Paul Sarbanes

Mr. SARBANES

Mr. SARBANES. Did not the President and the Attorney General hold it out as a major accomplishment?

Mr. SARBANES

Mr. SARBANES. If the Senator will yield, Mr. President.

Mr. SARBANES. First of all, I join with my colleagues who have commended the majority leader for the very efficient way in which the Senate has conducted itself over the past month. We have, obviously, processed a great deal of business. I just want to say that I was very heartened to hear the majority leader state that it was his intention to address this Executive Calendar before we go out, I gather, with the anticipation of clearing, if not all of it, most of it, as I understand it. I want to underscore how important that is. If we do it now, these people can move into their positions and be functioning within the week. If we don't do it now, then it obviously has to carry over into September, and you are talking about losing 5, 6, 7 weeks before we get people on the job. I just want to thank the majority leader for his indication that he is going to address that issue before we depart.

Mr. SARBANES

Mr. SARBANES. Will the Senator from Arkansas yield some time?

Mr. SARBANES. Mr. President, just 4 years ago, in 1993, in order to reduce the deficit, the Congress, by a narrow margin, enacted a budget resolution that curtailed programs and increased taxes--taxes that fell primarily on those at the upper end of the income scale. This combination of spending restraint and revenue increases represents a logical way of dealing with the deficit issue. This approach has worked in a most impressive way. The flourishing economy has brought unemployment below 5 percent for the first time in a quarter of a century. While unemployment is at a quarter-century low, inflation is at a 31-year low. I don't know what better proof you can offer of a strong economy than the low unemployment rate and low inflation rate we are now experiencing. As a consequence of this flourishing economy, the deficit has declined on a steady basis since fiscal year 1992. It has come straight down in each succeeding fiscal year from $290 billion to $255 billion, to $203 billion, to $164 billion, to $107 billion in the fiscal year that ended last September 30, and it is now expected to be below $50 billion for the current fiscal year come this September 30. As a percentage of gross domestic product, the deficit has gone from 4.9 percent--a very worrisome figure--in 1992 to well under 1 percent for the current fiscal year, the best performance since 1974. So you have the best unemployment rate in 25 years, the lowest inflation in 31 years, the lowest deficit as a percent of GDP in 23 years. We are doing far better than any of the other major industrial countries. So it is a very impressive economic and deficit-reduction performance indeed that we are now witnessing. Given this performance, one would think that the wise policy would be to stay the course and finish the job, that we would choose to continue following the path on which we find ourselves. Today we have already enacted budget cuts and spending restraints, legislation which obviously works in the direction of deficit reduction. But now we are passing a tax cut when the objective, or so everyone states, is deficit reduction. Tax cuts obviously work against deficit reduction. And the tax cuts contained in this legislation are particularly destructive of deficit reduction in that they will grow over time in a way that may well jeopardize the goal of reaching and staying in budget balance altogether. The capital gains, inheritance, and IRA tax cuts all carry with them the potential for substantial increases in future years. In fact, the tables put out by the Joint Tax Committee itself with respect to the tax cuts contained in this conference report tell this very tale. For the first 5 years covered by this legislation--1998-2002--estate tax cuts will cost $6 billion in revenues. For the next 5 years, from 2003 to 2007, they will cost $28 billion in revenue. That is the upward trendline from the first 5 years to the second 5 years. We don't have the figures for beyond the initial 10-year period. They have not been provided to us. So we are in a sense being asked to make this decision in the dark. But it is reasonable to assume that these estate tax cuts will continue on that upward trajectory. Capital gains cuts in this conference report are listed as producing $123 billion in revenues over the first 5-year period, 1998 to 2002, and then to cost $21 billion from 2003 to 2007 with no projection beyond that point. IRA's will cost $1.8 billion in the first 5 years, $18 billion in the next 5 years. And the alternative minimum tax costs $8 billion in the first 5 years and $12 billion in the 5 years thereafter. So, as everyone can see, we are on an upward trajectory that makes it reasonable to assume that the loss in revenues over the second 10-year period will be well in excess of $0.5 trillion. This rising trend will, in effect, undercut--if not derail--the deficit reduction effort. Is it not imprudent--indeed, irresponsible--to commit