David Pryor

Mr. PRYOR

Mr. PRYOR. Mr. President, I ask unanimous consent to proceed for 30 more seconds.

Mr. PRYOR. This area of privatizing income tax collections is something that I think goes far beyond anything that I have seen in this whole area of contracting. I urge the conferees to stay with the decision of the Senate.

Mr. PRYOR

Mr. PRYOR. Mr. President, I do not want to impede progress here. I simply rise to give a thank you to our distinguished chairman, the manager of the bill. I want to thank the distinguished Senator for the approach he has taken to resolving a very, very complicated issue regarding Federal fish hatcheries. The State of Arkansas has developed the Federal fish hatchery system to the extent that trout fishing now in our State is one of the major businesses that we have. It brings hundreds of thousands of tourists, fisherpersons, into our State. We also have the unique situation of mitigation that arose when the Federal Government dammed up some very beautiful rivers and streams some time back. And the mitigation aspect is that, if the Government dams up those streams and basically makes unavailable other types of fish, they will make available a substitute--in this case, trout. It has worked out very well for the Federal Government. It has worked out exceptionally well for our State system. And we collect millions of dollars in taxes and revenues from this. It is a win-win for everyone. In recent months the Federal Government, the Department of the Interior, Fish and Wildlife, in an attempt to cut some costs have thought about closing some of these fish hatcheries. I know the distinguished occupant of the chair probably has some of the same problems that we have in the State of Arkansas. My colleague, Senator Bumpers, and I held a town meeting near one of these hatcheries. In fact, it was on April Fool's Day, April 1. Truly, we had an overflow crowd. I must say that 99 percent of the people who attended this town meeting on the possibility of closing these hatcheries were extremely bewildered that it was even under consideration to close these fish hatcheries. They are money-making operations for our State. They certainly create revenues for the Federal Government. Once again, Mr. President, I want to thank my friends for working out what we think is a temporary solution to the closing of the fish hatcheries by making available in this legislation what I consider to be a moratorium, at least until next March, on the closing of any fish hatcheries in our country. During that time, we will work with the distinguished chairman. We will do everything possible to negotiate and with our ultimate bottom line of convincing those in authority, Fish and Wildlife Service, Members of the House and Senate on committees that appropriate the money for these fish hatcheries, to show them what a win-win situation this Federal fish hatchery program has been. I thank the distinguished Senator and look forward to working with him over the next several months.

Mr. PRYOR

Mr. PRYOR. If I might ask my friend a question, has this been looked at and have hearings been held in the Labor Committee?

Mr. PRYOR. Mr. President, I have no problems with that, and I do thank the chairman.

Mr. PRYOR. If the distinguished Senator would please withhold that, I have a question I wish to propose to the distinguished Senator, my good friend from Iowa.

Mr. PRYOR

Mr. PRYOR. Mr. President, with the permission and understanding of the manager of the bill, the distinguished Senator from Washington [Mr. Gorton], and also after consultation with the ranking member of the Appropriations Committee, I ask unanimous consent that I may proceed for a time not to exceed 12 minutes in morning business.

Mr. PRYOR. Mr. President, then let me withdraw that request.

Mr. PRYOR. The Senator from Illinois says he is waiting, so I will proceed.

Mr. PRYOR

Mr. PRYOR. Mr. President, reserving the right to object, I am not going to, of course, argue with the majority leader. He stated he wants to dispose of this matter. But I wonder if he would consider reconsidering that in view of the fact that we are looking at something around 11 o'clock before our vote on this amendment. I wonder if the manager can speak for the majority leader in this area where we might have a vote actually in the morning.

Mr. PRYOR. Is there any disadvantage to just debating the amendment tonight and voting in the morning?

Mr. PRYOR. I promise I will go home and watch it on the monitor, Mr. President. [Laughter.] Amendment No. 2296 (Purpose: To restore funding for programs within the Bureau of Indian Affairs)

Mr. PRYOR. Thank you. In behalf of many of my colleagues, we want to thank the distinguished majority leader.

