William Roth

Mr. ROTH

Mr. ROTH. Mr. President, at the outset of this debate I set out my reasons for supporting fast-track authority. Having heard the debate and the point made by my esteemed colleagues, I want to distill what, I believe today, our vote is about. First, I submit that the question before this body is whether we will shape our own economic future or leave our fate in the hands of others. We must decide whether we will allow the President to take a seat at the negotiating table or force him to stand outside the room while others write the rules for the international economy. A vote for fast track is a vote for a brighter American future. Toward that end, this bill arms the President with the authority to open foreign markets and allow our firms to do what they do better than anywhere else on Earth: That is, compete. Second, the making of trade policy must be a full partnership between Congress and the President. The bill before this House ensures that Congress is, in fact, a full partner in the process. Indeed, it is difficult to concede of any other measure where we subject the President's action to such scrutiny and constraints. The bill requires the President to notify us in advance of his intent to make use of this authority. He must then consult prior to and throughout the negotiations up to and including comprehensive consultations immediately before initialing an agreement. If the agreement is signed, we then proceed to develop the implementing legislation in consultation with the President. After all that, Congress still exercises a veto over the President's action by voting on the agreement and implementing bill. Those conditions are necessary to ensure the President fulfills the objectives set by Congress. They are also needed to ensure that Congress and the President do, in fact, speak with one voice on trade matters. I firmly believe that bill strengthens the role of Congress and the trade agreements process to an unprecedented extent and lets our trading partners know that the President is answerable to Congress for any agreement he may reach. Third, laying the foundation for our economic future will require a partnership here in Congress, as well. We will not make progress toward our common goal of providing for America's economic future without strong bipartisan support for our trade policy. I was extremely heartened by the vote yesterday and expect to see the same bipartisan support for the motion under consideration and for the bill itself. At the same time, the debate identified important issues that must be fully examined in order to sustain that bipartisan future. As chairman of the Finance Committee, I intend to ensure that the committee addresses those issues of critical importance to the well- being of every American. I look forward to working with my colleagues toward this end. Nonetheless, I believe we must take the first step now to exert the leadership on trade that only the United States can provide. The President must have fast-track negotiating authority. I urge my colleagues strongly to support the motion to proceed.

Mr. ROTH. I have a request from the distinguished Senator from Pennsylvania. I will yield him 5 minutes of my time. I yield 5 minutes to the junior Senator from Pennsylvania.

Mr. ROTH. I yield the distinguished Senator 3 minutes.

Mr. ROTH. I yield 2 minutes.

Mr. ROTH. I thank the distinguished Senator for his words of support. I now yield 10 minutes to the distinguished Senator from South Dakota.

Mr. ROTH. That is fine.

Mr. ROTH. That is correct.

Mr. ROTH. I say to the distinguished Senator from Maryland that at this time we only have one request. So we probably are going to yield back time. We are waiting to see if anybody else wants to speak.

Mr. ROTH. Why don't we just go ahead and call for a quorum, and take it from both sides equally? We are now checking to see if we need to preserve time.

Mr. ROTH. How much time do you need for that?

Mr. ROTH

Mr. ROTH. Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet during the session of the Senate on Wednesday, November 5, 1997 at 2 p.m. in room 226 of the Senate Dirksen Office Building to hold a hearing on the nomination of Seth Waxman to be Solicitor General.

Mr. ROTH. Mr. President. I ask unanimous consent that the Subcommittee on Transportation and Infrastructure be granted permission to conduct a hearing Wednesday, November 5, 10 a.m., hearing room (SD- 406), to examine the General Services Administration proposal to construct or otherwise acquire a facility to house the headquarters of the Department of Transportation.

Mr. ROTH

Mr. ROTH. Mr. President, I ask unanimous consent that full floor privileges be granted to Grant Aldonas during the pendency of S. 1269 and the House corresponding bill, H.R. 2621, during this Congress, and that, too, the privilege of the floor be granted to Robert M. Baker with respect to the same bills during the first session.

