Paul Sarbanes

Mr. SARBANES

Mr. SARBANES. Mr. President, will the chairman yield?

Mr. SARBANES. Mr. President, I want to take a few minutes to lay out why, on balance, I believe the enactment of this conference report is in the public interest. First, the legislation gives the regulators significant authority to supervise newly affiliated financial companies and protect the safety and soundness of the financial system. I started with the safety and soundness issue because I think it is paramount. I think the U.S. economy, in large part, depends on the confidence in the safety and soundness of our economic and financial institutions. If we are to lose that confidence, which exists not only in this country, but around the world, I think we would be in severe difficulties in a very broad and fundamental economic sense. So safety and soundness, I think, always has to be at the very top of the list of our concerns. Specifically, section 114 of the conference report provides the Federal Reserve, the Comptroller of the Currency, and the FDIC authority to place restrictions or requirements on relationships or transactions between a bank and an affiliated company or a subsidiary, appropriate to prevent an evasion of any provision of law applicable to depository institutions, or--and I quote the bill now, soon to become a statute, I hope--``to avoid any significant risk to the safety and soundness of depository institutions, or any Federal deposit insurance fund, or other adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interest, or unsound banking practices.'' This important and broad delegation of authority to require ``firewalls'' to protect the federally insured bank from nonbank affiliates or subsidiaries emphasizes the important burden being placed on the regulators by this legislation to develop a coherent, responsible, safe and prudent approach to the supervision of the financial system. The permission contained herein for the expansion of activities calls for vigilant supervision of the financial system by the regulators. The legislation, in my view, provides the regulators the authority to do the job, but the responsibility will be on them to carry it out. So this ``firewall'' provision that is in the conference report, which was actually taken from the House bill--we had no comparable provision on this side--gives the regulators the authority, I believe, to ensure a responsible, safe, and prudent approach. But it places, I think, a significant responsibility upon the regulators to exercise this authority in a way that it ensures that these objectives are realized. This legislation also codifies a principle of functional regulation under which bank activities are generally supervised by bank regulators, securities activities by securities regulators, and insurance activities by insurance regulators. New financial activities are the joint responsibility of the Federal Reserve and the Treasury, which also serve as the umbrella regulators respectively of a financial holding company or a bank and its operating subsidiaries. Now, secondly, the conference report strengthens the separation that currently exists in our financial system between banking and commerce. Financial authorities, including Federal Reserve Chairman Alan Greenspan, Treasury Secretary Larry Summers, former Treasury Secretary Bob Rubin, former Federal Reserve Board Chairman Paul Volcker, and many other commentators, such as Henry Kaufman, Gerald Corrigan--and the list goes on--have expressed strong concerns about the mixing of banking and commerce, particularly in light of the recent experiences in Asia. The conference report, therefore, closes the so-called unitary thrift holding company loophole to the separation of banking and commerce. The report before us prohibits all unitary thrift holding companies from having commercial affiliates. In addition, it prohibits exists unitary thrift holding companies from being transferred to commercial companies. This prohibition on transfer to commercial companies was added to the Senate bill on the floor by an amendment offered by my colleague, Senator Johnson of South Dakota, and it carried in the Senate by a 2-to-1 vote and was subsequently adopted by the conference committee. In addition, the conference report contains important limitations similar to the House bill on merchant banking activities and activities complementary to financial activities that are designed to maintain the separation of banking and commerce. In regard to merchant banking, the conference report allows a financial holding company to retain a merchant banking investment only for a limited period of time and generally prohibits the company from routinely managing or operating a nonfinancial company held as a merchant banking investment. Importantly, the conference report also gives the Federal Reserve and the Treasury the authority to jointly develop implementing regulations on merchant banking activities that they deem appropriate to further the purposes and prevent evasions of the conference report and the Bank Holding Company Act. Under this authority, the Federal Reserve and the Treasury may define relevant terms and impose such limitations as they deem appropriate to ensure that this new authority does not foster conflicts of interest or undermine the safety and soundness of depository institutions, or the conference report's general prohibition on the mixing of banking and commerce. In regard to activities determined by the Federal Reserve Board to be complementary to financial activities, it is expected that such activities will not be significant in size, and determinations will be made on a case by case basis. Third, with respect to consumer protections, the conference report contains important protections for consumers regarding the sale of uninsured financial products by banks. The conference report provides the Securities and Exchange Commission significant authority to supervise the securities activities of banks and includes several crucial investor protections. The conference report incorporates provisions to ensure the SEC can adequately regulate bank-sponsored mutual funds. These provisions are necessary to ensure that the SEC has adequate information about and inspection authority over bank investment advisers to inspect for trading violations, such as front- running and personal trading. The provisions also address potential significant conflicts of interest that may impact banks that advise registered investment companies. The conference report also ensures SEC protections for new hybrid products and for most sales of securities by banks. It also includes protections for sales of sophisticated securities instruments to retail investors. Similarly, the conference report requires the Federal banking agencies to issue consumer protection regulations within one year, applicable to the sale of insurance by any bank or other depository institution, or by any person on behalf of such an institution. The regulations will give protection over several aspects of insurance sales, such as sales practices, including anti-tying and anti-coercion rules; advertising; location, limiting sales to an area physically segregated from where deposits are taken; and qualification and licensing of sales personnel. The conference report also preserves important authorities for the States to provide consumer protection on bank sales of insurance products. These protections were in the House bill and were included in the Senate bill by an amendment offered by Senator Bryan during the markup in the Banking Committee. It was in the legislation that came to the Senate floor, and was passed by the Senate. Fourth, with respect to the operating subsidiary issue, the conference report contains a provision authorizing banks to conduct certain new activities through an operating subsidiary of the bank. I will not go into this provision in detail. I simply note that it was worked out between the Treasury and the Federal Reserve over an extended period of time, and was crucial to the Administration giving its support to this bill. It will give financial services firms some latitude in choosing the corporate structure that best serves their customers. In regard to the Community Reinvestment Act, this legislation establishes a fundamental principle: No bank or financial holding company can engage in any new activities authorized by the bill, or engage in any new merger or acquisition authorized by the bill, if the bank or financial holding company does not have a satisfactory CRA rating. This requirement on a bank or financial holding company for a satisfactory CRA rating in order to benefit from the new powers provided by the legislation was necessary to preserve the relevance of CRA in the new financial world which will be created by this bill. Without it, a bank's CRA performance would have become irrelevant to what will likely be the most intense area of activity in the financial industry. And the acceptance of this provision was essential for the Administration, and indeed for the Democratic members of the conference committee, to support the conference report. The conference report does not contain two provisions with respect to CRA that were in the Senate bill, and I think would have been very damaging. One would have provided a safe harbor for banks from public comment on their CRA performance when they submitted an application to a regulator. The second exempted rural banks with assets under $100 million from CRA altogether. The conference report does contain a provision providing for banks with assets under $250 million to have CRA examinations once every 4 years if they have a satisfactory rating, and once every 5 years if they have an outstanding rating. The regulators do retain authority to examine a bank at any time for reasonable cause. The conference report also contains a provision requiring public disclosure and reporting on CRA agreements. The conference report explicitly directs the regulators to ensure that regulations prescribed by the agencies do not impose an undue burden on parties. In this regard, the statement of managers specifically provides that the reporting requirements of the provision can be fulfilled by the submission of a group's annual audited financial statement, or its Federal income tax return. This was a provision that was intensely discussed and negotiated. The concept of public disclosure which was in the Senate bill was accepted by the conferees. The question that had to be worked out was exactly what did that mean and what was the reach of it and the requirements of it. As with many other provisions of this bill, the regulators will carry a particular responsibility to implement these provisions in a reasonable and responsible way. Finally, let me point out where the conference report does not fully address two important areas. First, I do not think that the right of an individual to financial privacy is adequately protected. I expect that issue will be discussed at some length by some of my colleagues in the course of the debate on this conference report. Second, we have not dealt with what I think is a very important issue of what is called ``too big to fail.'' On the issue of privacy, last January I introduced the ``Financial Information Privacy Act of 1999'' together with a number of my colleagues, some of whom serve on the Banking Committee. I am frank to say I believe the central issue in this debate on privacy boils down to answering the question: To whom does this personal financial information belong, the individual, or the financial institution? I think upon reflection most people would answer the individual. This legislation introduced earlier this year would have given an individual the right to ``opt out'', which would mean the right to say ``no'' to the sharing of or selling of his or her personal information to an affiliate within a financial services holding company. It also would have required an ``opt-in'' for the selling of such information to a third party. An ``opt-in'' would require a customer's informed consent before selling or sharing confidential customer information with an unaffiliated third party. Neither of these provisions are included in the legislation before us. However, we were able to include in the conference report an amendment that I proposed which ensures that the Federal Government will not preempt stronger State financial privacy laws that exist now or may be enacted in the future. As a result, States will be free to enact stronger privacy safeguards if they deem it appropriate. I am very frank to say that I think Americans are becoming increasingly concerned about this issue of financial privacy protection. I predict that this issue of privacy will not go away with the passage of this legislation. I know Senators Bryan and Shelby took a very strong lead in the conference committee on the privacy issue, along with a number of their colleagues from the House. Many of those who were very supportive of that effort will want to speak at some length on this subject during the discussion of this conference report, and they have specifically reserved time in order to do that. The conference report also fails to deal with the creation of institutions which may be deemed ``too big to fail.'' The legislation before us substantially transforms the structure of the financial services industry by eliminating restrictions on the affiliations of banks, insurance companies, and securities firms. Despite the benefits which may accrue from such affiliations, there continue