Mr. PRYOR. Mr. President, I rise to express to my colleagues in the Senate my concerns about a provision in this legislation that pertains to funding of our national system of fish hatcheries. First, let me say that I am grateful for the actions of our distinguished Chairman, Senator Gorton, in the committee mark-up of this bill. The report calls for a moratorium on any possible closures of fish hatcheries until March of next year pending the report of a study group that will be convened by the U.S. Fish and Wildlife Service for the purpose of making recommendations on the future of the hatchery program. Mr. President, recreational fishing is an incredible industry in our country, and in my home State of Arkansas in particular. The number of jobs created, the amount of State and Federal taxes collected from the sale of lures, boats, gasoline, hotel accommodations, food, etc., are enormous. It is absolutely perplexing to me that an agency of our Federal Government would ever propose to close hatcheries without an economic analysis of the impact, both to local economies and to the Federal treasury. It is troublesome to me that an agency of our Government would consider eliminating hatcheries that mitigate for damages to fishery resources that Federal water projects caused. This legislation contains a provision to either transfer ownership or close 11 Federal fish hatcheries. The Department of the Interior has intentions of closing additional hatcheries in fiscal year 1997. It is their intention of using the study group to define the criteria by which hatcheries would be chosen to be transferred or closed. I believe this premise is wrong. I understand and support our President when he attempts to reduce Federal spending by eliminating unnecessary and wasteful programs. Federal fish hatcheries are neither. It is a burden to try to understand that on the one hand we have Federal agencies, such as the Economic Development Agency and the Department of Commerce, whose roles involve the creation of jobs and strengthening our economy. On the other hand, we have the Fish and Wildlife Service, which can take actions which harm or destroy jobs under the guise of budget reduction and mission redefinition. Mr. President, I want my colleagues to know that I am going to stay involved in this issue. I do not accept the premise that some hatcheries have to be closed, that it is inevitable. If a hatchery is mitigating for damages to a fishery, if the tax revenues that result from economic activity generated by recreational fishing exceed the cost of operating and maintaining that hatchery, then I am going to take the attitude that the Federal Government has an interest in that hatchery. Our taxpayers paid for its construction and operation, and we should not be arbitrarily closing or giving it away. We have an obligation to those taxpayers.

