Don Nickles

Mr. NICKLES

Mr. NICKLES. Mr. President, first, let me compliment my colleague from New Mexico for his leadership in putting this budget together. And I will make a speech a little later about the entire budget package. But I have a strong feeling, if this amendment should pass, we are not going to have a budget package. Maybe I will not have to give that speech. I was going to compliment my colleagues from New Mexico and from New Jersey and the majority leader of the Senate and the minority leader of the Senate, because they worked for hours, for weeks, they worked for a long time with the administration to put together a budget package. I will tell you I do not think everything in this budget package is perfect, but I am absolutely certain if we pass an amendment that increases taxes $30 billion and increases spending $20 billion over what is already in this package, we do not have a deal. We just killed the budget. There will not be a budget agreement. I believe that very strongly. I will be involved with several people trying to make sure that we do not do it. This deal is not very good from many people's perspective because it does not cut taxes very much. A net tax cut of $85 billion when we have total taxes in that period of time of over $9 trillion is not much. I argue it is better than nothing, but $85 billion of almost $10 trillion is not much. You reduce that to $55 billion, and I will say it is not worth it. I am a little bit bothered by my colleagues when I hear there is bipartisan agreement. Yesterday, we had an amendment on the floor to increase spending and taxes by $15 billion, again, breaking the budget deal. We had eight Democrats vote for that or vote to sustain the budget package. Everybody else said, ``No we want another $15 billion more in spending and $15 billion in more taxes.'' Now it looks like almost all the Democrats are going to jump on and say we want more money for this program. Senator Hatch and Senator Kennedy put together a good program. We do not care that the Budget Committee and the negotiators put in $16 billion; we are going to double it. We want $20 billion on top of it. It does not matter what you already did; we want more. It is like whatever that program is, hey, we are for more. The original bill that Senator Hatch and Senator Kennedy had only had $20 billion. The committee put in $16 billion. I do not know why they did not high five each other and say, ``Hey, we won,'' and I would probably be on the sideline saying, ``Yes, they did. They got 80 percent of what they are looking for.'' I will say I lost because I do not think we should have a new mandate. This is mandatory. It is mandatory under the Hatch-Kennedy bill, too. I heard people say it is not. I will be happy to read the language, and I know we are not adopting the Hatch-Kennedy bill, but we are debating it. We already have $16 billion, and now we are coming along with an amendment that says put another $20 billion on top, adding to it so now we will have $36 billion for this program. No one in their wildest dream would have said we should have $36 billion to try to solve this problem, which I will be happy to debate. Do we want to make sure that kids have insurance? Make sure they have access to health care? You bet. I have four kids. I want to make sure my kids have health care. I want to make sure your kids have health care. Is the solution a Federal mandate? I want to make sure kids have plenty to eat. Are we going to mandate a Federal program for that? I want to make sure kids have a warm home. Are we going to mandate everything? Government is big enough to give you everything you want. It is big enough to take everything you have. We are approaching that. A young child born today is already inheriting a debt of about $20,000. If we do not change the way we are doing our business now, a young person born today will spend 84 percent of their lifetime earnings paying taxes and paying for entitlements, working for Government--84 percent, if we do not start living within our means and start balancing the budget. So, first thing right out of the hopper--we have a budget bill that purportedly is to balance the budget within a few years; it has some fiscal discipline--the first thing we do, we had an amendment yesterday to increase spending another $15 billion and increase taxes $15 billion. Almost all the Democrats voted for it despite the so-called bipartisan budget, and now we have an amendment that says increase taxes $30 billion, increase taxes $20 billion, and I understand we are only going to get maybe a few Democrats who will vote against that amendment. Just break the deal. What deal? I absolutely tell you, Mr. President, if this amendment passes, there are going to be other amendments that say, ``Hey, if taxes are on the table, maybe this $85 billion is not sacrosanct. I do not think that is enough.'' Last Congress we had $245 billion that we passed and we balanced the budget. I thought that was a lot better tax package. We had real things in there for American families and it helped the economy. I would like it to be bigger than $85 billion. I will not be satisfied with $55 billion. My guess is there will not be a majority in this body satisfied with $55 billion, so if people want to kill this budget package in the name of saying, ``Hey, no matter what you did, Budget Committee, in putting $16 billion in, we will double it because we are for kids and against tobacco.'' I do not care that much about tobacco. Somebody wants a different tax, a different time, do it on the Finance Committee when we have the reconciliation bill before us, and they can say, ``I do not like this, raise the tobacco tax.'' They can have that amendment. It can be in order, and then you are playing with real bullets, then you are talking about something that is real. All this is, this budget resolution, if one turns to the budget resolution, all that says is we want to spend $2 billion more in the Finance Committee, $18 billion more in the Labor Committee, and we want to raise taxes $30 billion. That is all it says, and it directly violates the so-called budget deal. So we will find out before too long, are we for a budget package? Do we want to balance the budget? Or do we want to play games, and say, ``I do not care, I am more for kids than you, so I want to increase it.'' How much is needed? We have heard the statistics. There are 10 million kids uninsured. How long are they uninsured? A study was done that found that the majority of kids had insurance within 4 months. Well, we just eliminated half of the problem. Most of the kids have insurance within 4 months. People change jobs, people move, people have different reasons, but for whatever reason, a lot of those kids will have insurance within a short period of time. Of that 9.8 million group, about a third, over 3 million, already are eligible for insurance, they just have not signed up. Does that mean they will not get health care? No, my guess is, if they have an accident, they might go to Children's Hospital or something, they will be covered, and they already have vaccinations and so on, but for whatever reason, there is a program and now we come up with a bigger program, but they are already eligible. What about the group above 200 percent of poverty? For that group, a family of four that makes over $32,000 a year, they make enough money to provide kid care, health care for their children, they are just not doing it. We will make them do it? We will come up with big subsidies? What about the 3 million people that maybe are between the 100 percent of poverty and 200 percent of poverty? About 3.5 million kids fall in that category. Half of them will have insurance within 4 months. But you still have maybe 2 million children that are chronically uninsured. Mr. President, $16 billion is more than adequate to cover that chronically uninsured child, more than adequate. Yet we are saying $16 billion is not enough, make it $36 billion. We will match you and double it, so now we have $36 billion. If you look at the cost of kid care, in many cases it is $600, $700, $800, up to $1,000. A population of children between 100 percent of poverty and 200 percent of poverty, 3.5 million, most have insurance within 4 months, so you are only talking a couple million. You can do that for a couple billion a year. We have more than that in the $16 billion. Yet, no, we are coming up now with $36 billion. No, I do not think so. I do not think that is a solution. It may be good politics. Looking a little bit at the substance, we do not have the legislative language of the Hatch-Kennedy bill, but the Hatch-Kennedy bill, if someone reads it, one, they will find out it is a mandate. It mandates the Federal Government shall give money to the States. That is not optional. It is a mandate. Then looking at the subsidy, the subsidy for the group of nearly poor, not the Medicaid poor, the subsidy for this group is much more generous from the Federal Government standpoint than it is for Medicaid. Now, if we revamp and improve this program, we have Medicaid--Medicaid is a Federal-State program. It is supposed to be 50- 50 cost shared, but in some cases the Federal Government is up to 70 percent or more. Under the Hatch-Kennedy bill, the Federal contribution is only 40 percent of whatever the State was putting in. If the State put in 50 percent, the State's share would be 25 percent. In many States the Federal share would be 90 percent. You have a lot of States right now that are only paying like 22 percent of Medicaid costs. The Federal Government is picking up 75 percent. Under the Hatch-Kennedy bill in a lot of States the Federal Government would be paying 90 percent. So we will have greater subsidies for the income eligibility between 100 percent and 200 and 300 percent, a greater share of Federal for the lowest income. That absolutely makes no sense, absolutely makes no sense whatever. Then to say you can do this in the Finance Committee, and then we will come up and double the program in the Labor Committee absolutely makes no sense. It is like, wait, we do not work together so we will have the Finance Committee solve this problem and then we will come over here and have the Labor Committee solve this problem and give both committees enough money to solve it. That makes no sense. Mr. President, I hope we will have colleagues on both sides who will be fiscally responsible and say let's work to balance the budget and work for America's kids. We are not solving America's children's problems by saddling them with another great big, open-ended, expensive entitlement program that can only explode in the future, wreck the budget deal, and totally destroy the budget package. I do not think that is good for kids. I think it is a disaster for children. I think if this amendment should pass, we will not have a budget deal and the real losers will be America's children.

Mr. NICKLES. Eight minutes.

