David Pryor

Mr. PRYOR

Mr. PRYOR. Mr. President, speaking of protections that should be given to people--in fact, last Tuesday, 1 week ago, I introduced the Bank Customer Confidentiality and Protection Act of 1995, which became S. 663. This legislation was crafted to address problems in the area of bank sales of uninsured products, such as mutual funds identified during an investigation conducted by my staff on the U.S. Special Committee on Aging. After hearing the stories of numerous older Americans specifically, who claim they did not know what they were buying when they purchased an uninsured product through their bank and then lost much of their life savings, I am today convinced that more stringent protections are needed to ensure that financially inexperienced bank customers fully understand what they are buying when they invest in uninsured accounts. Mr. President, I have a series of stories today. I am trying to put human faces and human concerns together with statistics. This is a letter I received on November 11, 1994. Let us just call our friend who wrote me ``Dick.'' This legislation today is intended to help financially inexperienced bank customers such as this man, a 64-year- old retired priest and a Vietnam veteran. By last year, Dick had saved $3,000 for a cruise that he wanted to take 2 years in the future when he retired. In fact, I believe in his letter he states that he wants to take this cruise sometime in late 1995. He had always put his money in savings accounts and in CD's at this particular bank. He had never invested before in a mutual fund or in any other uninsured product. After all, he is a former priest and he never had a lot of money laying around. When he went into his bank he told the worker there that he wanted to put his money in a safe account. They did the opposite. They put this man's money in an uninsured bond fund that lost hundreds of dollars by the end of the year. Dick told our staff that had he known this was an uninsured product, he would never have given the bank this money. Now he may not ever be able to go on that cruise that he had dreamed of. Now I want to tell you, Mr. President, how this man and other inexperienced older customers ended up buying uninsured products. We say, How could that happen? How could any individual be led to buy a product that was uninsured? The truth is that some banks have elaborate sales systems set up to sell securities such as mutual funds to any customer who will buy them. They have other types of funds. Let me show you how these particular uninsured products, and the sales systems, work at some of our banks. Perhaps it is the bank that the Presiding Officer banks with. Perhaps it is the bank that I bank with. Our customer case is Mrs. Jones. This is a true case of a 77-year-old widow who never put her money in anything but insured products like CD's. Our other cast members include Sally, who is Mrs. Jones' teller of many years in the bank where she banked. The cast of characters also includes David, a broker who was with the bank's brokerage subsidiary. Teller No. 12 is Sally. She has identified a customer, Mrs. Jones, with a high amount of CD's coming due who, ``came in today and wasn't sure what she would do with her money.'' She tells the broker about Mrs. Jones having these CD's coming due. Sally, the teller, is so excited because she gets a commission on referrals to the bank's brokerage arm. So Sally prints out a copy of Mrs. Jones' account history. There is Mrs. Jones' account history. She sends it over to David across the hall, one of the brokers working at her branch. If Sally makes more referrals than her coworkers, she could win a prize, even a trip to Las Vegas. Mrs. Jones is not the only bank customer whose records are shared with brokers without the customer's explicit knowledge and consent. In fact, my staff has seen proof that this practice is very widespread. For example, our staff has seen evidence that brokers have access to the banking records of a very, very high ranking U.S. Government official and those of a famous actor, which have been shared with many other people. Until we started this investigation I had never heard of blitz night. Some banks hold contests to see which of their tellers and customer service representatives can get the most bank customers into the bank to talk to a securities salesperson. Depository institution employees, who are winners of the blitz telephone calling contest, can now win unimaginable wealth. Sally the teller, for example, participates in blitz night. Mrs. Jones, the 77-year-old bank customer, is contacted during one of these contests. advertising: Blitz night, unimaginable wealth, fabulous prizes--for what? For making referrals to the bank's own broker who would then try to lure from CD accounts, Mrs. Jones and her type, to put their funds in uninsured funding properties. When Sally the teller calls Mrs. Jones, Sally tells Mrs. Jones that she is calling from her branch bank, from Mrs. Jones' bank for many years. They know each other. So, from the start, Mrs. Jones associates the uninsured products that she will hear about later with what she knows about her depository institution. Such is the fact that she feels secure taking the advice from the people who work there, and the fact that she never has lost any money there in this bank in the past. Since it is somebody at her depository institution or her bank calling, Mrs. Jones figured that she would make an appointment as Sally suggests. Now we are going to demonstrate how some of the brokers who are associated with the banks are trained to operate. In a moment I will show a document related to one bank's training program for brokers. First let me make a few important points about the documents. The following bank uninsured product sales system charts are an enlargement of selected pages from one large bank's training manual, used to train bank-based brokers as recently as last year. This is not something that was going on 10 or 20 or 30 years ago. It went on as recently as last year. And, Mr. President, it is going on this year. Not all banks that sell securities did or do use this sort of training manual. However, our investigations suggest that more than a few banks use similar sales techniques. These charts that we will see represent just one example of how some banks have sales systems that, while not illegal necessarily, do tend to contribute to customer confusion. These training manuals are for the bank's internal purposes only and they are not ever seen by the public. They are not ever seen by Mrs. Jones, the potential customer. Thus, what the broker actually tells each customer varies from customer to customer. Some representatives of the banking community have pointed out to me that, despite what a customer is told by a broker, all customers are required to sign a written disclosure form when they purchase an uninsured product. However as I explained in the statement I made on the floor last Tuesday, these written disclosure forms commonly do not help financially inexperienced customers fully understand what they are purchasing. When Mrs. Jones comes into the bank in a few days and talks to somebody about getting higher rates on her money, there are things that cause Mrs. Jones to not totally understand the distinction between the depository institution and the brokerage business which might be just a few steps away. These things which confuse Mrs. Jones include: The bank has an FDIC emblem on the bank's doors. The location of the broker's desk was near where Mrs. Jones had opened her CD account just last year. The use of the bank's name and the bank's logo on the uninsured product's marketing material. And, perhaps most importantly, Mr. President, what the broker tells Mrs. Jones about her investment. This is a ``person commercial'' we see here, presented by Mrs. Jones' new broker named David. It makes it sound as if the only difference between the bank's brokerage business and the bank's depository business is some separation on paper for ``tax reasons.'' Another thing I would like to point out is that the broker tells Mrs. Jones that his ``recommendations are on the best approaches available to investors today.'' However, in this particular case, David, the broker, receives a higher commission--this is very important--if he recommends one of the bank's inhouse mutual funds that are not insured by the Federal Government. This means that David has the incentive to push the bank's product regardless of its suitability for Mrs. Jones. Let us talk about how the broker and the bank sometimes downplay the fact that the broker's products are not backed by the FDIC. Let us take Mrs. Jones once again. She is in ill health. She is 77. She is a widow. She knows that she is going to need that money eventually. So she asks the securities salesperson whether the investment he is offering-- mutual funds, in this case --is insured by the FDIC. To Mrs. Jones, the FDIC seal that she saw in the bank is analogous to a ``Good Housekeeping Seal of Approval.'' This particular chart shows us what the broker, David, was trained to tell her. David does not tell her that the investment product is not insured by the FDIC, it is not insured by anything else, or that she could lose all of her money. These are his talking points about which he is talking on the phone or in person with a potential customer like Mrs. Jones. For example, he says, ``With this investment, you can earn $10,000 more in income over the next 5 years. This will go a long way toward providing you with a more comfortable retirement. Don't you agree?'' Then the next thing that he is instructed to ask, from instructions in his private book from the bank: ``Ask for the order!'' Once the order is given, and it is not FDIC insured, then a commission--a handsome commission, I might say--is paid to the broker and to the teller who made the reference of Mrs. Jones' case or her interest to buy some additional securities to the broker. How do you change the mind, or how are these brokers and personnel taught to change the mind of a customer who only wants to purchase a CD? Even though she may now think that the uninsured mutual fund is backed by the FDIC, Mrs. Jones becomes wary and she tells the broker, David, ``I am not interested in anything but CD's.'' Then the broker might say--once again, this is the sales system supplied by the bank and used by the broker to get money from CD's through the bank's own financial product, in this case, uninsured mutual funds--``If we could show you the way to cut your taxes hundreds or thousands of dollars a year, would you have some interest in learning more?'' These are the ``three dynamite questions'' right here below that the broker is instructed to utilize in luring this poor widow woman's funds from CD's into uninsured funds. We see that it sounds pretty good to someone who might be on a fixed income with no other person to advise her. Now, it is not over. David keeps plugging away. The broker keeps plugging away. What he recommends that this lady buy is not some fund that is insured by the U.S. Government. But now the bank has contrived a new name for a new fund for people just like this. Guess what the name of that fund is, Mr. President? It is called ``U.S. Government Fund.'' And it says, ``This is a mutual fund portfolio of securities issued by the United States Government and its agencies. The U.S. Government Fund currently pays a dividend of [blank] percent,'' and it goes on explaining the U.S. Government Fund, which in no way is tied to, in no way is an entity of, or in no way is insured by the Government of the United States. Mr. President, it is a fraud, and it is wrong, and we must now do something about it. Look at the number of times that the ``United States'' and ``U.S.'' is mentioned on this particular chart. While the customer might not ever see this document, it is clear that the brokers are encouraged with their instruction sheets to frequently mention the ``United States'' and the ``United States Fund.'' Now, Mr. President, we come to the point where the broker has to make his sale. The pressure is mounting. The customer is confused. And this chart shows that Mrs. Jones agrees to buy into the bank's proprietary ``U.S. Government Bond Fund.'' Once again, it is not insured, not a Government fund, but only named the ``U.S. Government Bond Fund.'' Mrs. Jones may have been convinced that the product was right for her, or she may be just deferring to David, who is part of the institution that she trusts so much, her bank, with the FDIC seal in the window. While Mrs. Jones is going to be asked to sign a disclosure form, this may not and probably will not help her realize that this product is probably not the right product for her. customers have told our committee staff that when they looked over the disclosure forms, they did not understand what they read. These customers typically would then ask the investment sales people to interpret the forms for them. In these cases, the sales people told their customers that the documents were just a ``formality'' to open the account, or that the form simply was stating what the sales people had told the customers. It is not hard to identify the problem because the problem is, in some cases, the brokers have made misleading, false statements about the nature of the uninsured products when they describe them, such as, ``This is as safe as the money in your pocket, and you will only lose money if the Federal Government goes bankrupt,'' or, ``It is backed by something better than the FDIC.'' Finally, the legislation that I introduced last Tuesday, which was crafted after numerous meetings with industry and consumer groups, would provide needed consumer protections for financially inexperienced customers. This legislation would provide protections to financially inexperienced bank customers by, one, full and clear disclosure about the risks associated with uninsured products; by establishing limits to compensation that institution employees receive for making referrals to securities sales people. Remember the case of Sally, Mr. President, our bank teller who got a nice commission by referring Mrs. Jones' private banking records and situation to a broker across the aisle from her; and to establish guidelines for uninsured products and promotional materials; common sense physical separation of deposit and nondeposit sales products would be another area of this legislation; and fifth, Mr. President, we would end in my legislation the practice of sharing bank customers' personal financial information without the customer's explicit consent; and finally, Mr. President, we would increase the coordination of securities enforcement activities between the Federal banking agencies and the Securities and Exchange Commission. I am very hopeful that this will begin a dialog in which we will find as an end result a cure for this particular problem that we are addressing today in the Senate. It is a problem, we think, of severe magnitude. It is a problem which has not risen to the height of many of the concerns we have expressed here in recent months, but we do think this is a concern which should be addressed and should be one of protections that we should ensure for those potential customers of uninsured bank products such as mutual funds and certain bond funds that are uninsured. Finally, Mr. President, if we do it for no other category of our population, let us do it for those individuals like Mrs. Jones, that 77-year-old widow who has no one to lean on, no advice, no adviser, and truly finds herself in the grips of, in my opinion, unethical salespersons, unethical brokers, and people who are interested only in making certain that they receive a nice fat commission in selling Mrs. Jones uninsured bank products which truly may wipe out all of her assets. Mr. President, I see no other speakers or Senators seeking the floor. I wish to thank the Chair, and at this time I yield the floor and suggest the absence of a quorum.