Mr. PRYOR

Mr. PRYOR. Mr. President, it is my understanding that the managers of the bill, Senators Shelby and Kerry, have accepted my amendment, and I want to thank them for their support. However, a similar provision was included in the House Treasury, Postal Service appropriations bill, and I want to make my comments on this matter part of the Record in anticipation of the conference between the House and Senate. Mr. President, the Treasury, Postal Service, and General Government appropriations bill provides $13 million to ``initiate a program to utilize private counsel law firms and debt collection agencies in the collection activities of the Internal Revenue Service.'' In short, this provision requires the IRS to spend $13 million to hire private law firms and private bill collectors to collect the debts of the American taxpayer. My amendment is very simple--It strikes this provision from the Treasury, Postal Service appropriations bill. Mr. President, in over 200 years of our Federal Government, we have never turned over the business of collecting taxes to the private sector--But I must point out that this dubious practice is as old as the hills and dates back to at least ancient Greece. The practice of private tax collection even has a name. It is called ``tax farming'', and its modern history is chronicled in a book authored by Charles Adams, a tax lawyer and history teacher. The book is named ``For Good and Evil: The Impact of Taxes on the Course of Civilization.'' In this book, Mr. Adams recounts many tales of how the world has suffered under the oppression of the tax farmers. He specifically describes the tax farmers sent by the Greek kings to the island of Cos as ``thugs, and even the privacy of a person's home was not secure from them.'' He further notes that a respected lady of Cos around 200 B.C. wrote ``Every door trembles at the tax-farmers.'' Mr. President, in the later Greek and Roman world, no social class was hated more than the tax farmer. The leading historian of the period, Rostovtzeff, described tax farmers with these words: ``The publican (keepers of the public house) certainly were ruthless tax collectors, and dangerous and unscrupulous rivals in business. They were often dishonest and probably always cruel.'' Tax farming flourished, as a monster of oppression in many forms, in Western civilization, for over 2,500 years until its demise after World War I. Tax farming brutalized prerevolutionary France. The French court paid the price during the Reign of Terror when the people were so incensed that they rounded up the tax farmers, tried them in the people's courts, and condemned them to death. Accounts of the time tell of the taxpayers cheering while the heads of the tax farmers tumbled from the guillotine. In 17th-century England, Charles II imposed a ``Hearth Tax'', assessing 2 shillings per chimney in each house. To collect it, the king contracted out with private parties--named by the people, ``Chimney Men''. These Chimney Men were ruthless and hated by the people of England. Hatred of the privately collected tax helped depose Charles' brother, James II. As soon as the new monarchs, William and Mary, were installed, the House of Commons abolished the tax, ending a ``badge of slavery upon the whole people that allowed every man's house to be entered and searched at the pleasure of persons unknown to him.'' Now, I am not suggesting that providing $13,000,000 to the IRS in order to contract out with private law firms and collection agencies will cause anyone to actually lose their head. But, for well-reasoned decisionmakers, history should be utilized as a guide as to--what is, and what is not--a good idea. Clearly, Mr. President, history tells us that contracting out the tax collection responsibilities of government is not a good idea. Mr. President, some very notable economists and philosophers have also warned against tax farming. In his book, ``The Wealth of Nations,'' Adam Smith states, ``The best and most frugal way of levying a tax can never be by farm.'' Smith goes on to observe that ``The farmers of the public revenue never find the laws too severe, which punish any attempt to evade the payment of tax. They have no bowels for the contributors, who are not their subjects, and whose universal bankruptcy, if it should happen the day after their farm is expired, would not much affect their interest.'' Mr. President, I know there are those in this Chamber who revere Adam Smith, so I hope they will heed his message in ``The Wealth of Nations.'' Mr. President, just as relevant to the discussion is how this practice may be employed in our time and by our Federal Government? First, Who will these people be? Second, How will they be hired? Third, Who will train them? Fourth, Who will oversee them? Fifth, Which taxpayer's cases will they work on? Sixth, What type of taxpayer information will be made available to them? And, Seventh, How will these private bill collectors be paid? Mr. President, this legislation provides no answer to these important questions--it simply provides taxpayer dollars, $13 million of them, to nameless, faceless, untrained, and unaccountable bill collectors with no guidance as to how they will be paid. Let us just briefly explore two of the questions that I just mentioned. First, what type of taxpayer information will these private bill collectors have access to? The American people demand that their tax return information will be kept confidential; that it will only be shared with the appropriate personnel within the Government. It is an essential element which lends confidence in our tax system and leads to a high percentage of voluntary compliance. If taxpayer information is shared outside of the Government confidence, how many taxpayer will decide to no longer comply? I fear in an effort to collect more revenues, we will collect less. Second, how will these bill collectors be paid? The bill does not specify the manner in which these private law firms and private collection