned the cost of the bailout to the taxpayer. When we first recognized the difficulty with the failing savings and loans, the estimated loss at that time was $25 billion to $30 billion. But we in the United States did not take our medicine in a timely manner and the S&L bailout ultimately cost the taxpayers of this country more than $200 billion. We finally did face the S&L problem. The longer we put it off, the more it cost. We created the Resolution Trust Corporation. We closed down the failed banks and consolidated others. After several years, we finally put the S&L crisis behind us, because we recognized that keeping sick financial institutions open only exacerbates the problem and costs more to the taxpayer. By contrast, the Japanese banks and their regulators have for years tried to hide their financial problems. In order to help cover up the insolvency problems of Japanese banks, just before the end of the fiscal year, in March, the Ministry of Finance changed the accounting rules affecting the so-called BIS ratio, a ratio used by international markets as a bellwether of financial health of the banks. This ratio says that shareholder equity--or assets minus liabilities--should at least equal 8 percent of the weighted assets, or typically the outstanding loans. The changes allowed the banks to use the purchase price of their stock portfolios as the asset value when the stocks' prices have fallen. Since many of these stocks were bought in the heyday of the Japanese bubble economy, this enabled the Japanese banks to look healthy when, in fact, they were sick. Indeed, they are very sick, Mr. President. Moreover, the Government attempted to manipulate the end-of-March stock prices by buying up shares on the open market. Neither of these actions suggest that the Japanese Government is serious about making banking changes in conformity with good accounting practices. Until Japan faces up to its banking crisis, things are going to get worse, not only in Japan but throughout Asia, because of the importance of the Japanese economy to the rest of Asia. Another looming threat to Asia lies in China which also faces a seriously dangerous banking situation. I was over in Beijing and Shanghai towards the end of the year. It is amazing to see the number of huge high-rises with very little occupancy as they attempt to negotiate the rent to a level to get people in them, regardless of if it makes financial sense. By some estimates, China has as much as $250 billion in doubtful loans. The Government-controlled Chinese banking system has been directing funds to favored companies regardless of the economics. In China's case, 70 percent of the state-owned banking loans go to inefficient and near-bankrupt state-owned enterprises. The Government is attempting to encourage foreign ownership coming into China, but there is a great reluctance on the part of U.S. firms to come in and share the debt associated with those opportunities. In any event, Mr. President, as a result, an estimated three out of four state commercial banks are now believed to be insolvent in China. China has announced their intention to reform their banking system, but with the Asian economy weakening and Japan in recession, China may wait too long to make the tough changes, and then those changes become that much tougher. In the end, we could find the two largest economies in Asia in recession, and I think this is very likely. My experience in finance tells me that when you have bad financial news, if you can take the hit up front and get on with it, as opposed to bearing it and putting it off, you will be much better off. That is not what is happening in Asia in either the case of China or Japan. There is a great reluctance to face up to the realities and take the medicine to change the banking system and get them back on a functional basis. This would shore up the economy in Asia. Finally, Mr. President, our own U.S. economy is, more than ever, linked to the world economy. So I can only hope that the Japanese Government and the Chinese Government will accept the problems in their system and make the necessary changes before the cost becomes too great, before the cost affects the U.S. economy and the U.S. taxpayer. Mr. President, neither Japan nor China is going to survive this crisis merely by devaluing their currency and trying to export their way out of their economic problems. When we see both countries taking serious steps to address their failed financial institutions, as they are currently structured, and bringing greater transparency to their banking systems, then at last we will know that Asia is beginning to turn the corner. Mr. President, I suggest they start now without further delay. I thank the Chair and suggest the absence of a quorum.

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

Mr. MURKOWSKI

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

Mr. MURKOWSKI. Mr. President, I ask unanimous consent that I may speak as in morning business for 7 minutes.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I ask unanimous consent that the Subcommittee on Administrative Oversight and the Courts, of the Senate Judiciary Committee, be authorized to meet during the session of the Senate on Monday, June 15, 1998, at 2 p.m. to hold a hearing in Room 226, Senate Dirksen Building, on: ``S. 1166, the Federal Agency Compliance Act,'' and ``A Review of the Judgeship Needs of the 10th Circuit.''