Mr. PRYOR

Mr. PRYOR. Mr. President, I am very proud that I was here at the moment when Senator Glenn was introducing his two proposals, especially the proposal on browsing by the Internal Revenue Service. It has been my pleasure to have served as the chairman of the Finance Committee's Committee on Oversight of the Internal Revenue Service for a period of years. During that period of time, I might say that the committee in the House and the Senate, in their wisdom, did in fact adopt the 1988 Taxpayers Bill of Rights. The Taxpayer's Bill of Rights was the very first piece of legislation ever in the history of this Republic, or in the history of the Internal Revenue Service, to spell out the specific powers of the individual taxpayer. We have now introduced something we call T-2, Mr. President, which is the taxpayers Bill of Rights II. This legislation goes even several steps further in the protection of the rights afforded to the individual taxpayer in this country. Senator Glenn's proposal is an answer to, and is a direct result of, testimony which was unearthed and information which has been gathered by Senator Glenn's committee, his very competent staff, on the issues and the alarming fact that, in the past--and maybe even in the present--certain overzealous Internal Revenue Service employees have taken the liberty to abuse the system by looking at individual taxpayer records and accounts and sharing those facts with other individuals. I think what Senator Glenn is doing today is a true service. I stand behind him all the way, and I hope that the Senator will put me down as an original cosponsor.