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

Mr. ROTH. Mr. President, it is unthinkable that the Senate would not revive the fast-track trade negotiation authority enjoyed by previous Presidents. Since its inception, the United States has been a trading state, and from the Jay treaty that ended the Revolutionary War to the Uruguay round agreements that established the World Trade Organization, we have, in the main, pursued a policy of free and open commerce with all nations. That legacy has helped bring us unrivaled prosperity. We are in the seventh year of sustained economic expansion, and during that same period, the United States has registered the greatest rise in industrial production of any developed nation, an increase over the last decade of 30 percent. It is no coincidence that our economic growth has taken place at a time when we have struck a series of international agreements that have sharply lowered barriers to American trade abroad. The opponents of trade and economic growth do not want you to hear that the United States has been a significant winner in those agreements. In the Uruguay round, we cut our tariffs an average of 2 percentage points, while trading partners cut theirs between 3 and 8 percent. In NAFTA, while we eliminated the average 2-percent tariff on Mexican imports, Mexico eliminated its 10-percent average tariffs, as well as a host of nontariff barriers that inhibited United States market access. That job is not done. In most developing countries which represent the markets of the future for U.S. goods and services, tariffs on many products range up to 30 percent and higher. Developed countries continue to maintain high barriers in sectors where the United States has a tremendous comparative advantage. In Europe, for example, tariffs on our dairy products exceed 100 percent. In Japan, the tariffs on United States dairy products exceed 300 percent, and tariffs on our wheat exports, most of it grown in Midwestern States such as North Dakota, remain above 150 percent. In other words, we have vastly more to gain from trade than we do to lose. Let's agree on this much: We cannot legislate reduction in foreign tariffs or market access. That has to be done at the negotiating table. For that, the President needs negotiating authority. Simply put, a vote for fast track recognizes the fact that today, more than ever, our economic well-being is tied to trade. Exports now generate one-third of all economic growth in the United States. Export jobs pay 10 to 15 percent more than the average wage. In the last 4 years alone, exports have created 1.7 million well-paying jobs and, by some estimates, as many as 11 million jobs, and this country now depends directly on exports. As a result, when asked why the Senate would extend fast-track authority to the President, I offered a very practical answer. In 1989, General Motors exported three automobiles to Mexico. This past year, the third full year after we reached a trade agreement with Mexico that many have criticized, General Motors exported over 60,000 vehicles. That amounts to $1.2 billion in sales and paychecks for workers in General Motors' facilities and those of their U.S. suppliers. I also explained that trade benefits all of us in many other ways. By producing more of what we are best at and trading for those goods in which we do not have a comparative advantage, we ensure that every working American has access to a wider array of higher quality goods at lower prices. In that respect, using the fast-track authority to liberalize trade acts just like a tax cut; we leave more of each consumer's paycheck in their pocket at the end of each month by ensuring that they get the highest quality goods at the lowest price. I think it is also worth underscoring that trade does not mean fewer jobs. By increasing the size of the economic pie, trade means more jobs and better pay, as the figures I noted attest. Higher wages depend on rising productivity, a growing economy and rising demand for labor. Each of those factors depend on expanding our access to foreign markets, and to expand our access to foreign markets, the President needs fast-track authority. I do not, therefore, view the question before this body as simply whether another, in a long line of bills, will pass. The question before this body is whether the United States will maintain its leadership role as the world's foremost economic power and assure our future economic prosperity. Some might ask why the United States should continue to bear that responsibility. The answer lies in our own history. It relates those times when we have forsaken our traditional policy of open commerce in favor of protectionism, as some would have us do now. The Smoot-Hawley tariff and the retaliation it engendered among our trading partners gravely deepened the Great Depression. Economic deprivation left citizens in many countries easy prey for the political movements that led directly to the Second World War. And it is worth remembering that the foundations of the current international trading system were built on the ashes of that great conflict. America led the way in establishing the current economic order as a means of ensuring that the trade policies of the past would not--and I emphasize would not--lead to similar devastating conflicts in the future. It was, in fact, the effects of the Smoot-Hawley tariff and the Depression that led to the original grant of tariff negotiating authority and the namesake of this bill: Reciprocal Trade Agreement Act of 1934. On the strength of that grant of negotiating authority, President Roosevelt and his Secretary of State Cordell Hull, a distinguished former Member of this body and a member of the Finance Committee, created the trade agreements programs that reversed the protectionist course of trade relations and laid the groundwork for the post-war economic order. Five decades and eight multilateral rounds of trade negotiations have helped us to build this burgeoning economy. The lessons of the postwar years are easy to forget. It is easy to forget that Congress' grant of trade negotiating authority to the President was one of the key components of our economic success, and led to reduction in tariffs among developed countries from an average of over 40 percent to just 6 percent at the end of the Uruguay Round. It is easy to forget that on the strength of those grants of negotiating authority, Democratic and Republican Presidents alike helped forge economic relationships with our allies that have seen us through the succeeding decades to the dawn of a new era. American firms and American workers now compete in a global marketplace for goods and services, and the economic future of each and every American now depends on our ability to meet that challenge. The changes we see in the marketplace and in our daily lives represent the benefits and costs of technological change. We should not make trade a scapegoat, as some do, for that process. Progress brings dislocation and requires adjustment. Indeed, with every expansion of our economy there are dislocations. This is an inevitable part of the economic process. Every expansion exposes inefficiency. At its most basic and personal level, economic progress occurs when an individual worker shifts from an inefficient way of doing things to a more efficient one, from stage coach driver, the original teamster, to railroad engineer, to truck driver, to pilot for an overnight air delivery system. Such transitions, of course, are not always easy. I firmly believe that the many who benefit from expanding trade and economic growth must help those who do not. But that adjustment is the inevitable effect of technological progress and economic growth, not the grant of fast-track authority. There are some who argue that the cost of these transitions is too high, that we are doing just fine economically without further trade agreements, and that there is no need for fast-track negotiating authority. My reply is simple and straightforward. We need fast-track authority now more than ever. Without the ability to take a seat at the negotiating table, we will be giving up the ability to shape our own economic destiny. If we leave it to others to write the rules for the new era of international competition, we will be leaving our economic future in their hands, and we will lose the ability to shape the rules of the new global economy to our liking. The evidence of that is already mounting. Our trading partners are proceeding without us and giving their firms a competitive advantage over American businesses in the process. Canada and Mexico have, for example, negotiated free-trade arrangements with Chile while we have debated the merits of fast track. And because Chilean tariffs average 11 percent, our firms now compete at an 11-percent disadvantage against Canadian and Mexican goods in the Chilean market. The same holds true more broadly in the rest of the rapidly growing markets of Latin America and Asia. A recent article in the Wall Street Journal described the efforts of European trade negotiation to steal a march on the United States and Latin America while the debate on fast- track authority continues here. There is even more at stake in upcoming negotiations in the World Trade Organization. We are scheduled to complete talks on opening foreign markets to our financial services, a sector in which the United States has a strong comparative advantage. Without fast-track authority, the President is unlikely to be able to conclude these terms or these talks on terms most favorable to the United States. In a little over a year, the World Trade Organization will once again take up the difficult and contentious issue of barriers to trade and agriculture. I know of no