to be legitimate concerns that mergers permitted under this bill would create financial organizations so large that they would be deemed ``too big to fail.'' Organizations as diverse as the American Enterprise Institute, the Brookings Institution, and the former Bankers Roundtable have repeatedly encouraged us to address the ``too big to fail'' problem by requiring large banking organizations to back some portion of their assets with subordinated debt. Regrettably, the conference report contains no such mandatory subordinated debt requirement or other market policing mechanisms. The report does contain an 18-month study to be conducted by the Federal Reserve Board and the Treasury Department regarding the use of subordinated debt to protect the financial system, and to protect federally ensured deposit funds from the ``too big to fail'' institutions. While obviously I think it would have been better to address this issue directly in the legislation, I certainly hope that 18 months from now, if not sooner, the Federal Reserve Board and the Treasury will present the Congress with a joint recommendation together with legislative proposals on how best to deal with the issue of ``too big to fail.'' In trying circumstances, the consequences of failing to deal with this issue could be extremely severe. I am hopeful that the Federal Reserve Board and the Treasury will come back with a joint set of recommendations we can place into law. These issues--dealing comprehensively with privacy and with ``too big to fail''--remain to be addressed as we move into the future. Finally, I want to make a brief observation about the context in which we are working and have to consider this legislation. The need for this legislation has been influenced by the marketplace. In seeking to respond to the financial needs of their customers, securities firms have offered bank-like products, banks have offered insurance-like products, and both banks and insurance companies have engaged in significant securities activities. This blurring of the lines among banks, securities, and insurance products has been taking place in the marketplace since at least the mid-1970s. Those who look at this endeavor and say we don't want to allow any of this affiliation to take place need to appreciate and understand, it has been happening in a significant way. A development which began the blurring of the distinction between securities and bank products was the offering by securities firms of cash management accounts. That development added a bank deposit transaction feature to a securities account. It allows customers to write checks on their money market funds, enabling those accounts to function much like the traditional checking account. Subsequently, marketplace changes, regulatory actions, and court decisions have enabled banks to sell insurance and to develop annuity products that have insurance characteristics but are defined as bank products. On the commercial banking side, interpretations of existing laws have brought about a significant shift in ownership of firms underwriting securities. As of this past September, all the top 20 bank holding companies had what are known as section 20 subsidiaries that may engage under certain conditions in securities underwriting. Updating our financial services laws is not only important to enable financial services firms to respond to the financial service needs of their customers, it is also important in order to ensure that appropriate regulatory oversight is maintained in the evolving marketplace. In my view, this conference report will put in place a rational legislative framework for the future evolution of the U.S. financial services industry. It is a framework that will preserve safety and soundness, maintain the separation of banking and commerce, provide meaningful consumer protections, and preserve the relevance of the Community Reinvestment Act. I urge my colleagues to support this legislation. I extend my congratulations to the chairman of the Banking Committee, Senator Gramm. It has been a long ride, as one might say, with its ups and downs. However, the ship has been brought into port, so to speak. With the various accommodations worked out in the course of the conference, I expect the very close vote on the Senate bill will shift very markedly in the direction of support for this conference report. I echo Senator Gramm's commendation of House Banking Committee Chairman Leach who was chairman of the conference committee. Chairman Leach showed great fairness and calm under pressing circumstances. He kept the process working at times when it might otherwise have been in some jeopardy. Congressman LaFalce as ranking member of the House Banking Committee, Congressman Bliley and Congressman Dingell, the chairman and ranking member of the House Commerce Committee, and indeed all the members of the conference who in one way or another played very constructive roles in trying to work this situation out deserve commendation. I am particularly grateful to my Democratic colleagues on the Banking, Housing, and Urban Affairs Committee for working through and joining together as we sought to achieve legislation that would meet our desires and meet the perceptions of the Administration and therefore bring about a Presidential signature at the end of this process. All Members on both sides of the aisle did not want to go through this very extended process and then have it vetoed and have to start all over again. Fortunately, we have accomplished that. Federal Reserve Board Chairman Greenspan played a significant role, as did the members of his staff who are extremely able, as did Treasury Secretary Summers and the members of his Treasury staff. I also acknowledge the role Bob Rubin has played in shaping where we are today, although he is no longer Secretary of the Treasury. Chairman Gramm appropriately recognized the role Chairman D'Amato played in moving this legislation along. The Chairman of the SEC, Arthur Levitt, was important on the investor protection provisions. Finally, I thank the staff on this side of the aisle. Chairman Gramm has recognized staff on his side of the aisle. I have high respect for their commitment and their competency. I don't think people fully appreciate the kind of dedication staff provides when Members are working through a very complex, complicated piece of legislation such as this. In this we have not only the concepts on which to reach agreement, but we have to work the concepts in the statutory language in a way that embodies what the understanding was that will also work in a technical and complex way. We are dealing with the sort of issues where, if it does not work, there are problems. I am hopeful we won't have to come back with extended technical corrections with respect to this legislation. If that is the case, obviously, we bow our heads to the staff. On our side, I acknowledge our staff director Steve Harris, Marty Gruenberg, Patience Singleton, Dean Shahinian, Mitchell Feuer, Michael Beresik, Jonathan Miller, Yael Belkind, Erin Hanson, and Christen Schaefer. That is a long list, but it is a long list because some of the people are no longer on the staff. This issue has been going on long enough that people have come and gone. A number of those I listed are no longer on the staff, but they were here through at least part, if not a lot, of this effort. They made a significant contribution. It would be an oversight not to reference them. Tomorrow, obviously, we will resume the debate. We will have the opportunity to hear from a number of our colleagues on this issue. I anticipate we will be able to go to a vote by midafternoon on this very important piece of legislation. I yield the floor. Exhibit 1 Department of the Treasury, Washington, DC, November 3, 1999. Hon. Tom Daschle, U.S. Senate, Washington, DC. Dear Tom: The Administration strongly supports passage of S. 900, the Gramm-Leach-Bliley Act of 1999. This legislation will modernize our financial services laws to better enable American companies to compete in the new economy. The bill makes the most important legislative changes to the structure of the U.S. financial system since the 1930s. By allowing a single organization to offer any type of financial product, the bill stimulate competition, thereby increasing choice and reducing costs for consumers, communities and businesses. Americans spent over $350 billion per year on fees and commissions for brokerage insurance, and banking services. If increased competition yielded savings to consumers of even 5 percent, they would save over $18 billion per year. Removal of barriers to competition will also enhance the stability of our financial services system. Financial firms will be able to diversify the product offerings and thus their sources of revenue. They also will be better able to compete in global financial markets. The President has strongly supported the elimination of barriers to financial services competition. He has made clear, however, that any financial modernization bill must also preserve the vitality of the Community Reinvestment Act, enhance consumer protection to the privacy and other areas, follow financial services firms to choose the corporate structure that best serves their customers, and continue the traditional separation of banking commerce. As approved by the Conference Committee, S. 900 accomplishes each of these goals. With respect to CRA, S. 900 establishes an important, prospective principle: banking organizations seeking to take advantage of new, non-banking authority must demonstrate a satisfactory record of meeting the credit needs of all the communities they serve, including low and moderate income communities. Thus, S. 900 for the first time prohibits a bank or holding company from expanding into newly authorized businesses such as securities and insurance underwriting unless all of its insured depository institutions have a satisfactory or better CRA rating. Furthermore, CRA will continue to apply to all banks, and existing procedures for public comment on, and CRA review of, any application to acquire or merge with a bank will be preserved. The bill offers further support for community development in the form of a new program to provide technical help to low- and moderate-income micro-entrepreneurs. The bill includes other measures affecting CRA that have been narrowed significantly from their earlier Senate form. The bill includes a limited extension of the CRA examinational cycle for small banks with outstanding or satisfactory CRA records, but expressly preserves the ability of regulators to examine a bank any time for reasonable cause, and does not affect regulators ability to inquire in connection with an application. Finally, the bill includes a requirement for disclosure and reporting of CRA agreements. We believe that the legislation and its legislative history have been constructed to prevent undue burdens from being imposed on banks and those working to stimulate investment in underserved communities. In May, the President stressed the importance of adopting strong and enforceable privacy protections for consumers financial information. S. 900 provides protections for consumers that extend far beyond existing law. For the first time, consumers will have an absolute right to know if their financial institution intends to share or sell their personal financial data, and will have the right to block sharing or sale outside the financial institutions' corporate family. Of equal importance, these restrictions have teeth. S. 900 gives regulatory agencies full authority to enforce privacy protections, as well as new rulemaking authority under the existing Fair Credit Reporting Act. The bill also expressly preserves the ability of states to provide stronger privacy protections. In addition, it establishes new safeguards to prevent pretext calling, by which unscrupulous operators seek to discover the financial assets of consumers. In sum, we believe that this reflects a real improvement over the status quo; but, we will not rest. We will continue to press for even greater protections--especially effective choice about whether personal financial information can be shared with affiliates. We are pleased that the bill promotes innovation and competition in the financial sector, by allowing banks to choose whether to conduct most new non-banking activities, including securities underwriting and dealing, in either a financial subsidiary or an affiliate of a bank. The bill also promotes the safety and soundness of the financial system by enhancing the traditional separation of banking and commerce. The bill strictly limits the ability of thrift institutions to affiliate with commercial companies, closing a gap in existing law. The bill also includes restrictions on control of commercial companies through merchant banking. Although the Administration strongly supports S. 900, there are provisions of the bill that concern us. The bill's redomestication provisions could allow mutual insurance companies to avoid state law protecting policyholders, enriching insiders at the expense of consumers. The Administration intends to monitor any redomestications and state law changes closely, and return to the Congress if necessary. The bill's Federal Home Loan Bank provisions fail to focus the System more on lending to community banks and less on arbitrage activities short-term lending that do not advance its public purpose. The Administration strongly supports S. 900, and urges its adoption by the Congress. Sincerely, Lawrence H. Summers.