to such tax cuts before we have actually achieved budget balance and before we have a more accurate and realistic view of whether it can be sustained? As the Baltimore Sun said in an editorial only yesterday, and I quote: The question remains: Will the generous tax cuts come back to haunt the country in the form of widening deficits as the tax cuts take full effect several years down the road?'' The answer, judging from the figures I have just cited, appears to be yes. Furthermore, let me note that all of this is premised on the economy continuing to function as strongly as it is functioning right now. In effect, with this tax cut, we are giving away our margin to engage in a countercyclical fiscal policy, if we have an economic downturn. What would we do in a downturn when, in fact, you might want to do a tax cut in order to stimulate the economy to help move us out of the recession when, in fact, you have proceeded to use up the margin for taking such policy action with the legislation that is here before us. Second, these tax provisions before us in this conference report are strikingly inequitable, and result in a disproportionate share of the burdens of deficit reduction being placed on lower income individuals and families. The impact of the reduction in programs contained in the spending bill passed earlier today will be felt by ordinary working people, primarily. The tax reductions contained in this legislation, far from burdening upper income individuals, will primarily benefit those at the top end of the income scale. In fact, it has been reliably estimated that the top 1 percent of the income scale will receive 30 percent of the tax benefits contained in this conference report. The top 5 percent will receive 44 percent of the benefits. And the top 20 percent, the upper quintile, will receive 77 percent of the tax benefits contained in this conference report. I repeat, the top quintile will receive 77 percent of the benefits. By contrast, the bottom 60 percent, the lowest three quintiles, will receive less than 7 percent of the benefits. So the top fifth of the income pyramid is going to get 11 times the benefit that the bottom three-fifths of the income pyramid will receive under this proposal. There is no way that can be regarded as an equitable arrangement. And, in fact, what is happening here is, in order to move toward deficit reduction, additional burdens are being put on working people. In fact, under this conference report, the people at the top end of the scale, instead of making a contribution to deficit reduction, are getting out from some of the burden which they now bear, a burden which has helped to bring the deficit down to the point at which we find ourselves today. A budget agreement and the tax measure to implement it should undertake equitable deficit reduction apportioning the burdens in a way that it is reasonably spread across the entire society, as was done in 1993 when ordinary working people made their contribution through program reductions, and those at the top end of the income scale made their contribution through tax increases. Here again we have working people bearing their share of the burden of program reduction. But the tax breaks contained in this resolution go very much to those at the upper end of the income scale, leaving working Americans bearing a far larger percentage of the load. So one must conclude this budget fails the equity test. A budget agreement and the tax program to implement it should also lead to lasting long-term deficit reduction. I don't think this legislation will do that. In fact, as I have already discussed at length, I have very deep concern that in the long term, as the Sun editorial indicated--in posing the basic question, ``Will the generous tax cuts come back to haunt the country in the form of widening deficits as the tax cuts take full effect several years down the road?''--this conference report will do serious damage to our long-term deficit reduction efforts. These tax cuts will explode in the outyears. They start exploding even within the 10-year period. Let me repeat the figures: The estate tax cuts go from a loss of revenue of $6 billion in the first 5 years to a loss of $28 billion in the next 5 years, and presumably more in the outyears. Capital gains are scored under this conference report to earn revenues--earn revenues--of $123 billion in the first 5 years, and to cost $21 billion in the next 5 years, and presumably more in the outyears. IRA's are scored here to cost $1.8 billion--less than $2 billion--in the first 5 years, $18 billion in the next 5 years, again with no projection beyond that, although everyone assumes it is on an upward trajectory. So, Mr. President, this measure before us also fails the long-term deficit reduction test, just as it fails the equity test. In effect, it does not have either of two essential attributes--equitable deficit reduction and lasting long-term deficit reduction--that should inform a tax bill. For those reasons, I must oppose the measure before us. I thank the Senator for yielding me time. Mr. BUMPERS addressed the Chair.

