Richard Shelby

Mr. SHELBY

Mr. SHELBY. Mr. President, it is not surprising to me today that we are where we are today--forced to seek enforcement in the courts of a subpoena for documents from the White House. It is no surprise to me, Mr. President, because the White House's refusal to release the notes sought under this resolution is part and parcel of this administration's consistent and continuous way of operating, its modus operandi, if you will, on how to cooperate with the special committee without really cooperating. It goes something like this: ``Do not give up any information or documents unless you absolutely have to, and if forced to give them up, release it to the press first with your spin on it before giving it to the committee.'' Mr. President, throughout the committee's investigation, witnesses from the White House have come before the committee and, en masse, failed to recollect, remember, or to recall important meetings, conversations, and phone calls. We have so much testimony on the record, reciting the lines, ``I cannot remember, I do not recall, I do not have a specific recollection,'' that you would begin to wonder whether amnesia is, in fact, contagious. We had the dance of the seven veils from the White House witnesses, whom the committee was being forced to recall every time a new document or phone log previously unattainable mysteriously appeared in some way. Interestingly, Mr. President, while White House officials were suffering under the debilitating loss of memory, or selective memory, career prosecutors and law enforcement personnel were able to remember phone calls, conversations, and meetings with great specificity. Quite frankly, the testimony before the committee has come to be the tale of two stories. One story was told by the Clintons' political appointees and long-time business partners and friends, versus the story told by career professionals, civil servants, law enforcement personnel and, yes, investigators. Mr. President, this wholesale memory loss, evasive answers, and claims of privilege against document production sounds strangely familiar, does it not? Indeed, Mr. President, in the past couple of weeks I have noted what I believe is an increasing similarity between this White House and the Nixon White House. In my view, the committee's need to enforce the subpoena for the notes only reinforces the Nixonian comparison. Last week, during the committee hearing on Whitewater, I compared some of the arguments that Mr. Clinton has made with the arguments that Mr. Nixon made in support of Executive privilege in 1973 and 1974. Now, some have suggested that this is purely a political exercise. But the fact is, Mr. President, that this is the first time that such a defense--that I am aware of--has been raised since the Nixon administration. Furthermore, this same defense of privilege has been tried and tested in the courts, and it has failed. The comparison is, therefore, self- evident, Mr. President, and the exercise rather instructive, giving all of us an opportunity to examine the reasonableness of the White House's claim of attorney-client and possibly Executive privilege. I would like to share some of the quotes with you. First, this is President Nixon's response to a question from a UPI reporter on March 15, 1973. He said: Mr. Dean is counsel to the White House. He is also one who was counsel to a number of people on the White House staff. He has, in effect, what I would call a double privilege, the lawyer-client privilege relationship, as well as the Presidential privilege. Those were the words of President Nixon. Compare those with the following words, which were sent up to the committee by the White House on December 12, 1995: The presence of White House lawyers at the meeting does not destroy the attorney-client privilege. On the contrary, because of the presence of White House lawyers, who themselves enjoy a privileged relationship with the President and who are his agents, was in furtherance of Mr. Kendall's and White House counsel's provision of effective legal advice to their mutual client, their presence reinforced, rather than contradicted, the meeting's privileged nature. Think about that just a minute. Compare them in your own mind. I will read President Nixon's address to the Nation announcing an answer to the House Judiciary Committee subpoena for additional Presidential tape recordings on April 29, 1974. President Nixon said: Unless a President can protect the privacy of the advice he gets, he cannot get the advice he needs. This principle is recognized in the constitutional doctrine of executive privilege, which has been defended and maintained by every President since