Mr. NICKLES

Mr. NICKLES. Mr. President, I rise today to introduce the Domestic Oil and Gas Production and Preservation Act. This legislation is an effort to help revive our domestic oil and gas industry which plays such a vital role in our national security. If our domestic industry is to survive, then Congress needs to act now to provide tax incentives to encourage production in America. Since the early 1980's, oil and gas extraction employment has been cut in half. Employment in the oil and gas industry has declined by 500,000 since 1984. Imports of crude oil products were $68 billion in 1996, up 24 percent over last year and the import dependency ratio now exceeds 50 percent. From 1973 to 1996, crude oil production dropped 44 percent in the lower 48 States. We must take action now to save domestic production not only for the sake of the oil and gas industry but for the sake of the national security of this Nation. To date, the Clinton administration has done nothing to encourage domestic production. In fact, in 1996, crude oil reserves continued to decline by 788 million barrels. Natural gas reserves fell by 2,600 Bcf to 162,415 Bcf. In the President's budget there is nothing to aid this industry. That is why I am introducing this bill today. The Domestic Oil and Gas Production and Preservation Act is intended to do just what its name implies--encourage oil and gas production and preserve and revitalize the domestic oil and gas industry. This bill would accomplish these goals through specific tax proposals. Section 2 of the bill would allow current expensing of geological and geophysical costs incurred domestically including the Outer Continental Shelf. These costs are an important and integral part of exploration and production for oil and natural gas, and should be expensed. In addition to the G&G expensing, this bill provides for the elimination of the net income limit on percentage depletion. Currently, the net income limitation requires percentage depletion to be calculated on a property-by-property basis and disallows depletion to the extent it exceeds the net income from a particular property, thus discouraging producers from investing income from other oil and gas properties to maintain marginal wells. Furthermore, this bill clarifies that delay rental payments are deductible, at the election of the taxpayer, as ordinary and necessary business expenses. This clarifies an otherwise gray area in Treasury regulations and eliminates costly administrative and compliance burdens on both taxpayers and the IRS. It would also extend the 90-day prepayment period to 180 days for determining when deductions may be taken on certain oil and gas investments. Harsh winter conditions in many States make the current 90-day limitation for commercial drilling impractical. Lastly, section 6 includes hydro injection as a tertiary recovery method for purposes of the enhanced oil recovery credit. Although the Treasury Department is tasked with continued evaluations and editions to the list of recovery methods covered under the EOR, they have proven notably lax in pursuing this objective. By legislating this outcome, this bill keeps domestic production of our endangered marginal wells on the cutting edge of available technology. Collectively, the provisions of this bill provide much-needed incentives to an industry that is vital to our national security. The sooner the administration and Congress acknowledge the critical importance of the domestic oil and gas industry and stop burdening this industry with high taxes and regulatory obstacles, the sooner we can take the necessary actions to preserve and revitalize this important sector of our economy. Mr. President, I ask unanimous consent that a summary of the bill be printed in the Record. Summary of the Domestic Oil and Gas Production and Recovery Act Section 2. Election to expense geological and geophysical expenditures Current law treatment G&G costs are not deductible as ordinary and necessary business expenses but are treated as capital expenditures recovered through cost depletion over the life of the field. G&G expenditures allocated to abandoned prospects are deducted upon such abandonment. Reasons for change These costs are an important and integral part of exploration and production for oil and natural gas. They affect the ability of domestic producers to engage in the exploration and development of our national petroleum reserves. Thus, they are more in the nature of an ordinary and necessary cost of doing business. These costs are similar to research and development costs for other industries. For those industries such costs are not only deductible but a tax credit is available. Crude oil imports are at an all-time high which makes the U.S. vulnerable to sharp oil price increases or supply disruptions. Domestic exploration and production must be encouraged now to offset this potential threat to national security and our economy. Allowing current deductibility of G&G costs would increase capital available for domestic exploration and production activity. The technical ``infrastructure'' of the oil services industry, which includes geologists and engineers, has been moving into other industries due to reduced domestic exploration and production. Stimulating exploration and development activities would help rebuild the critical oil services industry. Encouraging the industry to use the best technology available and to reduce its environmental footprint are important public policy reasons to clarify that these ordinary and necessary business expenses for the oil and gas industry should be expensed. Section 3. Elimination of net income limitation on percentage depletion for oil and gas The net income limitation severely restricts the ability of independent producers to use percentage depletion. Depletion is subject to many other limitations. First, it may only be taken by independent producers and royalty owners and not by integrated oil companies. Also, depletion may only be claimed up to specific daily production levels (1,000 barrels of oil or 6,000 mcf of natural gas). The depletion allowance is further limited to 65% of taxable income. The net income limitation requires percentage depletion to be calculated on a property by property basis and disallows percentage depletion to the extent it exceeds the net income from a particular property. The current requirement creates a nightmarish quagmire of record keeping, paperwork and compliance for taxpayers and the IRS. The typical independent producer can have numerous oil and gas properties, and many of them can be marginal properties (with high operating costs and low production yields). During periods of low prices, the producer may not have net income from a particular property, especially from these marginal properties. In this situation, when domestic production is most susceptible to being plugged and abandoned, the net income limitation discourages producers from investing income from other oil and gas properties to maintain marginal wells. proposal: eliminate the net income limitation on percentage depletion Reasons for change The Interstate Oil and Gas Compact Commission (IOGCC) estimates there are more than 433,000 marginal wells in the U.S. which produced more than 333 million barrels of oil in 1995. This represented more than 18% of all the oil produced in the U.S. (excluding Alaska). The United States is the only country with significant production from marginal wells. They represent the ultimate in conservation, since once wells are plugged and abandoned access to the remaining resource is often lost forever. Eliminating the net income limitation on percentage depletion will encourage producers to keep marginally economic wells in production and enhance optimum oil and natural gas resource recovery. Relief would be focused to independent producers and royalty owners. Eliminating the net income limitation on percentage depletion would simplify record keeping and reduce the administrative and compliance burden for taxpayers and the

Mr. NICKLES

Mr. NICKLES. Mr. President, I move to reconsider the vote.

Mr. NICKLES. Mr. President, we have to ask the question Senator Smith asked us: Why kill a viable baby? That is another aspect of this amendment that troubles me a lot. The amendment allows for the destruction of viable unborn children. A group of physicians headed by my colleague from Oklahoma, Dr. Tom Coburn, and the Physicians' Ad Hoc Coalition for Truth, states that it is ``never medically necessary, in order to protect a woman's life, health or future fertility, to deliberately kill an unborn child in the second or third trimester of pregnancy.'' He is an obstetrician. He has delivered hundreds, thousands of babies. I have not. But he has made that statement. Dr. Koop has made that statement. I happen to give them credit. I think the child would like for us to give them that credit. So the Daschle amendment would be ineffective in protecting viable unborn infants. Mr. President, a big difference between the Daschle amendment and the amendment by the Senator from California that was defeated earlier today is that the Daschle amendment does not include a ``mental health'' exception. The distinguished Democratic leader, in speaking with the press earlier this week, said that his amendment does not contain ``a simple mental health loophole.'' But he then added, ``It's my understanding based upon an extraordinary number of conversations and consultations that mental problems ultimately, in situations involving pregnancy and abortion, evidence themselves physically.'' Thus, while the amendment does not contain a simple mental health loophole, the author of the amendment believes that mental illness can have physical manifestations that would possibly justify late-term abortions. The Daschle amendment would not eliminate the vast majority of all partial-birth abortions. Ron Fitzsimmons, the executive director of the National Coalition for Abortion Providers admitted he lied about the frequency and necessity of partial-birth procedures. He told the American Medical News that the vast majority of partial- birth abortion are performed in the 20-plus week range on healthy fetuses and healthy mothers. ``The abortion rights folks know it, the anti-abortion folks know it, and so, probably, does everyone else.'' Yet this amendment would permit most partial-birth abortions since they are usually performed during the 2d trimester of pregnancy. The amendment prohibits abortions of viable infants unless there is a risk of grievous injury to the mother's life or health. Abortionists who violate this law are subject to fines and suspension of their medical licenses. No provision is made for any review of the physician's certification or the medical basis for it. Unfortunately, since the abortionist determines the health of the mother and the viability of the baby, no punishment would result no matter what the evidence. In order for someone to be prosecuted under this amendment they would have to voluntarily report that the child they had aborted was viable and that the abortion they had performed was not medically necessary. Does anyone imagine a physician would ever volunteer for such a penalty? It would be as if we allowed each driver to decide whether or not he or she was speeding. The only people who would receive speeding tickets would be those who voluntarily reported to the police that they had exceeded the speed limit. Self-enforcement is no enforcement. And that is what the Daschle amendment would put in place. I just conclude with the statement, Mr. President, this is a vitally important issue. I do not question the motives of my colleagues on the other side of this issue. I hope maybe we can come up with some type of a ban on aborting viable fetuses. But I believe this language in the first paragraph of the bill, language that says it shall be unlawful for a physician to abort a viable fetus when the physician makes that determination, unless the physician certifies--and he can do that, basically, by saying it is his best medical judgment that the continuation of the pregnancy would threaten the mother's life or risk grievous injury to her physical health--any risk, every pregnancy has risk--I am afraid that this language is so riddled with loopholes that it would provide no protection whatsoever, that it would have no real impact whatsoever. So I urge my colleagues to vote ``no'' on the Daschle amendment, to support the ban on partial-birth abortions, and then let us see if we cannot work together in the intervening couple of months, through the proper committees, have hearings, have suggestions from experts, health experts, and maybe we can refine language comparable to this to provide real protection for unborn children. I ask unanimous consent an article by Charles Krauthammer, ``Saving the Mother? Nonsense,'' which is dated March 14, and also a letter from the Physicians' Ad Hoc Coalition for the Truth, be printed in the Record.