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I would like to announce for the public that an oversight hearing has been scheduled before the Full Energy and Natural Resources Committee to consider the issue of independence of Puerto Rico. The hearing will take place on Tuesday, June 23, 1998, at 9:30 A.M. in room SH-216 of the Hart Senate Office Building. For further information, please contact James Beirne, counsel at (202) 224-2564 or Betty Nevitt, Staff Assistant at (202) 224-0765. committee on energy and natural resources

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, today the Senate has just passed landmark legislation which will serve to restore, reinvigorate and rebuild our National Park System. S. 1693 addresses a wide variety of Park Service operations from failing infrastructure to improve management and accountability for park programs. The Administration reports that it will take over $8 billion to bring our park facilities, historic structures, roads and trails up to an acceptable standard. Over the years while we have expanded the National Park System with new units and new responsibilities we have deferred maintenance and reduced funding in many important park programs. As a result we now have what can be best described as a National Park System that is worn-out and broken--a System in need of attention. Quite frankly, Congress does not have the available monies to address or devote to the problems currently encountered by park managers, however meritorious they may be. During this Congress, Senator Thomas, Chairman of the Subcommittee on National Parks, Historic Preservation and Recreation, has take a pro- active approach to National Park Service reform. While conducting over fifteen over-sight and legislative hearings on the problems confronting the National Park System. He found that despite reports of $300,000 outhouses, the National Park Service and Congress have failed to deal with the lack of personnel and fiscal resources desperately needed in our parks. Unfortunately, the needs are not limited to a certain number of parks or areas of the United States. The units of the National Park System require a major face-lift from coast to coast, in my State of Alaska, and parks on the islands of Hawaii and in American Samoa. While the lack of fiscal resources can be addressed. Throwing money to any government agency without accountability is in no one's interest. In this regard the legislation requires the Secretary to develop a comphensive training program for employees in all professional careers, for the purpose of assuring that the work force has available the best, up-to-date knowledge, skills and abilities with which to manage, interpret and protect the resources of the National Park system. The Secretary is also directed to implement a clear plan for management training and development to enable only those qualified to move into positions of park superintendents and regional managers. The legislation also addresses park budgets and accountability. Today individual park budgets, if you can find one, are a haze of smoke and mirrors. When this legislation is enacted into law each unit of the System will prepare a budget and make it available to the public. Mr. President, let me repeat, ``make available to the public'' a five year strategic plan and an annual performance plan pursuant to a published park budget on an individual park-by-park basis. There will be accountability for the expenditure of all appropriated funds as well as monies collected from enhanced fee collection programs. There will no longer be management in the darkness. Light will be shed where no light has shown before. During the 105th Congress we found that decisions by park service management are often not based on sound science, in fact, in many parks throughout the country the Service knows very little about the natural resources they are supposed to protect. This legislation directs the Secretary to undertake a program in inventory and monitoring of National Park System resources to establish baseline information and to provide information on the long-term trends in the condition of resources under his jurisdiction. In addition, the Secretary is directed to establish a comprehensive network of college and university based cooperative study units in order to complete the baseline information inventory. Mr. President, I mentioned earlier that one of the problems with the Park System is that over the last 20 years we have more than doubled the number of units in the System. There has never been a formal procedure to consider new areas which might be eligible for inclusion in the System, nor has any criteria been established by which a potential park area would be evaluated. I direct your attention to Title III of S. 1693 in which the legislation establishes procedures and criteria for Congress and the National Park Service to consider when studying potential new areas that may be added to the System. Mr. President, Title IV of this legislation deals with concession reform. After eight years of debate this very contentious issue has been resolved. Both Senator Bumpers and Senator Thomas deserve a great deal of credit to have turned this issue into a bi-partisan one. Senator Bennett as well as Secretary Babbitt also deserve recognition for their work and positive approach to working on the finer points of the concessions legislation. I have long been an advocate of granting an interest in property to those in the private sector who invest in our park facilities such as hotels, lodges, and restaurants. The private sector requires this incentive or interest to borrow from a bank--collateral--to invest in needed capital improvements. The advantage is that we can improve visitor facilities with private sector dollars as opposed to taxpayer dollars. However meritorious, possessory interest has been a large sticking point in ever reaching resolution on concession reform. As in any great bi-partisan compromise, no one got everything they wanted. The concession folks lost their right of preference in renewal but are allowed to maintain a form of possessory interest. We were able to place private sector expertise into the concession management program with an advisory committee made up of individuals in the hospitality industry and the Secretary is directed to contract-out certain concession management functions. I firmly believe that this legislation will enhance concession program management, increase competition among prospective concession operators, improve the delivery of goods and services to park visitors, improve facilities and increase revenues from concession franchise fees. Mr. President, the legislation extends the popular Recreational Fee Demonstration Program from the year ending in 1999 to 2005 and extends the fee collection authority to all 376 park areas. This should be a valuable shot in the arm for increasing park operating funds. For the first time since 1948 commercial film producers will pay a fee for using these unique backdrops; our parks, for major motion pictures and advertisement in addition to allowing the parks to recover their direct costs such as security activities and permit processing. In return the parks will do a better job in processing permits. As time is money it is much easier on the film industry to hear the word ``no'' early on in the process rather than wait weeks to receive a decision. Mr. President, the Park Service is directed by this legislation to establish a National Passport Program based on the familiar and popular Duck Stamp used by the Fish and Wildlife Service. The collectable stamp and related competition and posters etc. should produce additional revenues for major park projects. In addition to the National Passport Program which will provide the user entrance into any one of the fee areas an international passport will be sold overseas for use by foreign visitors. On another note we ask the National Park Foundation to share their expertise with many of the park's friends groups to encourage expansion of the volunteer ranks as well as to develop entrepreneurial programs at the local level. We have looked at the National Park System and found that many of our parks are adjacent to state and county parks. There is no reason why the NPS cannot share their personnel and resources with these local agencies and vice-versa. In other words you don't need two snowploughs when one could be shared. This legislation changes the law and provides the Park Service with the authorization to enter into agreements with other local agencies. Our own United States Park Police are often the forgotten step-child of the National Park Service. Their particular needs and requirements are unknown even though we have asked for reports from the Administration on a number of occasions. Within a year we have that report so that Congress can act in an appropriate manner while addressing the critical needs of the Park Police. Mr. President, I thank the Members of the Committee on Energy and Natural Resources who came together in a bi-partisan fashion and reported the bill to the full Senate 20 to 0. The Senate can be proud, for this legislation represents a new beginning for the National Park System which will carry it into the next century, alive, vibrant and serving the hundreds and millions of park visitors yet to come. Perhaps, most important, our natural, cultural and historic resources for which these parks have been set aside will be better protected and managed for future generations. I thank the Chair, and I thank my colleagues for their support on this important legislation.