Mr. PRYOR

Mr. PRYOR. Mr. President, today we take a step forward to correct a situation adversely affecting small businesses and farmers which I have many times called an absurdity. During this tax filing season, over 9 million self-employed small businesses and farmers will fill out their tax returns. And when they do, they will learn first hand of how this absurdity affects them and their family. The absurdity I am speaking of Mr. President is that no part of their health insurance premiums are deductible in their 1994 tax return due April 17--just over 3 weeks from today. This in contrast to owners of large corporations that have a permanent 100 percent deduction, and that typically pay smaller health care premiums because of their size. It is a double penalty Mr. President. A double penalty on innovators and job creators in our economy--people who should be encouraged, not penalized. Mr. President, this inequity must be corrected and it must be corrected quickly. This should be a high priority for this Congress, and I am very happy that we are taking up this matter today. I want to comment briefly on one aspect of this bill which is extremely important--and that is this deduction for health insurance will be made permanent. Many times we focus on the amount of the percentage deduction. In the past it has been 25 percent, and today's bill increases that percentage to 30 percent which is a very positive step toward the goal of a 100 percent deduction which I hope we will continue to work toward. In fact, Senator Grassley, Senator Roth and I introduced legislation in January of this year to achieve a 100 percent deduction by 1997, and I look forward to working with them again in the future to meet this goal. But Mr. President, I cannot stress enough the importance of making this deduction permanent, and this is borne out by the history of the deduction. In 1986, the self-employed were first given 25 percent deductibility as part of the Tax Reform Act of 1986--with the understanding that it would be eventually increased to 100 percent, the same deduction incorporated business enjoy. In the Omnibus Budget Reconciliation Act of 1989, the deduction was extended for 9 months. In 1990, 25 percent deductibility was extended through 1991. And in 1991, 25 percent deductibility was extended through June 30, 1992. Mr. President, each time we scrambled to reinstate the deduction--uncertainty surrounding the deduction was high, and it was shameful to treat the self-employed in this way. But on June 30, 1992, the worst scenario happened--the deduction expired. Small businesses and farmers could not deduct the cost of their health insurance. The 1992 tax season came and went and still there was no reinstatement of the deduction because of the difficulty of moving any tax bill. Then, in August 1993, as part of the Budget Reconciliation Act, the deduction was retroactively reinstated from July 1, 1992, to December 31, 1993. Self-employed were required to amend their 1992 returns to take the deduction, and no doubt some failed to do so and lost their deduction. So that brings us to 1994 when the deduction once again expired, and no bill has been moved to correct the inequity--until today. Mr. President, this uncertainty is unpardonable and it must not happen again. Under this legislation the deduction will never again expire--it is permanent. Mr. President, we all understand the difficulty of moving a tax bill on the Senate floor where any of the 100 Senators my offer any amendment with no time limit. So that is why I and my friend and colleague on the Finance Committee, Senator Roth, sought signatures on a January 19, 1995, letter to Senator Dole and Senator Daschle stating that we would ``not support or offer any amendments to the legislation'' should they schedule it for Senate floor action. We were pleased to obtain 75 of our colleagues' signatures, and I am even more pleased today that no amendments will be offered and we will agree to the bill on a voice vote. I ask unanimous consent that a copy of the letter be printed in the Record, and I thank my colleagues for putting aside some issues very important to them in order to correct this problem and quickly as possible. printed in the Record, as follows: U.S. Senate, Washington, DC, January 19, 1995. Hon. Robert Dole, Senate Majority Leader, Hon. Thomas Daschle, Senate Minority Leader, Washington, DC. Dear Senator Dole and Senator Daschle: We are writing to you regarding the need to extend the 25% deduction for health insurance for the self-employed, which expired at the end of 1993. As you know, more than 9 million self-employed business owners, representing almost 10% of the working population, lost the ability to take this deduction when the law expired. It is our hope that the Chairman of the Ways and Means Committee will soon take up this legislation as a stand-alone bill, and that the House will soon pass this bill and send it to the Senate. In order that we may move as expeditiously as possible, we are writing to assure you that if you receive this legislation, and if you schedule it for Senate floor action, we will not support or offer any amendments to the legislation. As many of these small business men and women begin to file their 1994 tax returns, we believe that it is essential that Congress act now to avoid the administrative difficulties that could arise from amended returns if the legislation is not passed until after April 15th. Thank you for your consideration. David Pryor; Don Nickles; Jesse Helms; Arlen Specter; Bill Roth; Chuck Grassley; Dirk Kempthorne; John Warner; Mitch McConnell; Ted Stevens; Kit Bond; Dale Bumpers; Chuck Robb; Paul Simon; Carol Moseley-Braun; Joe Lieberman; J. James Exon; Connie Mack; Bob Kerrey; John McCain; J. Bennett Johnston; Harry Reid; Wendell Ford; Kent Conrad; Sam Nunn; Ernest Hollings; Jeff Bingaman; Max Baucus; Kay Bailey Hutchison; Spencer Abraham; Bryon L. Dorgan; Dan Coats; Patrick Leahy; Herb Kohl; Barbara A. Mikulski; John Ashcroft; John Glenn; John F. Kerry; Bob Graham; Hank Brown; Jay Rockefeller; Mark Hatfield; Dianne Feinstein; Howell Heflin; Ben Nighthorse Campbell; Slade Gorton; Fred Thompson; Al Simpson; John H. Chafee; Trent Lott; Larry Pressler; Larry E. Craig; Olympia Snowe; Lauch Faircloth; Rod Grams; Rick Santorum; R.F. Bennett; Dick Lugar; Jim Jeffords; Conrad Burns; Paul D. Coverdell; Richard H. Bryan; Bill Frist; Craig Thomas; Jim Inhofe; Mike DeWine; Jon Kyl; Strom Thurmond; Bob Smith; Phil Gramm; John Breaux; Richard Shelby; Orrin Hatch; Bill Cohen; Patty Murray.

