Robert Packwood

Mr. PACKWOOD

Mr. PACKWOOD. I thank the Senator.

Mr. PACKWOOD

Mr. PACKWOOD. Mr. President, yesterday, when I made an opening comment on welfare, I talked about the philosophy of the different approaches between the two parties. It is well illustrated in the minority leader's bill that Senator Daschle will present, and the bill that Senator Dole and I have presented, in terms of giving authority, power, decisionmaking--call it what you want--back to the States. The argument is used: This is Federal money, and if it is Federal money, we ought to tell the States how to spend it, how to use it. I made the argument that while legally this may be Federal money, and in a court suit I suppose we could defend our legal right to it, in reality it is the taxpayers' money. We hold it in trust for some limited period of time and spend it as a trustee should, in the best way possible for the beneficiaries, that is the taxpayers. We should not get caught up in the argument as to whether this money is ours, that is the Federal Government, or the States, or the local governments, and that whoever thinks they own the money should put the strings on how it is spent. There is nothing wrong, even if we make the argument this is our money, with us giving it to the States and letting them spend it as they think best. With that background, let me explain what has happened over the years and why the States so desperately want us to block this money together and give it to them and let them attempt to solve the problems. I say ``attempt.'' The Washington Post had an editorial this morning somewhat critical of me because I said I cannot guarantee that--if we give these programs to the States I cannot guarantee the States can make them work. I can guarantee, however, the States cannot do any worse than what the Federal Government is doing now. We have been trying to make welfare work for 60 years. The welfare system started in 1935. If anyone wants to make the defense that after 60 years of the Federal Government running the welfare system it is working, I have yet to hear it on this floor. It is not working, and we are not going to make it work by tinkering with it a bit around the edges, by creating one more Rube Goldberg attachment to an already overburdened Rube Goldberg device. What happened? Here is the 1935 section of the Social Security Act that created the present welfare system. It is 2\1/4\ pages long. That is it. That is where we started. And there were no regulations. There was a little pamphlet which kind of told the States how this worked. But there was no regulations. Sixty years later, where are we? From 2\1/4\ pages, we have come to this. This is only part of it. These are the regulations that a caseworker in Oregon has to be familiar with and go through in order to determine a person's eligibility for welfare. And they had better jolly well know it and do it well or Oregon can be sued by the Federal Government for not complying with the Federal regulations. I emphasize this is only to determine eligibility. Once you are eligible, not how much money you get, or not once you are eligible, how long before we try to put you to work, or something else; just that you are eligible. Here is the path of the reason. Here is the eligibility process. In comes Jimmy Jones or Susie Smith. ``I would like to apply for welfare.'' The caseworker says, ``Hello, Jimmy and Susie. Can you give me proof of identity, age, [[Page S 11816]] and citizenship? I want your driver's license, Social Security card, birth verification for each person, alien registration and your arrival and departure record, or any other identification from any other agency or organization.'' That is the first thing they ask you. Assuming Jimmy or Susie actually understands what an alien registration and arrival or departure record is, whether they have a Social Security card for each person, let us say we get to the first person. We now move over to the proof of relationship and child in the house. We want a signed and dated statement from a friend or relative naming each child and the child's residence, birth certificate or other documents stating the parent's name. That is simple enough. Then we will move over here--proof of residence and shelter costs. How much are your electric bills, paid or unpaid; gas or fuel bills, paid or unpaid; rent or lease agreement; rent receipt and landlord statement; mortgage payment and book; deed to the property and proof of housing subsidies? Assuming poor Jimmy or Susie actually has access to it, knows what it is, has gathered it all together along with their driver's license, Social Security card, alien registration form, names of all children or proof from some relative who knows who they are, who is living in the house. We now have gone through to here: Proof of family situation; death certificate for deceased parent; divorce papers or separation papers showing the date, if separated, a statement from friend, neighbor, or relative that you are separated; marriage certificate; if in prison, the date of imprisonment and the length of sentence; if pregnant, medical statement with expected delivery date, name of doctor, name of hospital and doctor's statement. Poor Susie and Jimmy is gathering up more information. Now we come to here: Does anyone here have any income? It is a very important question. Do you have any income? If no, we go this way. Let us go to ``no.'' All right, we want to check your bank statement, current checking account statements, real estate documents, payment books or receipts from all mortgages, land sales, list of all stocks and bonds with current market value. My hunch is they do not have a lot. By chance, they may have some. We want title for all motor vehicles, agreements or documents showing conditions, trust fund, insurance policies. This is all to prove, in essence, that you have nothing. I am not quite sure how you prove a negative. ``No, I do not have any stocks or bonds nor a bank statement, book.'' ``I do not have, I do not have.'' How do we know you are telling the truth. ``I do not have it.'' Now, if it is ``no,'' we finally get an annual eligibility decision over here. But if the poor devil has some income, now you are in serious trouble. ``Does anyone here have any income?'' If yes, proof of income. Now we go to uncashed workmen's compensation, other benefits check, Social Security or VA benefit, a court order stating alimony--go through all of that. The one that I like, you do not count for purposes of income--but you do count. You do not count for purposes of income. Adoption assistance for a child's special needs, do not count that. But you do count as income adoption assistance if not for special needs. This is assuming that Susie or Jimmy knows what special needs are. Here is my favorite. ``Do not count benefits from the agent orange settlement fund, Aetna Life.'' We do not count as income benefits from the agent orange settlement fund, Aetna Life. We do count as income, however, payments under the Agent Orange Act of 1991. That is income. I could go down this list. Here is another one of my favorites. We do count as lump sum the amounts over $2,000 of payments to Seminole Tribe members. We count that. We do not count, however, payments to Indians under Public Law 91-114. If you have finally gone through all of this, you may finally at the end of it became eligible for welfare--just eligible. This is just Susie or Jimmy. What has the State had to go through? Why does it cost them so much money? Why do we have this stack of regulations? Because these are the things you have to know to understand this. That is just the first step because this is not just welfare, AFDC, as we call it; there is also food stamps. Food stamps have a different standard of eligibility from welfare, and there are 57 major areas of difference between Federal policies as they affect the Food Stamp Program and the welfare program, and yet these programs serve in many cases the same person. Usually, if you are eligible for welfare you are probably eligible for food stamps, but this does not qualify you for both. That just qualifies you for AFDC, if you can get through. Then you go to food stamps. What has Oregon had to do? The information I am giving you comes from Jim Neely, who is the assistant administrator for Oregon's adult and family services division. This is our principal welfare division. Oregon has 600 administrative rules, of which this stack is a part: Two volumes of computer guides, 1,452 pages; one volume of form guides, 270 pages; eligibility manual, 871 pages; workers guide, 910 pages--all of which you, as a caseworker, are expected to know. These regulations are used to determine welfare eligibility and to make welfare payments. Less than 15 percent of this information deals with helping people become self-sufficient through employment. As a matter of fact, most of this information is not really designed to help the person at all other than to get them a welfare payment. This information is gathered to make sure that the State of Oregon does not get sued by the Department of Health and Human Services or the Department of Agriculture because