Mr. SARBANES. If the chairman will yield, I want to echo the chairman's comments. I say to our colleagues, if Senators will come early on and we can perhaps sequence them, we can give them more time than if some of the time is used up in quorum calls. Waiting for people to come becomes lost time. Then, when people come over, we may be very limited in how much time we have available to give them. If Senators have statements they want to make of some consequence, we very much hope they will come over and do that.

Mr. SARBANES

Mr. SARBANES. Mr. President, I rise today to express my serious concern that House and Senate negotiators have agreed to delay for one year almost all of the proposed increase in the National Institutes of Health (NIH) budget for FY 2000. I strongly disagree with this approach to balancing the budget. Fully funding biomedical research at the NIH should be one of our highest priorities, and I intend to oppose proposals that would delay funding for the NIH or fail to provide sufficient funding to ensure continued advancement in the field of biomedical research. The proposed delay in NIH's authority to use $7.5 billion of its FY 2000 funding will mean that no new grants could be made until the end of the fiscal year. Thus, a one-year freeze will be put on all new biomedical research. Moreover, some on-going grants will have to be short-funded. For those suffering from life-threatening diseases, a one-year delay could be devastating. We cannot imperil continued progress in an area as important as biomedical research. As our Nation searches for ways to improve health care for all its citizens, the need to ensure stability and vitality in biomedical research programs is increasingly imperative. Biomedical research has fundamentally changed our approach to treating disease and illness and has revolutionized the practice of medicine. Through the NIH, the Federal government has been the single largest contributor to the recent advances made in biomedical research, and NIH research has played a major role in the key medical breakthroughs of our time. Biomedical research at the NIH has also contributed significantly to the growth of this Nation's biotechnology, medical device, and pharmaceutical industries. Many of the new drugs and medical devices currently in use were developed based on biomedical research supported by the NIH. NIH research has paved the way for the development of pharmaceutical, biotechnology, and medical device industries that have created millions of high wage jobs. The promise of continued breakthroughs in the eradication of disease and the overall improvement in public health are contingent upon our commitment to supporting our scientists and researchers with adequate tools and resources. However, today, only one of three approved research proposals can be funded. We must maintain our commitment to achieving full funding for biomedical research by FY 2002. Last year, we provided NIH with a downpayment on the resources it will need to take full advantage of the overwhelming opportunities for scientific advancement currently available in the field of biomedical research. This year, again we started on the right track by including another fifteen percent increase in the NIH budget. However, the proposed one percent overall budget cut will have a dramatic impact on the grant-making capacity of the NIH. As a result of this cut, 500 to 550 fewer grants will be awarded by the NIH next year. This most recent proposal to require that the NIH delay spending approximately $2 billion of its FY 2000 funding until FY 2001, essentially revokes the entire increase for next year and goes back on our promise to substantially increase NIH funding by 2002. This additional funding cut will disrupt and delay research fundamental to saving lives and improving public health. It will also critically undermine our progress toward securing a strong and stable funding stream needed to ensure continued advances in biomedical research. The proposed delay in NIH funding for FY 2000 is unconscionable. I will oppose it, and I urge the President to veto any conference report that includes this proposal.

Mr. SARBANES

Mr. SARBANES. Mr. President, I rise today to join my colleagues in honoring a distinguished public servant and a revered Member of the United States Senate, Senator John Chafee, who died Sunday evening at Bethesda Naval Hospital. While John Chafee was elected to the Senate in 1976, his public service began years before when he interrupted his education at Yale University to enlist in the Marine Corps during World War II, serving in the original invasion forces at Guadalcanal. He later returned to complete his education, receiving a bachelors degree from Yale in 1947 and, in 1950, a law degree from Harvard. In 1951, John Chafee was called again to serve his country, returning to active duty to command a rifle company in Korea. Later, John Chafee served six years in the Rhode Island House of Representatives, where he was elected Minority Leader. He served as Governor of Rhode Island for three terms and in 1969 was appointed Secretary of the Navy. As a Senator, John Chafee continued his proud legacy of leadership and accomplishment. I worked with Senator Chafee perhaps most closely in the U.S. Senate in his capacity as Chairman of the Environment and Public Works Committee where he labored tirelessly on behalf of many critical environmental initiatives, including efforts to strengthen the Clean Air Act and the Safe Drinking Water Act. Senator Chafee has been recognized for his important contributions in the area of environmental protection throughout his service in the U.S. Senate and has received nearly every major environmental award. He was also a senior member of the Senate Finance Committee where he worked hard to expand health care coverage for women and children and to improve community services for persons with disabilities. John Chafee was a well-respected member of this body who engendered the affection of every member with whom he served. He had a unique ability to achieve consensus under very difficult circumstances. His unfailing courtesy and civility provided a positive and unifying force in the Congress which will be sorely missed by his colleagues on both sides of the aisle. The Senate was a better place because of John Chafee and his devoted public service. I would like to take this opportunity to pay tribute to him and to extend my deepest and heartfelt sympathies to his family.