one in the agricultural sector who was entirely satisfied with the outcome of the Uruguay round talks. It is difficult, as a consequence, to conceive of a more harmful message to send our own agricultural community than derailing fast-track negotiating authority that will allow the United States to participate fully in those talks. Thus, we in this body face a simple choice--we can reject our heritage as the world's greatest trading state, or we can vindicate the faith of our forefathers and America's ability to compete anywhere in the world where the terms of competition are free and fair. We can focus only on the possible economic dislocations that occur when trade barriers are lowered, or we can look at the common good that results from economic growth. We can leave our economic fate in the hands of others, or we can step forward to shape our own economic destiny. For me, the choice is clear. We must move forward to maintain our economic leadership in the eyes of the world, as well as provide the fruits of an expanding economy to our citizens. Enacting the pending legislation is indeed essential to that effort. Our trading partners will not negotiate trade agreements with us unless we as a nation can speak with one voice. That is what this bill does. It allows two branches of the Government, the President and the Congress, to speak with one voice on trade. This bill creates a partnership between two branches that allows us to speak with one voice and does so to a degree greater than previous fast-track bills. As it has since the original grant of fast-track authority, Congress establishes the negotiating objectives that will guide the President's use of this authority. The negotiating objectives also serve as limits on the Executive, since the bill ensures that only agreements achieving the objectives set out in the bill will receive fast-track treatment. In that regard, I want to emphasize the effort we have made to ensure that the negotiating objectives restore the proper focus of the fast- track authority. This authority is granted for one reason alone, to allow the President to negotiate the reduction or elimination of barriers to U.S. trade. Authority granted in this bill is not designed to allow the President to rewrite the fundamental objectives of our domestic laws. Rather, the fast-track process applies solely to those limited instances in which legislation is needed to ensure that U.S. law conforms to our international obligations. There is one trade negotiating objective that has drawn particular attention. It relates to foreign government regulations. It includes labor and environmental rules that may impede U.S. exports and investments in order to provide a commercial advantage to locally produced goods and services. Indeed, in this provision is the concern that foreign governments might lower their labor, health and safety or environmental standards for the purpose of attracting investment or inhibiting U.S. exports. I want to emphasize that this negotiating objective is limited to affecting conduct by foreign governments in these areas. It does not authorize the President to negotiate any change in U.S. labor, health, safety or environmental laws at either the Federal or State level, nor does it authorize a negotiation of any rules that would otherwise limit the autonomy of our Federal or State governments to set their own health, safety, labor or environmental standards as they see fit. I view these provisions of the bill as protecting everyone's interests in these areas. I know of no one who is an advocate of labor or environmental interests that would want the President to be able to negotiate international trade agreements that effectively weaken U.S. standards and then submit the implementing legislation on a fast-track basis. Under this bill, no President can negotiate an agreement that raises or lowers U.S. labor or environmental standards and then submit an implementing bill for consideration on a fast-track basis. Beyond setting the specific negotiating objectives, we have also strengthened Congress' role in the trade agreement process in several ways. First, we have ensured the right of the two committees of the Congress that have general trade jurisdiction to veto at the outset any negotiation that might ultimately rely on fast-track authority if those committees disagreed with the President's objective. This check on the Executive applies to all negotiations, not merely bilateral free trade negotiations as under prior law. The only exceptions are for negotiations already underway, such as financial services negotiations in the World Trade Organization, those anticipated with Chile. Second, the bill strengthens Congress' role and the partnership with the President by requiring greater consultation by our trade negotiators than has ever occurred in the past. The bill requires the U.S. Trade Representative to consult closely and on a timely basis throughout the process and even immediately before the agreement is initialed. The bill obliges the President to explain the scope and terms of any proposed agreement, how the agreement would achieve the policy purposes and objectives set out in this bill, and whether implementing legislation on nontrade items would also be necessary since only trade provisions are entitled to fast- track treatment. Any nontrade items would be handled under the regular practices and procedures of the Senate, which allow for amendment and unlimited debate. Clearly, many in the Congress have been displeased in the past with cursory and nontimely consultation. The legislation in our report makes clear that this will no longer do. The bill provides an explicit provision allowing Congress to withdraw the fast-track procedures with respect to any agreement for which consultation has not been adequate. So not only does the legislation exhort the trade negotiators to consult; it provides sanctions if they do not adequately do so. Third, the bill carefully circumscribes the scope of the implementing legislation that can be considered under fast-track procedures. Basically, to qualify, the implementing legislation must be a trade bill. It must be limited to approving a trade agreement, which is defined to include only, one, reducing or eliminating duties and barriers and, two, prohibiting or limiting such duties or barriers. Moreover, the implementing legislation may only include provisions necessary to implement such trade agreement and provisions otherwise related to the implementation, enforcement, and adjustment to the efforts of such trade agreement that are directly related to trade. Examples of such provisions would include amendments to our antidumping laws and extensions of trade adjustment assistance such as those reauthorized with this bill. Finally, the implementing bill may include pay for provisions needed to comply with budget requirements. Since this component of the implementing legislation does not address the agreement and its implementation but is included only to satisfy interim budget requirements, some have suggested that this portion of the implementing legislation be fully amendable. The Finance Committee decided to follow previous fast-track legislation out of concern that allowing amendments to this portion would make passage of the implementing bill more difficult. There was concern about turning every implementing bill into a general tax bill, that pay for provisions might be offered by opponents to cause mischief, and that adopting amendments would create the need for conference with the House and would invite deadlock over nontrade issues. In sum, the terms of the partnership between Congress and the President are these: If the President adheres to the trade objectives expressed in the bill to which fast-track procedures apply, if he provides us an opportunity to disapprove of a specific negotiation at the outset, if he consults with us closely throughout the negotiation right up to the time the agreement is to be initialed, if the agreement is a trade agreement as defined in the bill, and if the implementing legislation contains only the trade-related items I noted, Congress agrees to allow an up-or-down bill after 30 hours of debate on the implementing legislation. Now, I think for Congress that is a very good deal. I fully appreciate the important role and responsibility this body has in American Government: The right to offer amendments, to debate the merits of an issue as long as necessary, are rights not to be laid aside lightly. That is why at every juncture we have sought to refocus the fast-track procedure on reducing trade barriers. We have done our best to make sure that matters of domestic policy remain outside the limited scope of the fast-track procedure. Such matters of domestic policy should and will remain subject to the traditional practices and procedures of the U.S. Senate. I would not support this limited exception to our Senate traditions were it not absolutely essential to our continued economic leadership around the world. This is a critically important accommodation. It is not unprecedented. Grants of similar authority for the President, in effect, exceptions to our Senate rules, have been provided in the past, dating back to the Trade Act of 1974. As recently as 1988 a Democrat-controlled Congress provided a Republican President the legal assurance that America would speak with one voice on trade. I hope that a similar spirit of bipartisanship envelops us today. Let me say in conclusion that if in 1988 my colleagues on the other side of the aisle do, for the good of this country, see fit to entrust a President from another party with this authority, that today it would help us in extending this authority to President Clinton. I yield the floor.