Mr. PRYOR

Mr. PRYOR. Mr. President, I was in the office of Senator Daschle a few moments ago visiting with Senator Daschle and some of our colleagues about issues coming before the Senate this week and down the line, and one of our trusted staff members came in and made the announcement that Senator Howell Heflin, of Alabama, was on the floor of the U.S. Senate announcing that he would not run for reelection. There was, I must say, shock and sadness and dismay in that room at that time. As we came to the floor of the Chamber to hear the last part of the remarks of our friend from Alabama, I could not help but be reminded of a part of the creed of the U.S. Junior Chamber of Commerce that we used to recite at our noonday luncheons, and I quote: We believe that service to humanity is the best work of life. I think that service to humanity is something that will be the hallmark of this great son of Alabama. It was my pleasure and my privilege to come to wife, Mike, in 1979. I will never forget that we had a class structure; that our Senators in that particular class from time to time would have meetings, we would go to each other's homes for perhaps a potluck supper. We would have speakers, and they would come and give us what they thought were the great issues of the day. It seems almost like the blink of an eye, when I had the privilege of beginning to get to know this fine man, this fine gentleman from Alabama. I remember, too, Mr. President, that when Judge Heflin, as we have affectionately called him over these some 16 or 17 years, I remember the day that he was stricken ill. I will never forget the stillness that overcame this building, the Senate office buildings as Senators and staff members and elevator operators and policemen stopped to pause and to reflect and perhaps even to pray about their friend, Howell Heflin. I have had the privilege of serving on the Agriculture Committee with Senator Heflin for these 16 years, and I can tell you that the farmers in Alabama, the farmers in Arkansas, the farmers in Michigan or West Virginia, Hawaii, or wherever it might be, have never had a better friend nor a stronger advocate than Howell Heflin, of Alabama. Mr. President, finally, I had the high honor of serving as a member of the Senate Ethics Committee--not an easy responsibility--with the very great chairman of many years of that committee, Senator Howell Heflin. And many, many times during the deliberations, most of the times behind closed doors, in trying to deal with some of the extremely sensitive issues that faced individuals in this body or that faced this body as a whole, it was always Judge Heflin who brought us back to the center of the argument and the center of the issue as he said time and time and time again, ``Ladies and gentleman, we must do what is good for this institution.'' This institution--this institution--Mr. President, I think, has been so much better because he has graced this institution with his presence. He has made us laugh, he has made us cry but, above all, he has made us think. He is truly, I think, one of the greatest Members this body has ever had. And it has been a high privilege and honor for me to have had the privilege of serving with him. Mr. President, I yield the floor. Mr. INOUYE addressed the Chair.

Mr. PRYOR

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

Mr. PRYOR. Mr. President, if I may, I do not want to spoil the opportunity to pass this amendment because I think it is going to be accepted by everyone. So I will sit down. I could not help but catch it when my good friend and colleague from Alaska was talking about his good friend and our colleague from Rhode Island when he referred to their ``prior disagreements.'' I am very hopeful that they will just use ``former disagreements.'' I think that would be a little more helpful here. [Laughter.] Mr. President, I thank the managers. I thank them for the support for this amendment. I hope it will be adopted.

Mr. PRYOR. Mr. President, at this time, I rise to offer an amendment with my friend, Senator Stevens of Alaska, and also Senator Pressler, Senator Wellstone, and Senator Cochran. This amendment would ensure that the 45-day suspension of a significant rule does not include the regulations opening duck hunting season. The amendment I am offering at this time was adopted by the Governmental Affairs Committee when it considered S. 219, but it was not included in the Nickles-Reid substitute. The substitute would suspend for 45 days any significant rule to give Congress time to review the regulation. The annual rule regulating duck hunting, which has a direct effect on the economy of $686 million annually, would be considered a significant rule. The effect of this 45-day suspension on the duck hunting season would be most severe. The Fish and Wildlife Service is required by law to issue regulations each year to open and close the duck hunting season. Each year, in late July, after the young birds are large enough to be counted, the Fish and Wildlife Service then gathers information about the various duck populations. They then have roughly 2 months to draft and finalize the duck hunting regulations, which are typically issued 2 or 3 days before the hunting season begins. Because these regulations are significant regulations, they would be suspended for 45 days, which would cut a month and a half from the duck hunting season. I do not believe this effect on duck hunting is necessary or useful. It is counterproductive, and it may be a classic case of unintended consequences. Our amendment today simply says that for the purposes of the Nickles- Reid substitute, duck hunting regulations would not be considered significant and, therefore, would not be suspended for 45 days. The duck hunting rule, like all other rules under the Nickles-Reid substitute, would still be reported to Congress. Mr. President, I do not think that in the name of regulatory reform, we should eliminate 45 days of the duck hunting season. I believe our amendment is simple and it is straightforward. I thank my colleagues for cosponsoring this amendment with me. I sincerely appreciate the help and the strong support of my good friend and colleague from Alaska, Senator Stevens, who has worked with us very carefully to develop this amendment as it is. Mr. President, I have not actually sent my amendment to the desk. I send the amendment to the desk and ask for its immediate consideration.