they have food stamps and claim that we have not had sufficient quality control to monitor the program. So I emphasize again, we are doing these things to comply with the Federal law. Mr. Neely in the letter that he sent said this Oregon Department of Adult and Family Services files 550 reports a year with the Federal Government; 550--roughly 1\1/2\ every day, Saturdays and Sundays included; that is our welfare division--spends 20 percent of their resources complying with Federal regulations, 20 percent beyond any level necessary to run what we would call a seamless welfare program. The Federal regulations have also interfered with Oregon's efforts to move welfare recipients into the work force. Oregon must now spend an enormous amount of time and resources documenting how welfare caseworkers spend this time. Can you believe this, Mr. President? A welfare caseworker must document what they are doing during every 6-minute segment of the day. I know lawyers do that. I can recall the time charts in a lawyer's office where you put, ``10 o'clock, I talked with client Jones.'' You put that down. I do not know if lawyers bill in less than 15-minute quarters. No matter how much they talk, they keep all the time, and that is the way they bill. The caseworker accounts for every 6 minutes so that this time is properly allocated to different moneys the State is eligible to receive. The welfare worker is doing the welfare workload. It may be welfare, or it may be food stamps. It might be job training. But all of these are separate amounts of money that come from the Federal Government with their own regulations. So for the State to be able to say caseworker Jones spent 2 hours and 14 minutes on Wednesday on food stamps, you have to be able to document it. In addition, the coding system that the caseworkers use to code each 6 minutes, they have 110 different time reporting codes. You just do not put down, ``10 o'clock to 10:06, Susie Smith.'' You put down the code for what it was you were doing. You have to figure from the 110 codes the correct one so that you are in compliance. Mr. Neely estimates that less than 10 percent of agency time is spent on what we call JOBS activities, capital J-O-B-S. Less than 10 percent is spent on JOBS Program activities and 90 percent is spent on attempting to prove what they have done--programmed administration. Now, you know what the argument is? We need a waiver process and we do not need to really block grant and give these programs to the [[Page S 11817]] State and say, here, use this money for the poor as best you see fit. You have to make them work. But you use it as best you see fit. The argument is, well, we can have a waiver process. And the Federal Government, if you apply to them, will give you a waiver from all of these regulations I have been talking about. Mr. President, I have been through this. I went through it with the State of Oregon when we tried to get a waiver that would let us take food stamp money and in certain circumstances ``cash it out,'' as we call it. Instead of giving food stamps to a person, we say we will help you get a job. We coordinated it with our JOBS Program. We had to get waivers for both of them. And we would say to an employer, we will give you x amount of money if you will hire Susie Smith. And we will give the employer the subsidy from the food stamp money because we would rather have Susie have a job that paid more than AFDC and food stamps combined. In order for Oregon to make these reforms, we had to apply to both the Department of Health And Human Services for a waiver, and to the Department of Agriculture for a waiver. In some cases, State must apply to the Department of Health and Human Services, the Department of Agriculture, the Department of Housing and Urban Affairs, and to the Department of Labor. All four of these departments are responsible for programs in one way or another that affect low-income families, the current welfare system, welfare as we know it. But there is no coordination between the departments in granting waivers, and the requirements of each department are different. So I am going to just read what happened in order for Oregon to get a waiver and why, having had this experience, I feel so strongly we ought to block these programs together and give them to New York, give them to Oregon and say, here, you make it work. Let us get rid of this stack of rules and regulations. In November 1990, ballot measure 7 was passed by the voters of Oregon. It was an innovative workfare demonstration, but it did not qualify for Federal waivers. Federal officials said that substantial changes would have to be made in the program the way the voters had passed it and we would have to apply for the waivers. That is November 1990. We got no waiver for years. Jump forward now 2\1/2\ years to July 1993. The JOBS Plus--this is the J-O-B-S Plus Program as Oregon called it--was created by the Oregon Legislature in response to this 1990 ballot measure. We could not even get going on it because we could not get any help from the Federal Government. The Governor and the Department of Human Resources worked with the ballot measure's supporters to create a workable alternative. But in order for Oregon to try this JOBS Plus Program, it was still necessary to get waivers from some of these Federal departments. On September 28, 1993, Mr. Neely, to whom I have previously referred, the assistant administrator for adult and family services, writes to Louis Weissman, the Deputy Assistant Administrator of the Administration for Children and Families, requesting suggestions on the draft waiver request. That is September 28. September 30. Mr. Neely writes to Steve Pichel, Western Region State Program Officer for food stamps, requesting suggestions on the draft waiver request. This is because we have to apply to one Department, Health and Human Services, for the AFDC waiver. We have to apply to another Department, Agriculture, for the food stamp waiver. Two weeks later, on October 18, formal request for waivers for the JOBS Plus Demonstration Program was sent to Mary Jo Bane, the Assistant Secretary for the Administration for Children and Families of Health and Human Services. A day later, October 19, a request for food stamp waivers to implement the JOBS Plus Program was sent to Dennis Stewart, the Regional Director for the Food Stamp Program, U.S. Department of Agriculture. Ten days later, Governor Roberts, our then Governor, sent a letter to each member of the Oregon delegation asking for our help in getting these waivers. Three weeks after that, Kevin Concannon, the director of the department of health and human services; Stephen Minnich, the administrator of adult and family services; and Jim Neely, the assistant administrator, came here to meet with Health and Human Services and U.S. Department of Agriculture officials. In January 1994, Governor Roberts requested Congressmen Wyden and Kopetski to meet with the new administration and see if we could get the waivers that we wanted. January 5, 1994. A letter goes to Bruce Reed, the Deputy Assistant to the President for Domestic Policy, from Kevin Concannon, asking his intervention on Oregon's behalf with the Department of Agriculture. January 14, 1994. A letter is sent from Jim Neely to Bonny O'Neil, Acting Deputy Administrator for Food Stamps, to follow up on the November meeting. I will not read the rest of what goes on. It goes on for another 10 pages of letters, meetings, requests, refusals to grant the waiver, suggestions as to how we had to change it, pare it, make it different to fit Federal standards. And I will not bother to read the six pages of my personal involvement with this --phone calls, letters, meetings. That is what it took to get a waiver so that Oregon could try an experimental program combining AFDC and food stamps and work. Mr. President, it is working. It is working. It would have worked a lot faster and it would have worked a lot better if Oregon could have put this into effect immediately, if Oregon could have gotten rid of that stack of documents immediately. So when those who oppose the Dole-Packwood bill say we can do this with waivers, here is an example of an attempt to do it with waivers. At the end, after 3\1/2\ years--pardon me, 4\1/2\ years--did we finally get the waiver, did we finally get the waiver in the form we wanted it and do exactly what we wanted? No. Do we still have to do more reports than we think we should? Yes. Is our program working? It is. There is not a State in this country that does not know better than we in Washington, DC, know what their problems are. And there is probably not a county in a State that does not know their problems better than the State government. And there is probably not a neighborhood in the county that does not know its problems better than the county government. The closer we can get this program back to the local level, the better it is going to work and the more money that can be spent on helping people instead of filing forms. So, Mr. President, I very much hope when we are done with this, we will pass the Dole-Packwood bill. I thank the Chair. Mr. MOYNIHAN addressed the Chair.