Mr. ROTH. Parliamentary inquiry, doesn't he have to yield the floor to get a response?

Mr. ROTH

Mr. ROTH. Mr. President, as we consider the nomination of Charles O. Rossotti to become the new Commissioner of the IRS, it's appropriate that we pause to take a good look at that agency as a whole. Let me say from the beginning, that Mr. Rossotti--who came before the Finance Committee just a little over 1 week ago--is uniquely suited to this confirmation. I am impressed by him and his background. Mr. Rossotti is a successful businessman--in touch with the needs, concerns, and risk- taking mindset of entrepreneurs. He has made his mark as a management consultant and expert on computer systems--a vital background at a time when one of the agency's major setbacks is its dysfunctional information system. I intend to vote for Mr. Rossotti's confirmation, and I encourage my colleagues to do the same. Having said this, I also want to say something about the Internal Revenue Service and its current condition. September 23 to 25, the Finance Committee held what will be the first in a series of hearings to probe an agency that is cloaked in more secrecy than the FBI and the CIA. What we learned in our initial hearings was so disturbing that the IRS--its stories of abuses, mismanagement, lack of accountability and perverse incentives--continues to captivate the attention of taxpayers everywhere. As last month ended, the House Ways and Means Committee, with the support of the White House, moved legislation to restructure the IRS. Chairman Archer is to be commended for his work. I compliment him on the job he has done in reversing the White House's position on the issue. The growing effort to restructure and reform the IRS reflects the growing concern about the agency. Congressional switchboards have been inundated with calls from Americans who have their own tales of IRS- induced woe. Likewise, we have received thousands of letters, faxes, e- mails and notes--some of them hand delivered--each detailing another story of power run amok. A recent NBC News/Wall Street Journal poll shows that 21 percent of Americans report to have had some dealings with the IRS, in addition to simply filing their taxes. Of these Americans, a full 42 percent felt they were treated unfairly. Forty-two percent. And as if these statistics aren't compelling enough, the poll found that 70 percent of Americans believe that the incidents of abuse and mistreatment by the IRS that we uncovered in our hearings occur on a regular basis. Mr. President, our hearings, these statistics--and the growing consensus we're witnessing in Washington--make it clear that something must be done to rechart the course of this powerful agency. On the Tuesday following our hearings, the Secretary of the Treasury and the Acting Commissioner of the Internal Revenue Service held a joint press conference to introduce what has been called a list of mini- initiatives. These included: keeping offices and telephone lines open one Saturday a month to address taxpayer grievances; giving taxpayers ``customer feedback surveys''; and, rewriting taxpayer notices in plain language. Beyond these reforms, the agency, itself, has suspended four IRS managers, demonstrating an increased awareness of the abuses disclosed in our three-day hearings. Each of these measures is a welcomed change. As Acting Commissioner Michael Dolan told the committee--that the IRS has made mistakes, handled taxpayer cases very badly, and caused Americans to suffer in ways they should not have. Acting Commissioner Dolan testified that the Internal Revenue Service has disrupted . . . lives without excuse. My concern, Mr. President, is that these initiatives--though welcomed--may still be insufficient to meet all the problems that affect the IRS. To understand how the Government can collect the necessary and proper amount of taxes in a way that does not harass, abuse or overly burden the American taxpayer will take a thorough examination--one that engages not only Congress, but the agency and the administration. Such a thorough examination will require 6103 authority--the authority granted to only two Members of Congress. Only by appropriately using that authority can we have a complete understanding of what must be done to properly restructure and reform the IRS. The hearings we held a few weeks ago were intended as a solid beginning in a process that must be comprehensive. It is likely that we will get only one shot at restructuring the Internal Revenue Service. We must make certain that reform legislation addresses all the problems that we are in the process of discovering. The problems--administratively and culturally--within the agency are the culmination of a history where power has been left unchecked, where objectives have been misapplied and priorities misplaced. They exist despite past reform efforts. And unless they are appropriately addressed this time around, they will continue to plague the agency. Despite past efforts at reform, Lord Acton's phrase about absolute power is still given frightening clarity in an agency that--as we have shown--resorts to unethical or illegal tactics in dealing with taxpayers. Our hearings showed how IRS employees use pseudonyms, despite the fact that they are prohibited according to the agency's manual. We showed how blue sky assessments are made against Americans-- assessments that have no basis in fact or tax law. We showed how they are used to hurt the taxpayer, or simply to raise the individual statistics of an IRS employee. We showed how statistics and quotas are used to rate employees, despite the fact that such usage is strictly prohibited, and how levies and seizures are used to measure employee performance. We listened to heartbreaking testimony by courageous witnesses-- private citizens whose lives have been torn apart by the IRS, as well as current employees of the agency who speak of horrific tactics and practices within the agency. One witness has disclosed how IRS abuse led to suicides, the break up of families, the destruction of businesses, and loss of financial credit and personal reputation. Employees testified concerning a culture of secrecy, vindictiveness, abuse, and retribution that exists within the agency, itself--often targeted against employees, themselves. And let me say here, Mr. President, the vast number of IRS employees are good, hard-working, honest men and women. Without the help of the employees themselves, our hearings would have been impossible. We discovered that IRS employees want change. They understand that change is necessary. They are performing an extremely difficult duty--an important duty--under extremely difficult circumstances. We heard of false allegations of wrongdoing against targeted employees. We learned about one senior agent who discovered an electronic listening device in the IRS employee break room, the area where agency employees are supposed to be able to relax and hold informal conversations. The room, Mr. President, had been bugged. Buttons were found under the desks of several IRS managers who were listening to their employees--violating their privacy. And as if this discovery wasn't bad enough, the