Mr. PRYOR

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

Mr. PRYOR

Mr. PRYOR. Mr. President, I rise to introduce the Bank Customer Confidentiality and Protection Act of 1995. This legislation has been crafted to address problems in the area of bank sales of uninsured products, such as mutual funds, identified during a continuing investigation conducted by my staff on the U.S. Senate Special Committee on Aging. After hearing the stories of numerous older Americans who claim they did not know what they were buying when they purchased an uninsured product through their bank and then lost much of their life savings, I am convinced that more stringent protections are needed to ensure that financially inexperienced bank customers fully understand what they are buying when they invest in uninsured products. Mr. President, this legislation is intended to help those who really need its protections, such as the 72-year-old widow in Florida who had always put her savings into FDIC-insured certificates of deposit until she was contacted by telephone by an employee of her bank offering a product with a higher rate of return. This woman then went into her bank, listened to the advice of a man whom she thought was a banker, and then transferred all her savings into an uninsured government bond fund. Even though she did not exactly understand the risks associated with the product, she trusted the bank to do her right. Two years later, the value of the fund declined and she lost about a quarter of her life savings, savings that she had intended to use in the years ahead to avoid being a burden to her children. It is this sort of tragedy, Mr. President, that this legislation is intended to prevent. Mr. President, under our present banking system financially inexperienced customers have reason to be concerned about the safety of their deposits. During our investigation, my Senate Aging Committee staff found that some banks were, for example, routinely: Sharing detailed customer financial information with people selling securities, without customers' explicit knowledge; Avoiding full and clear disclosure about the risks associated with uninsured products; Discouraging bank customers from investing in certificates of deposit [CD's], savings accounts, and other similar FDIC-insured investments; Establishing commission structures that provide incentives for securities salespeople to offer the bank's in-house investment products, regardless of the products' suitability for a particular customer; and Operating in a manner that leads some customers to not fully understand the relationship between the securities salesperson and the depository institution. I and a number of my colleagues consider these to be questionable marketing practices and find them especially troubling because of the special place banks have in our communities. Mr. President, many older bank customers hold their bank and the people who work there in high regard and feel comfortable about taking advice from them about where to put their money. In addition, when some customers see the FDIC emblem--something analogous to the Good Housekeeping seal of approval for many--they may believe that the FDIC coverage applies to all products offered in the institution. As customers who have seen their principals drop have realized, this is not the case. While all bank customers need to exercise caution, older customers need to be particularly vigilant when it comes to uninsured investments such as mutual funds, principally because the savings of the elderly do not represent a renewable resource and the loss of such savings cannot be written off as lessons learned for the future. Mr. President, to explore the impact on older Americans further, in September 1994 I chaired a U.S. Senate Special Committee on Aging hearing entitled ``Uninsured Bank Products: Risky Business for Seniors?'' At this hearing, we had older bank customers, former bank-based brokers, and industry experts come and discuss how some banks' brokerage businesses are selling inappropriate products to older customers. It is clear that something must be done about these questionable practices. While I would prefer to avoid legislation, it appears that there may be no other option. Although some banks recently have taken steps to clean up their practices, many are continuing business as usual. In addition, the banking regulators' joint guidelines and the industry's voluntary guidelines, while well-intended, do not appear to have been totally effective in addressing marketing abuses. Mr. President, let me address one part of these guidelines, the provision that banks have their customers sign ``disclosure'' documents before they make a purchase. One concern I have is that the format of these disclosure forms vary from bank to bank. Some banks or their investment subsidiaries do a fine job putting in plain English required disclosure information, such as the fact that uninsured investment products are not backed by the Federal Deposit Insurance Corporation. Other banks, however, present the information in such a way that you would have to be an attorney or an experienced investor and have great eyesight in order to understand what they mean. Then there is the even more problematic issue of oral disclosure-- what bank customers are told. More than a few financially inexperienced bank customers have told me that when they looked over the disclosure forms they did not understand what they meant. These customers typically would then ask the investment salespeople to interpret the forms for them. In these cases, the salespeople told their customers that the documents were just a formality to open the account or that the forms simply restated what the salespeople had told the customers. The problem is that in some cases the salespeople had made misleading or false statements about the nature of the uninsured products when they described them, such as that they were ``as safe as the money in your pocket and will only lose money if the Federal Government goes bankrupt'' or ``backed by something better than the FDIC.'' Mr. President, the legislation I am introducing, which has been crafted after numerous meetings with industry and consumer groups, would provide needed consumer protections for financially inexperienced customers. The legislation would provide protections by: Requiring full and clear disclosure about the risks associated with uninsured products; receive for making referrals to securities salespeople; Establishing guidelines for uninsured products' promotional materials; Requiring common-sense physical separation of deposit and nondeposit sales products; Prohibiting the sharing of bank customers' personal financial information without customers' explicit consent; and Improving the coordination of enforcement-related activities between the Federal banking agencies and the Securities and Exchange Commission. These protections will be especially important if the remaining legal barriers that currently restrict banks' involvement in the securities and insurance industries are broken down, as called for by Treasury Secretary Robert E. Rubin and several congressional proposals. These changes to our banking system that Secretary Rubin and others are advocating are not necessarily bad ones, and I will consider them with an open mind if they come to the floor of the Senate. However, without the consumer protections called for by my legislation, dropping the remaining restrictions likely would create even more confusion among customers over which products at a bank are federally insured and which are not. In the meantime, as we consider the legislation I am introducing today, we need to continue reminding all bank customers that not everything they put money in at the bank is backed by the FDIC or the bank--regardless of what somebody might lead them to believe. Mr. President, I ask unanimous consent that the text of the bill appear in the Record.

Mr. PRYOR

Mr. PRYOR. Mr. President, by exempting Social Security administrative funds as incorporated in the Democratic amendment, we can honestly tell the American people that their Social Security checks are secure and that administrative functions and services will not be interrupted, reduced, or eliminated. Exhibit American Association of Retired Persons, AARP, Washington, DC, March 2, 1995. Hon. David H. Pryor, U.S. Senate, Washington, DC. Dear Senator Pryor: The American Association of Retired Persons (AARP) supports your amendment to S. 4, the ``Legislative Line Item Veto Act of 1995,'' that would ensure that Social Security is exempt from the line item veto. Although AARP believes a limited line item veto or other mechanism that allows for appropriate Congressional review may be warranted to help control unjustified tax breaks or spending programs, expenses of the Social Security Administration (SSA) should be excluded for the following reasons: Social Security is a self-financed program that does not contribute one penny to the deficit. In fact, since Social Security takes in more revenue than is needed to pay benefits, Congress deliberately took it off budget in order to shield it from unwarranted reductions. SSA's administrative expenses are financed from the Social Security trust funds. These trust funds are financed by the payroll tax contributions workers and their employers make. SSA's administrative costs are already less than 2 percent. Further cuts could harm the agency's ability to meet its obligations. Cutting SSA's administrative costs does not always lead to savings. Past underfunding had forced the agency to reduce the number of Continuing Disability Reviews (CDR) it conducts. The General Accounting Office (GAO) estimates that SSA's failure to conduct CDRs will cost the trust funds about $1.4 billion over 5 years. AARP appreciates your commitment to the welfare of older Americans and the protection of Social Security. If we can be of further assistance, please do not hesitate to call me, or have your staff call Evelyn Morton of our Federal Affairs Department at (202) 434-3760. Sincerely, John Rother, Director, Legislation and Public Policy Division.