Washington and which has been recognized by the courts, whenever tested, as inherent in the Presidency. Let us compare Nixon's statement to the White House brief on behalf of President Clinton to the committee, December 12, 1995: If notes of this type of meeting are accessible to a congressional investigating committee, then the White House counsel could never communicate, in confidence on behalf of the President, with the President's private counsel, even when the discussions in question are properly within the scope of the official duties of the governmental lawyers. Such a rule would deprive the White House counsel of the ability to advise the President and his White House staff most effectively regarding matters affecting the performance of their constitutional duties. You be the judge. The words of Nixon and the words on behalf of President Clinton. I will now share with you a statement President Nixon made to reporters' questions, the National Association of Broadcasters, on March 19, 1974: Now, I realize that many think, and I understand that, that this is simply a way of hiding information that they should be entitled to, but that isn't the real reason. The reason goes far deeper than that. In order to make decisions that a President must make, he must have free, uninhibited conversation with his advisers and others. The words of President Nixon. Compare those with the words of the White House brief on behalf of President Clinton, December 12, 1995: The committee's action also implicates important governmental interests--namely, first, the ability of White House counsel to discuss in confidence with the President's private counsel matters of common interest that indisputably bear on both the proper performance of executive branch duties and the personal legal interests of the President, and second, the ability of White House counsel to provide effective legal advice to the President about matters within the scope of their duties, including the proper response of executive branch officials to inquiries and investigations arising out of the President's private legal interests. Again, ``Private legal interests.'' Compare, again; you be the judge of the similarity. Now, from the words of President Nixon in a letter responding to the House Judiciary Committee subpoenas requiring production of Presidential tape recordings and documents, June 10, 1974. What did he say? From the start of these proceedings, I have tried to cooperate as far as I reasonably could in order to avert a constitutional confrontation. But I am determined to do nothing which, by the precedents it set, would render the executive branch, henceforth and forevermore, subservient to the legislative branch, and would thereby destroy the constitutional balance. This is the key issue in my insistence that the executive must remain the final arbiter of demands in its confidentiality, just as the legislative and judicial branches must remain the final arbiters of demand on their confidentiality. The word of President Nixon. Now, in the brief on behalf of President Clinton to the committee, December 12, 1995: In a spirit of openness and with considerable expenditure of resources, the White House has produced thousands of pages of documents and made scores of White House officials available for testimony, foregoing assertion of applicable privileges. In view of this cooperation, the committee's attempt, after 18 months, to invade the relationship between the President and his private counsel smacks of an effort to force a claim of privilege by the President, who must assert that right to avoiding risking the loss, in all fora, of his confidential relationship with his lawyer. Now, you compare it. You have seen the words and the comparison. I think they are relevant. This comparison, I believe, Mr. President, is self-evident and the exercise rather instructive. I do not know whether the Clinton administration has anything to hide. But I do know this: The first administration to use these arguments certainly did have something to hide, and we know what happened there. If the White House does not have anything to hide, and I hope they do not, if there is nothing of substance in these notes, nothing damaging in these notes as they claim, then they should comply with the subpoena and produce them to the committee without any reservations, without any conditions, because, Mr. President, if there is nothing damaging in these notes, it is incomprehensible to me why they would raise a defense clearly rejected over 20 years ago. Mr. President, I also would ask unanimous consent that a letter from Mr. Hamilton, to the President, dated January 5, 1994 be printed in the Record.