Mr. MURKOWSKI

Mr. MURKOWSKI. Madam President, it gives me a great deal of pleasure to introduce to this body, the U.S. Senate, Mrs. Anson Chan. Anson Chan is the Chief Secretary of the Hong Kong Special Administrative Region, known to many Senators in this body. Anson Chan is the head of Hong Kong's 190,000-strong Civil Service. She was appointed to the position back in 1993 by then-Governor Chris Patten and has continued to serve in this capacity under C.H. Tung, the Chief Executive of the Hong Kong Special Administrative Region.

Mr. MURKOWSKI

Mr. MURKOWSKI. Madam President, I ask unanimous consent the Senate stand in recess for 5 minutes, so colleagues may greet Anson Chan, our dear friend.

Mr. MURKOWSKI. I thank the Chair for recognizing Anson Chan. I thank my colleagues who visited with her, as well as the pages. I suggest the absence of a quorum.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, when the Committee filed its report on S. 1275, the Northern Mariana Islands Covenant Implementation Act, the cost estimate of the Congressional Budget Office was not available. The estimate has since been received and I ask that it be printed in the Record for the information of the Senate. The cost estimate follows: U.S. Congress, Congressional Budget Office, Washington, DC, June 8, 1998. Hon. Frank H. Murkowski, Chairman, Committee on Energy and Natural Resources, U.S. Senate, Washington, DC. Dear Mr. Chairman: The Congressional Budget Office has prepared the enclosed cost estimate for S. 1275, the Northern Mariana Islands Covenant Implementation Act. If you wish further details on this estimate, we will be pleased to provide them. The CBO staff contacts are John R. Righter (for federal costs), Marc Nicole (for the state and local impact), and Ralph Smith (for the private-sector impact). Sincerely, June E. O'Neill, Director. Enclosure. S. 1275--Northern Mariana Islands Covenant Implementation Act Summary: S. 1275 would amend the covenant act between the United States and the Commonwealth of the Northern Mariana Islands (CNMI), a territory of the United States, to reform the immigration laws of CNMI, It also would establish a special committee to set minimum wage rates by industry within CNMI. The estimated cost of S. 1275 depends on whether the Attorney General would elect to apply the provisions of the Immigration and Nationality Act (INA) to CNMI. If the Attorney General (AG) decided not to apply the INA, CBO estimates that, on average, implementing S. 1275 would increase annual costs by less than $500,000, subject to appropriation of the necessary amounts. If the AG did apply the INA, as modified for CNMI by S. 1275, CBO estimates that, subject to appropriation of the necessary amounts, implementing S. 1275 would increase costs--mostly at the Immigration and Naturalization Service (INS)--by less than $500,000 in fiscal year 1999 and a total of between $7 million and $8 million over the 1999-2003 period. In addition to the increase in discretionary costs, S. 1275 also could affect direct spending if the AG applies the INA to CNMI; consequently, pay-as-you-go procedures would apply. CBO estimates, however, that any change in direct spending would have no significant net budgetary impact each year. S. 1275 contains intergovernmental mandates as defined in the Unfunded Mandates Reform Act (UMRA) because the bill would preempt the immigration and minimum wage laws of CNMI. CBO estimates that the costs of such mandates would not be significant and that the threshold for intergovernmental mandates established in UMRA ($50 million in 1996, adjusted annually for inflation) would not be exceeded. S. 1275 contains private-sector mandates as defined in UMRA. Section 2 would impose a mandate on employers by limiting the number of temporary alien workers who could be legally present in CNMI. Section 3 would impose a mandate on employers by increasing the minimum wage which they would be required to pay their employees; the amount of the mandated increases in wages would be determined by an industry committee established as a result of enactment of this legislation. CBO cannot determine whether the direct cost to employers of those mandates would exceed the $100 million inflation-adjusted annual threshold specified in