Mr. PRYOR. Mr. President, I rise today to speak for a moment on behalf of the line-item veto proposal that the minority leader has offered. I support this reasonable alternative to the so-called separate enrollment line-item veto legislation. Just one of a number of problems with the separate enrollment measure is that it makes funds for operating the Social Security Administration vulnerable to the President's line-item veto authority. It is clear that the public expects us to protect the integrity of the Social Security System for current beneficiaries and for the millions of current workers and employers worried about the future of Social Security. The majority leader's separate enrollment proposal would not protect Social Security. A provision, however, in the Democratic substitute would exempt moneys used to administer the Social Security program from the President's line-item veto power. This provision is almost identical to an amendment that I successfully offered to one of the line-item veto bills during our recent Governmental Affairs Committee markup. This amendment was unanimously accepted. The Democratic proposal simply states that, The term ``budget item'' means an amount, in whole or in part, of budget authority provided in an appropriation Act except to fund direct spending programs and the administrative expenses of Social Security. Under the separate enrollment proposal new direct spending for Social Security would be subject to the line-item veto. But my primary concern is about the annual appropriation that is used to administer the Social Security program. These funds, for the most part, come from the Social Security trust funds, are reviewed annually, and are appropriated by the Appropriations Committees of the Congress. The President, armed with line-item veto authority, could eliminate, or by leveraging a veto, limit these administrative funds. As it currently stands, the Social Security Administration's operating budget is over $5 billion. The greatest portion of these funds come from the Social Security trust funds and are used to administer the Social Security retirement and disability programs. Operating expenses for these two programs represent only 0.9 percent of total program costs, but are the key to effective distribution of Social Security payments and efficient operation of the Social Security system. If we don't have sufficient operating funds to properly fulfill the mission of the Social Security Administration, we fail to honor our commitment to protect Social Security. One of the many functions carried out by the Social Security Administration is to make sure that beneficiary checks are correctly calculated and promptly mailed out. This is vital to the 42.6 million recipients of Social Security who deserve to get their benefits on time and also to receive the right benefit amount. In my State alone, according to the Social Security Administration, 489,330 Arkansans receive Social Security benefits. This is 20 percent of the Arkansas population. I can only imagine the outcry and confusion if these citizens were to not receive their benefits on time due to a President's line-item veto of Social Security. Administative funds also ensure that citizens who apply for benefits under the disability program are reviewed for eligibility and that benefit denials can be appealed. But perhaps even more importantly, these operating funds are also used to conduct continuing disability reviews. These reviews are conducted to determine if individuals continue to be eligible for disability benefits, and, if not, to terminate them from the rolls. Just yesterday the Subcommittee on Social Security of the Senate Finance Committee held a hearing on the growth in the Social Security disability program. This growth stems, in part, from the lack of resources the Social Security Administration currently has to conduct these important reviews. The resources provided for the Social Security Administration are important to ensure that benefits only go to those individuals who are truly eligible. In fact, the General Accounting Office has estimated that administrative budget cuts at Social Security have resulted in significant reductions in disability reviews and that the failure to conduct these reviews will cost the trust funds $1.4 billion over 5 years. Proper administrative funding also means that we can combat fraudulent Social Security claims. Social Security is not immune to fraud and abuse. Without proper funding, it is possible that there could be an increase in fraudulent claims filed by citizens that will try to cheat the system. Mr. President, before the committee mark-up of the line-item veto legislation my amendment was endorsed by the American Association of Retired Persons. I have a letter from the AARP which makes several important points that I would like to emphasize today. They point out, and I quote, that ``Social Security is a self-financed program and does not contribute one penny to the deficit.'' They also state ``since Social Security takes in more revenue than is needed to pay benefits, Congress deliberately took it off budget in order to shield it from unwarranted reductions.'' I ask that the full text of this letter be printed in the Record following my statement.

Mr. PRYOR

Mr. PRYOR. Mr. President, I thank the Chair for recognizing me. Mr. President, I ask unanimous consent that I may speak not to exceed 12 minutes as if in morning business.

Mr. PRYOR

Mr. PRYOR. Mr. President, a constituent of mine, Clyde Edwin Pettit, was a member of the staff of the late Senator J. William Fulbright. Mr. Pettit went to Vietnam as a foreign correspondent and made many distinguished radio broadcasts from there in 1965 and 1966. He was one of the very first Americans to predict that the United States would not prevail in that tragic undertaking. He wrote what Senator Fulbright called a long and prescient letter * * * from Saigon that was a substantial influence upon my long opposition to America's adventure in Indochina. Mr. Pettit has written a moving and eloquent tribute to Senator Fulbright. Mr. President, I ask unanimous consent that a copy of the eulogy to which I have referred and a letter of introduction Senator Fulbright wrote regarding Clyde Pettit be inserted in the Record.