senior agent who had discovered and reported the bugging devices was the one who was investigated. Our hearings, Mr. President, struck a chord with the American people. They struck a chord because Americans fear the IRS. It touches the life of every family--of every business. And our hearings struck a chord because Americans believe Congress is serious about reforming the agency--reform that must be thorough enough to address the problems that we are continuing to uncover. As I said when I opened the hearings, Congress has given the IRS awesome power in an effort to help the agency carry out its tremendous responsibility. In that Congress has given such power, it is also Congress' responsibility to ensure that it is being used prudently, constructively, and with regard for the taxpayer and employees of the agency. Working together, we must help the IRS get back to its mission statement--to collect the proper amount of tax revenue at the least cost; serve the public by continually improving the quality of our products and services; and perform in a manner warranting the highest degree of public confidence in [the IRS's] integrity, efficiency, and fairness.'' Toward achieving this, we must answer three fundamental questions that I posed during the Committee hearings: First, does the IRS have too much power? Second, if Congress were to limit that power, what expectations do we have that the new limits will be more effective than the old limits? And, third, how do we go about changing the culture of the IRS? With the painful disclosures still lingering weeks after the hearings, I believe it is safe to say that we have an answer to the first question. The IRS does have too much power. The very manner by which seizures, liens, and levies can be imposed--often without due process, and the manner in which the agency has now been shown to abuse those methods of tax collection-- suggests that the IRS's power is beyond what would be considered necessary and prudent. Now, Mr. President, we must focus on the latter two questions: How can Congress effectively limit the agency's power while allowing it sufficient authority to carry out its important responsibility? And what can we do to change the culture of the IRS? As we turn our attention to these issues and consider possible legislative remedies, I want us to keep the following four criteria in mind: First, we must restructure the Internal Revenue Service. The IRS-- like many Federal departments and agencies--was created in the industrial age. While its mission is necessary to collect the revenue Government needs to run legitimate programs and services, its organization, administration, and infrastructure must be engineered to meet the needs, demands and expectations of the information age. The IRS must be dedicated to service. It must be responsive to taxpayer needs and above political influence. Second, in restructuring the IRS, we must build into its system a mechanism that promotes accountability and continuous improvement. Our hearings raised serious problems about the lack of accountability of IRS employees. We found there to be little accountability for their actions--against taxpayers and internally, against employees of the agency. There is a need for a zero tolerance policy for improper and abusive behavior. There must be zero tolerance for failure to follow procedures and regulations. Accountability must also contain appropriate restraints on powers--especially the use of liens, levies and seizures--to assure that taxpayers are treated fairly. It must include a top to bottom review of employee evaluations, and make certain that such evaluations are not based on goals, quotas or statistics. There must be no promotion in spite of abusive behavior. And accountability certainly includes the ability to identify IRS employees. The IRS must include signatures on correspondence and do away with false identifications. Third, comprehensive reform must address the issue of due process for taxpayers. Our investigation and hearings disclose cases where innocent taxpayers had liens placed against their homes, where they had their automobiles seized and bank accounts frozen without notification or the right to appeal. Restructuring and reforming the agency must include strengthening and implementing fundamental procedures for due process, and those procedures must be followed to protect and serve the taxpayer. Fourth, and finally, reform and restructuring the IRS must result in more timely results for taxpayer problems. Our hearings showed that the IRS does not fix problems within a reasonable time frame. Change in this area must go beyond the systemic to embrace the culture within the IRS, as well. Just as in the private sector, an employee's promotion should be based on his or her ability to serve the client--to resolve problems, not create them--to assure that a fair and appropriate tax has been paid, and not to harass or intimidate the client into paying more than is due. These Mr. President are changes that can be made. Service must be the hallmark of the IRS. It is certainly the hallmark of America's finest corporations. Each day they become more effective and efficient, more service oriented and customer friendly. If they do not, they are quickly overtaken by other concerns, or they go out of business altogether. A mechanism that establishes self-sustaining improvement within the IRS is critical to the future of that agency. As I said during the hearings, just as the IRS is quick to say that no honest taxpayer should ever fear an agency audit, the IRS itself should never fear congressional oversight. Congress must continue its oversight. One discovery from our first series of hearings is that it was the first time the full Senate Finance Committee--which has IRS oversight authority--has ever held such hearings. Congress must be vigilant. Our current efforts must lay a foundation for systematic oversight. These four recommendations that have come immediately out of our hearings lay a strong foundation for the reform process. We have a consensus that something must be done. What we do must build on this momentum to assure that our effort at reform and restructuring is based on a complete understanding of the problems and necessary remedies. Toward this end, the Finance Committee will continue to investigate and hold hearings. When Congress returns next year, the Finance Committee will hold additional hearings and work to act on reform and restructuring that addresses all the problems and concerns disclosed thus far. We will work with the House, the President, and Commissioner Rossotti--once he's been confirmed--to ensure that not only is there a complete understanding of the challenges and problems currently plaguing the IRS. We must ensure that such efforts at restructuring and reforming are complete, workable, and effective in making this powerful agency more efficient, more service oriented, and less frightening to honest Americans. Mr. Rossotti has a background and the experience that will be invaluable in helping us bring about the kind of changes we believe are needed in the agency. Mr. President, I yield the floor. Mr. MOYNIHAN addressed the Chair.