Mr. SARBANES. I am happy to do that. Unanimous-Consent Agreement

Mr. SARBANES

Mr. SARBANES. Mr. President, I want to join with my colleague, Senator Mikulski, in endorsing the inclusion of I-70/I-270 in Frederick, MD, on the priority list for discretionary highway funding. Anyone who drives on I-70 or I-270 in Frederick knows what a serious traffic and safety problem we have in this area. The highway narrows from 6 lanes to 4 lanes creating a bottleneck. There are missing interchanges with I-270 and U.S. 15, forcing cars and trucks onto city streets and adding to existing congestion; and the substandard condition of the highway and resulting congestion means accidents and delays for commuters, interstate truckers, tourists, businesses, and employers alike. With traffic volumes in the area projected to more than double in the next 20 years, there has been a clear need to address this problem. I want to thank the distinguished managers of the bill for their assurances.

Mr. SARBANES

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

Mr. SARBANES. I hope we could move to adoption of the amendment.

Mr. SARBANES. I ask unanimous consent that Senators Moynihan, Hatch, Jeffords, Kerry, Biden, and Leahy be added as cosponsors.

Mr. SARBANES. Mr. President, is the Sarbanes amendment now the pending business?

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

Mr. SARBANES. Mr. President, reserving the right to object, in the discussions with the chairman of the subcommittee, as I understand it, the amendment that is pending at the desk will be adopted this evening.

Mr. SARBANES. Mr. President, I object to the request, but it doesn't preclude the distinguished Senator from having her colloquy.

Mr. SARBANES. Reserving the right to object, I don't think it is necessary to set the amendment aside in order to have a colloquy.

Mr. SARBANES. Certainly.

Mr. SARBANES. Mr. President, I want to direct my colleagues' attention to section 408 of this bill, on pages 124 and 125. I am absolutely stunned to find this language in this legislation, because it provides for our withdrawal from the United Nations. What it says, if I understand it correctly, is that if the appropriation does not come up to the level of the U.N. assessment, then the United States shall withdraw from an international organization, but I assume it is primarily directed at the U.N. Let me just read a couple of paragraphs to my colleagues. The United States shall withdraw from an international organization under this section in accordance with the procedures identified for withdrawal in the treaty, pact, agreement, charter, or other instrument of that organization which establishes such procedures. Unless otherwise provided for in the instrument concerned, a withdrawal under this section shall be completed by the end of the fiscal year in which the withdrawal is required. This is a small section located in the latter part of this legislation. As you read through this bill, all of a sudden, you come across the provision. If we are going to withdraw from the U.N., we ought to have a full-scale debate. This is not a minor decision. There are some people in the country who would like to do that, but if we are going to undertake to do so we ought to have a full scale debate. What this section says as it starts off is: Notwithstanding any other provision of law, the United States shall withdraw from an international organization if the President determines that the amount appropriated or otherwise available for a fiscal year . . . is less than the actual amount of such contributions. . . . In other words, the assessments. So, if we do not appropriate the full assessment, as I understand this section, the President has to begin withdrawal procedures. There are many years when we have not met the assessment. In fact, we continue to run arrearages. We just passed legislation here that had certain conditions for paying our U.N. dues, that withheld certain amounts, required certifications, and so forth and so on. I don't know where this provision came from but it is a backdoor way of compelling our withdrawal from the United Nations. The amendment that was sent to the desk would strike this section from the bill. I urge my colleagues to support the amendment. We should not be talking about withdrawal from international organizations. We are the world's leading power. We essentially use these international organizations to serve our interests. Now we come to this section, which is sort of hidden away. The upshot of it would be to, in effect, lead us to begin withdrawal procedures from the United Nations. I don't think we even ought to have any references to withdrawal. Certainly the way this provision is written, the bill is going to force us out of the U.N. I hope the committee, upon reflection, would agree to drop the section from the bill.

Mr. SARBANES. Mr. President, could we have order in the Senate?

Mr. SARBANES. Mr. President, is it in order to send an amendment to the desk at this point?

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

Mr. SARBANES

Mr. SARBANES. Mr. President, I am pleased to join Senator D'Amato, chairman of the Senate Committee on Banking, Housing, and Urban Affairs, in introducing legislation awarding the congressional gold medal to Ecumenical Patriarch Bartholomew, the spiritual leader of approximately 300 million Orthodox Christians worldwide. The occasion of this legislation is to honor Patriarch Bartholomew's first visit to the United States as Patriarch and to recognize his outstanding contributions to world peace and understanding during his tenure as head of this ancient branch of Christianity. As a Greek-Orthodox American and member of the Greek Orthodox Cathedral of the Annunciation in Baltimore, I am particularly gratified to join in this tribute. During his American visit, which will take place from October 19 through November 17, 1997, Patriarch Bartholomew will meet with thousands of Orthodox faithful and will take the opportunity to convey his message of reconciliation to Americans of all backgrounds and beliefs. His All Holiness has been a leader in ecumenical understanding and has convened important meetings which have brought together participants of all religious backgrounds. In 1994, in cooperation with Rabbi David Schneier and the Appeal of Conscience Foundation, he cosponsored a peace and tolerance Conference in Istanbul where Christians, Jews, and Muslims joined together to discuss important and pressing issues. As spiritual head of world Orthodoxy, Patriarch Bartholomew has been a leader in the quest for peace throughout the world, particularly in Eastern Europe, the Balkans, and the Middle East. He has vigorously spoken out against extremists and those who would use violence to achieve their ends and has counseled respect for all peoples, irrespective of their nationality and religion; his ministry has been a call to our best virtues. From his historical seat in Istanbul, Turkey, Patriarch Bartholomew has served as a mediator between East and West, Christians and Muslims, and as a force for openness and tolerance in the newly emerging independent countries of Eastern Europe. As he pursues the goal of peace, Patriarch Bartholomew is equally vigorous in his desire to preserve and promote the earth's environment as a reflection of God's creation. Working with the European Commission, the Worldwide Fund for Nature, and his Royal Highness Prince Philip, he has cosponsored significant international conferences on the environment, including one scheduled for this fall on the future ecological health of the Black Sea. I believe it is most fitting that the visit and the accomplishments of Patriarch Bartholomew should be recognized and honored by this gold medal as it will reflect the appreciation of the American people for his ministry of peace and reconciliation. I am also pleased to join Senator D'Amato in submitting a concurrent resolution providing for the use of the rotunda for a ceremony honoring Patriarch Bartholomew.