Mr. PRYOR

Mr. PRYOR. Mr. President, on Friday I talked briefly about an amendment that I am going to call up for a vote tomorrow. The number of this amendment, for the purposes of our staff who might be watching the monitor at this time, is amendment number 307. Mr. President, this amendment is very simple. In fact, it is only one sentence long. I am going to take the liberty of reading amendment 307 that we will consider tomorrow, and I will do that at this time. On page 3 of the constitutional amendment, between lines 8 and 9, the following sentence would be inserted: It is the intent of Congress that each State should, as a part of the ratification process, submit to Congress recommendations for reductions in direct and indirect Federal funds provided to the State and its residents (based on the State's allocation of Federal funds) necessary to balance the State's share of the Federal deficit. That new sentence I would attempt to add by amendment 307 to the proposed constitutional amendment before us at this time. Mr. President, I call this--and I think I can call it this in all truth and honesty--a States' rights amendment. This is an amendment that would belong to the people as their right to tell the Congress how the cuts should be made in our respective States. Back in the middle part of January the Department of Treasury came out with what I consider to be a very thorough study of how each State would be impacted and affected by a constitutional amendment to balance the budget by the year 2002. Mr. President, I hold this study in my hand. And from time to time, I have been given the opportunity to discuss with my colleagues in the Senate how each of our States represented by this body would be affected by this particular amendment that will be voted on sometime during the course of the legislative day tomorrow. For example, the Treasury Department has indicated that the State of Arkansas from which I come, a small State of around 2.5 million people, would have to increase State taxes--not Federal taxes, State taxes--by 16.5 percent across the board to make up for the loss of grants, should the balanced budget amendment pass, and the Federal budget is balanced by the year 2002. Also, Mr. President, we would see a cut in about $1.1 billion a year in Medicare benefits to our State, and another $1.1 billion per year in other programs where the Government allocates the money to the States. There are going to be severe cuts to each State. My amendment basically would say that the people of the State--through or via their own State legislatures sitting at the proper time, during the debate on whether or not to ratify this amendment by the respective States, would tell their State legislators sitting in their respective general assemblies how the people feel these allocations should be effectuated in the State. The State legislatures would be looking at the allocation of cuts based upon the total Federal funds received today. That would be the basis of the formula that the States would be employing in recommending to the Federal Government, the Federal Congress, the national Congress, how these Federal funds, these cuts, should be implemented out in the States. This would give the people of our country a very, very rare opportunity. It would provide our people the opportunity to tell Congress where these cuts should be made. It would provide the people of America the right basically to petition Congress, in an informal, nonbinding way, say as what we believe out in the country, the priorities should be in allocating cuts in Federal spending back to the States. Mr. President, we have just gone through a very, very lengthy several days of session in the Senate with regard to the issue of unfunded mandates. Let me say that this is not an unfunded mandate. This is not even a mandate. This is something merely declaring the intent of the Congress, that the States would have the opportunity to show us where these cuts and where this pain could be best allocated. We think it is fair; we think it is simple. It speaks to the issue in one simple sentence that we hope will be accepted by this body tomorrow. Some might say, if we accept this amendment, even though it is just one sentence, then we are going to have to go back and have a conference with the House of Representatives to reconcile any differences. We would do this because we have dared to differ with the House just by adding this one sentence. Mr. President, I do not really buy that argument, because it is very rare indeed that we approach the eve of a historic vote on an amendment such as this, which will change forever the basic relationships of the three branches of Government. We would be forever changing the way Government deals with how we finance, how we structure the American economic system. This is a crucial, critical vote tomorrow. In the 1 or 2 days' time that might be expended in a conference between House and Senate conferees--conferences are done all the time; it is normal and it is natural to have conferences on differences between the two bodies--I feel they can work out. If not this language, at least the spirit of this language to be encompassed in the final draft of the amendment, so as to give the people of America the opportunity to speak to the Congress, to say where these cuts should occur. Mr. President, once again, the people of the State would speak during the ratification process. This is presupposing--maybe wrongfully, I do not know--that there will be 67 votes tomorrow to ratify this amendment to balance the budget. But, Mr. President, in my opinion, it is very, very important because we have now lost the fight on the people's right to know how Congress will balance the Federal budget, and at least we will have some safeguard, some measure of the impact on the States, should this amendment receive 67 votes. And before the States ratify or fail to ratify this amendment, we would have the opportunity for the people to express to us how they feel as to the allocation of this pain that we will feel. Mr. President, I will conclude by saying that this is, as we have all known for a long time, going to be a very close vote. We are seeing many phone calls come into our offices, and letters and telegrams; there is no question about that. That should be encouraged because the people should express how they feel about altering the Constitution of the United States in this way. But I am just very hopeful that all of the people in the country who are watching this particular debate on this issue of the balanced budget amendment, I am just hoping, Mr. President, they will realize that most of us in this body want and desire and are committed to a balanced budget. Some of us do not feel at this time that the proper way to achieve that balanced budget is to put it in the Federal Constitution. I, for one, do not feel that we should wait until the year 2002 to begin trying to balance the budget. I think that we have to begin that process now, as we did in 1990, as we did in 1993. We have to continue on that cycle in order to balanced budget. I think, too, that many people who might be watching this argument must realize that we cannot in this country violate a 60- year-old contract that we have had and have maintained with the people of this country relative to their Social Security trust funds, which some fear will be used to balance the budget. Mr. President, we know that in this amendment, we have voted down the amendment which would have exempted Social Security funds from the balanced budget amendment. I say, and say without reservation, that this was one of the more critical votes that we dissected and explored with regard to this constitutional amendment. Finally, Mr. President, I think there is another issue that hangs out there and haunts us and, in fact, taints this constitutional amendment as proposed. This is the issue of the judiciary's role in interpreting what we did, and also, the role that the Federal judges might well play in implementing the constitutional amendment to balance the budget, and their having the ability to raise taxes to balance the Federal budget. Mr. President, I am not talking about the U.S. Supreme Court having that ability. I am talking about Federal district judges perhaps having the opportunity, or seizing the opportunity, to come forward and say that the Congress has not balanced the budget; therefore I, acting under the authority vested in me as a Federal district judge in Nashville, TN, or Little Rock, AR, or Oshkosh, WI, or wherever the case may have arisen, to enjoin the issue of taxation. Under the constitutional amendment, we are going to see taxation without representation, Mr. President--that is my firm belief--in the event that we pass the Federal balanced budget constitutional amendment on tomorrow. Tomorrow is a critical vote, and I just hope that the people of our country will realize that this has not been a delaying tactic, that we have wanted to fully explore the momentous decision that we have to make on tomorrow. Mr. President, I respectfully submit that on both sides of the aisle, we have conducted this debate in a manner where I hope the people-- whether they agree or disagree with our decision--will at least say that the U.S. Senate is a great deliberative body and that we have carried out our mission, I hope, with sincerity and a commitment to the cause that we are attempting to serve. Mr. President, I see my very good friend from Connecticut, and he is not ready to speak just now. Therefore, I will suggest the absence of a quorum.

Mr. PRYOR. Mr. President, I thank the Chair for recognizing me. Mr. President, before I make a few short remarks, I would like, if I might, to compliment the distinguished Senator from Rhode Island. He and I have talked about this issue of the balanced budget on several occasions. I have been in what you might call sort of soul-searching meetings with the Senator from Rhode Island. I have watched him--I do not want to say in his agony--in attempting to reach a decision about his vote. But I certainly have seen him trying to search for the proper role to take and the proper answer to give to his constituents and ours with regard to this all-important vote that we will take tomorrow. Mr. President, please allow me to compliment my very distinguished friend from Rhode Island, not only on his decision, but on the very thoughtful way in which that decision was reached.

Mr. PRYOR

Mr. PRYOR. First, Mr. President, I would say to my friend the problem is not in the Constitution. The problem is in Congress, and it is our commitment and our will. We can balance the budget. We can cure the deficit. We can do it in a number of years if we will make that commitment. We are pleading right now with our colleagues on the other side of the aisle to join us in that commitment that we helped to make in 1993. Let me say when the Senator said we are not going to cut spending, we are just going to raise taxes, I know had the Senator been here in August 1993 when that vote was counted and when the roll, as they say, was called. I know the Senator from Tennessee then would have realized that the budget reconciliation bill contained $250 billion in new taxes, but also an equal amount, $250 billion, in spending cuts. We made that hard decision. We made that hard decision stick, I am sorry to say, without our colleagues on the other side.

Mr. PRYOR. I would say that we are not going to have a horse if we do not do something. And we are willing to do something and we have demonstrated that we have been willing to do something. We are pleading with our colleagues on the other side of the aisle that we have to do something.