Mr. PACKWOOD

Mr. PACKWOOD. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Tuesday, August 8, 1995, at 10 a.m.

Mr. PACKWOOD. Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on Tuesday, August 8, 1995, at 2 p.m. to hold a closed hearing on intelligence matters.

Mr. PACKWOOD

Mr. PACKWOOD. Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on Monday, August 7, 1995, to conduct a markup of pending nominations.

Mr. PACKWOOD

Mr. PACKWOOD. Mr. President, I have a unanimous-consent request that has been cleared on both sides. I ask unanimous consent that only debate be in order on the welfare bill, H.R. 4, until the hour of 3 o'clock p.m. today.

Mr. PACKWOOD. Mr. President, ``The lessons of history, confirmed by the evidence immediately before me, show conclusively that continued dependence upon relief induces a spiritual and moral disintegration, fundamentally destructive to the national fiber. To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit. It is inimical to the dictates of sound policy. It is a violation of the traditions of America.'' So spoke Franklin Roosevelt in his second annual message January 4, 1935, the year that welfare, as we currently refer to it, was passed. As a matter of fact, we are almost 60 years to the day. One more week and we would be there. August 14, 1935, we passed the Social Security Act. The act had two components. One was Social Security pensions and the other was welfare for widows and orphans. Both of the above, the pensions and the welfare for widows and orphans, were intended to cover really the same group of people at that time, in 1935. But they were covered for different reasons. Social Security, the pension, was to be yours, of course, if you worked until age 65 and collected a pension for the rest of your life. But support for widows and orphans, enacted in the same bill, was to be yours if the breadwinner died. This was done in 1935, Mr. President. In most cases in those days, women did not work outside of the home for money. They stayed home, and they raised the children. The breadwinner was normally a man. So the Social Security Act said, all right, if the man works and he works until he is 65 and he retires, he gets a pension, and with the pension he will still be able to take care of his wife; his children by that time presumably would have been grown and off working on their own. If by chance, however, the breadwinner died before 65, then who was left to support the widow and the children? For that purpose, in the same act as Social Security, we passed what we now call Aid to Families With Dependent Children. We then simply called it welfare. It was presumed that the widow would have no more children unless she remarried, in which case she would not need welfare support any more. And in those days, almost all welfare, that is, as we now call it, AFDC [Aid to Families With Dependent Children], over 90 percent of welfare went to widows and orphans. It was not until 1939 that what we call survivor coverage was added to Social Security. And we now said if the breadwinner--and this was still presumed to be the man--died prior to age 65, and if the breadwinner had a widow with children, the widow would get 75 percent of the pension benefits that the breadwinner would have gotten had he lived until 65 and in addition got 75 percent for each child that she had up to a capped amount. You could not have 20 children and get 75 percent each, but most people do not have 20 children. I emphasize again, in 1935 we passed the Social Security Act. It has a pension part and a welfare part. And the two were really separated. Then in 1939, 4 years later, we added this survivors coverage to Social Security, and an interesting thing happened after we added it. Because by and large the survivors pension to the widow and the children under Social Security was larger than welfare, and gradually from 1939 on, first as more people worked in the system and then as we added by statute more and more people to the system and covered more and more people--I think probably the biggest single coverage expansion coming in 1953 or 1954 under President Eisenhower--by the time we had gotten to 1960, most people were covered by Social Security, and therefore had Social Security survivor benefits for widows and children. So the original purpose of welfare, to provide for the widows and the orphans, was supplanted by Social Security. And from 1960 onward, maybe 1970 onward, in a rapidly accelerating pace, welfare, Aid to Families With Dependent Children as we now call it, started tilting toward the support of unwed mothers and children who had never had a breadwinner in the house. This was not a substitute for the deceased husband. For the first time, we began to see the welfare system turn toward a different concept from that upon which it was founded. The concept upon which it was founded was, if the breadwinner dies, there is money for the widow and the child. As Social Security replaced and supplanted welfare, therefore, I sometimes wonder--I do not really say this with any assuredness--but I sometimes wonder if the bureaucracy that administered the old welfare system thought to itself, ``We will soon be out of a job,'' Social Security having taken over the job, and, ``We need to find some other function.'' It happens in private enterprise all the time. A classic example, of course, would be the March of Dimes. Franklin Roosevelt started the March of Dimes. We eradicated polio, and the need for the March of Dimes could have gone out of existence. If you look at it in the phone book, it is now referred to as the March of Dimes, Birth Defects. The organization--I do not mean this any way critically--needed another cause after our having successfully conquered polio. I do not say this is what happened with the welfare bureaucracy from 1960, and certainly 1970 onward. But instead of welfare now being emergency financial support for an absent, deceased breadwinner, it began to become a lifetime support system for somebody that never had a breadwinner. Then, unfortunately, it became not just a lifetime support system, but a generational support system of a woman, then a child, and then the child's child, and then the child's child's child, all on welfare. And, therefore, what we could presume at the start with welfare, we could no longer presume from--I will just pick the date--1960 onward. When we gave money in 1935, 1937, 1938, and on up until Social Security took over the principal function of survivors' benefits, we were presuming, one, the woman would have no more children, or if she got married she may have more children but she would marry a breadwinner and be off welfare, and, two, if it was a widow's pension with a child, the child grew up and the woman had her pension until she died. And society could humanely justify and support that, because we knew that this was not going to be massive in cost. Most breadwinners do not die. And we knew that, as a matter of conscience and humanity, we could afford it. But as we got into a situation where we were looking at lifetime support or generational support, we had to attempt to shift welfare from emergency support because the breadwinner died to an effort to teach and train people to get off of welfare. We did not intend welfare as a lifetime and generational support system. So for a quarter of a century, the Federal Government has tinkered and tried to remedy the problem of work. Mr. President, the Federal Government has failed. It has not worked. Welfare, as the Federal Government hoped it would work, would be a trampoline. People would spring back to work. Instead of a trampoline it has become a hammock. And it is not working at all. Let me ask you, Mr. President, has it failed because we have not spent enough money? This is often the argument. ``All we need is a bit more money and we could take care of the problem.'' Mr. President, I do not know how much ``a bit more'' is, but I do know that we have spent an increasing amount of money on welfare by any measure over the last half century. If we hoped that by spending more we would reduce the welfare caseload and get people off of welfare, we have failed. The Social Security Administration puts out a publication annually on what they define public aid. The Social Security Administration takes the various programs that we might generically call aid to the poor, not just aid to families with dependent children, but all the programs--Medicaid, food [[Page S 11737]] stamps, anything that would go to the poor--and have added up how much we spend. They have done it using what we call constant dollars, current dollars, and per capita dollars. I will define what I mean by these. ``Current dollars'' means what you spend today. It does not necessarily mean a dollar of the same value. Let us say you spend $100 on welfare today, and $100 will buy you a certain basket full of groceries. Let us say you have 100 percent inflation, and in order to buy the same basket of groceries the next year, you would need $200. So we spend $200 on welfare. That is called current dollar spending. Basically, it is just what we spend now and takes no account of inflation. The $200 does not buy you any more than the $100 did before the 100 percent inflation. That is one way to measure things. If you take all of the programs that Social Security counts as public aid in terms of current dollars, in 1947 we spent $2 billion in this country, including what the States spent--$2 billion. We now spend $180 billion on roughly the same programs. Some programs have dropped by the wayside and others have been added, but on balance it's roughly the same types of programs. A better test is what we call constant dollars. You assume that the value of the dollar has never changed, there has been no inflation. You adjust the spending backwards so you know what you would have spent based on today's dollars as if there were no inflation for 50 years. On a constant dollar basis, in 1947 we spent $10 billion, not $2 billion but $10 billion. Today it is $180 billion. We have gone in uninflated dollars from $10 billion to $180 billion.