Mr. SARBANES

Mr. SARBANES. Mr. President, I want to extend my congratulations and thanks to both Senators Bond and Mikulski for the conference report they are presenting us today. This bill makes constructive strides toward improving the housing situation for many poor and low income working families. Though the Chairman and Ranking Member were under extremely tight budgetary constraints, they stood together and worked hard to bring us a conference report which restores important funding. They have presented us with a strong bill that invests in our nation's low income housing stock and continues our efforts to aid struggling communities in their redevelopment efforts. It is my understanding that this bill moved forward with the support of members from both sides of the aisle. I think that the Chairman and Ranking Member should be commended for this as well. It is notable when legislation receives such even handed, bipartisan support. Let me highlight a few of the programs that received increased funding in this year's appropriations bill. It includes 60,000 new section 8 vouchers to be used in our nation's most needy areas. I cannot express how important these new vouchers are to addressing the needs of low income Americans. As the economy soars, so do rents in many metropolitan areas, making it nearly impossible for low income families to afford an apartment. A recent report by the Low Income Housing Coalition shows that in no metropolitan area in this country can a person working at a minimum wage job forty hours a week afford the rent on an average two bedroom apartment. There are 5.3 million families that HUD classifies as ``worst case housing needs.'' These are families that live in substandard housing or pay more than 50% of their income towards rent. Sixty thousand vouchers will not help all of these families, but they are an important step in the direction of alleviating poverty and will be enthusiastically received by the families that benefit from them. Also included in this bill is funding for the important mark-to- market plan that will allow HUD to raise section 8 payments to prevent landlords from opting out of the program. In addition, the bill exempts the old preservation deals from restructuring, which saves money and housing. These two provisions are important to preserving affordable housing in our nation's communities. This bill includes an additional $50 million to be used for Community Development Block Grants, or CDBG. These funds are used to address the needs of low income neighborhoods in a holistic manner. They have been a resource for renewal and redevelopment in many cities, including Baltimore and other Maryland metropolitan areas, since their creation in 1974. I am extremely pleased to see an increased investment in the hope that CDBG funds can bring needed assistance to many communities across America. There is also an increase of $55 million to aid the rehabilitation of disabled elderly housing programs. That includes provisions to provide supportive housing for the elderly, service coordinators in elderly facilities, grants to convert elderly housing into assisted living, and funds for section 8 assistance to be used for assisted living facilities. These levels show that we are committed to our low income senior citizens. Lastly, I want to highlight the increased commitment to improve the public housing projects that remain. Over the last few years many politicians have pointed to the failing of public housing, but have not provided the necessary funds to improve those developments. Senators Bond and Mikulski's bill takes the important and necessary action of increasing the public housing operating fund by $320 million. I look forward to seeing and hearing about the new and positive improvements that will occur as a result of this new funding. I will continue in the years to come to press for an increased commitment to housing programs that serve our nations' working and low income families. Overall, the bill we are presented with today is a good bill, with funding for many vital housing programs.

Mr. SARBANES

Mr. SARBANES. They write: Maryland Farm Bureau believes that many of the provisions in the economic disaster relief package are important and necessary. We are concerned, however, that the adoption of the conference report as drafted will not meet Maryland's drought disaster needs. We also believe that the absence of the Option 1A dairy language will have long-term negative impacts on the State's dairy industry. I agree with that. We should reject this package, go back to conference, and develop a package that addresses the dairy issue, allows us to develop the compact to give some stability and diminished volatility in the industry, and also increases the drought assistance package so it adequately and directly meets the needs of the farmers of our region. The conference agreement should have done better by these very hard- working men and women, these small farm families. And because it has not--as much as I appreciate the pressing needs of agriculture elsewhere in the country, and as much as I, in the past, have been supportive of those needs--we in the region must take measures to have our farmers' needs addressed in the current context. We have experienced a very difficult and rough period for Maryland agriculture, and for agriculture generally in the Northeast and Mid-Atlantic. Because this crisis is not adequately addressed in this conference report, I intend to vote against it. I yield the floor. Exhibit 1 Maryland Farm Bureau, Inc., Randallstown, MD, October 12, 1999. Hon. Paul Sarbanes, U.S. Senate, Washington, DC. Dear Senator Sarbanes: I am writing to urge you to vote against adoption of the conference report on Agricultural Appropriations when it is considered on the floor tomorrow. Maryland Farm Bureau believes that many of the provisions in the economic disaster relief package are important and necessary. We are concerned, however, that the adoption of the conference report as drafted will not meet Maryland's drought disaster needs. We also believe that the absence of the Option 1A dairy language will have long-term negative impacts on the state's dairy industry. I urge you to vote to send the agricultural appropriations conference report back to the conferees with instructions that they add the Option 1A dairy language and that they increase the drought assistance package to adequately meet the needs of mid-Atlantic farmers. Sincerely, Stephen L. Weber, President.

Mr. SARBANES. Mr. President, I rise in opposition to the conference report on the fiscal year 2000 Agriculture appropriations bill. I regret very much having to do this because I appreciate the fact that all across our country, farmers are in need of assistance. I recognize that it is important to try to get some of these programs out to them. But I am very frank to tell the Senate that I think the conference badly overlooked the pressing problems which the farmers in the Northeast and the Mid-Atlantic are facing. I can't, in good conscience, support a bill which simply fails to take into account the situation with which we are confronted, a situation which is unparalleled. Steven Weber, President of the Maryland Farm Bureau, was recently quoted as saying: This is not just another crisis. This is the worst string of dry summers and the worst run of crop years since the 1930s. Talk to the old-timers. They haven't seen anything like it since they were young. Our farmers have been absolutely devastated by the weather we have experienced, not only over this past farming season but in previous ones leading up to it as well. We face a very pressing situation.'' In addition, I think this bill fails to address the needs of our dairy farmers. I will discuss that issue subsequently. First, I want to address the disaster assistance. Most of the disaster assistance that is available under existing programs is in the form of low-interest loans for those who have been rejected twice by commercial lenders. What this approach fails to recognize is that our farmers have been hit with a double whammy. First of all, they had the low commodity prices which farmers all across the country have confronted; and in addition, in our particular situation, our farmers were confronted by severe drought problems, as I have indicated, unparalleled in the memory of those now farming for more than half a century. Low-interest loans simply won't work to address the collective and drastic impact of these factors. Recognizing that, we sought substantially more and more direct disaster assistance in the Conference Agreement. And the response that the Conferees made to this request--the $1.2 billion that is in this bill--is clearly inadequate. The Secretary of Agriculture estimated that in the Northeast/Mid-Atlantic, we needed $1.5 to $2 billion just for those States alone. Never mind, of course, comparable damage, either drought or floods, that have occurred in other parts of the country which also need assistance. Indeed, it should not be our goal to identify an amount of funding where we have to take from one to give to the other. These states need assistance as well. What we are arguing is that this package ought to be comprehensive enough to meet the needs in the agricultural sector all across the country. I appreciate that other parts of the country have been hit with droughts and floods and that we must address these needs as well, but the amount provided in this conference report for disaster assistance is clearly inadequate to accomplish this goal. The amount that this legislation provides and that which will eventually make its way into the Northeast/Mid-Atlantic States will not enable us to confront the problem bleakly staring our farmers in the face. We wrote to the conferees, a number of us from this region of the country, asking them to consider the following measures. I regret that very little weight was given to this request. All of them, I think, are exceedingly reasonable requests, and had they been addressed, it would have affected, obviously, the perspective I take on this legislation. We asked the conference committee to consider the following measures: First, crop loss disaster assistance programs that provide direct payments to producers based on actual losses of 1999 plantings. These payments could be drawn from the Commodity Credit Corporation funds without an arbitrary limit. The arbitrary limit currently in the agreement precludes comprehensive assistance and delays the availability of the assistance. We asked that yield loss thresholds and payment levels be determined in advance so the payments can be made to producers as soon as they apply, rather than providing a fixed amount which would require all producers to apply before a payment factor can be determined and payments can be issued. We asked for this measure because these farmers need the help now. They need it quickly. They are under terrific pressure. Secondly, we asked the committee to consider sufficient livestock feed assistance, which addresses losses in pasture and forage for livestock operations, provides direct payments to producers based on a percentage of their supplemental feed needs, determined in advance to speed payments and avoids prorating. Thirdly, we requested the conference to consider credit assistance which addresses the needs of producers who have experienced natural and market loss disasters. Fourthly, we asked the conference for adequate funding to employ additional staff for the Farm Service Agency and the National Resource Conservation Service so they could swiftly and expeditiously implement various assistance programs at the State and local level. Finally, we requested cooperative and/or reimbursable agreements that would enable USDA to assist in cases where a State is providing State- funded disaster assistance. All of these, had they been responded to as we sought, would have given us an opportunity to address the situation in our region, not only in a forthright manner but one that would accommodate the pressing crisis which we confront. As we indicated, this crisis has reached overwhelming proportions. We risk losing a substantial part of the region's critical agricultural sector. The measures in this conference report, I regret to say, are not sufficient, nor sufficiently focused on the needs of the Eastern States to address their problems. That is one major reason I oppose this conference report and will vote against it. Secondly, this conference report deals with the dairy issue in a way that is harmful to our region. By failing to adopt option 1-A and disallowing the extension of the authorization of the Northeast Dairy Compact, the conference agreement has left our dairy farmers confronting a situation of instability. Milk prices have been moving up and down as if they were on a roller coaster. Our dairy farmers have been subjected to wide and frequent swings, which place our dairy producers in situations where they don't have the cash-flow to meet their costs in a given month. The price goes up; the price comes down. It takes an enormous toll on the industry in our State and elsewhere in the east. As a result of these fluctuations, the number of dairy farmers in Maryland has been declining markedly over the last 2 decades. We fear that if this process continues, we are going to see the extinction of a critical component of our dairy industry and the farm economy; that is, the family-run dairy farm. Indeed, my concern is primarily focused on family farmers and on sustaining their presence as part of the dairy sector. The Maryland General Assembly passed legislation to enable Maryland to join the Northeast Dairy Compact. They also took measures in that legislation to ensure that the interests of consumers, low-income households and processors, would be protected when a farm milk price was established. In fact, a representative from those groups would be on the compact commission, as well as from the dairy industry itself. Other states that are a part of the Compact or want to participate have taken the measures to protect same interests. And we believe this established a reasonable solution to provide stable income for those in the dairy industry, particularly family dairy farmers. But the conference denied what I regard as a fair and reasoned approach--in refusing to extend the authorization of the compact, and therefore, committed our region's dairy industry to a continuance of this unstable and volatile environment. Mr. President, agriculture is an important economic actor in the state of Maryland. It contributes significantly to our State's economy. It employs hundreds of thousands of people in one way or another. We really are seeking, I think, fair and equitable treatment. I don't think this legislation contains a fair and equitable solution for the crisis that faces farmers in the Northeast and Mid-Atlantic states. Indeed, it seems to ignore the fact that we have farmers as well. The only farmers in the country are not in sectors other than the Northeast and Mid-Atlantic and the needs of all of our farmers should have been addressed in this legislation. The Farm Bureau has written me a letter urging a vote against adoption of the conference report. I ask unanimous consent that this letter be printed in the Record at the end of my remarks.