Mr. ROTH. I yield myself such time as I may consume. I assure my distinguished colleague I will be very brief. I want to point out that the hearings we held earlier this year were the result of the close cooperation between the minority side and majority side. I appreciate very much the full cooperation and assistance that the distinguished Senator from New York provided us. We look forward to bringing about reform that has nonpartisan support. I think the Senator is perfectly correct. It is not a Republican, it is not a Democratic, it is a nonpartisan solution that we seek. I have to say that I do think we are very fortunate in having a distinguished individual like Mr. Rossotti to be available. I think you made a very strong case as to why he should be confirmed because he has the very qualities and the very experience that I think are essential at this particular juncture. You talked about the layered lives within the IRS. Mr. Rossotti is, fortunately, an expert on management. He is an expert on high technology. As I understand, much of his experience is giving advice and consulting with large firms as to how to become more effective, more efficient. So I think you made the point very well. I think next year, I say to my distinguished friend and colleague, it is critically important that we begin some steps to simplify the Code. That is something I want to consult with you at the staff level because it is complex. It is going to be a multiyear effort. But there is no time better suited to start this than next year. I look forward to working with you on this important matter.

Mr. ROTH. I suggest the absence of a quorum.

Mr. ROTH

Mr. ROTH. Mr. President, I ask unanimous consent that the Subcommittee on Administrative Oversight and the Courts, of the Senate Judiciary Committee, be authorized to meet during the session of the Senate on Monday, November 3, 1997, at 2 p.m. to hold a hearing in room 226, Senate Dirksen Building, on: ``Oversight of the Administrative Procedures and Examination of Antislamming Laws.''

Mr. ROTH. Mr. President, I ask unanimous consent on behalf of the Subcommittee on International Security, Proliferation, and Federal Services of the Governmental Affairs Committee to meet on Monday, November 3, at 2:30 p.m. for a hearing on Oversight of the U.S. Postal Service.

Mr. ROTH

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

Mr. ROTH

Mr. ROTH. Mr. President, the respected historian and biographer, David McCullough, recently reminded us of the importance of education. Quoting John Adams, Professor McCullough wrote: ``Laws for the . . . education of youth are so extremely wise and useful that to a humane and generous mind no expense for this purpose would be thought extravagant.'' Today we consider a law that will go a long way toward helping parents provide educational opportunities for their children--a law that will benefit students, whether they attend public schools or private. This bill, which is sponsored by our distinguished colleague Senator Coverdell, and which has broad bipartisan support, expands the education savings IRA. It allows families to save up to $2,500 a year, and to use this money to pay for educational expenses for their children attending school, from kindergarten to 12th grade. This, as John Adams would say, is a wise bill. It is one that will go a long way toward helping our families meet the rising costs associated with schooling. It will go a long way toward helping our children receive quality educations. And it will pay dividends to America, itself, as these children--better educated and more prepared--become the parents, educators, scientists, businessmen, and businesswomen of tomorrow. Not too long ago, the Finance Committee held hearings to look into the rising costs associated with education, and the pressure those costs place on parents and families. What we found was rather alarming. Today, parents are under an enormous burden when it comes to paying for education. And the costs continue to rise. We designed the Taxpayer Relief Act of 1997 to help parents and students offset some of these costs. For example: We created an education savings IRA to allow parents to save for higher education. We expanded the tax-deferred treatment of State-sponsored prepaid tuition plans. We restored the tax deduction on student loan interest. And, we extended the tax-free treatment of employer-provided educational assistance. Each of these measures will go a long way toward helping our students and their families handle the burden associated with education. Personally, I would have liked to see stronger measures in each of these areas. The Senate version of the Taxpayer Relief Act actually contained stronger provisions, and I introduced them as a separate bill the very day that we passed the Taxpayer Relief Act. The legislation we're considering today--which Senator Coverdell has introduced in the Senate--is in keeping with the spirit and emphasis of our efforts. It expands the education savings IRA that we passed in the Taxpayer Relief Act of 1997. It allows the IRA to be used to help families finance school-related needs for their children beginning in their kindergarten years and covers them all the way through high school. It raises the yearly contribution amount from $500 to $2,500. It allows savings from the IRA to be used for both public and private schools. For example, money could be withdrawn to pay for tuition, fees and books for children attending private school. It could also be withdrawn to pay for computers, uniforms, instruments, books, supplies, and other educational needs for children in public schools. In addition, Mr. President, this expanded IRA can be used for children with special needs throughout their lives. This legislation does not engender a public versus private debate. It is fair and good for families and children who elect either form of education. It is focused on middle-income families--those who are most pinched by the rising costs of education. It provides these families with the tools they need to have the freedom to select whichever form of education they feel is best for their children. According to estimates by the Joint Committee on Taxation, the vast majority of withdrawn funds from these expanded IRAs will go for public school children. Over 10 million families with children in public schools will use these educational savings accounts, as opposed to a little over 2 million families with children in private schools. The expanded education savings IRA's are completely paid for, as revenue loss will be fully offset by repealing an abusive vacation and severance pay accrual technique. Again, Mr. President, this legislation has strong bipartisan support. It is good for families, good for children, and good for the future of America. It builds on the foundation we set with the Taxpayer Relief Act of 1997. It provides flexibility as well as opportunity, and it is a necessary step toward providing parents with the tools and resources they need to help their children prepare for the future.