Mr. SHELBY

Mr. SHELBY. Mr. President, I rise today to oppose President Clinton's plan to send America's sons and daughters into Bosnia. On Monday evening, President Clinton asked Congress and the American people to support a policy that transforms the world's greatest fighting force into a band of peace enforcers and nation builders. Unfortunately, this President is a poor student of history. He has quickly forgotten the tragic lessons of Somalia and Beirut. I can assure you, Mr. President, the families of those killed in those faraway places are reminded every day and will not soon forget the consequences of this type of ill-conceived foreign policy. President Clinton wants us to support an undetermined scheme to enforce a precarious peace between factions that have been at war for almost 4 years and fighting each other for generations. He tells us it will take 20,000 American troops and less than a year. Mr. President, less than a year to bring peace to a place that has not known peace in recent memory? President Clinton tells us that our troops will be peacekeepers and not war fighters. They will be neutral brokers of an agreed upon settlement between warring parties. The problem with this, Mr. President, is that we are not a neutral party in this conflict. President Clinton himself admits that we chose sides. We imposed economic sanctions on Serbia and were an active participant in a sustained air assault on Bosnian Serb targets. To add insult to injury, the administration also proposes that we train the Bosnian Federation while we enforce the peace. Is there any doubt that the Serbs will view our presence as something less than neutral? Mr. President, why is this any different than Beirut or Somalia and can we really expect a different result? President Clinton said that we will send 20,000 of our troops. How did he determine that we would need 20,000 troops to enforce the peace? Earlier this year President Clinton imprudently promised to commit up to 25,000 U.S. ground forces long before there was peace, before there was a plan, before there was a mission, and before we had any idea whether it would be necessary to become involved at all. Recently, the President told us that he still has not seen the plan. As yet, there is no clearly defined mission, no attainable military goals and no way to measure success. However, President Clinton knows that we will send 20,000 of our troops to implement this unknown plan. Mr. President, without well-defined and achievable military goals, I fear that the world's finest fighting forces are about to be used as global hall-monitors, sitting ducks for disgruntled belligerents. Mr. President, I suggest that the administration has yet to establish any credible case for this deployment. President Clinton also tells us that the United States must lead when NATO is involved. Of course the United States must lead, but the President has equated leadership with American ground troops. American ground forces offer no tactical or operational advantage to a Bosnian peace force. They offer only political advantage for our reluctant European allies. The Balkans are historically a matter of concern to Western Europe. If they do not believe the problem is important enough to solve--then we certainly should not. President Clinton apparently believes that the United States must deploy troops in Bosnia to preserve NATO and that NATO is the proper vehicle for peace in Bosnia. Mr. President, by any measure this would greatly expand the alliance's mandate to include missions never even remotely contemplated by NATO's founders. NATO was intended to be a military alliance to deter a Soviet attack on Western Europe. There is no doubt that the United States has a vital interest in the continent's security. President Clinton proposes, however, that we transform the basic mission of NATO from an organization that guards Western Europe from attack, into an organization that intervenes in civil disputes and parochial conflicts of nonmember states. Mr. President, we should never seek to preserve an alliance unless that alliance serves the purposes for which it was crated. NATO was not created to be the arbiter of civil disputes nor should it seek to become one. What did President Clinton not tell us? He did not tell us how our troops will get out. He told us that it should last only 1 year, but as former Assistant Secretary of Defense Richard Perle testified before the Armed Services Committee, ``An exit date is not an exit strategy.'' To compound the problem, the administration will be under enormous pressure to succeed. Especially in an election year. Without clearly defined military missions and goals, mission creep is inevitable. As President Clinton expands the mission he will be compelled to escalate American military efforts to meet the requirements of new missions. This sounds very familiar, Mr. President. President Clinton also did not tell the American people how much this will cost them. Some estimates run as high as $2 billion and that is based on a best-case scenario. Mr. President, military planning must take into account the worst-case scenario. Our fighting forces must be prepared for any contingency. Again, I fear that this administration has not prepared for unexpected events which are inevitable in any military operation. This could be critical not only to the financial cost of the operation, but to the incalculable human cost as well. President Clinton asked the American people to choose peace. Mr. President, the American people do choose peace. We hope for a lasting end to the Bosnian civil war that has raged for so long. The American people and this body will support the President in his efforts to end the fighting, but we will not commit our fighting men and women when we have no vital national interest at stake. Just saying we have a vital interest, Mr. President, does not make it so. President Clinton has failed to make the case to the American people, and this body should not support a deployment of American troops to Bosnia. Mr. President, I yield the floor.

Mr. SHELBY

Mr. SHELBY. Mr. President, I strongly support Senate Joint Resolution 31, which amends the Constitution to protect the flag of the United States from those who would desecrate it. The American flag is a national symbol of the values this country was founded on. Many Americans have fought and died to defend these values and this country. It is an insult to these patriots, their relatives, and all other citizens who hold this country dear, to burn or desecrate the symbol of our nation and our freedom. I certainly support the right of all citizens to freedom of speech, but that right has never been absolute in our country. That's why there are laws against libel, slander, perjury, and obscenity. Similarly, our freedom of political expression is also limited. No one can legally deface the Supreme Court building or the Washington Monument, no matter how much he or she might wish to protest a particular government policy or law. The American flag, as the symbol of all the great values this country stands for, deserves special protection under the Constitution. It simply is not necessary to commit an act of violence against this flag to register protest against the government. Passage of Senate Joint Resolution 31 will help ensure our national symbol receives the respect and protection it deserves. [[Page S 18275]] Again, Mr. President, I offer my strong support for Senate Joint Resolution 31 and I urge my colleagues to support it as well.