Mr. NICKLES. Mr. President, first, I would like to compliment my colleague from Pennsylvania, Senator Santorum, in addition Senator Smith of New Hampshire, who brought this issue to the floor of the Senate last Congress and maybe educated everybody in the Congress and maybe in the country about this very gruesome procedure which, unfortunately, happens all too many times. The President said it doesn't happen very many times. But now we found out it happens thousands of times. In one clinic in New Jersey it happened 1,500 times. So I compliment my colleagues from Pennsylvania and from New Hampshire, and also Senator DeWine and Senator Frist, who spoke very eloquently about this issue. It is not an easy issue. It is not one that I think a lot of us look forward to debating. Mr. President, I speak on this issue on occasion. Again, it is not one that I particularly like to speak on. Maybe I did it for a lot of reasons. Somebody said, ``Why does Congress always have debates on abortion?'' I think part of the premise goes back to the fact that the Supreme Court legalized abortion. They legalized abortion in the Roe versus Wade decision. Everybody acknowledges that. I have a problem any time the Supreme Court legalizes or legislates in any area. I look at the Constitution. Article I says Congress shall pass all laws--Congress being comprised of the House and the Senate, elected bodies. People have a choice. If they don't like the laws we pass, they can change Members of Congress. In 1973, the Supreme Court legalized abortion. They overturned laws in almost every State that had some restrictions dealing with abortion and basically decided by trimesters what was legal and what was not legal. I object to that process. Colleagues who really think that we should legalize abortion or preempt all State laws, or some State laws, should introduce such legislation, and, if they have the votes, they can codify Roe versus Wade, or they can change it. But they should do it through legislative process not do it through a nonelected judicial process of the Supreme Court. So I object to the Supreme Court legislating. I think that they have done a pretty crummy job in their legislating. Our colleagues are aware of the fact--because we had this debate last year and now we have this debate before us today--that there is a procedure called partial-birth abortions where the baby is almost totally delivered, yet its head is held inside, scissors are inserted into the baby's head, and the brains are sucked out. Then the dead baby is delivered. We are trying to ban that procedure. Senator Daschle has an amendment. I looked at the headline. It says: ``Daschle Abortion Ban Spares `Viable' fetuses.'' If I believed that headline, I would support the amendment. But I look at the amendment. What does it do? In the first place, it is a substitute. If it was in addition to the language before us, maybe we would have something to talk about. But it isn't. It is a substitute. It strikes the language. If you look at the language of the amendment, it strikes all of the prohibition on banning partial-birth abortions and says let's insert the following. So it totally eliminates the bill that has already passed the House of Representatives by an over two-thirds vote, and a bill that we voted on last year when we had overwhelming support. We didn't have two- thirds. It strikes that, and says let's start over. We just saw the language today. It was just inserted today. We have not had enough time to totally review it. But I have read it. I have some problems with it. If the real purpose of it is to spare viable fetuses, I am going to support it. But I don't think that is the case. I want to go into the language and maybe point out what I think is deficient in the language and then tell my colleagues and my friend, the minority leader, that I will be happy to work with him. Maybe we can come up with language that would accomplish the objective of sparing viable fetuses. I will work with any Senator to try to do that. I will be happy to. But I don't think the language that we have in front of us today does that. I will go into a statement to illustrate it. Mr. President, the amendment that we have before us includes the health exception that is said to be ``stricter than the Republican measure,'' what it says on the headline. But, in reality, the exception contained in this amendment is no exception at all, but a large hole, a large protection for late-term abortions. The proposal is--as George Will accurately characterized it in his April 24, 1997, column--``a law that is impossible to violate.'' That's one reason this amendment has been termed by critics ``the abortionist empowerment clause.'' While this amendment claims to protect viable unborn children from abortion, a closer look shows that it provides no protection at all. The amendment would make it ``unlawful for a physician to abort a viable fetus. * * *'' Who determines whether a particular fetus is viable? There is no definition of ``viability'' in federal law. Nor does this amendment define ``viability.'' The prevailing standard of viability in federal law was set by the Supreme Court in Planned Parenthood of Central Missouri versus Danforth. In that case, the Court held: The determination of whether a particular fetus is viable is, and must be, a matter for the judgment of the responsible attending physician. In other words, the person who performs the abortion decides whether the baby he or she is aborting is viable. This is the standard that governs the Daschle amendment. The abortionist decides whether the baby is viable. The abortionist doesn't even have to certify his decision. Unless he voluntarily says to a U.S. attorney that the baby he aborted is viable, no civil penalty can be brought against him. Let's say that an abortionist tells a U.S. attorney that he has aborted a viable baby. In order to avoid civil action, the abortionist need only ``certif[y] that the continuation of the pregnancy would threaten the mother's life or risk grievous injury to her physical health.'' To whom does the physician certify? Does he file a certification with the Justice Department? With HHS? With the state licensing authority? With a notation in the patient's file? The amendment doesn't say. When does the physician certify? Before he performs the abortion? After he performs the abortion? After he is called into question for having performed the abortion? The amendment doesn't say. It merely says that by ``certifying,'' he avoids civil action for having aborted a viable infant, and it leaves it to the Secretary of HHS to develop regulations defining what the certification entails. A physician who aborts a viable child must certify that ``the continuation of the pregnancy would threaten the mother's life or risk grievous injury to her physical health.'' While the amendment defines ``grievous injury,'' it does not define ``risk.'' The risk of continuing a particular pregnancy may be small, but that is irrelevant under the Daschle amendment. The risk of carrying a pregnancy to term may carry less risk in a particular case than the risk of terminating the pregnancy, but that doesn't matter under the Daschle amendment. The only relevant question is ``does the abortionist believe that the ``continuation of the pregnancy'' poses any risk of ``grievous injury?'' Since every pregnancy poses at least some risk, an abortionist can justify any abortion under the Daschle amendment. The Daschle amendment states that a physician must certify--under penalty of perjury--``that, in his or her best medical judgment, the abortion involved was medically necessary.'' Unfortunately, as with other provisions of this amendment, the perjury penalty is very difficult, if not impossible, to enforce. The abortionist only has to sign a paper that asserts that ``in his or her best medical judgment,'' the abortionist believes that ``the continuation of the pregnancy would . . . . risk grievous injury to her physical health.'' The certification is based not on objective medical facts but on the abortionist's subjective judgment. If the certification by an abortionist was challenged in an action for perjury, the question before the court would not be about medical facts but on whether the physician believed that he had exercised his best medical judgment. Impossible, impossible to bring a conviction. I think that every abortionist would certify he had exercised his best judgment when he aborted a baby, whether viable or no. For example, Dr. Warren Hern, who performs third-trimester abortions in Colorado, said of this amendment: ``I will certify that any pregnancy is a threat to a woman's life and could cause grievous injury to her physical health.'' So long as Dr. Hern says he used his best medical judgment in making these certifications, he could not be prosecuted for perjury under this amendment. So this amendment, in my opinion, would be ineffective, totally ineffective in protecting viable unborn infants. Mr. President, I ask the sponsor if I can have an additional 2 minutes.

Mr. NICKLES

Mr. NICKLES. Mr. President, I would like to announce for the information of the Senate and the public that the Subcommittee on Energy Research, Development, Production and Regulation of the Committee on Energy and Natural Resources will hold a hearing to review H.R. 363, a bill to amend section 2118 of the Energy Policy Act of 1992 to extend the Electric and Magnetic Fields Research and Public Information Dissemination Program. The hearing will take place on Monday, May 19 in room SD-366 of the Dirksen Senate Office Building starting at 11:30 a.m. Those who wish to submit written statements should write to the Committee on Energy and Natural Resources, U.S. Senate, Washington, DC 20510. For further information please contact David Garman or Shawn Taylor at 202-224- 8115.