agencies will be compensated. But Mr. President, most bill collectors are paid on a contingency basis--that is, they are compensated on some percentage of what they collect. If this is to be the case--and it is certainly a possibility under this bill--this is a blatant violation of the Taxpayer Bill of Rights. In the Taxpayer Bill of Rights, passed in 1988, there is included a strict prohibition against the IRS from using enforcement goals or quotas. Mr. President, a contingency fee to an outside contractor is a quota, and if applied to the compensation of an IRS agent would be strictly prohibited under the Taxpayer Bill of Rights. However, there is a fatal problem the drafters of this legislation have not recognized. And that is--the Taxpayer Bill of Rights only applies to the IRS--not outside contractors. Given this loophole, I must register my strongest objection to any possibility that a modern day tax farmer might be paid on a contingency basis. But this certainly will not be the only protection afforded by the Taxpayer Bill of Rights which does not apply to these private bill collectors. For example, a reckless IRS agent can be sued under the Taxpayer Bill of Rights. Mr. President, no such right exists for the taxpayer against a private bill collector. We must take the time to analyze what other rights the taxpayer may be losing under this provision. Mr. President, I might also point out that we have had no hearings in the Senate on this proposed practice. And, as a member of the Finance Committee, I must say I am shocked that an issue so fundamental to the relationship between the Government and the taxpayer has not been the topic of any discussion before the members of the Finance Committee. Mr. President, the IRS Commissioner raises serious questions about this provision. In a letter I received today, Commissioner Richardson outlines her concerns. Mr. President, I ask that a copy of the Commissioner's statement be printed in the Record. Mr. President, I believe the IRS Commissioner's concerns are warranted and we should not act until we have the answer to these questions. The statement follows: Department of the Treasury, Internal Revenue Service, Washington, DC, August 4, 1995. Hon. David Pryor, U.S. Senate, Washington, DC. Dear Senator Pryor: I am writing to express my concern regarding statutory language in the FY 1996 Appropriations Committee Bill (H.R. 2020) for Treasury, Postal Service and General Government that would mandate the Internal Revenue Service (IRS) spend $13 million ``to initiate a program to utilize private counsel law firms and debt collection activities . . .'' I have grave reservations about starting down the path of using private contractors to contact taxpayers regarding their delinquent tax debts without Congress having a thorough understanding of the costs, benefits and risks of embarking on such a course. There are some administrative and support functions in the collection activity that do lend themselves to performance by private sector enterprises under contract to the IRS. For example, in FY 1994, the IRS spent nearly $5 million for contracts to acquire addresses and telephone numbers for taxpayers with delinquent accounts. In addition, we are taking many steps to emulate the best collection practices of the private sector to the extent they are compatible with safeguarding taxpayer rights. However, to this point, the IRS has not engaged contractors to make direct contact with taxpayers regarding delinquent taxes as is envisioned in H.R. 2020. Before taking this step, I strongly recommend that all parties with an interest obtain solid information on the following key issues: (1) What impact would private debt collectors have on the public's perception of the fairness of tax administration and of the security of the financial information provided to the IRS? A recent survey conducted by Anderson Consulting revealed that 59% of Americans oppose state tax agencies contracting with private companies to administer and collect taxes while only 35% favor such a proposal. In all likelihood, the proportion of those opposed would be even higher for Federal taxes. Addressing potential public misgivings should be a priority concern. (2) How would taxpayers rights be protected and privacy be guaranteed once tax information was released to private debt collectors? Would the financial incentives common to private debt collection (keeping a percentage of the amount collected) result in reduced rights for certain taxpayers whose accounts had been privatized? Using private collectors to contact taxpayers on collection matters would pose unique oversight problems for the IRS to assure that Taxpayers Bill of Rights and privacy rights are protected for all taxpayers. Commingling of tax and non-tax data by contractors is a risk as is the use of tax information for purposes other than intended. (3) Is privatizing collection of tax debt a good business decision for the Federal Government? Private contractors have none of the collection powers the Congress has given to the IRS. Therefore, their success in collection may not yield the same return as a similar amount invested in IRS telephone or field collection activities where the capability to contact taxpayers is linked with the ability to institute liens and levy on property if need be. Currently, the IRS telephone collection efforts yield about $26 collected for every dollar expended. More complex and difficult cases dealt with in the field yield about $10 for every dollar spent. I strongly believe a more extensive dialogue is needed on the matter of contracting out collection activity before the IRS proceeds to implement such a provision. Please let me know if I can provide any additional information that would be of value to you as Congress considers this matter. Sincerely, Margaret Milner-Richardson. amendment no. 2237 Mr. SHELBY offered an amendment (No. 2237) for Mr. Simpson, for himself and Mr. Craig. At the appropriate place, insert the following:

Mr. PRYOR

Mr. PRYOR. Mr. President, I rise today to offer an amendment to continue funding for the Troops to Teachers Program in the Department of Defense. Troops to Teachers is a Department of Defense Transition Program designed to assist separated military service members and other former DOD employees to become certified and obtain employment as teachers or teacher's aides. Congress established this program in 1992, and it has always enjoyed strong bipartisan support. Troops to Teachers provides up to $5,000 stipends to selected participants to help them become certified to teach, and grants of up to $50,000, paid over 5 years, to local education agencies for each former military service member they agree to hire. Troops to Teachers is helping former service members find productive, meaningful employment after leaving the military. By tapping the skills and experience these individuals possess, Troops to Teachers is improving the quality of our public school education nationwide. And by placing special emphasis on schools with a high concentration of students from low income families, this program provides teachers in areas where educators are in short supply. In the Department of Defense, the response to this program has been outstanding. Over 500 Troops to Teachers have recently been hired by school districts in 39 States. In addition, over 1,000 individuals scattered across 46 States are using this program to become certified to teach. Most importantly, there are over 9,000 applicants currently preparing to enter this program. These 9,000 former DOD personnel awaiting acceptance to this program are counting on these funds to begin a new life after the military. They are counting on our support. I mentioned earlier that Troops to Teachers has always enjoyed strong bipartisan support. In 1992, I was asked by former Senate majority leader George Mitchell to chair a task force on defense transition. The centerpiece of our task force report was a recommendation for Congress to help former military personnel get training, certification, and job placement required for employment in critical public service jobs, such as education, law enforcement, and medical services. The legislation that resulted from this recommendation created the Troops to Teachers and Troops to Cops Programs. That same year, a Republican task force convened and made an identical recommendation supporting the creation of Troops to Teachers. The 1992 report of the Senate Republican task force on adjusting the defense base stated, [[Page S 11309]] The Task Force recommends that Congress adopt legislation to encourage states to adopt alternative teacher certification programs for separated and retiring servicemen. Not only will this enable some former military personnel to put their talents to productive use in public service, it will help address the teacher shortage found in some particularly urban, areas. This report goes on to say, ``The Task Force supports an expansion of the DOD program to pay for coursework of departing servicemen which meets reasonable state certification requirements.'' Finally, the Republican task force report concludes, ``The cost of programs directly responding to problems resulting from the declining defense budget . . . should be paid for out of the defense budget.'' Mr. President, the Troops to Teachers program was designed by Congress, in a bipartisan fashion, in response to the needs of separating military personnel. But the primary responsibility of Troops to Teachers is taking care of the men and women who are leaving the military after years of dedicated service to our country. These individuals should not be penalized because they desire to work in a classroom instead of in a shipyard building submarines. Perhaps the best reason for continuing funding for this program is that it is a tremendous success. Just listen to what a few of its participants have said about their experiences. Take Ed Coet for example. Ed is 45 years old. He recently retired from the Army after last serving as a military intelligence officer in the gulf war. Now Ed teaches a class of 10 emotionally disturbed fourth-grade boys at Brookhaven Intermediate School in Killeen, TX. Ed recently said, ``My work as a teacher is every bit as challenging and important as anything I did in the Army. In the past, it was what I was doing for my country. Now all my kids are an extension of me. If they succeed, I succeed.'' And then there is Arthur Moore, a retired Army staff sergeant from Baltimore, MD. Arthur is currently teaching fifth grade at Samuel Coleridge-Taylor Elementary School. About his experience Arthur said, ``Every day I have to prove to them I really care, not just about teaching but about them.'' And listen to what the school districts across America are saying about Troops to Teachers. The Jackson County Public School System in North Carolina said, ``Our teachers have exceeded all expectations. We are very pleased.'' Beaufort County School District in South Carolina says, ``An outstanding program--all of our participants are excellent.'' Isaac School District No. 5 in Arizona says, ``we are very fortunate to have an experienced, dedicated Troops to Teachers participant who bilingual. The military training and experience have assisted this individual in making the transition to teaching.'' Mr. President, that is exactly what this program is all about-- helping military personnel make the transition into a productive life in public service. These individuals are the centerpiece of the program. Eliminating funding for Troops to Teachers would mean turning our backs on the military service members who served their country on the battlefield, and who now want to continue their service in the classroom. This program truly deserves our full support. troops to cops

Mr. PRYOR

Mr. PRYOR. Mr. President, I have one.

Mr. PRYOR

Mr. PRYOR. I yield back all time.

Mr. PRYOR. Mr. President, if I may say just a word in thanks to the Senator from Ohio and the Senator from Delaware, two extremely capable Senators that I have had the privilege of working with in the Senate, more specifically in the Governmental Affairs Committee, for a lot of years. I want to thank them for their endorsement, their kind words, patience and perseverance and for them accepting this amendment, endorsing it. I will always be grateful. Mr. President, I yield the floor.

Mr. PRYOR. Mr. President, let me respond to my friend from Delaware by stating, in the original draft of the amendment, we did not specifically exclude peer review. However, in the latest draft, which is pending before the Senate, we now have a sentence that states: This section shall not apply to provisions of section 633(g) . . . And I believe that is the peer review section. So peer review is not in any way involved in this proposal that I am submitting. I thank the Senator for asking that clarifying question.