Mr. PACKWOOD. No, not until I finish, thank you. Have we fixed the welfare problem? We have not even come close. Maybe the best figure, though, is per capita spending. How much do we spend per person in this country on a constant dollar basis? In 1947, we spent $70 per person in this country; in 1991, which is the last year we have figures for, we spent $713 per person. This assumes the dollar has never been inflated. The $70 has risen to $713, and the welfare problem is getting worse. Last figure. What percent of our total gross domestic product do we spend on what Social Security calls public aid? In 1947, 0.7 percent of our entire gross domestic product of all the goods and services in this country was spent on public aid. We now spend over 3 percent. So by any measure of money we have spent on welfare, we have spent it in spades. We have doubled and redoubled and redoubled and redoubled and redoubled the money we have spent on welfare. I would suggest, Mr. President, it has not solved the problem. Next, has it failed then because of insufficient regulation? I have here in my hand the 1935 section of the Social Security Act for welfare. It is about two and a quarter pages long. That is it. That was the welfare law. There were no regulations. There was a little pamphlet that could not have exceeded 30 pages that sort of explained what this two and a quarter pages of law meant. You know what we have today? Let me show you this. This is what an Oregon caseworker has to go through to make sure that they are meeting the eligibility standards of a potential recipient. This is not for all of welfare. This is only for welfare eligibility, not the administration of the program once you are on it. This is what we have come to. Do you wonder why the States are asking us to give them a block grant and saying, ``Let us try it.'' Can you imagine what it is like for a caseworker, who is a decent person who would like to help somebody, who would like to spend the bulk of his or her time working person to person with people who are deprived and genuinely entitled to welfare? That is what this caseworker would like to do. The caseworker does not want to spend time reading these kinds of regulations and filling out forms to make sure that what they are doing comports with the Federal regulations which are equally thick. And that is what we have come to year by year, year by year, year by year. There was a wonderful example yesterday. It is unrelated to welfare. It involves the Drug Enforcement Administration. This tells you the folly of federal rules. Portland has a drug-sniffing pig. It is a Vietnamese pot-bellied pig, and it can sniff out drugs better than a dog and it is cheaper than a dog. Here is the picture of Harley. People keep these things for pets. The Portland police bureau applied to the Drug Enforcement Administration for funds for Harley and the Drug Enforcement Administration said, ``No, only dogs, not pigs.'' The Portland police bureau said, ``But the pig can smell better, the pig is cheaper.'' ``No, only dogs.'' We finally got them to admit that the pig was all right. This is the kind of thing that States have to go through to do perfectly normal things. I realize we are not all used to drug-sniffing pigs, but they work. We ought to let States try it. Here is the best statement I could find. This is from Duncan Wyse, who is the former executive director of the Oregon Progress Board monitoring welfare. This is his statement. Oregon comes very close to being the best, probably the best State, in terms of trying innovative welfare and Medicaid approaches. It has been like pulling teeth to get the Federal Government to give us waivers and to cooperate. This is what Duncan Wyse says: Almost all of the Oregon option undertakings require the use of Federal funds and, in many cases, the waiver of Federal rules and restrictions on how the money is used. We need the Federal Government as a partner. But Federal programs that provide money tend to be so severely prescriptive and riddled with redtape that stifles innovation. In the biggest area of Federal aid--welfare--at least 20 percent of our administrative time and money costs have been spent on Federal paperwork. Twenty percent is spent on Federal paperwork. When people say, what happens if we give welfare to the State, will the State be able to administer it well and compassionately, to begin with, Oregon can save 20 percent off the top if they do not have to cross every ``t'' and dot every ``i'' of the Federal regulations. So where are we after 60 years, 60 years this year, of Federal welfare almost divided in two with the dividing line coming maybe 1960, maybe 1970 when it moved from widows and orphans as survivors of the deceased breadwinner to what welfare as we know it now? I thought Senator Carol Moseley-Braun from Illinois phrased it best at the Finance Committee markup on May 24, 1995: ``In this $7 trillion economy, we still have 40 million people living in poverty; some 14 million of those people are in the welfare system in the States and 9 million of those people are children.'' Mr. President, that is welfare as we know it. This is the welfare as we know it that President Clinton has said he wants to end. This is welfare as we know it that has been fostered, foisted, and directed by the Federal Government. Do we have any reason to assume after 60 years of toying and tinkering with the system that the Federal Government will do any better if we tweak it here, twist it there and hope that this beast will fly? It is like a hippopotamus, Mr. President. No matter how long you make his ears or how long you screw up its tail, it is not going to fly. Every now and then, you run across a little pamphlet. I say to Senator Moynihan, this was written 20 years ago, ``To Empower People-- The Role of Mediating Structures in Public Policy.'' Jack Kemp would like the title. I mention Senator Moynihan because almost 20 years ago--he came to the Senate in 1976, so it is not quite 20 years ago--he and I tried to get tuition tax credits for parochial, private school students. I think we would have settled for vouchers if we could get vouchers. This book--book is the wrong word, pamphlet is better--is only 42 pages long. I do not know the two gentlemen who wrote it, but I was intrigued with their opening page statement: Two seemingly contradictory tendencies are evident in current thinking about public policy in America. Do not forget, this is 1977. First, there is a continuing desire for the services provided by the modern welfare state. * * * The second tendency is one of strong animus toward Government bureaucracy and bigness as such. * * * We suggest the modern welfare state is here to stay, indeed that it ought to expand the benefits it [[Page S 11738]] provides--but that alternative mechanisms are possible to provide welfare state services. There are a number of us who would quarrel with whether or not we want to expand the services or not. What I was intrigued with was the authors' suggestion. They almost bypass States and local governments. What they refer to as the role of mediating structures in public policy they define as neighborhood, family, church and voluntary associations. They go through what could be done if we were willing to attempt to administer our welfare programs through these organizations, and they have any number of quotes. I am not going to quote them all, but there is one I find interesting: If a policy furthers a legitimate secular purpose, it is a matter of legal indifference whether or not that policy employs religious institutions. How many of us have been to a Salvation Army workshop or Goodwill workshop, or any of the sheltered workshops where private charities are doing a sensational job beyond anything that we seem to be capable of doing? And yet, in many of these areas, we have run up against the argument, ``Well, it's a religious institution.'' Mr. President, the time has come when institutions should not be prohibited from trying to help us, the Government, solve our welfare problems simply because they have a cross on the wall or a menorah in the hall. That does not disqualify some of the most extraordinary organizations in America from being able to help. Lastly, and then I will go on to the bill itself, I will quote just very briefly from a speech that I made also in the same year, 1977, to an annual Republican conference in Oregon called the Dorchester Conference, in which I was attempting to delineate major differences between parties. I said I do not find overwhelming differences on foreign policy or on transportation, or on a number of areas, but I said there were two where they were significant differences. One was in the providing of social services. And, on average-- speaking generically because it is not of every Republican or every Democrat, but on average--Democrats would prefer that Government rather than private entities--be that business or religious entities, neighborhood associations, or anything else--deliver those services, whereas Republicans prefer private entities to deliver the services. The other was the feeling that if government had to deliver the services, the Democrats would prefer that the Federal Government did it. Republicans would prefer that State and local government did it. I am not sure that, generically, those two differences--Government versus private sector--and in the private sector, I include all kinds of nonprofit charities, let alone business--and central Government versus State and local government--have changed. In that March 5, 1977, speech, I said: In considering this difference, we first must get over our hangup about which government the taxpayers' money belongs to --local, State, or Federal. The money does not belong to any government. It is the taxpayers' money, and government--be it local, State, or Federal--simply holds it in trust for a time after collection and before disbursement. The argument that money collected by the Federal Government is Federal money and, therefore, the Federal Government has not only a right but a duty to say how it is spent is poppycock. But even assuming the Federal Government does have a right to say how it should be spent, there is nothing obtuse about saying that the Federal Government policy on spending money will be: Give it back to the State and local governments with minimal strings. Let them spend it as they like. We don't need dozens of housing, health, urban, and other kinds of programs, let alone 50 to 100 categorical grant education programs. If a local government doesn't know better whether it needs a park block or a fire engine or a day care center or a school librarian, then how can those in Washington, DC, possibly know better? I want to get to the outline of the bill now, Mr. President. I want to emphasize once more what I just said and what Professors Berger and Neuhaus would say. In essence, we are saying that you cannot run this country well from Washington, DC. It is interesting that we are finding the same philosophy existing in some of the major businesses of this country. They realize they can no longer run their business well from corporate headquarters. Businesses are devolving, giving regional managers more authority than they ever had, giving plants more authority to organize than they ever had. You are seeing this devolution outward from the center in all areas of this country except the Federal Government. The Federal Government has preempted one of the best sources of raising money and that source is, of course, the income tax. Some States have high income taxes. My State is one that has a high income tax as compared to other States. One of the reasons we have a high income tax is because we have no sales tax in Oregon. All States are pikers in comparison to the amount of money the Federal Government gets from the income tax. It is a progressive source of revenue from everybody, and we collect most of it. There is nothing wrong with our saying we want to see if we can solve this welfare system. ``We,'' being collectively the States, the local governments, Salvation Army, and the Catholic Church. We want to see if collectively we can solve this problem. We have failed to solve the problem since we first got into this area in 1935, and we have progressively failed in the last quarter of a century. We have geometrically failed. Is there a possibility--just a scintilla of a possibility--that State and local governments, if we let them experiment and innovate, might come up with solutions that we have been incapable of thinking of, or if we have been able to think of them, for whatever reason we were incapable of administering and achieving? That, in essence, is what the bill before us today attempts to do. First, I will describe the bill's provisions on what we call welfare, aid to families with dependent children. This bill has a number of sections to it of which this is one.