Mr. NICKLES

Mr. NICKLES. Mr. President, today I join my colleague from West Virginia, Senator Rockefeller, to introduce legislation to reform the Alternative Minimum Tax, or AMT. We are joined in this effort by 13 of our colleagues, including a total of 10 Finance Committee members. Congress created the AMT in 1986 to prevent businesses from using tax loopholes, such as the investment tax credit or safe harbor leasing, to pay little or no tax. The use of these tax preferences sometimes resulted in companies reporting healthy ``book'' income to their shareholders but little taxable income to the government. Therefore, to create a perception of fairness, Congress created the AMT. The AMT requires taxpayers to calculate their taxes once under regular tax rules, and again under AMT rules which deny accelerated depreciation, net operating losses, foreign tax credits, and other deductions and credits. The taxpayer then pays the higher amount, and the difference between their AMT tax and their regular tax is credited to offset future regular tax liability if it eventually falls below their AMT tax liability. Unfortunately, Mr. President, in the real world the AMT has reached far beyond its original purpose. As it is currently structured, the AMT is a massive, complicated, parallel tax code which places huge burdens on capital intensive companies. Corporations must now plan for and comply with two tax codes instead of one. Further, the elimination of accelerated depreciation increases the cost of investment and makes U.S. businesses uncompetitive with foreign companies. It makes little sense, Mr. President, to allow a reasonable business deduction under one tax code, and then take it away through another tax code. Perhaps there are some bureaucrats who believe regular tax depreciation is too generous and should be curtailed, but the AMT is an extremely complicated and convoluted way to accomplish that goal. The legislation I am introducing today would correct this problem by allowing businesses to use the same depreciation system for AMT purposes as they use for regular tax purposes. This one simple reform removes the disincentive to invest in job-producing assets and greatly simplifies compliance and reporting. In fact, this reform was first suggested by President Clinton in 1993. Further, my bill helps AMT taxpayers recover their AMT credits in a more reasonable timeframe than under current law. Many capital- intensive businesses have become chronic AMT taxpayers, a situation that was not contemplated when the AMT was created. These companies continue to pay AMT year after year with no relief in sight, and as a matter of function they accumulate millions in unused AMT credits. These credits are a tax on future, unearned revenues which may never materialize, and because of the time-value of money their value to the taxpayer decreases every year. Since Congress did not intend for the AMT to become a permanent tax system for certain taxpayers, my bill would allow chronic AMT taxpayers to use AMT credits which are 5-years-old or older to offset up to 50 percent of their current-year tentative minimum tax. This provision will help chronic AMT taxpayers dig their way out of the AMT and allow them to recoup at least a portion of these accelerated tax payments in a reasonable manner and time-frame. Mr. President, as the Senate begins working out the details of the recent bipartisan budget accord and the resulting tax bill, I hope we will not forget the importance of savings and investment. In that regard, there are few tax code changes we could make which are more important than eliminating the investment disincentives created by the AMT. Does my legislation fix all of the AMT's problems? No, it does not. This bill specifically addresses the depreciation adjustment, but there are many other AMT adjustments, preferences, and limitations which are unchanged. Some of these, such as the 90-percent net operating loss limitation and the foreign tax credit limitation, are very damaging to business profitability and competitiveness. I hope all these issues will be examined when the Senate Finance Committee considers AMT reform. Mr. President, I ask unanimous consent that there appear in the Record a list of the original cosponsors of this legislation, as well as statements of support by the U.S. Chamber of Commerce and the National Association of Manufacturers. I encourage my colleagues to join Senator Rockefeller and me in this important initiative.

Mr. NICKLES

Mr. NICKLES. Mr. President, today I join my colleague from West Virginia, Senator Rockefeller, to introduce legislation to reform the Alternative Minimum Tax, or AMT. We are joined in this effort by 13 of our colleagues, including a total of 10 Finance Committee members. Congress created the AMT in 1986 to prevent businesses from using tax loopholes, such as the investment tax credit or safe harbor leasing, to pay little or no tax. The use of these tax preferences sometimes resulted in companies reporting healthy ``book'' income to their shareholders but little taxable income to the government. Therefore, to create a perception of fairness, Congress created the AMT. The AMT requires taxpayers to calculate their taxes once under regular tax rules, and again under AMT rules which deny accelerated depreciation, net operating losses, foreign tax credits, and other deductions and credits. The taxpayer then pays the higher amount, and the difference between their AMT tax and their regular tax is credited to offset future regular tax liability if it eventually falls below their AMT tax liability. Unfortunately, Mr. President, in the real world the AMT has reached far beyond its original purpose. As it is currently structured, the AMT is a massive, complicated, parallel tax code which places huge burdens on capital intensive companies. Corporations must now plan for and comply with two tax codes instead of one. Further, the elimination of accelerated depreciation increases the cost of investment and makes U.S. businesses uncompetitive with foreign companies. It makes little sense, Mr. President, to allow a reasonable business deduction under one tax code, and then take it away through another tax code. Perhaps there are some bureaucrats who believe regular tax depreciation is too generous and should be curtailed, but the AMT is an extremely complicated and convoluted way to accomplish that goal. The legislation I am introducing today would correct this problem by allowing businesses to use the same depreciation system for AMT purposes as they use for regular tax purposes. This one simple reform removes the disincentive to invest in job-producing assets and greatly simplifies compliance and reporting. In fact, this reform was first suggested by President Clinton in 1993. Further, my bill helps AMT taxpayers recover their AMT credits in a more reasonable timeframe than under current law. Many capital- intensive businesses have become chronic AMT taxpayers, a situation that was not contemplated when the AMT was created. These companies continue to pay AMT year after year with no relief in sight, and as a matter of function they accumulate millions in unused AMT credits. These credits are a tax on future, unearned revenues which may never materialize, and because of the time-value of money their value to the taxpayer decreases every year. Since Congress did not intend for the AMT to become a permanent tax system for certain taxpayers, my bill would allow chronic AMT taxpayers to use AMT credits which are 5-years-old or older to offset up to 50 percent of their current-year tentative minimum tax. This provision will help chronic AMT taxpayers dig their way out of the AMT and allow them to recoup at least a portion of these accelerated tax payments in a reasonable manner and time-frame. Mr. President, as the Senate begins working out the details of the recent bipartisan budget accord and the resulting tax bill, I hope we will not forget the importance of savings and investment. In that regard, there are few tax code changes we could make which are more important than eliminating the investment disincentives created by the AMT. Does my legislation fix all of the AMT's problems? No, it does not. This bill specifically addresses the depreciation adjustment, but there are many other AMT adjustments, preferences, and limitations which are unchanged. Some of these, such as the 90-percent net operating loss limitation and the foreign tax credit limitation, are very damaging to business profitability and competitiveness. I hope all these issues will be examined when the Senate Finance Committee considers AMT reform. Mr. President, I ask unanimous consent that there appear in the Record a list of the original cosponsors of this legislation, as well as statements of support by the U.S. Chamber of Commerce and the National Association of Manufacturers. I encourage my colleagues to join Senator Rockefeller and me in this important initiative.

Mr. NICKLES

Mr. NICKLES. Mr. President, I wish to join with my friend and colleagues from Florida and Virginia, in stating my strong support for this amendment. Mr. President, let me state, at the outset, I wish we had an amendment that would strike the $793 million that was added on in the Appropriations Committee. In my opinion, it does not belong in this so- called urgent supplemental. I have been wondering, how does this bill grow from about $4.6 billion to almost $8 billion, about $793 million are in roads and highways. You think, if they are going to put in more for roads and highways--I am not contesting the $139 million; I don't guess anybody is. But the additional $793 million, I am contesting. Again, I think the proper motion would be to strike it, and somebody says, why aren't you doing that, because we have cloture? I understand from the Parliamentarian that that motion to strike is not in order. Maybe I should have gotten that amendment in at an earlier time, and I regret that. At least the amendment of the Senator from Virginia says, if we are going to have the additional $793 million, let's allocate it according to existing law. We have spent days on this floor fighting allocation formulas. A lot of us are not satisfied with those. We end up sending a lot more to Washington, DC, in roads and highway taxes than we get back. And then we look at the amendment that comes out of the Appropriations Committee and say, well, this makes it worse. We don't really find that acceptable. So I just make the comment that, really, the $793 million should be allocated according to the formulas we have agreed to. It should not be changed to the disadvantage of many States. We are going to fight the allocation of the formula fight again this year, in this Congress, on the ISTEA bill. We will have plenty of time to debate it and time for the committees. The chairman of the Transportation Subcommittee, Senator Warner, and his committee will mark up that bill. We will have it on the floor. Every Senator will have a chance to have their input on that. That is the way we should fight for the allocation process. We should not be changing it on a supplemental--``urgent supplemental''--appropriations bill. It doesn't belong here. I urge the conferees, since the motion to strike is not in order, to drop everything in conference except for the $139 million. This urgent supplemental, in my opinion, is getting loaded with a lot of things we can't afford, and maybe we are not legislating in the proper way. We should not be doing this on an appropriations bill. We should be doing it on the authorization bills. So I urge my colleagues, at the minimum, if we are going to put in additional money, let's allocate it according to existing law, as Senator Warner provided in his amendment.