Mr. SARBANES

Mr. SARBANES. Moreover, to the extent Members are concerned with the adequacy of procedures for onsite inspections, I would remind them that, as with the Chemical Weapons Convention, these procedures were crafted with an eye not only to gaining access to other countries' facilities, but also to guarding against overly intrusive inspections within the United States. The lead U.S. treaty negotiator, Stephen Ledogar, explained to the committee how those procedures were developed: This Treaty provides for on-site inspections on request by any Treaty party and with the approval of the Executive Council. No state can refuse an inspection. The U.S. position from the start was that on-site inspections were critical to provide us with added confidence that we could detect violations. And, if inspections were to be effective, they had to be conducted absolutely as quickly as possible after a suspicion arose, using a range of techniques with as few restrictions as possible. However, the U.S. also had to be concerned with its defensive posture, as well as an offensive one. It was necessary to ensure that sensitive national security information would be protected in the event of an inspection on U.S. territory. The U.S. crafted a complicated, highly detailed, proposal that balanced our offensive and defensive needs. There was resistance from some of our negotiating partners. However, by the time we were through, the Treaty read pretty much like the original U.S. paper put together jointly by the Departments of Defense, Energy, and State, the Intelligence Community, and the then-existing Arms Control Agency. With regard to the security of our nuclear arsenal, the President has proposed six safeguards which will define the conditions under which the United States enters into the CTBT, and which, as I understand it, have been incorporated into the Resolution of Ratification. I ask the ranking member, these have now been adopted; is that correct?

Mr. SARBANES. And those dealt with the conduct of the Stockpile Stewardship Program, the maintenance of modern nuclear laboratory facilities, the maintenance of a basic capability to resume testing, should it become necessary, the continuation of a comprehensive research and development program to improve our monitoring capabilities, the continued development of a broad range of intelligence gathering, and the ability to withdraw from the CTBT if the safety or reliability of a nuclear weapon type critical to our nuclear deterrent could no longer be certified. I believe these safeguards will ensure that U.S. national security interests can be met within the context of the treaty. Mr. President, I support ratification, but there do not appear to be enough votes to approve it. The President, in his letter requesting that action be delayed, stated that . . . proceeding to a vote under these circumstances would severely harm the national security of the United States, damage our relationship with our allies, and undermine our historic leadership over 40 years, through administrations Republican and Democratic, in reducing the nuclear threat. I agree with the President's assessment. Therefore, I urge my colleagues to join in voting to postpone consideration of the treaty while we undertake to build the necessary understanding and political support that will lead to its ultimate ratification. If we cannot approve the treaty, ratify it, then surely we should delay its consideration, postpone its consideration while we continue to explore the matter further, rather than, in my judgment, doing the grave harm that would come to the national security, as the President has outlined. I ask unanimous consent that two editorials from the New York Times in support of the treaty be printed in the Record.

Mr. SARBANES. Perhaps as compelling as the case in favor of the treaty are the potential consequences of a negative vote. Senate rejection of the treaty could severely weaken the Nuclear Non- Proliferation Treaty, for which a review conference is scheduled next April. It is entirely possible, as the Washington Post reported, that ``some nonnuclear countries might regard failure to ratify the treaty as a broken promise that would relieve them of the obligation to comply with key parts'' of the Nuclear Non-Proliferation Treaty. Such a result would not only undercut U.S. leadership and credibility on nonproliferation, threatening our policy objectives in Iraq and North Korea, among other places, but could increase the likelihood of resumed testing and aggravate the situation in South Asia. Resumed testing would not only threaten regional security and U.S. strategic interests but could pose new challenges to public health and the natural environment. According to the Energy Department, more than one out of seven underground U.S. nuclear tests since 1963 vented radioactive gases into the atmosphere, and the problem will obviously be much worse in countries that do not take or cannot afford the same level of environmental protections. Some have objected that the treaty will be difficult to verify, that it will prevent the United States from maintaining a safe and reliable nuclear arsenal. While no treaty is completely verifiable, I believe the CTBT will increase, rather than decrease, our ability to monitor the development of nuclear weapons and preserve, not forfeit, our nuclear superiority. In his statement before the Armed Services Committee on October 6, Secretary of Defense William Cohen addressed this point at length. I will quote the Secretary because I think his observations are extremely important. CTBT evasion is not easy; it would require significant efforts in terms of expertise, preparations and resources. In the end, the testing party has no guarantees that its preparation or its nuclear test will escape detection and possible on-site inspection, despite its best efforts. In addition, detection capability varies according to the location of the clandestine test and the evasion measures employed; a potential evader may not understand the full U.S. monitoring capability, thus adding to his uncertainty. Further, detection of a nuclear explosion conducted in violation of the CTBT, would be a very serious matter with significant political consequences. . . . Under CTBT, I believe the U.S. will have available sufficient resources to deter or detect, with confidence, the level of clandestine nuclear testing that could undermine the U.S. nuclear deterrent and take timely and effective counteraction to redress the effects of any such testing. I yield myself 2 additional minutes.

Mr. SARBANES. Indeed, all of our major allies have weighed in with their strong support for this treaty, which is particularly significant since they rely on our nuclear deterrent for their own defense. An article in the Washington Post on October 8 reported that: The world's major powers, including America's closest allies, warned the United States today that failure to ratify the multinational nuclear test ban treaty would send a dangerous signal that could encourage other countries to spurn arms control commitments. German Foreign Minister Joschka Fischer was quoted as saying: What is at stake is not just the pros and cons of the test ban treaty, but the future of multilateral arms control. I ask unanimous consent the full text of that article be printed in the Record at the conclusion of my remarks.