Mr. SARBANES

Mr. SARBANES. Mr. President, I am pleased to join Senator D'Amato, chairman of the Senate Committee on Banking, Housing, and Urban Affairs, in introducing legislation awarding the congressional gold medal to Ecumenical Patriarch Bartholomew, the spiritual leader of approximately 300 million Orthodox Christians worldwide. The occasion of this legislation is to honor Patriarch Bartholomew's first visit to the United States as Patriarch and to recognize his outstanding contributions to world peace and understanding during his tenure as head of this ancient branch of Christianity. As a Greek-Orthodox American and member of the Greek Orthodox Cathedral of the Annunciation in Baltimore, I am particularly gratified to join in this tribute. During his American visit, which will take place from October 19 through November 17, 1997, Patriarch Bartholomew will meet with thousands of Orthodox faithful and will take the opportunity to convey his message of reconciliation to Americans of all backgrounds and beliefs. His All Holiness has been a leader in ecumenical understanding and has convened important meetings which have brought together participants of all religious backgrounds. In 1994, in cooperation with Rabbi David Schneier and the Appeal of Conscience Foundation, he cosponsored a peace and tolerance Conference in Istanbul where Christians, Jews, and Muslims joined together to discuss important and pressing issues. As spiritual head of world Orthodoxy, Patriarch Bartholomew has been a leader in the quest for peace throughout the world, particularly in Eastern Europe, the Balkans, and the Middle East. He has vigorously spoken out against extremists and those who would use violence to achieve their ends and has counseled respect for all peoples, irrespective of their nationality and religion; his ministry has been a call to our best virtues. From his historical seat in Istanbul, Turkey, Patriarch Bartholomew has served as a mediator between East and West, Christians and Muslims, and as a force for openness and tolerance in the newly emerging independent countries of Eastern Europe. As he pursues the goal of peace, Patriarch Bartholomew is equally vigorous in his desire to preserve and promote the earth's environment as a reflection of God's creation. Working with the European Commission, the Worldwide Fund for Nature, and his Royal Highness Prince Philip, he has cosponsored significant international conferences on the environment, including one scheduled for this fall on the future ecological health of the Black Sea. I believe it is most fitting that the visit and the accomplishments of Patriarch Bartholomew should be recognized and honored by this gold medal as it will reflect the appreciation of the American people for his ministry of peace and reconciliation. I am also pleased to join Senator D'Amato in submitting a concurrent resolution providing for the use of the rotunda for a ceremony honoring Patriarch Bartholomew.