Mr. PACKWOOD. Not until I finish. Thank you.

Mr. PACKWOOD. Mr. President, AFDC or welfare, as most people call it, is a section of this bill. I am going to take it section by section, but I will take this one first. The bill takes the seven AFDC programs--they are, one, cash assistance; two, administration of the program; three, the so-called JOBS Program; four, emergency assistance; five, child care for the JOBS Program; six, child care for transition to work; seven, child care for at-risk families--we take those seven programs and consolidate them into one program called a block. We say to the States, we will eliminate these programs as we now know them, and we will give you the money instead, and you must spend this money on the needy, not airport tarmacs, or rebuilding piers for their port, but to spend it on the needy as you see fit. Here you have a battle, a philosophical battle, because we have put some strings on this bill. The ultimate would be to say to the States, here is the money, you spend it on welfare as you want to define it. But because we did not want to be that broad and did not know what they wanted to do, there have been two very tough restrictions put in the bill. The first one is work. Welfare recipients must go to work. They must go to work no later than after they have been on welfare for 2 years. But the States can make that much shorter if they want. If the State determines that somebody is work ready, then they have to go to work then. The States have to have 50 percent of their total number of adults who are on welfare in work by the year 2000. Today, we do not even approach that. On occasion, people will give you a percentage that seems quite high, but that is because, under the present law, there are all kinds of exceptions to those who do not have to work at all. So say you had 1,000 people on welfare, but you say 200 do not have to work because they have a child under 3; another 100 do not have to work because they are disabled; and another 100 for another reason. You get down to 500, and then you say of the 500, 250 are working. That is 50 percent. Well, that is 50 percent of 500. It is 25 percent of a thousand. This bill says by the year 2000, 50 percent of what caseworkers would call your adult caseload, your welfare caseload, must be working. Second, we say that [[Page S 11739]] you can only be on welfare for a maximum of 5 years in your lifetime, cumulative period, total. You run out the 5 years, it is zip, finito, gone. Those are the two major strings that we put into this bill. The States and the Governors, by and large, find this acceptable, but there are some Governors who do not agree with what we have done. Most like what we have done because we have said to the States, this is no longer a Federal entitlement program as we call the words ``entitlement,'' which means we determine who is eligible for welfare. We are saying to the States, ``Here's the money; you determine who is eligible, but you have to put a certain percentage of those you determine as welfare-eligible to work. That is basically all we are requiring of you.'' They cannot be on welfare for more than 5 years. That is the broad outline of the welfare portion of the bill. We have a second section called SSI, supplementary security income. I do not find a great deal of dissent with what we have done to SSI. This is another welfare program, often for the elderly, but not always for the elderly. We have said that there will be three categories that will no longer be eligible. SSI is totally a Federal program. No State money and no State administration is involved in this at all. The bill says that you will no longer be eligible if you are disabled because of a drug addiction or an alcoholism addiction. You may be an alcoholic or a drug addict, and you may be eligible for this program for other reasons, but you are no longer going to be eligible solely for drug addiction or alcoholism. Noncitizens will no longer be eligible unless they do work and pay taxes for specified periods of time, and children with modest disabilities will no longer be eligible. I do not find overwhelming argument with the SSI provision of the bill. The third part of the bill is child support enforcement. Here we have strengthened the Federal role, and the States agree. By ``child support enforcement,'' we are talking about custody orders. The child's parent is ordered to pay $100 a month, $500 a month, $1,000 a month, and the parent moves to another State. The parent may not even disguise their name, but it is almost impossible to enforce child support orders between States. It costs more than it is worth. This particular provision of the bill significantly beefs up the interstate, between- State, enforcement of child support. Next is food stamps. This part of the bill is somewhat controversial. I have to give great credit to the Agriculture Committee. They came forth with reforms of the program in their committee that were extraordinary in terms of both the reforms and saving money. The bill includes all of their reforms. We have added a particular wrinkle to food stamps. We have given States the choice of taking a block grant for food stamps. The way food stamps work now is that the Federal Government determines if you are eligible, then you get food stamps and take them to the grocery store for groceries. You give the grocer food stamps, you receive groceries, and the grocer turns the food stamps in to the Federal Government, and we pay the grocer money. Some States under experimental programs with waivers are doing what is known as cashing out food stamps. In some cases they are doing it statewide, and in some cases only in counties. What they do is take the money that a recipient would otherwise give for food stamps, use it as a subsidy with an employer, and put the person to work. Almost invariably the person has more money from working than they get from the food stamps and welfare. The food stamp money is used as a wage subsidy. You can only do that now if you get a waiver from the Federal Government. This bill would make it easier for States to do this. As I said, the bill also gives States the option to take a block grant for food stamps. We have put a limitation in it. I would go further and say the States can cash out totally and use the money as they see fit. I recognize there are not the votes to go this far. Instead, this bill allows States to cash out food stamps, but at least 75 percent of the money must be used for food for the poor and the remaining 25 percent can be used for wage-subsidy programs which, if we are trying to get people off of welfare and into work, probably are a better use of the money than anything else that we might suggest. On the child nutrition programs and the commodity distribution programs, we have included in the bill the Agriculture Committee reforms exactly as they reported them without change. They are good reforms. I think they are relatively noncontroversial reforms. We have taken from the Labor Committee, Senator Kassebaum's committee, her child care and development block grants. She consolidates three Labor Committee child care programs into a single program, and we have put it in this bill with a minor modification. We have also included another bill that the Labor Committee reported which takes 90 different job training and education programs and consolidates them into one block. Then we have taken suggestions on housing with relatively modest changes in rent subsidy eligibility rules and housing assistance rules. Again, I think there is no controversy. Those provisions came principally from the Banking Committee. Then we have changed the rules on noncitizens for what are called Federal means-tested programs. Means-tested programs are those that determine eligibility based on how much income and money you have. If your income and resources exceed a certain level, you can not qualify for the program. The bill provides a uniform rule for noncitizens who apply for Federal means-tested programs. I believe there is some controversy about this provision in the bill. But, Mr. President, I think the overwhelming bulk of the controversy falls in two or three areas of the bill and not most of the latter ones I talked about. Then lastly, we have called for a reduction of 30 percent in Federal employees who administer the AFDC welfare programs and the work force job training programs. Mr. President, that is it. It is not very often that we have a genuinely philosophical debate in this Congress. This is a genuinely philosophical debate. Do you prefer that the Federal Government continue to fund and administer the welfare programs in this country and the food stamp programs? If yes, in essence, you are saying you like the way they are working. Or do you say, I am not happy with the way the welfare programs are working, and try as we might, well- intentioned as we may be, the Federal Government has failed to make them work and we would like to let the States experiment? Mr. President, the problems of the States in this country are difficult. A State that has immense immigration has different problems than a State that does not. A State that has a disproportionately large number of poor has a different problem than a State that does not. One size does not fit all. This bill, as we debate it, and as we finally vote upon it, is going to be a touchstone showing the difference between the parties and between those who prefer a Federal system, no matter how badly run, to a State system which we cannot guarantee will work but I think we can guarantee it cannot work any worse than it is now working. Is it worth a try? You bet it is. Over the next 2, 3, or 4 days, or however long we debate this, keep in mind a few objectives: Federal versus State, and work. Those are the issues that we are talking about. I thank the Chair. Mr. MOYNIHAN addressed the Chair.