Mr. SARBANES. Mr. President, I yield the floor. Mr. BROWNBACK addressed the Chair.

Mr. SARBANES. Ten or 12 minutes.

Mr. SARBANES. Mr. President, parliamentary inquiry. The amendment was adopted; is that correct?

Mr. SARBANES. I thank the Chair.

Mr. SARBANES. Mr. President, I yield myself 4 additional minutes.

Mr. SARBANES. Mr. President, I rise in support of the Comprehensive Nuclear Test-Ban Treaty, the CTBT, to which the Senate has been asked to give its advice and consent. This is a landmark agreement that will help stem the tide of nuclear proliferation and reduce the risk of nuclear confrontation. In my view, it is a treaty that, on balance, will serve U.S. interests and strengthen U.S. security. The Comprehensive Test Ban Treaty is a product of nearly 40 years of labor. The idea was first endorsed in 1958 by President Eisenhower, who recognized that the most effective way of controlling the development and spread of nuclear weapons was to ban their testing. In 1963, the United States took the first step toward this end by signing and ratifying the Limited Test Ban Treaty, which prohibits nuclear explosions in the atmosphere, outer space, and under water. Further limitations were established through the Threshold Test Ban Treaty, signed in 1974, and the Peaceful Nuclear Explosion Treaty, signed in 1976. Under those treaties, the United States and the Soviet Union agreed to halt underground explosions larger than 150 kilotons. When the cold war came to an end, sentiment began to build for a comprehensive ban on nuclear testing. President Bush signed legislation establishing a moratorium on such testing that was joined by France and Russia and continues to this day. In January 1994, the Geneva Conference on Disarmament began negotiations on a treaty to forbid all nuclear explosions. An agreement was concluded in August of 1996, and the following month, President Clinton became the first world leader to sign the new treaty. It was submitted to the Senate for advice and consent to ratification just over 2 years ago, on September 24, 1997. The Comprehensive Test Ban Treaty is relatively simple and straightforward. First, it prohibits all explosions of nuclear devices. It does not ban the development or production of nuclear materials, nor does it affect activities to maintain a secure and reliable stockpile. By establishing a zero threshold on nuclear yield that affects all countries equally, the treaty draws a clear and consistent line between what is permitted and what is not. Second, the treaty sets up a regime of verification and inspections, consultation and clarification, and confidence-building measures. An International Monitoring System of 321 monitoring facilities is to be established, and all data will be stored, analyzed, and disseminated by an International Data Center. In addition, information that the United States obtains through its own intelligence can be used as the basis for a short-notice, on-site inspection request. Let me emphasize that. Information that the United States obtains through its own intelligence can be used as the basis for a short- notice, on-site inspection request. Third, the treaty creates an organization to ensure proper implementation and compliance, and to provide a forum for consultation and cooperation among States Parties. The new body will have a Technical Secretariat responsible for day-to-day management and supervision of the monitoring and data-collection operations, as well as a 51-Member Executive Council, on which the United States would have a seat. Both the Technical Secretariat and the Executive Council are to be overseen by a Conference of States Parties, which will meet at least annually. Finally, the treaty provides for measures to redress a situation and ensure compliance, including sanctions, and for settlement of disputes. Violations may result in restriction or suspension of rights and privileges under the treaty, as well as the recommendation of collective measures against the offending party and the referral of information and conclusions to the United Nations. As Stephen Ledogar, who was the Chief Negotiator of the treaty for the U.S., testified before the Foreign Relations Committee, the United States objected to the inclusion of specific sanctions because of concerns about appointing an international organization ``to be not just the investigator and special prosecutor, but also the judge, jury, and jailer.'' He explained, ``we reserve for a higher body, the United Nations Security Council in which we have a veto, the authority to levy sanctions or other measures.'' The CTBT, which has been signed by some 154 countries and ratified by 48, has drawn broad support not only from among the American population, but from key U.S. military and intelligence officials and from our key allies. It has been endorsed by the Chairman of the Joint Chiefs of Staff, Gen. Hugh Shelton, as well as former Chairmen Gen. John Shalikashvili, Gen. Colin Powell, Gen. David Jones, and Adm. William Crowe, and the directors of all three national laboratories that conduct nuclear weapons research and testing. NATO's Defense Planning Committee and Nuclear Planning Group called for ratification and entry into force ``as soon as possible.'' Thirty- two Nobel laureates in physics have written to the Senate stating that ``it is imperative that the CTBT be ratified,'' and noting that ``fully informed technical studies have concluded that continued nuclear testing is not required to retain confidence in the safety, reliability and performance of nuclear weapons in the United States' stockpile, provided science and technology programs necessary for stockpile stewardship are maintained.'' Despite the importance of the CTBT for U.S. national security, formal consideration of the treaty has not taken place over the last 2 years. Now we are suddenly called upon to register a judgment without the benefit of proper hearings and committee debate. While I have come to the conclusion that the merits of this treaty outweigh its risks, and that it is therefore deserving of Senate advice and consent to ratification, I do regret that an issue of such significance should be taken up without the normal course of hearings and proceedings leading up to the consideration of a measure of this magnitude. Let me outline a few of the reasons why I support this treaty. First, it will help reduce threats to U.S. national security. A complete ban on testing makes it harder for countries already possessing nuclear weapons to develop and deploy more sophisticated new designs, and for those seeking nuclear capability to initiate a nuclear weapons program. As we know, relatively simple bombs can be built without testing, but creating smaller, lighter weapons that are easier to transport and conceal and that require less nuclear material is difficult without explosive tests. With a global ban in place, a nation intent on conducting tests would take on the burdens not only of increased expenses and technical dangers, but also the risk of detection and imposition of international sanctions. In a very real sense, the CTBT locks in U.S. nuclear superiority while preventing reignition of arms races that constitute serious threats to our national security. The CTBT also promotes U.S. security by strengthening the Nuclear Non-Proliferation Treaty, the NPT, which entered into force in 1970 and was extended indefinitely in 1995. The NPT is the bedrock of international arms control policy, representing a bargain in which non- nuclear weapons states promised to foreswear the acquisition of nuclear weapons and accede to a permanent inspection regime so long as the nuclear powers agreed to reduce their arsenals. In order to gain approval for permanent extension of the Nuclear Non-Proliferation Treaty, the five declared nuclear powers promised to negotiate and ratify a test ban treaty. The CTBT further advances U.S. interests by providing additional tools to enhance our current monitoring and detection capability. The International Monitoring System will record data from 321 sensor stations--262 beyond what the United States possesses today. The new facilities include 31 primary and 116 auxiliary seismic monitoring stations, 57 radionuclide stations to pick up traces of radioactivity, 8 hydroacoustic stations to detect explosions on or in the oceans, and 50 infrasound stations to detect sound pressure waves in the atmosphere. Thirty-one of the new or upgraded monitoring stations are in Russia, 11 in China, and 17 in the Middle East, all areas of critical importance to the United States. And one of the burden-sharing advantages of the treaty is that the United States will have access to 100 percent of the information generated by these 321 sensor stations but will pay only 25 percent of the bill for obtaining it. Since the United States has not conducted a nuclear explosion in 7 years, and is unlikely to test with or without this treaty, the major effect of the CTBT is to hold other countries to a similar standard. It includes surveillance to identify warhead problems, assessment to determine effects on performance, replacement of defective parts, and certification of remanufactured warheads. Our policy is to ensure tritium availability and retain the ability to conduct nuclear tests in the future, should withdrawal from the test ban regime be required. Thus, under the treaty, the United States will be able to depend on its nuclear deterrent capability, while other nations will find it much more difficult to build weapons with the degree of confidence that would be needed to constitute an offensive military threat. Any country that should test would find itself the subject of international response; whereas in the absence of a treaty, such behavior carries no penalty. It has been suggested that the United States should wait until more of the nuclear capable countries--whose ratification is essential for the treaty to go into effect--have ratified before moving forward on the treaty ourselves. Yet what incentive have the countries with only peaceful nuclear reactors to proceed, when the one country with the greatest number of deployed strategic warheads is unwilling to do so? Just as with the Chemical Weapons Convention, where U.S. approval facilitated ratification by Russia, China, Pakistan and Iran, U.S. ratification of the Comprehensive Test Ban Treaty will create increased momentum and pressure for others to come along. The treaty cannot enter into force without us, but it needs our support to convince others to join.