Mr. SARBANES

Mr. SARBANES. Mr. President, I rise in strong support for the amendment now pending. The National Endowment for Democracy has done some extremely effective work around the world in strengthening and assisting in the development of democratic institutions and protecting individual rights and freedoms. Endowment programs have assisted grassroots organizations and individuals in more than 90 countries across the globe. A great number of distinguished individuals have walked through the Halls of the Capitol over the years whom we have recognized as fighters for human rights, freedom, and democracy. They are leaders from abroad who have come to visit the U.S. Congress as a sign of their respect for American democracy. They have led the way toward democracy and human rights, and freedom in their own countries. In expressing their support for the National Endowment for Democracy, they have underscored the critical assistance that they have received from it, which made it possible for them to pursue democratic efforts in their own countries. The National Endowment for Democracy has enjoyed broad bipartisan support since it was established in 1983 under the Presidency of Ronald Reagan. Seven former Secretaries of State--James Baker, Lawrence Eagleburger, Alexander Haig, Henry Kissinger, Edmund Muskie, George Shultz, and Cyrus Vance--wrote to the leadership of the Congress in 1995 to express their support for continuing funding of the National Endowment for Democracy. Their letter and stated, and I quote: During this period of international change and uncertainty, the work of the NED continues to be an important bipartisan but nongovernmental contributor to democratic reform and freedom. We consider the nongovernmental character of the NED even more relevant today than it was at NED's founding 12 years ago. The NED serves an important role because of the fact that it can operate as a nongovernmental entity. It can support nongovernmental organizations which, in turn, provide opportunities that would not otherwise be available if these activities were undertaken by a government or governmental agency. This is an extremely important dimension to the work of the National Endowment for Democracy. Former national security advisers of previous administrations and the President's current Adviser for National Security Affairs, Sandy Berger, have expressed their strong support for the NED. Mr. Berger noted in his letter to Members of Congress this week: I welcome the opportunity to reaffirm strong administration support for the NED and our opposition to any effort to reduce or eliminate NED funding . . . The President is a dedicated supporter of the NED, as it has been in the forefront of U.S. efforts to promote democracy, civil society and the rule of law around the world. Moreover, it has done so at very little cost to the American public, leveraging modest resources with great effectiveness. The sweeping and profound changes resulting from the end of the cold war provide ample reason for why we continue to need institutions like the NED, which can operate in a cost-effective manner and at the same time promote our interests and values. Many of the new democracies that have emerged from the implosion of the Soviet Union and the collapse of the Iron Curtain have benefited from the assistance NED and its grantees have provided. Those who paved the way for freedom and democracy in their own countries have consistently testified as to the importance of NED support to the success of their efforts. In fact, President Vaclav Havel of the Czech Republic stated that ``the National Democratic Institute was one of the first supporting actors in the democratic revolution in our country.'' And others have made similar statements with respect to the activities of the two party organizations, the business groups, and the labor groups that are the core grantees of NED. This is a program that is working. It is producing significant results around the world. I strongly support this amendment, and urge my colleagues to adopt it. I yield the floor. Mr. BUMPERS addressed the Chair. Several Senators addressed the Chair.

Mr. SARBANES. Mr. President, I object.

Mr. SARBANES

Mr. SARBANES. Mr. President, I rise today in support of an amendment concerning rural housing reauthorizations for the Rural Housing Service of the Department of Agriculture. I want to commend Chairman Cochran and Ranking Member Bumpers for their tireless efforts and cooperation in bringing the Agriculture Appropriations Act of 1998 to the floor for Senate consideration. Given the uncertainty of housing reauthorization legislation this year, I have joined with Banking Committee Chairman D'Amato to request the inclusion of an amendment that would reauthorize several rural housing programs in the 1998 Agriculture appropriations bill. This amendment will allow the section 515 and section 538 rural rental housing programs to continue providing multifamily housing developers with direct loans and loan guarantees to build or rehabilitate affordable rental housing. In addition, this amendment reauthorizes for 1 year the nonprofit set-aside which reserves 10 percent of section 515 funds for nonprofit applicants, as well as the Underserved Areas Program which targets funds to the 100 most underserved rural communities. This amendment also changes the section 515 loan term from 50 to 30 years, while allowing the loan to be amortized over a 50-year period. This change permits the administration's proposed program level in the budget of $150 million to be supported by almost 15 percent less in budget authority. Without these housing programs targeted to very-low and low-income rural residents, there exists few resources in rural America to help alleviate the shortage of affordable rental housing. Rural areas still lack adequate access to commercial credit to finance affordable multifamily housing. The direct benefits to rural communities from the section 515 and section 538 programs includes increased jobs and local taxes in addition to attracting and maintaining businesses. This is a direct and vital link to the overall health and stability for rural communities. While the Rural Housing Service has done much to bring decent, safe, and affordable housing to rural America, many rural families are still in need of assistance. Rural renters experience housing problems such as overcrowding, cost overburdens, and substandard facilities. There are 1.6 million rural households that live in housing without adequate plumbing, heating, or kitchen facilities. Nearly 2.5 million are paying more than 50 percent of their incomes for housing costs, and another 3 million pay between 30 and 50 percent. As we encourage families to move from welfare to work, it is even more essential that we build on the vital housing programs that provide the safety net which will give the working poor an opportunity to live in affordable, decent housing. Again, I would like to thank Chairman Cochran, Ranking Member Bumpers, and the rest of my colleagues for their swift action to ensure that essential rural rental housing programs receive authorization to continue serving low-income families for another year. I urge the adoption of this amendment.