Mr. PACKWOOD. One year.

Mr. PACKWOOD. Yes.

Mr. PACKWOOD. The Chair is correct. There is no rule. Senator Moynihan and I agreed we would try to go back and forth. I must say, in fairness, we have had four or five speakers on our side. The Democrats had none on theirs. Just to the extent we are on the floor, we are going back and forth on the floor informally. If no one is on the floor, we will recognize who is there to speak.

Mr. PACKWOOD. Or a local soccer team. I am indebted to the Senator for calling to my attention this book by Professor Putnam in which he studied all the provinces of Italy which had identical charters given to them in 1920. Professor Putnam discovered that the provinces governed themselves differently, although the charters were identical. And after extensive research and evaluation, Professor Putnam concluded that local and civic traditions was responsible for most of the differences and the charter did not make much difference at all. And the best example we have of that is the Soviet constitution, which hardly had a peer in the world as a Constitution.

Mr. PACKWOOD. Mr. President, I want to make sure the Senator from Minnesota does not misconstrue. In the play ``Man for All Seasons'' where Thomas Moore is being tried--and I will paraphrase the best I can recall--for he would not assent to the king's divorce, he never said anything about it. He just did not assent to it. But he would not sign on it. And in the trial they accused him of opposing the divorce. He said, ``No. I said nothing about the divorce.'' And the prosecutor said something about the law and presumptions, and Moore says, in that case, it is not to presume that silence assumes assent. He said nothing. I do not want my silence--in response to his papers when he is holding them up saying ``anybody here disagrees''--to be assent. He said nothing. I do not want my silence--in response to his papers when he is holding them up saying ``anybody here disagrees''--to be assent. At the appropriate time, I will respond to those. But I do not want to leave you with the impression that I agree with everything or barely anything that he said.

Mr. PACKWOOD. Mr. President, could I make a request that those on the Republican side who wish to make opening statements offer them so we can get them in order. I thank the Chair. Mr. DeWINE addressed the Chair.

Mr. PACKWOOD

Mr. PACKWOOD. Mr. President, on April 26 of this year, the life of my fellow Oregonian, David Jack Wheeler, was snuffed out. He was murdered while working in the Wallowa-Whitman forest that he loved. David was an employee of the U.S. Forest Service, and he was an exemplary citizen of Baker City, OR. David was well-regarded in the community of Baker City because he was one of those individuals who didn't stop at just holding down a job and caring for a family. He gave back to his community. David worked to provide access for everyone to recreational and administrative facilities within the forest. He was a mentor and counselor to his coworkers. Because of this his community, friends, family, and employer would like to honor him by designating the Federal building located in Baker City as the David J. Wheeler Federal Building. I agree with these good people in this effort and so have sponsored a bill to make this happen. Folks in Baker City are right to honor David in this way. He gave so much to his community and this is a small thing to ask in return.

Mr. PACKWOOD

Mr. PACKWOOD. Mr. President, the Finance Committee has not yet had its hearing of Lawrence Summers to be Under Secretary of the Treasury. We will be convening the Finance Committee as soon as the last vote is over. I would appreciate it if Members can get there reasonably promptly. It is a controversial nomination. I hope it will not take a long time. We will be taking it up at about a quarter to 1, whenever we finish with the vote. I thank my friend from Montana.

Mr. PACKWOOD

Mr. PACKWOOD. Mr. President, I am very pleased with the conference agreement on Medicare select. The agreement is very close to the bill passed by the Senate. The only major change is extending the program 3 years instead of 18 months. This is reasonable extension. It gives States sufficient time to take the necessary legislative or administrative actions to allow Medicare select policies to be sold in their states. It also allows insurers sufficient time to develop products, bring them to market, and accumulate enough experience for a meaningful evaluation of Medicare select policies. This legislation will allow people in all the States to have access to very popular, lower cost type of Medicare supplemental insurance. Remember, Medicare supplemental insurance is private insurance that people buy with their own money to cover medical expenses not paid for by Medicare. There is no Federal money involved. Some concerns have been raised about Medicare select. Since Medicare select is a new type of supplemental insurance and the full implications of Medicare select for the Medicare Program are not known, this legislation contains a safety valve. The Secretary of Health and Human Services is to study Medicare select. If the Secretary finds that Medicare select is saving seniors money on supplemental insurance, is not adding additional costs to the Medicare Program, and has not negatively affected quality or access to health care, Medicare select automatically becomes a permanent option after 3 years. If, on the other hand, the Secretary finds serious problems with Medicare select, the program expires June 30, 1998. This is a very sensible compromise. It protects the Government against unintended consequences while also allowing the program, if successful, to become permanent without having Congress take additional action.