Mr. NICKLES. Mr. President, I wish to compliment my colleague from Pennsylvania for his statement as well as Senator Gramm, for this amendment. I find this amendment to be very important and one I certainly hope will pass. The Senator from Pennsylvania said we want to provide economic assistance for the victims of this most recent flood. I agree with that. Senator Gramm says we ought to pay for it. I agree with that. We should pay for it. If we do not, if we pass this bill as it is right now, we are going to be increasing the national debt by $6.5 billion--not this year but over several years. Senator Gramm's amendment says let us do it in two ways. Let us have an across-the-board reduction of about 1.8 or 1.9 percent this year to fund the outlays for this year. For the second part of that, for the outlays that will be strung out over the next 5 years, let us reduce the outlays in those years. We are going to be spending about $1.6, $1.7, $1.8, $1.9, $2 trillion dollars in those successive years. Surely we can afford the couple of billion dollars in outlays in those years. We can have offsets. We can pay for it. We can reduce outlays in those future years by an amount to pay for this disaster relief. We ought to pay for it. We ought to say yes, we want to help the people with the floods, but we want to pay for it. We should be responsible. Let us not increase the national debt by $6.5 billion. If we do not pass this amendment that is exactly what we are going to do. So I urge my colleagues, this proposal--and I have the greatest of sympathy for the victims of this flood but the President requested $4.6 billion in discretionary spending and the committee proposes $7.7 billion in discretionary spending. If you include the mandatory spending the President requested, $6.2 billion, and in this bill that is $9.5. If you include discretionary and mandatory, it is about $3, $3.1 billion over what the President originally requested. I do not want to pass that much money. I am bothered. We had a vote earlier on the highway bill. We had several hundred million dollars, $773 million, I believe, in highway funding that was not requested that was added to this bill. The funding formula was changed. We get into a funding fight. People voted for what was best for their States. But, frankly, that did not belong in this bill and we find there are hundreds of millions of other dollars that do not belong in this bill. I hope when this bill goes to conference it comes back a lot leaner, that it really is constrained to disaster relief. Then, likewise, I hope that we will pay for it. I heard a lot of people say we should pay for it. Frankly, as the bill is written right now, this bill increases national debt over this 5-year, 6-year period of time $6.5 billion. Let's pay for it. Let's pay for it this year by a small, less than 2 percent reduction for the next few months. That is certainly manageable. Then for the future years, let's reduce spending enough to pay for it. I think it is a responsible amendment. I think it is fiscally responsible. I think it is the right thing to do, and I urge my colleagues to support the amendment. Mr. President, I ask unanimous consent that a table comparing the budget request to the committee recommendation and the differences be printed in the Record.

Mr. NICKLES

Mr. NICKLES. Mr. President, earlier today, I voted against the D'Amato amendment, which would reinstate SSI benefits for legal nonresidents. I think 11 Senators voted against that amendment. Mr. President, I rise to make a statement about why I voted against that amendment. I know a lot of people said they voted for it because it is part of the budget package that was agreed to by the leadership of Congress and the President. They wanted to reinstate that. They said they might as well do it anyway because the budget is going to pass and the benefit will be reinstated. That may well be. These individuals will lose their benefits for 2 weeks in August and the month of September--6 weeks--if that happens. But I didn't think that was the reason why it should be put in the urgent supplemental. Some colleagues probably voted with me on that because they didn't think it belonged in there, that it can be included in the budget package. It may well be included in a budget package. That is when we will do the entire budget. So my point is--I informed my colleagues on this side of the aisle-- if we have other amendments on this supplemental that try to pull out various pieces of the budget package and put it into the supplemental, and they say, ``Everybody has agreed, the leadership has agreed, that we are going to spend more money for education, let's go ahead and put it in the supplemental, we are going to spend more money for children that do not have health care, we will put into a supplemental''--I disagree. This is supposed to be an urgent supplemental. It is supposed to be helping people with disaster assistance, and not to be prefunding part of the budget package. At least I for one--and I am the only one--in the future, if we find other amendments that try to maybe prefund the budget agreement, I am going to object. Also, I want to touch on this a little bit. Some people said, ``Well, we need to undo part of this welfare package.'' I happen to be one that disagrees with that. We passed significant welfare reform, and I think rightfully so. We said, yes, we are going to provide more benefits for citizens than noncitizens. Somebody said they are here legally. That is correct. Let me give a couple of facts. Since 1882, an alien who was likely to become a public charge has been subject to exclusion from the United States. Since 1917, an alien who becomes a public charge within 5 years of entry has been subject to deportation from the country. That continues to be the immigration policy, that aliens within our Nation's borders should not depend on public resources to meet their needs, but rather rely on their own capabilities and the resources of their families and their sponsors. That is the way it should be. Families of immigrants who enter the United States signed affidavits of support. By these affidavits of support they pledge to provide for the immigrants themselves and not put them on public assistance. That is a pledge. That says they will not become a public charge. That is to make sure that when people come to the United States, they are seeking citizenship and freedom, and not seeking welfare. We found with this program, unfortunately, despite these policies, that large numbers of sponsors have failed to live up to their obligations, both their moral obligations and their financial obligations. Just a couple of facts: In 1986, just over 200,000 noncitizens were receiving SSI welfare benefits. In 1996, that figure had grown to 800,000, 4 times as many in a period of 10 years. It didn't double or triple--4 times as many; it went from 200,000 to 800,000 in the last 10 years. The Social Security Administration predicts that the number of noncitizens receiving benefits would grow to 1 million by the end of the decade. So this is exploding. A lot of people are bringing their families over, saying, ``Yes, you can be on welfare. You can be on welfare for life. You get cash payments, cash assistance, several hundreds of dollars per month, and be eligible for Medicaid concurrently.'' It is a pretty good deal. A lot of people said, ``I want in on that.'' So they would come over and totally ignore the affidavits of support that they and their families pledged they would not became a public charge. In the welfare bill that we passed last year, they should get around this by becoming citizens. Now, I know a lot of people are becoming citizens. Some people said, ``Well, the States don't have the resources. Not everybody can become a citizen.'' You have minimal English requirements. Maybe they are not able to make that. The States save millions, and collectively the States save billions of dollars in the welfare changes we made last year. There is plenty of money to provide assistance to those people that really need some help. Total noncitizen applications for SSI alone increased almost 600 percent from 1982 to 1994, compared to just a 49-percent increase amongst citizens. Most noncitizens apply for welfare within 5 years of arriving in the United States. Mr. President, I want to make these comments. I know that in the budget package we have--I hope that we will pass a budget package--we are going to address this issue. I know, in all likelihood, for most noncitizens we will be continuing SSI payments for those noncitizens who are already here or already here at the time of enactment of the welfare bill. That may well be. I might support it as part of an overall package. But I voted in opposition to this being added to the supplemental because I didn't want to cherry-pick a few of the things out of the budget package and say, ``Let's put it on this supplemental too.'' This wasn't going to happen. No one would lose benefits now for another 3 months. Our objective is to pass the reconciliation bill to implement the balanced budget by July 4, a full month and a half before you would have discontinuance of benefits. So we would have time to rectify the situation if we have not reached the budget agreement. So, Mr. President, I just make mention of that, and maybe forewarn my colleagues. At least this Senator's intention is to object strenuously if future efforts are made to put parts of the budget package onto this urgent supplemental. Mr. President, I yield the floor. Mr. McCAIN addressed the Chair.

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

Mr. NICKLES

Mr. NICKLES. I move to lay that motion on the table. The motion to lay on the table was agreed to. Mr. HOLLINGS addressed the Chair.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from Texas [Mrs. Hutchison], is necessarily absent.

Mr. NICKLES

Mr. NICKLES. I thank the Chair. I thank my colleague from Vermont for his leadership and also for having the hearing today that discussed project labor agreements. I told my friend from Massachusetts that I did not have a problem with Alexis Herman being Secretary of Labor as much as I had a real problem with what I perceive to be legislation by Executive order. There was proposed to be an Executive order dealing with project labor agreements that, as it was read by me and many other people, basically would have excluded nonunion companies from bidding on over $200 million of work per year. I think that requires legislation, and if Congress wants to legislate that, certainly Congress has the right to legislate that. I told the White House my hope and desire would be that if they want to legislate, to find someone to introduce that legislation, we would take it up in the legislative process. So I have had for the past few weeks objected to considering this nomination, trying to get the White House to back off from that order. I might inform our colleagues--somebody said, well, what caused this change of events? The White House has now agreed not to issue the Executive order, and I appreciate that. They have said that they were going to issue a memorandum from the President to the executive agencies, and that is certainly within their right. The memorandum does not have the force and effect of law. My purpose was to make sure that the administration did not try to legislate by Executive order. We now have a letter from Erskine Bowles that I will just read. This is to confirm the administration's intention to issue a Presidential memorandum encouraging executive departments and agencies to consider utilizing project labor agreements in Federal Government construction projects. The President believes that such agreements are desirable in circumstances where they promote efficient and high quality contract performance and labor/management stability. It is also our understanding, as I say, very frankly, they are not going to do it by Executive order. So that is the reason why I am withdrawing my objection and have no objection to the Senate voting on the nomination of Alexis Herman to be the next Labor Secretary. So I appreciate the cooperation of the White House and think this is the proper way to proceed. If they wish to legislate on project labor agreements, certainly they have the right to introduce that legislation and we will consider it in due process. Mr. SPECTER addressed the Chair.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from Missouri [Mr. Bond] is necessarily absent.