Mr. ROTH

Mr. ROTH. Mr. President, I rise today for myself and Senators Hagel, Thomas, John Kerry, and Akaka to introduce legislation that will grant normal trade relations to the People's Republic of China on a permanent basis when China accedes to the World Trade Organization. Today, President Jiang arrives in Washington for the first bilateral summit in 8 years. Exchange at the highest levels is critical to the maintenance of any of our important bilateral relationships. It is even more crucial in our relationship with the world's largest country, fastest growing economy, and most important rising power. Mr. President, this body has spent a great deal of energy debating United States policy toward China, cresting each year with the struggle over renewal of normal trade relations. I have always supported such renewal, and viewed the annual debate as a singularly unproductive means of moving the United States toward a coherent China policy. I say that because, besides regular high-level exchange, normal trade relations with China are essential to any coherent China policy, one that keeps our economy strong and engages Beijing in constructive reform. Currently, the United States is negotiating with China over the package of measures Beijing must implement to comply with the strict market-based rules of the World Trade Organization. Until the United States is satisfied with commitments from China on such issues as lower tariff levels and enhanced market access, and assured that Beijing can and will carry out those commitments, China will not gain entry to the WTO. The concessions China must make to gain United States approval are significant and will dramatically affect large segments of China's economy. The single most important economic benefit Beijing will derive from membership in the World Trade Organization is permanent normal trade relations--also known as most-favored-nation trading status--with every other WTO member. As a practical matter, however, every member economy of the World Trade Organization, except the United States, has already conferred on China permanent normal trade relations. Moreover, the United States has provided normal trade relations to China 1 year at a time for more than 15 years. However, until China is specifically removed from the limitations of title IV of the Trade Act of 1974, Beijing cannot receive permanent normal trade relations from the United States, whatever China's status in the WTO. The resulting ambiguity over China's trade status with the United States hinders Beijing's willingness to make the significant concessions necessary to complete a commercially viable WTO accession package. A clear signal from the United States that China will, in fact, gain permanent normal trade relations upon its accession to the World Trade Organization will provide Beijing an incentive to make those concessions. Mr. President, it is crucial that we understand that China's membership in the WTO under commercially viable terms is wholly in the interest of the United States. That is because China will be forced to open its markets significantly to American trade and investment. And more fully open markets represent the best approach to reducing our current trade deficit with China. China's membership in the World Trade Organization will also make Beijing fully subject to the market- oriented disciplines of the WTO. Finally, our bilateral trade disputes with China will be subject to multilateral resolution mechanisms, in addition to the means we already have available under United States trade law. China is the world's 10th largest trading country. It is the largest economy not in the World Trade Organization. Regardless of its WTO status, China will have a major influence on the future development of the world trading system. I believe the time has come for Congress to recognize the importance of integrating China into the global economy. Our bilateral economic relationship is the most important means we have of integrating China fully into the world economy and the international political order. The United States is one of the top five sources of foreign investment in China. That investment is not limited to the special economic zones, but now takes place throughout China and across every major industry. Our businesses are linked in investment and in trading relationships that provide a vehicle for common effort and common understanding at the most practical and personal levels. China also represents a growing economic and political influence in a region of critical importance to the United States. The Asia-Pacific region now represents over 40 percent of world trade and 53 percent of world gross national product. Trans-Pacific trade is more than twice as large as trans-Atlantic trade. The Asia-Pacific region economies, including the United States and China, are becoming increasingly interdependent. The region now represents the largest market for United States exports--over $130 billion by some estimates. The predicate to our ability to encourage China to play a constructive role in the region is our willingness to redefine our bilateral economic relationship through the WTO accession process and the normalization of our trade relations under United States law. A China more fully immersed in global capitalism is more likely to behave in ways compatible with American interests and international norms. We have seen this reality throughout Asia as countries have made major reforms in opening their economies and joined us at the table of democratic freedom. Moreover, without permanent normal trade relations, not only will we have less influence over the role China chooses to play on the global stage, we will also be left on the sidelines of China's economic growth. We cannot passively accept abuses of human rights, religious persecution, or the many other problems we have with China that must be addressed and corrected. But neither must we neglect the many issues and problems where our interests converge, including the stability in the Asia Pacific that undergirds the region's economic growth, peaceful resolution of the urgent troubles on the Korean Peninsula, and addressing the transnational concerns posed by environmental degradation, narcotics trafficking, and crime. A relationship premised on cooperation in areas of shared interest also provides us a better opportunity to discourage Beijing from transferring missiles and other arms to Iran, Iraq, Burma, and other rogue regimes, persuade China to reduce tensions in the Taiwan Straits, and encourage Beijing to maintain freedoms in Hong Kong and foster greater human rights in China. Mr. President, Congress and the American people must understand what is at stake in the bilateral relationship and how best to move China in a direction that is in our best interest and the best interest of the American and Chinese people. The summit taking place this week and this legislation, I believe, can provide the United States and China the impetus to move toward a far more mutually productive relationship.