Mr. PACKWOOD

Mr. PACKWOOD. Section 252(a)(2)(A) requires a separate subsidiary for all information services except those that were being offered before July 24, 1991. Since that date literally hundreds of information services have been initiated and offered, because July 24, 1991, is the day before the information services line of business restriction was lifted by the MFJ court. This means that all of those services have to be shifted to a separate subsidiary on the date of enactment of this act. Are there not two problems in your view: First, the bill does not grandfather all existing information services. Second, it will be impractical for Bell operating companies to transfer existing information services to a separate subsidiary prior to the date of enactment of this act.

Mr. PACKWOOD

Mr. PACKWOOD. Mr. President, I thank the Chair. I come to speak in strong opposition to this Lieberman-Leahy amendment. Seldom has something been so misguided, misconceived, and antimarket as what we have attempted to do to cable over the last decade. I can speak with some degree of knowledge and history on this, because I was chairman of the Commerce Committee when we deregulated cable in 1984. When we deregulated them, we asked two things of them. One, give us lots more channels. Two, give us more diverse programming. Mr. President, we got that in spades. There is hardly a person so young in this Chamber that they cannot remember precable days, when what you got was ABC, NBC, and CBS, through your local affiliates, maybe a public broadcasting station, and maybe an independent, unless you were in Los Angeles or New York. That was basically it on television. You got it with your rabbit ears. Cable came in initially to fill a void where people could not get signals. Instead of growing from urban to rural, they grew from rural to urban. They began to realize if they were going to compete, they had to do more than just carry the signal of the major networks. And so when they were deregulated in 1984, they gave us what we asked for. Today, we have, unfortunately, limited them with that foolish 1992 act. But you could ``channel surf,'' as we have learned to call it, and be fascinated. I find Spanish language stations here in Washington. You can find three or four in Los Angeles, and a number of them in Corpus Christi. They program to the market on things that the over-the-air networks could not do because, by the very nature of the fact that you were over the air, you had to have a wide audience. You could not program to a narrow audience. Cable can. Cable can make money on programming to a narrow audience. So consumers got services and programs that they wanted, that they could never get before. You cannot probably justify a history channel on NBC or ABC or CBS, broadcasting over the air to a broadband audience; probably could not on MTV, if you had to cover the entire audience in an area. But you can on this narrow broadcast. Now this argument about competition, holy mackerel, Mr. President. The argument about a referendum, put this to a referendum, people would vote down what they are paying for cable. My hunch is if you put to a referendum what they pay for phone bills, they would put that down. And electric bills. I hesitate to say what they would do if you gave them a referendum on congressional salaries. My hunch is they would vote that down. Is that the standard this representative body will be --whatever a referendum might be, that will be it? If you were to pose the question in a different way to people, do you want to cut your cable prices in half and have your programs cut in half and have the channels taken off, you might get a different answer. But if the question is, do you want some costs lowered, what answer do you expect to get? I would like to have the price of gasoline lowered. I might put that up for a referendum and see what we get. Now look at the competition argument. I heard the Senator from Vermont talk about 600,000. This is not 600,000 direct broadcast satellite over the year, but 600,000 what we call wireless cable. This is growing. You normally have to have flat terrain, but this does not come from the satellite. Wireless cable, as we call it, is line-of-sight from a transmitter. Because the terrain is relatively flat, the line-of-sight is good. Corpus Christi is a good example where the line-of-sight has taken a fair portion of the market and the prices are cheaper than normal cable, and you can transmit a good program over the air because you have a straight line-of-sight. Obviously, that kind of programming is limited, but it is growing. That is the 600,000 subscriber figure that the Senator from Vermont talks about. They expect to have 600,000 within 2 years grow to 1.5 million, and 3.4 million by the year 2000. In addition, you already have Bell Atlantic, NYNEX, Pactel, phone companies, all of them experimenting in small areas with carrying the equivalent of cable on their phone wire system. That is going to expand. But then beyond that, direct broadcast satellite. Here is a business, 2,000 new subscribers a day. The company that makes the dishes cannot make them fast enough. Mr. President, 2,000 additional subscribers a day. We will have over 5 million subscribers to this by the year 2000, and I bet that is an underestimate. Except for the local news, you can get every program from the direct broadcast satellite you can get from cable. If you want the local news, you know that 94 percent of the people in this country can get local news with rabbit ears. Local is local, you do not broadcast very far. All you have to do is turn the switch on your television set from cable to over the air and you can get the local news. So the fact that the direct broadcast satellite cannot physically carry it at the moment is not an impediment. Mr. President, the market works. While we are talking about communications, the best example to probably use is the cellular telephones. Again, I speak with some degree of history on this. In 1981, when I was chairman of the Senate Commerce Committee, we passed a bill restructuring AT&T. They had to have separate boards for Bell labs, and we worked out an agreement that was satisfactory to a lot of parties. The bill went to the House. Before the House acted, the antitrust settlement between AT&T and the Government was arrived at. The so- called modified final judgment. Therefore, the bill became moot. AT&T and everybody else agreed to a different method of restructuring than we passed in the Senate Commerce Committee, and that agreement was that they would spin off all the local Bell companies. They would get out of the local business and keep the long distance business. That was not the only agreement in the modified final judgment. There were lots of things that the local Bells could not go into--local information services, manufacturing. This was a structured settlement. Still regulatory, but very structured. The one thing that the settlement left out was cellular telephones, because there was no future in cellular telephones of any great consequence, and nobody cared about it. An analogy I used the other day was the dividing up of the Middle East by Britain and France after World War I. All of the Middle East had been part of the Turkish sovereign area. Turkey was allied with Germany in World War I, and Britain and France in the middle of the war said, ``When this is over we will take a lot of Turkey's territory in the Middle East and divide it among ourselves.'' At the end of the war, Britain took what has become now Israel and Jordan and Iraq. France took what has become Lebanon and Syria. Nobody wanted Arabia. It was not worth anything. Nothing but sand. So it got left out, on its own devices. Today, it occupies a position of more extraordinary influence because of its oil reserves than all of the other countries, save Israel, put together. Cellular telephones are the same analogy. They were left out of the modified final judgment. There were 100,000 of them in existence in 1982. AT&T predicted by the year 2000 there might be a million cellular telephones. Today, there are 25 million subscribers. Predictions are in 10 years that will be 125 million subscribers. I bet that underestimates the number. [[Page S8429]] This has happened because we did not regulate it. We left it to the marketplace. Does anybody think there is no competition in cellular telephone today? All you do is turn on your radio, turn on your television, open your newspaper, and you have company upon company stumbling over each year to compete for your business. ``Sign up, we will give a free phone.'' And you have to understand that you have to make so many phone calls or pay so much. People are pretty darn smart and managed to figure this out. They have done well figuring out long distance, watching MCI ads, AT&T ads, the Sprint ads. They have also discovered that there are lots of small long distance companies. I have over 40 long distance phone companies in Oregon that are what you would call niche carriers. They rent their time from AT&T. They are a bulk buyer, they will buy it. Then they say we have 24 hours of time over the week, or 10 hours of time over the day on such and such, and they go out and sell it. They are specialists in certain niches. Some sell to the medical profession. Some to the insurance profession. They figured out a way--the companies are not big, some 8 or 10 employees, and they are renting everyone else's facilities--to do something very narrowly and good that is better than the big company can do it. We have seen this in telecommunications. The innovators in this field are not always IBM and AT&T. They are more often new companies that are spinoffs--not spinoffs, been formed by some 35-year-old engineer who left the company, mortgaged his house, sold his hunting dog, and both he and his spouse put up everything that they had to take a chance. And they succeeded. Come back again to cable. There is no need for any regulation of cable at any level. They have more competition now than they can handle, and they will have more competition than they can handle. The consumer is going to be the beneficiary. I hope, Mr. President, that the Lieberman-Leahy amendment would be defeated overwhelmingly. If there is any example of where the market is working, and will get even more and more competitive, it is in communications generally. It is in cable specifically. I think to adopt this amendment to further regulate cable beyond which we have already regulated in 1992--and we should not--would be a terrible mistake.