Mr. NICKLES

Mr. NICKLES. Mr. President, an April 15, 1997 letter to the Wall Street Journal, which I will insert for the Record, describes one family's recent experience with the estate tax. The letter states, ``We finally did it. We didn't want to, but we had no choice. Exactly nine months after my father-in-law died, my wife and I signed a check for $1,285,000 payable to the Internal Revenue Service.'' The man who wrote this letter goes on to talk about what his family could have used that money for, such as buying a beach house, prepaying their kids' college education, or even retiring. Instead, he calculates that the federal government will spend in 26.8 seconds what took his father-in-law 75 years to accumulate. After I read this letter, I decided to do some calculations of my own. In 1997, the federal government will collect $19.2 billion in estate taxes from 37,200 Americans. The federal government will spend that $19.2 billion in 4.3 days. Assuming each of those decedents was 70 years old when they died, that represents more than 2.6 million years' worth of work and savings which will be wiped-out forever and spent by the government in less than five days. Mr. President, some people mistakenly believe estate taxes only affect the rich. In the Washington Post this week, Deputy Treasury Secretary Larry Summers says in response to a question about the estate tax, ``You have to raise revenue somewhere, and ability to pay seems like a good way to do it.'' The truth is that there are thousands of small businesses and farms throughout the country owned and operated by middle-income Americans that are affected by the estate tax. In Oklahoma alone, statistics from the U.S. Census of Agriculture indicate that over 7,500 farms and ranches have a value that could trigger estate tax. Even those who do not end up paying the tax will spend thousands of dollars planning to avoid it or insuring against it. What is the ultimate impact of all this uneconomic activity? According to the Small Business Administration, only 30 percent of family businesses are passed down to a second generation, and only 13 percent make it to a third generation. It does not take a lot of success in business or investing these days to become a ``taxable estate'' in the eyes of Uncle Sam. With the explosive growth in mutual fund investments over the last several years, and the corresponding increase in stock prices, workers will retire and discover their pension plan to be much larger than they had anticipated. Aggressive business owners who reinvest all their profits back into their business will find themselves asset-rich and cash-poor. Under current law, a taxable estate of $1 million faces a marginal tax rate of 39 percent. A taxable estate of $3 million qualifies you for a confiscatory 55 percent marginal tax rate. A tax credit limits the tax on the first $600,000 of the estate. If a person starts a small business--be it a farm, a restaurant, or a car dealership--and they work hard, expand, and become successful, why should Uncle Sam be entitled to 39 percent or 55 percent of it? What did the government do to build that business? This business owner has already paid annual income tax (twice if organized as a corporation), self-employment tax, FICA tax, FUTA tax, and capital gains tax. Why should the Government come in and say, after all these taxes are paid, ``We want over half of everything that's left''? Mr. President, the current estate tax is unfair and it is counterproductive. In the long term, it needs to be repealed. In the short term, it needs to be dramatically changed. I am introducing legislation today which represents dramatic change in the short term and provides a stepping-stone to eventual repeal. My bill goes right to the basic problem, which is estate tax rates. With seventeen marginal tax rate brackets ranging from 18 percent to 55 percent, estate tax rates are too complex and too high. Under my legislation, taxable estates and gifts under $1 million will pay no tax, taxable estates and gifts from $1 million to $10 million will be taxed at a marginal rate of 20 percent, and taxable estates and gifts over $10 million will be taxed at a marginal rate of 30 percent. Mr. President, this legislation benefits all taxpayers by simplifying the structure of the estate tax and reducing the number of tax brackets from seventeen to three. Further, by increasing the basic exemption from $600,000 to $1 million, it will reduce the number of estates subject to taxation by more than 40 percent and greatly reduce the need for and cost of estate tax planning. The benefits of this legislation are also progressive. A taxable estate worth $1 million will have its tax liability completely eliminated. A taxable estate worth $5 million will receive a 64 percent reduction in tax liability, and a taxable estate worth $50 million will receive a 50 percent reduction in tax liability. Finally, the benefits of this legislation are fair. It does not single-out certain types of estate assets for preferential treatment, and thus avoids the problems of picking winners and losers. The enactment of estate tax reform this year will not be very easy, Mr. President, despite broad, bipartisan support in the Senate and the House. The Clinton administration continues to block estate tax reform with partisan, class-warfare rhetoric. In the Washington Post article I mentioned earlier about estate tax reform, Deputy Secretary Summers even said, ``When it comes to the estate tax, there is no case other than selfishness.'' I find that statement offensive, and I wonder if President Clinton agrees with his lieutenant. Is passing your life's work on to your children is ``selfish''? I encourage all my colleagues to read the letter I submitted with my statement today and ask themselves, ``Is our estate tax policy promoting freedom, family, and opportunity, or does it just promote the redistribution of wealth?'' Mr. President, I ask unanimous consent that additional material be printed in the Record.

Mr. NICKLES

Mr. NICKLES. This article lists about 20 chemicals that are not prohibited by this treaty, that basically this section of article XI says you will be able to sell those chemicals. As a matter of fact, no restriction. This language says that countries cannot maintain amongst themselves any restrictions including those in any international agreements. It does not say some. It says any international agreements. That sounds pretty open. A lot of those chemicals can be used to develop chemical weapons. They can also have a dual purpose. It can be kind of confusing. I understand the President in his letter today said, well, he would try to end the confusion. And so I looked at his letter, and in his letter on page 2 he says--dealing with article X, he said: Using article X to justify providing defensive chemical weapon equipment, material or information to another State Party that could result in U.S. chemical protective equipment being compromised so that U.S. war fighting capabilities in a chemical weapons environment are significantly degraded. If that is the case, he wants out. What is ``significantly degraded''? How do you reach that level. I do not know that you would ever reach--since he has ``significantly degraded,'' I do not know, because the word ``significantly'' is there that it would ever be treated. And then in (b) he talks about where it would be impossible for him to make a certification on the Australia Group. But in the final language he says we would get out if the implementing of this convention carries out transfers or exchanges under either article X or XI which jeopardize U.S. national security by promoting chemical weapons proliferation. When is that going to be triggered? His final conclusion is kind of interesting. I read the AP story that said, well, because of the President's letter, he said if these things happen, we are out of there, we are going to walk away from the treaty. I do not read that in his language. It says I would be prepared to withdraw. It did not say he would withdraw. So if it really jeopardizes our national security, he might be prepared, but it did not say he would withdraw, after consulting with Congress. In other words, I do not find a lot in this letter that gives me any real comfort or assurance that article X or XI has really been addressed. And I appreciate the fact that a lot of our colleagues have addressed this issue, but to me treaties are important. And we have had a lot of significant discussion over various sections of the treaty, maybe none more than article X and XI, but it happens to still be in the treaty. And the President's letter notwithstanding, at the conclusion of his letter he said if all these things happen or any of these things happen, I would be prepared to withdraw. Frankly, Senator Kyl is right. That is not going to happen in 2 or 3 years. It is not going to happen under President Clinton's term. I do not know that this letter would be binding on succeeding or successors of the President. So, Mr. President, this language is vitally important. I would tell my colleague from North Carolina my vote on final passage depends on this amendment. If we are able to make this change by the Senator from North Carolina, I will vote maybe for final passage. I think this is a killer amendment, having it in the treaty. I think it is that important. We are ratifying the entire treaty including article X, including article XI. And again I compliment my colleagues. I have the greatest respect for Senator Lugar. I know he has worked hard on this. I have the greatest respect for Senator McCain and a lot of other people on both sides of the aisle. They have conducted an excellent debate. I have made a long list of pluses and minuses on this treaty. I could debate either side of the treaty, I have spent just that amount of time on it. But I happen to think that this article X and article XI do a lot of damage. Since we are ratifying not just article I, but the entire treaty, I urge my colleagues to vote to delete the section. I urge my colleagues to vote no on this. I think this is the most important amendment and discussion that we will have to date. I yield the floor.