Mr. PRYOR. Mr. President, I would answer my friend from Tennessee, I know he was not here then, but in 1982 I supported a balanced budget amendment. That was after I had voted for President Reagan's program to decrease taxes and increase defense spending. This was a mistake on my part. Only 11 Members of the U.S. Senate stood up at a time of great national passion and opposed President Reagan. I supported President Reagan. In 1982, I voted for the balanced budget amendment. It was worded differently. In 1986, this Senator voted again for the balanced budget amendment. It was worded a little bit differently. On two occasions, I have voted in the 1980's to freeze spending, once for 2 years and once for 1 year. I always will think, had we passed these spending freezes during that period, I say to my friend, that we would not be in the dire consequences that we are in today. In 1990, I voted a hard vote on the deficit reduction package. In August of 1993, this Senator voted to decrease the deficit by $500 billion. And I can tell my friend from Tennessee, that was a hard, hard, mean vote. And right there, in the middle of that aisle, in my opinion in August of 1993, was where we saw the difference between commitment and just talking. On our side, we voted the hard choice. And this is the only way I think we are going to be able, as we might say in Tennessee and Arkansas, to bring that horse back into the barn. Because in the mid-1980's, we let that horse out of the barn. Now how do we bring him back? Do we do it by a constitutional amendment to balance the budget? The problem is not in the Constitution. The problem is us. And this is why I maintain that we have to continue making tough choices here in the legislative branch and not simply pass a balanced budget amendment that is suddenly going to magically trigger in the year 2002, if it is ratified.

Mr. PRYOR. I am proud to yield to my friend.

Mr. PRYOR. Mr. President, I applaud my colleague from Tennessee for his answer, because, to some extent, the Senator from Tennessee, in his answer, is making an argument for the amendment that I am about to call up. That amendment, basically, says that the States have a right to tell Congress how to balance the Federal budget. This is a States rights amendment. This is an amendment that I am sure my colleague who traveled around Tennessee in that red pickup truck, through those hills and hollows of Tennessee that I love to drive through between here and Arkansas, would have agreed with when he heard those people in Tennessee say that they wanted just the facts. They wanted the right to know. They wanted the right to tell the Congress their point of view. Well, I have an amendment that is going to do exactly that. This amendment says that the State legislatures, before voting on whether or not to ratify this constitutional amendment--this presupposes or presumes that this amendment will get 67 votes, it might not get 67, and it may not be sent out to the States--but if it does, that the State legislature will have the right to tell Congress how the pain is going to be shared. They are going to have the right to petition Congress, so to speak, and to tell the Congress of the United States where they want these cuts to come from. Of course, the right-to-know amendment went down. Every Republican Senator, to the best of my knowledge, with all due respect, voted against telling people in advance of our vote here as to what is going to happen in each respective State. So we are going to try now to give the States the opportunity to tell us, if this amendment passes, how those cuts should be made. I just think that there is a feeling, Mr. President, out there in the country, that there is some kind of magical plan here in Washington. The Congress is going to wave some secret magic wand and is going to pass a balanced budget amendment and 38 States are going to ratify that amendment and all of our problems are going to be over. Well, Mr. President, that is not going to be the case. I just think that we still have an opportunity out in the States to show that, one, we are for States rights; and, two, that we will listen to the State legislatures tell us how they want this pain to be allocated out in the States. I notice, I say to the distinguished occupant of the Chair, the State of Missouri would have to raise taxes, according to the Treasury Department, across the board by 15.5 percent. This balanced budget amendment would mean, for Missouri, a $2.4 billion loss in Medicare, $3 billion in grants to local Governments and veterans benefits and student loans and all down the line. I think the States have a right, Mr. President, to let us know in Congress how they prefer that pain to be allocated. This would be before the vote would occur as to whether the particular State wanted to ratify or not.

Mr. PRYOR. I do not believe they are. They are not in Arkansas. They may be across the river in Tennessee.

Mr. PRYOR. Mr. President, I want to compliment our new colleague from Tennessee. I think our new colleague from Tennessee has made a very wise and thoughtful presentation today. I must say I do not agree with his ultimate conclusion and the outcome that he says is going to be the answer to our budget crisis or dilemma that we find ourselves in. I do not find myself in agreement with that conclusion. But I compliment him. I watched his campaign, Mr. President. I watched that campaign from across the Mississippi River. He is our good neighbor. He has been our good neighbor for a number of years. On many occasions, I can remember, Mr. President, flying from Washington to Nashville, or from Nashville to Washington when he was a private citizen. He and I happened to join on the same airplanes together, and I recall very good conversations that we have had. We established, I hope, the beginnings of a bond of friendship during that period of time. I welcome him to this body, and I thank him for his thoughtful presentation. Mr. President, there are a couple of items that the Senator from Tennessee addressed that, in fact, I would like to ask him about, if I might. One is the issue of the term ``incremental adjustments.'' He says the States and the governments might have to make some ``incremental adjustments.'' I pose a question to my distinguished colleague on arriving at a definition of what incremental adjustments might be. For example, the Department of the Treasury, on the 12th of January, sent information to all of the State Governors on what would occur in their respective States should the balanced budget amendment pass and should the budget have to be balanced by the year 2002. For example, our neighboring State, the State of Tennessee--and the distinguished Senator from Tennessee represents it well--says the Treasury Department, would have to increase State taxes by 19.5 percent across the board to make up for the loss in grants. I am wondering whether this is an incremental adjustment. I am wondering if the loss of $1.9 billion to Tennessee in Medicare benefits would be an incremental adjustment; or $989 million per year in lost funding in Medicaid; or $78 million in lost highway trust funds are incremental. I ask my friend from Tennessee, are those incremental adjustments?

Mr. PRYOR. Mr. President, am I correct in understanding that the Senator from Arkansas does have the floor? I will not keep the floor long. I know the Senator from Utah is back on the floor. My distinguished friend from Massachusetts is on the floor seeking recognition. amendment no. 307

Mr. PRYOR. Those spending cuts are beginning to come into fruition. I think what we have seen in the tremendous creation of jobs in the private sector is the result of the confidence we helped provide in the economy. We basically laid the groundwork in August 1993. I would like to say this, Mr. President: I am going to, in a moment, call up an amendment. But before I do that, I will yield just for 60 seconds. I would like to say one thing about the statement of the Senator from Tennessee. He made a statement that was so correct that I agree 100 percent. The Senator from Tennessee earlier in his remarks made the statement, I am not sure I can quote him exactly, I believe the Senator said, ``This vote on the balanced budget amendment is the most important vote that we will cast during this term.'' I certainly agreed with him as he said it. I agree with him now. I think future generations are going to look back and say that this was an important, critical vote in this session of Congress. Mr. President, I ask unanimous consent to yield such time as the Senator from Michigan desires.

Mr. PRYOR. Mr. President, I send an amendment to the desk and I ask for its immediate consideration.