Mr. SARBANES

Mr. SARBANES. Thank you, Mr. Chairman. daniel j. evans school of public affairs

Mr. SARBANES. I thank the Chairman for that clarification. Do you agree that HHS may use its section 1115 waiver authority to allow Maryland to use its CHIP funds to cover those children previously eligible for the Maryland Kids Count program?

Mr. SARBANES. Mr. President, as the Senate continues its consideration of the Labor-HHS Appropriations bill today, I rise to discuss a problem the State of Maryland is struggling to overcome as it seeks to extend health care coverage to the 158,000 uninsured children in our State. This issue is particularly timely in light of the Census Bureau report issued earlier this week which shows that the ranks of the uninsured grew by approximately 1 million in 1998 to a total of 44.3 million. The Census report also shows that the number of uninsured children has not decreased despite the establishment of a new Federal program designed to encourage States to expand health insurance coverage to more low-income children. Moreover, Maryland experienced one of the highest increases in uninsured people last year bringing the total number of uninsured to 837,000 or one-sixth of the population. A quarter of these uninsured Marylanders are children. To address the growing number of uninsured children throughout the United States, Congress enacted the Children's Health Insurance Program (CHIP) in 1997, and Maryland eagerly applied to participate in this new Federal-State partnership. However, over the past couple of years, Maryland has been penalized under this program for having previously extended partial Medicaid coverage under a five year demonstration program to a class of low-income children who would not otherwise have qualified for Medicaid. These children should now be eligible for CHIP funding, but the Department of Health and Human Services (HHS) is blocking Maryland from accessing its CHIP funds for the benefit of these kids. The law establishing the CHIP program prohibits the States from enrolling children into the State's CHIP program if those children were previously covered by the State's Medicaid program. HHS has made the decision to treat all children once eligible for the Maryland demonstration program, called the Maryland Kids Count program, as though they were covered under Medicaid. As a result of this discretionary decision by HHS, the majority of Maryland's uninsured children are ineligible for CHIP funding. In addition, Maryland has been unable to access most of the CHIP funding allocated to it. The Maryland demonstration program should not be used to disqualify the State from accessing its CHIP funds because this demonstration cannot be equated with covering this group of children with full Medicaid coverage. The Maryland demonstration offered only partial Medicaid benefits (primary and preventive care). Hospitalization as well as dental and medical equipment were not covered. Thus, for each child in the demonstration program, Maryland spent less than half the amount it would have spent had Medicaid been extended to these children. In addition, this demonstration program was conducted under a time- limited waiver which was scheduled to expire at about the same time the CHIP program was launched. In fact, HHS informed Maryland that it would not renew the waiver because Congress was establishing a more comprehensive children's insurance program and also because the Maryland demonstration had been rather unsuccessful. Only 5,000 children were enrolled, largely because the benefits offered were so limited. HHS has used its discretionary authority in implementing the CHIP program to equate the Maryland demonstration program with full Medicaid coverage. Since they used discretionary authority to make this erroneous determination, HHS clearly has the authority to reverse this decision administratively. Would the Senator from Delaware, the Chairman of the Finance Committee, agree that the Department of Health and Human Services has authority to allow Maryland to access its CHIP funds to extend health insurance coverage to those low-income children previously eligible for the Maryland Kids Count demonstration program without additional legislative action?

Mr. SARBANES

Mr. SARBANES. Mr. President, I am pleased to join today with my colleague from Florida, Mr. Mack, in introducing the ``Debt Relief for Poor Countries Act of 1999.'' This bill is the companion legislation to H.R. 1095, offered in the House by Representatives Leach and LaFalce and cosponsored by 116 other Members. The purpose of the bill is to provide the world's poorest countries with relief from the crippling burden of debt and to encourage investment of the proceeds in health, education, nutrition, sanitation, and basic social services for their people. All too often, payments on the foreign debt--which account for as much as 70 percent of government expenditures in some countries--mean there is little left to meet the basic human needs of the population. In effect, debt service payments are making it even harder for the recipient governments to enact the kinds of economic and political reforms that the loans were designed to encourage, and that are necessary to ensure broad-based growth and future prosperity. To address this problem the World Bank and the IMF began a program in 1996 to reduce $27 billion in debt from the most Heavily Indebted Poor Countries, known as the ``HIPC Initiative.'' But the program created a number of stringent criteria and provided only partial relief, which meant that only a small number of countries actually qualified for participation and the ones who did received only marginal benefits after an extended period of time. Following calls by non-government organizations, religious groups and member governments for faster and more flexible relief, the G-7 Finance Ministers, meeting this past June in Cologne, Germany, proposed alternative criteria that would make expanded benefits available quicker and to more countries. Last week, at the annual World Bank-IMF meetings here in Washington, President Clinton pledged to cancel all $5.7 billion of debt owed to the U.S. government by 36 of the poorest countries, and he sent a supplemental request for $1 billion over 4 years to pay the U.S. portion of the multilateral initiative. Canceling the debt will not cost the full $5.7 billion because many of the loans would never have been repaid and are no longer worth their full face-value. I commend the President for exercising international leadership on this important issue and for making it a foreign policy priority. The legislation we are offering today goes even further by requiring the President to forgive at least 90 percent of the U.S. non- concessional loans and 100 percent of concessional loans to countries that meet the eligibility guidelines. To qualify, the countries must have an annual per capita income of less than $925, have public debts totaling at least 150 percent of average annual exports, and agree to use the savings generated by debt relief to facilitate the implementation of economic reforms in a way that is transparent and participatory, to reduce the number of persons living in poverty, to promote sustainable growth and to prevent damage to the environment. Countries that have an excessive level of military expenditures, support terrorism, fail to cooperate in international narcotics control matters, or engage in a consistent pattern of gross violations of internationally recognized human rights are not eligible for debt relief under this legislation. In addition, the bill urges the President to undertake diplomatic efforts in the Paris Club to reduce or cancel debts owed bilaterally to other countries, and to work with international financial institutions to maximize the impact of the HIPC Initiative. The United States accounts for less than 5 percent of the total debt burden, so it is essential that relief is provided in a coordinated and comprehensive fashion. Mr. President, countries should not be forced to make a tradeoff between servicing their debt and feeding their people. And once debt is relieved, we should ensure that the savings are being used to reduce poverty and improve living standards, so that the benefits are widely shared among the population. This bill achieves both objectives, and I look forward to working with my colleagues to ensure its prompt consideration.