Mr. NICKLES. Mr. President, first I would like to compliment my colleague from Arizona, Senator Kyl, for an excellent statement. I happen to think that this amendment we are debating is the key amendment of the entire debate. I certainly compliment all Senators for their involvement in this debate. I think it has been one of the best debates we have had in the Senate for a long time. It is also one of the most important issues we have had where we have seen so many colleagues, particularly on this side of the aisle, who have been undecided and probably because of this language dealing with article X and article XI. This is the language we have heard former Defense Secretary Cheney, former Secretary of Defense Schlesinger, and Cap Weinberger, really speak out against in their statements before the Senate Foreign Relations Committee. Also, I note that President Clinton has a letter addressing this issue. But I looked at it a little bit more. I certainly concur with the goals and objectives; we want to reduce chemical weapons. And we have taken a laudatory step of saying we are going to ban them in this country and we want to encourage other countries to ban them, and I think that is great. And that is in article I. I see article I is over here, and if one reads article I it looks great. But I think it is incumbent upon us as Senators to read the balance of the treaty. When you read article X, and it is in the treaty, it says: Each State Party undertakes to facilitate, and shall have the right to participate in, the fullest possible exchange of equipment, material and scientific and technological information concerning means of protection against chemical weapons. Share defensive technology. I know the administration said, well, we are not going to do that. But it is in the treaty that we are going to. I find that a little contradictory, we are going to limit what we are going to share. This says to the fullest extent possible. The language is very contradictory in what the administration says they are going to do in subsequent letters and what the language of the treaty is. I think maybe the language of the treaty will supersede. If we are signing a treaty, don't we mean to comply with all of it. And then again we are not just talking about the United States, because I hope that we don't just give our technology away to some countries, some countries that will sign this convention and will not comply. We know that. We have had some experience. We have seen it not only with the Geneva Protocol on chemical weapons, but we also have seen it with the biological weapons convention which a lot of countries signed but they have not complied with and we know that. Our intelligence community has done a pretty good job, and in many cases we know a lot of countries are not complying. But I think it is legitimate to ask, are we better off with it or without. And I have heard good debate on both sides. But this language says to me we have to share this technology. Not only do we have to but also other countries, including countries like China, would be sharing this technology with Iran. Under the treaty, they would be obliged to, or certainly that is what they will be saying. Does that increase the likelihood and the dangers of chemical weapons? I am afraid it does. And then looking at article XI, and again just looking at the treaty and looking at the language of the treaty--every once in a while I think it is important we do it--under article XI, section 2(c) it says: Not maintain among themselves any restrictions, including those in any international agreements, incompatible with the obligations undertaken under this convention, which would restrict or impede trade and the development and promotion of scientific and technological knowledge in the field of chemistry for industrial, agricultural, research, medical, pharmaceutical or other peaceful purposes. In other words, we want a lot more trade in other chemicals that aren't banned by this treaty. There is an editorial in the Wall Street Journal that I ask unanimous consent to have printed in the Record.

Mr. NICKLES

Mr. NICKLES. Mr. President, an April 15, 1997 letter to the Wall Street Journal, which I will insert for the Record, describes one family's recent experience with the estate tax. The letter states, ``We finally did it. We didn't want to, but we had no choice. Exactly nine months after my father-in-law died, my wife and I signed a check for $1,285,000 payable to the Internal Revenue Service.'' The man who wrote this letter goes on to talk about what his family could have used that money for, such as buying a beach house, prepaying their kids' college education, or even retiring. Instead, he calculates that the federal government will spend in 26.8 seconds what took his father-in-law 75 years to accumulate. After I read this letter, I decided to do some calculations of my own. In 1997, the federal government will collect $19.2 billion in estate taxes from 37,200 Americans. The federal government will spend that $19.2 billion in 4.3 days. Assuming each of those decedents was 70 years old when they died, that represents more than 2.6 million years' worth of work and savings which will be wiped-out forever and spent by the government in less than five days. Mr. President, some people mistakenly believe estate taxes only affect the rich. In the Washington Post this week, Deputy Treasury Secretary Larry Summers says in response to a question about the estate tax, ``You have to raise revenue somewhere, and ability to pay seems like a good way to do it.'' The truth is that there are thousands of small businesses and farms throughout the country owned and operated by middle-income Americans that are affected by the estate tax. In Oklahoma alone, statistics from the U.S. Census of Agriculture indicate that over 7,500 farms and ranches have a value that could trigger estate tax. Even those who do not end up paying the tax will spend thousands of dollars planning to avoid it or insuring against it. What is the ultimate impact of all this uneconomic activity? According to the Small Business Administration, only 30 percent of family businesses are passed down to a second generation, and only 13 percent make it to a third generation. It does not take a lot of success in business or investing these days to become a ``taxable estate'' in the eyes of Uncle Sam. With the explosive growth in mutual fund investments over the last several years, and the corresponding increase in stock prices, workers will retire and discover their pension plan to be much larger than they had anticipated. Aggressive business owners who reinvest all their profits back into their business will find themselves asset-rich and cash-poor. Under current law, a taxable estate of $1 million faces a marginal tax rate of 39 percent. A taxable estate of $3 million qualifies you for a confiscatory 55 percent marginal tax rate. A tax credit limits the tax on the first $600,000 of the estate. If a person starts a small business--be it a farm, a restaurant, or a car dealership--and they work hard, expand, and become successful, why should Uncle Sam be entitled to 39 percent or 55 percent of it? What did the government do to build that business? This business owner has already paid annual income tax (twice if organized as a corporation), self-employment tax, FICA tax, FUTA tax, and capital gains tax. Why should the Government come in and say, after all these taxes are paid, ``We want over half of everything that's left''? Mr. President, the current estate tax is unfair and it is counterproductive. In the long term, it needs to be repealed. In the short term, it needs to be dramatically changed. I am introducing legislation today which represents dramatic change in the short term and provides a stepping-stone to eventual repeal. My bill goes right to the basic problem, which is estate tax rates. With seventeen marginal tax rate brackets ranging from 18 percent to 55 percent, estate tax rates are too complex and too high. Under my legislation, taxable estates and gifts under $1 million will pay no tax, taxable estates and gifts from $1 million to $10 million will be taxed at a marginal rate of 20 percent, and taxable estates and gifts over $10 million will be taxed at a marginal rate of 30 percent. Mr. President, this legislation benefits all taxpayers by simplifying the structure of the estate tax and reducing the number of tax brackets from seventeen to three. Further, by increasing the basic exemption from $600,000 to $1 million, it will reduce the number of estates subject to taxation by more than 40 percent and greatly reduce the need for and cost of estate tax planning. The benefits of this legislation are also progressive. A taxable estate worth $1 million will have its tax liability completely eliminated. A taxable estate worth $5 million will receive a 64 percent reduction in tax liability, and a taxable estate worth $50 million will receive a 50 percent reduction in tax liability. Finally, the benefits of this legislation are fair. It does not single-out certain types of estate assets for preferential treatment, and thus avoids the problems of picking winners and losers. The enactment of estate tax reform this year will not be very easy, Mr. President, despite broad, bipartisan support in the Senate and the House. The Clinton administration continues to block estate tax reform with partisan, class-warfare rhetoric. In the Washington Post article I mentioned earlier about estate tax reform, Deputy Secretary Summers even said, ``When it comes to the estate tax, there is no case other than selfishness.'' I find that statement offensive, and I wonder if President Clinton agrees with his lieutenant. Is passing your life's work on to your children is ``selfish''? I encourage all my colleagues to read the letter I submitted with my statement today and ask themselves, ``Is our estate tax policy promoting freedom, family, and opportunity, or does it just promote the redistribution of wealth?'' Mr. President, I ask unanimous consent that additional material be printed in the Record.