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I rise today to speak of the passing of our former colleague, Senator Barry Goldwater--one of the giants of twentieth century American politics. There is no doubt that Barry Goldwater was a transformational political thinker whose courage and conviction never wavered despite enduring a defeat in 1964. For in that defeat were sown the seeds of the Republican revolution that ultimately brought Ronald Reagan to the Presidency in 1980 and Republicans to control of Congress 14 years later. Senator Goldwater was a man who never minced words. He was honest, open and forthright. After his 1964 Presidential hopes were completely vanquished, he observed ``When you've lost an election by that much, it isn't the case of whether you made the wrong speech or wore the wrong necktie. It was just the wrong time.'' In fact, Barry Goldwater was far ahead of his time and had the opportunity to see his beliefs vindicated when Ronald Reagan was elected President. Barry Goldwater did not base his political views on focus groups or poll results. He had core beliefs and was not willing to bend them for temporary political advantage. He warned of the dangers of big government and the welfare state precisely at the time that Lyndon Johnson was constructing the largest expansion of government since the Depression. He preached a strategy of winning the cold war through a policy of peace through strength while the conventional wisdom argued for peaceful coexistence with a de-emphasis on military strength. When the American Presidency was in crisis in 1974 after the Supreme Court had ruled against President Nixon's claims of Executive Privilege, Senator Goldwater joined several Congressional colleagues in a visit to the White House to give counsel to the President. Although he had long supported President Nixon throughout the ordeal of Watergate, most observers believe that his words were decisive in persuading the President that the case was hopeless and for the good of the Nation he must resign. Mr. President, there are certain quotations that live on decades and centuries after a man has died, yet they capture the spirit of the time and the man. Two centuries ago, when America was heading into revolution, that spirit was best captured in the words of Patrick Henry: ``Give me liberty or give me death.'' The words of Barry Goldwater spoken 34 years ago at the Republican convention best sum up the spirit, clarity and wisdom that he will forever be remembered for: ``Extremism in the defense of liberty is no vice, and moderation in the pursuit of justice is no virtue.'' We will all miss this decent and honest man who made such a difference for America.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, if I may respond to my friend from Florida, first of all, we have not been able to obtain a copy of any statement from the Speaker. The statement that has been alluded to on the floor is a statement by the Congressman from Nevada who is running for the Senate office. He released a statement which indicated that the House leader would not take up the bill. We have not been able to confirm that with the House leader. It would be my intention to offer the Senate-passed bill, Senate bill 104, with an addition of the Bingaman amendment, which was circulated at the time of the Senate consideration. If informal negotiations with the House bear fruit, which they certainly have been, I will probably offer a perfecting amendment, but there is no agreement at this time.

Mr. MURKOWSKI. If I may respond, I don't have any type of vote counts on the House bill, and I would have to defer from any guesstimate. If I may reclaim my remaining time.

Mr. MURKOWSKI. I ask that we may withhold that time.

Mr. MURKOWSKI. May I ask the Chair, Mr. President, how much remaining time we have on this side.

Mr. MURKOWSKI. Is this not the statement from the Congressman that is running for the Senate seat that is vacant in Nevada?

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I just received a statement from the Speaker of the House concerning the last vote we had on the high-level nuclear waste bill. I would like to enter the Speaker's statement on the nuclear waste bill in the Record so that there will not be any confusion as to the position of the Speaker of the House of Representatives. I ask unanimous consent that this statement be printed in the Record.