Mr. SARBANES

Mr. SARBANES. Mr. President, I rise in support of Senator Robb's amendment to strike the exceptions to the high-density slot limit and the flight perimeter rule at Reagan National Airport. I have serious concerns about increasing the number of flights and granting exemptions to the 1,250 mile nonstop perimeter rule at Ronald Reagan Washington National Airport. In my judgment, the bill provisions creating new slots at DCA and allowing for nonstop flights beyond the airport's existing 1,250 mile perimeter are fundamentally flawed for four reasons: first, they contravene longstanding federal policy; second, they undermine regional airport plans and programs; third these provisions will not have any significant impact on service for most consumers or competition in the Washington metropolitan region; and finally the provisions will subject local residents to an unwarranted increase in overflight noise. First, the slot and perimeter rules have been in place for more than thirty years. And they were codified in the 1986 legislation that created the Metropolitan Washington Airports Authority. Both rules were pivotal in reaching the political consensus among federal, regional, state, and local interests that allowed for passage of the 1986 legislations. The rules, as codified, were designed to carefully balance the benefits and impacts of aviation in the Washington metropolitan area. The bill now before us would overturn more than thirty years of federal policies and upset the balance struck in 1986. Second, the slot and perimeter rules are among the most fundamental air traffic management and planning tools available to the Metropolitan Washington Airports Authority. The Washington-Baltimore regional airport system plan and Reagan National Airport's master plan both rely on the slot and perimeter rules. By eliminating these tools, the bill before us would inappropriately override the authority and control vested in the Metropolitan Washington Airport Authority and would affect local land use plans. One of the main purposes of the 1986 Metropolitan Washington Airports Authority Act was to remove the federal government from the business of micro managing the operation of National Airport. The bill before us puts the federal government right back in the business of making decisions about daily operations and local community impacts--issues that should be left to local decision- makers. Third, if the Washington region were not served by two other airports, Dulles and BWI, specifically designed to handle the kind of long-haul commercial jet operations never intended to use National, then the argument that the slot and perimeter rules are somehow inherently ``anti-competitive,'' might have some validity. However, because consumers have access to so many choices, the rules do not injure competition in the Washington-Baltimore region. Far from being an anemic market, the Washington-Baltimore market today is one of the healthiest and most competitive markets in the country. Consumers can choose between three airports and a dizzying number of flights and flight times. Indeed, GAO recently reported that even if the perimeter rule were removed ``only a limited number of passengers will switch'' from Dulles or BWI to National, underscoring my contention that the proposed new slots will yield no significant benefit to local consumers or otherwise improve the local market. Finally, let me address the very important issue of noise, which is of principal concern to my constituents. Anyone who lives in the flight path of National Airport knows what a serious problem aircraft noise poses to human health and even performing daily activities. Citizens for the Abatement of Aircraft Noise (CAAN), a coalition of citizens and civic associations which has been working for more than 14 years to reduce aircraft noise in the Washington metropolitan area, has analyzed data from a recent Metropolitan Washington Airport Authority report which shows that between 31% and 53% of the 32 noise monitoring stations in the region have a day-night average sound level which is higher than the 65 decibel level that has been established by the EPA and the American National Standards Institute as the threshold above which any residential living is incompatible. New slots will add to the noise problem. Mr. President, I support this amendment because I believe Congress should defer to the FAA and local airport officials on this issue. I also believe that Congress should not be asking hundreds of thousands of local residents to tolerate more aircraft noise merely to benefit a handful of frequent flyers and fewer than a handful of airlines. I urge my colleagues to support the amendment as well. Mr. ROBB addressed the Chair.

Mr. SARBANES

Mr. SARBANES. Mr. President, I rise today to pay tribute to an outstanding public servant and steward of our National Park System, Kathryn ``Kayci'' Cook, Superintendent of Fort McHenry National Monument and Historic Shrine and Hampton National Historic Site. Kayci has recently been selected as Assistant Superintendent of Glen Canyon National Park in Utah and I, and many others in the State of Maryland, are sorry to see her go. Throughout her 18-year career with the National Park Service, Kayci Cook has distinguished herself for her leadership, commitment and dedication to managing and protecting our Nation's most precious natural and cultural resources. Beginning as a seasonal park ranger at Wupatki and Canyon de Chelley National Monuments in northern Arizona, she quickly advanced through the ranks to positions as park ranger at San Antonio Missions National Historical Park in Texas, supervisory ranger at California's Death Valley National Monument, and Chief of Resource Education for Apostle Islands National Lakeshore in Wisconsin. In 1994, her contributions and accomplishments in these positions earned Kayci the prestigious Benvinetto Congressional Fellowship I came to know Kayci three years ago, soon after she was appointed to lead Fort McHenry and Hampton and have had the privilege of working closely with her on a number of matters of mutual concern affecting these units of the National Park System. I can personally attest to the exceptional talent, ingenuity, and energy which she brought to this position. Under her leadership the fort walls and many historic structures at Fort McHenry have been restored, plans have been advanced to develop a new visitors center to accommodate the increasing number of visitors to the Fort, many preservation projects have been completed at Hampton and a new General Management Plan for this historic site is being completed. Kayci Cook's hard work and dedication to the stewardship Fort McHenry and Hampton have earned her the respect and admiration of everyone with whom she has worked. She leaves behind two units of the National Park System that have been protected and improved through her efforts and the visitors to these sites will benefit from her labors for years to come. In my judgement, her extraordinary commitment and leadership should serve as a standard for those who will follow her. I greatly value the assistance Kayci provided to me and my staff and wish her the best of luck in the years ahead.

Mr. SARBANES

Mr. SARBANES. Mr. President, today I want to speak about the end of an era for the David Taylor Research Center, and the beginning of a promising future for this facility and many of its workers. On September 25, 1999, the Navy will formally close the Naval Surface Warfare Center, Carderock Division's Annapolis Site, more commonly known as the David Taylor Research Center (DTRC). While the Navy marks the occasion of its departure from this successful and accomplished lab, we must not dwell solely on its past. On this occasion we should also recognize the help and cooperation of Anne Arundel County, the Navy, and relevant businesses in developing a reuse strategy that will enable the lab to continue conducting important maritime research into the 21st century. The Navy has a right to be very proud of the legacy of this lab. I want to touch on a few of its most important contributions throughout our maritime history. From its inception in 1903 by Rear Admiral George Melville, it has served a crucial role in the development of our modern Navy. First established as the US Naval Engineering Experiment Station (EES), it served to fill the need for the testing of Naval equipment and the development of Fleet standards for Naval machinery. During WWI, the EES assisted the Navy with the procurement of naval machinery, crafting guidelines for optimum fuel usage, developing metal corrosion deterrents, and pioneering the first use of sonar. Before its expansion during WWII, the lab's research on sound led to the development of the first sonic depth and range finders. In 1941, Dr. Robert Goddard established a Bureau of Aeronautics at the facility which led to the expansion of five additional Naval Laboratories on the site during WWII. The newly expanded Annapolis lab served to make many critical contributions to WWII Naval Fleet development, ranging from high capacity water stills for submarine use to improvements in Marine Corps landing craft. By 1963, the facility had evolved into one of the Navy's premiere research and development centers, and was renamed the U.S. Marine Engineering Laboratory. During the Vietnam war, the lab provided support to our forces from 1966 until the end of the war. During that time, its projects included boat quieting systems, engine cooling, bunker busting, aluminum boat corrosion abatement, and the development of ferro-cement boats. During the late 1970s, the work of the Annapolis lab was concentrated into two technical departments, Propulsion and Auxiliary Systems, and Materials Engineering. The lab's contributions to today's Navy range from cutting edge superconducting electrical machinery to patented approaches to isolating and silencing machinery on every submarine class. In addition to these and other truly remarkable accomplishments, the Naval Surface Warfare Center, Carderock Division's Annapolis Site has served as the technical training ground for thousands of scientists, machinists, technicians, engineers, and other related lines of employment. It is through their innovation, expertise, and hard work that this facility has been such a critical proving ground for the Navy, and I am proud to say that because of our redevelopment strides, many of these experts will continue their excellent work for the Navy and other customers in Anne Arundel County. As many of these employees will recall, I fought very hard in 1993 when the Navy recommended that this site be shut down. And I fought again in 1995 when the BRAC Commission made the final decision to close the Annapolis Center. I continue to believe that the decision was unwise, unjustified and failed to take into account the critical capabilities of the highly skilled and experienced team of scientists and engineers who have contributed so much to the Navy over the years. After the Navy's decision, many of these dedicated scientists and researchers could have walked away and gone to Philadelphia or found jobs elsewhere. However, through reuse ventures such as those of VECTOR Research these individuals have made the best of the situation and worked to convert this unique facility into a maritime R&D park. As these businesses continue to expand their marine customer base, we can envision the park as a focal point for maritime high technology into the next millennium. In fact, this month has seen a major milestone in the site reuse process. As some of you know, DTRC houses a Deep Ocean Simulation Facility which is world class in nature, and is uniquely designed and equipped to evaluate commercial and military machinery targeted for deep ocean environments. I am delighted to say that on September 15th, operation of this complex was officially transferred from the Navy to a private firm. As a result of efforts such as this one, the Navy will also continue to benefit, since a large fraction of this reservoir of essential capability might otherwise have been dispersed or lost. Anne Arundel County's decision to take this approach for reuse and its coordinated and innovative strategy in this regard, should serve as an example for the nation. With the spirit of cooperation, and innovative reutilization reflected in this effort, I have no doubt that the DTRC will continue to contribute not only to the maritime high technology sector of Anne Arundel County and the State of Maryland, but also to our nation's technological advancement into the 21st Century.