Mr. NICKLES

Mr. NICKLES. I would like to follow up on some of the statements that have been made by our colleagues concerning the executive branch's current willingness to legislate by Executive order. I have talked to the White House two or three times now. I have let it be known that I want to use whatever tools are available to get their attention and make sure they quit attempting to legislate by Executive order. Some of our colleagues may not be aware of what we are talking about, but we have had two or three disputes--maybe we should have had more-- with the administration over the last few years about executive actions that clearly should be implemented through legislation by Congress, the body elected by the people for legislative purposes. This administration, the Clinton administration, has tried to bypass Congress and legislate by Executive order. I think they have done so knowing full well in many cases they could not get their desired objective through Congress so they just decided to do it by fiat. I am here to say all of us, Democrats and Republicans, should reject that approach. We should uphold this institution, the legislative branch, the branch of the people, and say this is why our forefathers had separation of powers. The Constitution is very clear. If you read the Constitution, it states in article I, ``All legislative powers herein granted shall be vested in a Congress of the United States which shall consist of the Senate and the House of Representatives.'' ``All legislative powers.'' It does not say some. It does not say that if the administration cannot accomplish its objectives through the Congress it can go ahead and pass them by Executive order. In the 10th amendment it says all other powers are reserved to the States and to the people. So the executive branch has the power to enforce the law but not to write it. That is the responsibility of the legislative branch. And then if people do not like the laws we pass, they can vote for someone else. They have a chance to do that through the election process. There are a couple of cases where the administration has overstepped its bounds, and I think where Congress has spoken up, or should have spoken up. One example was a case where the administration tried to give organized labor a gift and issued an Executive order to prohibit hiring replacement workers during a strike. They tried to get Congress to pass a bill that would do that in 1993 and 1994--and actually passed legislation through the House but could not get it passed through the Senate. So after the 1994 elections, the administration tried to change the law by Executive order in March 1995. That was contested in the courts. I might make note that in the November elections of 1994, Republicans took control of the Senate and it was obvious that this legislation could not pass Congress. So President Clinton, in my opinion, overstepped his bounds and issued an Executive order in 1995 barring management from hiring replacement workers during a strike--a perfectly legal practice under the National Labor Relations Act. He issued this order knowing that Congress had twice rejected legislation that would have done the same thing. The courts didn't let him get away with it. On February 2, 1996, the U.S. court of appeals threw out President Clinton's Executive order ruling that the President's action was clearly unlawful and was preempted by the National Labor Relations Act. Clearly, the court's message was a reminder that the President does not have a blank check to adopt policies in direct conflict with Federal laws established by Congress. The President does not have legislative authority. I think that is what we are finding in a couple of his other Executive actions. Another example deals with the Grand Staircase-Escalante National Monument where the President in September 1996 unilaterally took a 2 million acre coal-rich block of land in Utah and made it a national monument. He did it without talking to Congress. He did it without consulting the Utah delegation. He did it without consulting the people who live and work in that area. He did it without consulting the Governor of Utah. He basically said we are going to take that 2 million acres and declare it a national monument. Maybe I would support such a thing, but again we have a committee, the Energy And Natural Resources Committee, that considers such bills. We should have had a hearing on that legislation. There has never been a hearing. There has never been a chance for the Utah delegation to speak out on that legislation. Is it good or not? I am not sure how I would vote. Maybe I would vote with the President. My point is he usurped congressional responsibility and basically said we are going to declare this a national monument by Federal fiat. I might mention that when he did this--it was in September 1996, during a campaign--he had a press conference around the Grand Canyon in Arizona. He did not do it at a press conference in Utah because his decision was quite unpopular. My point is not whether his decision is popular or not. He did it clearly for political purposes. But he did not allow the people to speak. The President is not king. He cannot do that. And maybe this will be contested. Probably we did not speak out enough on it. Another example where I seriously think he has exceeded his Executive authority and I think legislation is required, is the President's Executive action requiring that if you are under age 27, if you buy cigarettes, you are required to show an ID wherever you are buying them. And if retailers are found selling to minors or anybody under the age of 27, they face civil penalties of $250 or more and could be subject to other sanctions. Retailers reported to have sold cigarettes or smokeless tobacco to someone under 27, without checking their photo ID, risk compliance checks being conducted in the future. Maybe we should do that. I will tell my colleagues, I do not want kids smoking. I have four kids. I absolutely do not want them to smoke. This is hazardous to their health. I have a mother who has emphysema, lung cancer, which is very serious. I absolutely do not want anybody to smoke. But if the President wants to have ID checks for anybody under age 27, or age 40 for that matter, he can introduce it in Congress and maybe we can pass it. I think that is a proper prerogative of the States. But at least it should go through the legislative route. He did not do that. He has advocated other Executive rules dealing with advertising. I supported banning smoking on airplanes. I may support banning various types of advertising. But we should go through the legislative process. We should have hearings. We should let elected people make a decision. I think the President's Executive action goes so far as to ban outdoor billboards or baseball caps that say Marlboro, and so on. I think the President's actions and the FDA's rules have exceeded the constitutional authority of the executive branch. I think that is wrong. Finally, Mr. President, let me bring up the latest proposed Executive order, and I say proposed because it has been announced by the President that he is going to issue an Executive order that deals with Federal construction projects which will in practice screen out nonunion businesses from participating in Federal construction projects or force their employees to join a union, the so-called project labor agreements. Mr. President, this is an egregious power grab by organized labor. If they want to try to do this they should do it through the legislative branch. They should see if they have the votes. We have $239 billion of Federal construction spending available between now and 2002, and to come up with an Executive order and say you need not apply unless you have a union is totally wrong. Totally wrong. More than 80 percent of the workers that are doing Federal work on construction projects now, according to this proposal, need not apply; or if you are going to apply you need to join a union. What about free competition? What about competitive bidding? What about the taxpayers? For the administration to try to make this kind of behind-the-scenes deal with organized labor--and we have reports that organized labor was writing this regulation, that they were involved in formulating this regulation--to come up with this type of a power grab I think is absolutely wrong. If they want to do it, they should do it through the legislative branch. Have somebody who supports this legislation introduce it. Let us debate it. Let us find out where the votes are. Let us go the legislative route. Let us go the constitutional route. And so I have contacted the White House and tried to let them know that I am very sincere about trying to protect the constitutional prerogatives of Congress. This is the legislative body and I am very sincere about making sure that the White House does not become the legislative body by Executive action. And so, Mr. President, I have told the White House we are willing to use what actions we have at our disposal to try to get their attention. We have the confirmation process. We also have the appropriations process. We have the judicial process. We have other tools available to try to convince the administration they cannot legislate by Executive order. That's very much my intention. I just noticed an article in the Thursday, April 17th Roll Call where Mr. Reed Hunt, the Federal Communications Commission Chairman, is talking about drafting a notice of proposed rulemaking to examine the idea of free broadcast time for Federal candidates and predicted that free time for candidates could be implemented in time for the 1998 elections. Mr. President, we have campaign reform before this body, and there is certainly legitimate debate and we have talked about having free time for political candidates. Some people call it food stamps for politicians. That is a legitimate legislative item we should discuss. But the FCC Chairman does not have the authority to say by fiat, by direction from the administration, that we are going to give candidates free time and mandate that or dictate it or bribe the broadcasting authorities to enforce it. That is a serious mistake. If we are going to say politicians are entitled to free time, let us have that as part of a bill. Let us debate it. But Mr. Hunt cannot do it. We as a legislative body, Democrats and Republicans, need to reassert our legislative authority, our legislative responsibility, and we need to object. If we find the administration, the executive branch, trying to legislate, we need to object. At a different time I will speak about the need to object when the Supreme Court or courts are legislating as well, because we find that branch of Government is involved in the legislative process. Right now they are considering two cases legalizing assisted suicide. The Supreme Court does not have the authority to legalize anything. That is the responsibility of this body. That is called legislation. And that is a subject for a speech at another time. I am strongly opposed to the executive branch legislating as well as the judicial branch legislating. Both are wrong. This is the legislative branch. I as one Senator, whether I agree with the direction of the Executive order or the judicial decision, I am going to speak out loudly and strongly and use tools available to make sure the Congress remains the legislative branch of Government. Mr. President, I yield the floor and I thank my colleague from Connecticut for his patience.

Mr. NICKLES

Mr. NICKLES. Mr. President, I want to compliment my colleague from Georgia for his managing this past hour. I hope that my colleagues have had a chance to listen very clearly. I would also like to compliment my colleague from Indiana on his very forceful statement denouncing the statement that was in the paper today, reported to be made by Mr. Summers, Deputy Assistant Secretary of the Treasury, when he said that those who want to cut inheritance taxes are wanting to do so for greedy individuals. I just totally disagree. I am one of those individuals who wants to reduce the inheritance tax, and I don't think I am trying to do it for greedy individuals. I think the tax is unfair. It is too high. The Senator from Indiana mentioned the fact that farmers and ranchers worked hard in their lifetime to build up a ranch, farm, or estate, and find that Uncle Sam is taking 39 percent, maybe 45 percent, or 55 percent of that estate. I think it is too high. It is higher even than the income tax. If you have a taxable estate of $1 million and you are at the 39 percent tax bracket, that is too much. Why should the Government be entitled to take 39 percent of a farm or ranch that has a value of $1.6 million--there is a $600,000 exemption and a $1 million estate--why should Uncle Sam be entitled to take 40 percent, or, if you have a taxable estate of $3 million, maybe two or three restaurants or businesses that you put together and the taxable estate is $3 million, why should Uncle Sam be entitled to take over half? Mr. Summers may think you are being greedy because you don't want to lose half of what you have built and worked all your life to accumulate, and you want to pass it on to your children. He thinks maybe you are trying to be greedy because you want to keep it in the family. Mr. Summers is wrong. I concur with my colleague from Indiana. I hope that the administration will denounce, renounce, or disassociate themselves from his remarks because trying to reduce the inheritance tax is not being greedy. I tell my colleagues that this is one Senator who is going to be very energetic in trying to make sure, when that tax bill comes up this year, that we are going to have estate tax relief. I hope we will cut estate taxes for everybody. I hope we will increase the exemption because I do not think the Federal Government should be entitled to take part of the property that people have worked their lifetime to pass on to their children. I do not think Uncle Sam should be entitled to take 40 or 50 or 55 percent. Mr. President, I am not sure what time remains of Senator Coverdell's time, but I ask unanimous consent to speak as if in morning business for 10 minutes.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from North Carolina [Mr. Faircloth], the Senator from Mississippi [Mr. Cochran], and the Senator from Missouri [Mr. Bond] are necessarily absent. I further announce that, if present and voting, the Senator from Missouri [Mr. Bond] would vote ``yea.''

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from North Carolina [Mr. Faircloth] is necessarily absent.