Mr. PACKWOOD

Mr. PACKWOOD. Mr. President, S. 652 contains what appears to be two checklists--the first is in section 251(b)--and it deals with such issues as interconnection, access, unbundling, resale, number portability and local dialing parity. Section 255, which deals with the removal of the long distance restriction imposed upon the Bell operating companies by the modification of final judgment, has the second checklist in section 255(b)(2). Section 251(b) deals with the very same issues as section 255(b)(2) does, but its requirements are stated in a broader and less specific manner. Is a Bell operating company required to have ``fully implemented'' both the section 251 and the section 255 checklist before the Communications Commission can authorize a Bell operating company to provide interLATA service pursuant to section 251(c)?

Mr. PACKWOOD. When Section 255 makes reference to section 251, is that reference intended to incorporate the minimum standards of section 251?

Mr. PACKWOOD. I thank the Chairman. I wanted to stress that the availability of radio frequencies is critical to technological advancements which enhance transportation safety. For example, the Department of Transportation is currently working with the Union Pacific Railroad and the Burlington Northern Railroad on an important test program to demonstrate the benefits of a new technology using radio spectrum called Positive Train Control. In fact, a 1994 Federal Railroad Administration report to Congress specifically emphasized the importance of radio technology in the development of positive train control. This is just one example of how the radio spectrum can be important to the development of new transportation safety technologies. Since the availability of radio frequencies will be critical to these efforts in the future, I strongly agree with my colleagues the term ``public safety radio services'' includes safety-related communications of railroads and other modes of transportation.

Mr. PACKWOOD

Mr. PACKWOOD. Mr. President, I thank my good friend from Arizona. I apologize for being late. The Finance Committee met from 9:30 until about quarter of 1. I have just gotten here now. I realize the time constraints we are under, and I am not going to make a lot of long opening comments. This amendment is a simple amendment. No matter how anybody cuts it and attempts to parcel the bill, there are two competitive tests in this. I am going to refer to them as section A and section B, and they are genuinely competitive, objective tests. But then there is a conjunction at the end of the second section. We get into this public interest. It reads, ``And if the Commission determines that requested authorization is consistent with the public interest, convenience and necessity,'' and what not. What that means is that if any applicant meets the first two, which are objective and measurable, they still have to get over the hurdle of the third test, which is the public interest test. That is amorphous. That is anything the Federal Communication wants it to be. It is an unneeded test. It is going to be a test that is going to tie up every applicant not for weeks, not for months, but for years as we go through not some kind of an objective what is the public interest but on every single application to extend service to consumers, every single application to get more competition into the communications field, every one of those is going to have to pass a subjective public interest test, because I can assure the Presiding Officer and I can assure this Chamber that anybody who opposes one of your competitors getting into your business is going to say it is not in the public interest and you are going to have to prove that it is in the public interest. And here is where I wish to complain about established bureaucracy generally, and I do not mean it critically, but I do mean it in the sense that there is a great tendency of any regulatory body to like what is. And there is a triangle between applicants and regulators and employees who used to be with the regulators, who now represent the applicants and who will also be representing the opponents of the applicants. And there will be a cozy tendency not to want to expand. I am just going to give 3 minutes of history here on deregulation efforts I have seen since I have been on the Commerce Committee. I have been on it now since 1977, and I have been through every single deregulatory phase that we have had. Airlines in 1978--no one in the airline industry except United Airlines, to their credit, favored deregulating the airlines, nor did any of the unions that worked for the airlines want deregulation. In 1980, truck deregulation was opposed by the American Trucking Association and the Teamsters Union and not very enthusiastically looked at by the Interstate Commerce Commission, which then regulated trucking. We deregulated trucking by and large in 1980, and the Interstate Commerce Commission has shrunk from about, as I recall, 2,200 employees in 1981 down to around 500 or 600 now. My hunch is that the life of the Interstate Commerce Commission is not long in being. But because we deregulated, they shrunk down. Now, what is the one thing that we left unregulated--I should not say we--that was left unregulated. When AT&T agreed with the antitrust division for the modified final judgment in 1982, the one thing that is not part of that judgment was cellular phones. Why? Because nobody cared. In 1982, you had 100,000 cellular phone customers. Do you know what the historical analogy is? It is England and France after World War I, when they decided to divide up the Turkish territories, Turkey being an ally with Germany in World War I, and they lost. Turkey had control of the entire Middle East. England and [[Page S7971]] France divided it up. England took Israel, Jordan, and Iraq; France took what became Lebanon and Syria. Nobody wanted Saudi Arabia--nothing but a desert. So it was left to drift on its own. No one knew there was any oil. I am sure Britain and France would have carved it up also if they thought they wanted it. Nobody cared about cellular phones in 1982, so with 100,000 then, 25 million now, and 28,000 new customers a day, we will be at about 120 million cellular phone users by the year 2002. There are only 150 million telephone subscribers now. The reason this service is growing-- and is it competitive? Read the advertisements. Hear the television. Listen to the radio. Competitive? Are the prices coming down? Is it big competitor after big competitor about some interesting small-niche competitors that understand this business, and because they are small and often personally held, they can beat AT&T or MCI or Bell Atlantic? That never would have happened had they been included in the modified final judgment. I can see exactly what is to happen if we do not get rid of this public interest part of this bill. In is going to come a smart young engineer who worked for AT&T until he or she was 38 and decided to leave and form a little niche company of their own, and they are going to want to get into Bell Atlantic's territory. We think this is Bell versus AT&T. They are going to want to get into that territory, and they are going to make an application. And they are going to be kept out, or Bell Atlantic is going to be kept out if they want to get into AT&T's territory because they do not meet the public interest test. Mr. President, of all of the areas of business in this country that no longer need regulation, communications is it. The argument is made that we are operating under an act that was passed in 1934. That is true. If we pass this act today, this takes us up to about 1964, 1974 at most. Mr. President, we are not 5 to 10 years from the day that wired systems are going to be irrelevant. We are going to go back to broadband broadcasting where your computers are going to be hooked up by radio waves or the equivalent rather than wires, and we are going to have more spectrum than we know what to do with. And we are going to be hobbled because this bill will not give the freedom to competitors that is necessary, and the public interest test will do more to stop that freedom of competition than any other single thing. I hope very much the Senate will adopt this amendment. This amendment by itself will do more to make sure that we have the equivalent of the kind of competition we have seen in cellular in the last 10 years than any other single thing this Senate will consider. I thank the Chair. Mr. McCAIN addressed the Chair.