Mr. PRYOR. Mr. President, I have only a very few moments. This is a very simple amendment that I am offering tonight. This basically is an amendment concerning Federal agencies which use private contractors to perform cost-benefit analyses and risk assessments. Mr. President, one of my main concerns about the bill that we are considering is that it is going to place additional burdens upon the Federal agencies during a period of downsizing of the number of Federal employees. Should S. 343 become law, the respective agencies throughout the Federal Government are going to have to reorder their priorities to allow them to devote a large portion of their resources to cost-benefit analysis, risk assessment, and regulation review. As the Government continues to downsize in the future, Mr. President, the Federal agencies are going to increasingly turn to private contractors to carry out the tasks of government. As my colleagues know, I have long been concerned with the use of private contractors in the Federal Government. During my years in the Senate, I have sought to shed light on the increasing role of private contractors and the possible conflict of interest involved with their use. This is no new issue. In 1980, for example, the General Accounting Office examined 156 contracts for regulatory analysis alone and found that 101 of these 156 contracts had a conflict of interest situation. Because S. 343 will likely increase the use of private contractors to conduct regulatory analysis for the Federal Government, I believe that this conflict of interest problem cannot and should not be ignored. Mr. President, to illustrate the potential for conflict of interest, one need only look at the promotional materials published by a few of the private contractors who have contracts with the Federal Government. For example, Mr. President, one of these contractors is a firm known as P.R.C. In 1990 the P.R.C. company, a consulting company, had four contracts worth $220 million with the Environmental Protection Agency. Here is their promotional material. This material proclaims to the possible user of their services, and I quote, ``Under contract to the United States EPA, P.R.C. has conducted hundreds of regulatory compliance inspections giving us indepth experience with what regulators are looking for.'' How then, Mr. President, can this particular company be a company that states that they have no bias and that they have no conflict of interest? Here is another company, Mr. President. This particular company is another major contractor with the Environmental Protection Agency. In 1990-1991, they had 13 contracts worth over $100 million with the Environmental Protection Agency. They boast to potential users of their services, in their very beautiful brochure--this is called The Weston Managers Design Consulting Company--I quote, ``In daily practice, the Weston philosophy has encouraged us to develop and maintain an objective, professional posture relative to public issues so that we can represent either''--and I quote--``the regulated or the regulator.'' So that we can represent either the regulated or the regulator. How fair, how objective and how free from conflicts of interest, Mr. President, can a firm be when it is working both sides of the street? Here is another firm, Mr. President, who has millions of dollars of contracts with the Federal Government today, the ICF Co. Their brochure is entitled: ``Environment and Energy.'' They list their clients. For example, some of ICF's clients are: Ashland Chemical; Cedar Chemical; Chemical Waste Management; Chevron; Dow Chemical, SCA Chemical Services; Union Carbide; and Vertec. Now they also list the Government agencies that they work for: the Department of Commerce; the Department of Defense; the Department of Energy; and, yes, Mr. President, the Environmental Protection Agency. My amendment says that if granting one of these contracts to a company doing business with the Government creates a conflict of interest, then the agency head has the opportunity to publish notice of the conflict in the Federal Register. This can make us aware that the contract has the potential of a conflict, could be printed in the Federal Register and give us fair and just warning of the potential that might exist for a contract. It would require agencies to gather certain information from its contractors that will allow agencies to determine if a conflict of interest actually exists. It would not, Mr. President, prohibit the agency, under certain circumstances, from hiring a contractor, even if a conflict of interest was found. My amendment simply sheds sunlight on the process by ensuring that the agency has considered possible conflicts so that the public is assured that potential conflicts of interest are not subverting public policy due to hidden bias in the regulatory analyses process. Mr. President, I want to thank the distinguished Senator from Wisconsin for being an original cosponsor of this amendment that is now before the Senate. I reserve the remainder of my time, and I yield the floor.

Mr. PRYOR. Fine.

Mr. PRYOR. If the distinguished majority leader would yield, I have an amendment. I think it could possibly even be accepted by both sides. I am not certain. Even if it has to be debated and voted on, I would agree to 30 minutes time, 15 minutes equally divided, sometime tomorrow, and no second-degree amendments to be offered.

Mr. PRYOR. Mr. President, I ask unanimous consent that further reading of the amendment be dispensed with.

Mr. PRYOR. Mr. President, in order to move things along here, I am going to make this suggestion that we lay the pending amendment aside. And I assume that is the amendment just offered by the Senator from Wisconsin, and that I be allowed to, in the sequencing order, present my amendment; and upon completion of my amendment, we will return to the amendment offered by the Senator from Wisconsin and proceed from there. I think that might expedite our time.