Mr. ROTH

Mr. ROTH. Mr. President, I rise today for myself and Senators Hagel, Thomas, John Kerry, and Akaka to introduce legislation that will grant normal trade relations to the People's Republic of China on a permanent basis when China accedes to the World Trade Organization. Today, President Jiang arrives in Washington for the first bilateral summit in 8 years. Exchange at the highest levels is critical to the maintenance of any of our important bilateral relationships. It is even more crucial in our relationship with the world's largest country, fastest growing economy, and most important rising power. Mr. President, this body has spent a great deal of energy debating United States policy toward China, cresting each year with the struggle over renewal of normal trade relations. I have always supported such renewal, and viewed the annual debate as a singularly unproductive means of moving the United States toward a coherent China policy. I say that because, besides regular high-level exchange, normal trade relations with China are essential to any coherent China policy, one that keeps our economy strong and engages Beijing in constructive reform. Currently, the United States is negotiating with China over the package of measures Beijing must implement to comply with the strict market-based rules of the World Trade Organization. Until the United States is satisfied with commitments from China on such issues as lower tariff levels and enhanced market access, and assured that Beijing can and will carry out those commitments, China will not gain entry to the WTO. The concessions China must make to gain United States approval are significant and will dramatically affect large segments of China's economy. The single most important economic benefit Beijing will derive from membership in the World Trade Organization is permanent normal trade relations--also known as most-favored-nation trading status--with every other WTO member. As a practical matter, however, every member economy of the World Trade Organization, except the United States, has already conferred on China permanent normal trade relations. Moreover, the United States has provided normal trade relations to China 1 year at a time for more than 15 years. However, until China is specifically removed from the limitations of title IV of the Trade Act of 1974, Beijing cannot receive permanent normal trade relations from the United States, whatever China's status in the WTO. The resulting ambiguity over China's trade status with the United States hinders Beijing's willingness to make the significant concessions necessary to complete a commercially viable WTO accession package. A clear signal from the United States that China will, in fact, gain permanent normal trade relations upon its accession to the World Trade Organization will provide Beijing an incentive to make those concessions. Mr. President, it is crucial that we understand that China's membership in the WTO under commercially viable terms is wholly in the interest of the United States. That is because China will be forced to open its markets significantly to American trade and investment. And more fully open markets represent the best approach to reducing our current trade deficit with China. China's membership in the World Trade Organization will also make Beijing fully subject to the market- oriented disciplines of the WTO. Finally, our bilateral trade disputes with China will be subject to multilateral resolution mechanisms, in addition to the means we already have available under United States trade law. China is the world's 10th largest trading country. It is the largest economy not in the World Trade Organization. Regardless of its WTO status, China will have a major influence on the future development of the world trading system. I believe the time has come for Congress to recognize the importance of integrating China into the global economy. Our bilateral economic relationship is the most important means we have of integrating China fully into the world economy and the international political order. The United States is one of the top five sources of foreign investment in China. That investment is not limited to the special economic zones, but now takes place throughout China and across every major industry. Our businesses are linked in investment and in trading relationships that provide a vehicle for common effort and common understanding at the most practical and personal levels. China also represents a growing economic and political influence in a region of critical importance to the United States. The Asia-Pacific region now represents over 40 percent of world trade and 53 percent of world gross national product. Trans-Pacific trade is more than twice as large as trans-Atlantic trade. The Asia-Pacific region economies, including the United States and China, are becoming increasingly interdependent. The region now represents the largest market for United States exports--over $130 billion by some estimates. The predicate to our ability to encourage China to play a constructive role in the region is our willingness to redefine our bilateral economic relationship through the WTO accession process and the normalization of our trade relations under United States law. A China more fully immersed in global capitalism is more likely to behave in ways compatible with American interests and international norms. We have seen this reality throughout Asia as countries have made major reforms in opening their economies and joined us at the table of democratic freedom. Moreover, without permanent normal trade relations, not only will we have less influence over the role China chooses to play on the global stage, we will also be left on the sidelines of China's economic growth. We cannot passively accept abuses of human rights, religious persecution, or the many other problems we have with China that must be addressed and corrected. But neither must we neglect the many issues and problems where our interests converge, including the stability in the Asia Pacific that undergirds the region's economic growth, peaceful resolution of the urgent troubles on the Korean Peninsula, and addressing the transnational concerns posed by environmental degradation, narcotics trafficking, and crime. A relationship premised on cooperation in areas of shared interest also provides us a better opportunity to discourage Beijing from transferring missiles and other arms to Iran, Iraq, Burma, and other rogue regimes, persuade China to reduce tensions in the Taiwan Straits, and encourage Beijing to maintain freedoms in Hong Kong and foster greater human rights in China. Mr. President, Congress and the American people must understand what is at stake in the bilateral relationship and how best to move China in a direction that is in our best interest and the best interest of the American and Chinese people. The summit taking place this week and this legislation, I believe, can provide the United States and China the impetus to move toward a far more mutually productive relationship.