Mr. SHELBY

Mr. SHELBY. Mr. President, I strongly support Senate Joint Resolution 31, which amends the Constitution to protect the flag of the United States from those who would desecrate it. The American flag is a national symbol of the values this country was founded on. Many Americans have fought and died to defend these values and this country. It is an insult to these patriots, their relatives, and all other citizens who hold this country dear, to burn or desecrate the symbol of our Nation and our freedom. I certainly support the right of all citizens to freedom of speech, but that right has never been absolute in our country. That is why there are laws against libel, slander, perjury, and obscenity. Similarly, our freedom of political expression is also limited. No one can legally deface the Supreme Court building or the Washington Monument, no matter how much he or she might wish to protest a particular government policy or law. The American flag, deserves special protection under the Constitution. It simply is not necessary to commit an act of violence against this flag to register protest against the Government. Passage of Senate Joint Resolution 31 will help ensure our national symbol receives the respect and protection it deserves. Again, Mr. President, I offer my strong support for Senate Joint Resolution 31 and I urge my colleagues to support it as well.

Mr. SHELBY

Mr. SHELBY. Mr. President, I am disappointed to say that the conference report before us today is not a balanced bill. It was not a balanced bill when it left the Senate several months ago, and it has not improved by any measure in conference. Plain and simple, Mr. President, it remains unbalanced against the defrauded investor. I am disappointed, as I was when the Senate passed S. 240, because I believe that there are some worthy provisions in this bill that would go far in reducing frivolous suits without compromising the rights of victims of fraud. These few, worthy provisions, however, are insufficient to overcome the unbalanced nature of this bill. While I support efforts to reduce frivolous litigation, I simply cannot support the approach taken here today. This past year I have actively sought alternatives that would seek a middle ground between weeding out meritless litigation and preserving legitimate claims. I have actively sought alternatives that would seek a middle ground between eliminating economic incentives to pursue frivolous litigation and protecting the rights of the defrauded investor. And, I have actively sought alternatives that would seek a middle ground between opportunistic strike suits and preserving the powerful check of private litigation on professional misconduct. Earlier this year, I joined Senator Bryan in introducing a securities litigation reform bill that, I believe, struck the proper balance between protecting investors and reducing meritless litigation. Our bill contained some of the same worthy provisions also incorporated in this conference report, like the ban on referral fees and the payment of attorney fees from the SEC disgorgement fund, increasing fraud detection and enforcement and ensuring adequate disclosure of settlement terms. In addition, however, our bill sought balance by including several provisions to protect the rights of the defrauded investor. It restored aiding and abetting liability; extended the statute of limitations for private fraud actions to the earlier of 5 years after the violation or 2 years after discovery, and ensured that the victim of fraud was made whole in the case of an insolvent joint and several defendant. When S. 240 came before the Senate I, again, sought to improve the balance of the bill by offering an amendment on proportionate liability. My amendment would have ensured that the insolvency of the defendant does not prevent the innocent victim from obtaining a full recovery by making proportionate defendants liable for the remaining uncollectible amount of an insolvent joint and several defendant. Again, this provision would have weighted in favor of the victim of the fraud over the perpetrator of the fraud--a balance which is still missing from the conference report before us today. Mr. President, these provisions are crucial, in my view, to ensuring that rights of defrauded investors are not unfairly impaired in an effort to reduce litigation--meritorious or meritless. Mr. President, the conference report fails to do what S. 240 failed to do--and I, therefore, cannot support it. The conference report, put simply, fails to ensure adequate protection of the rights of the innocent victim of securities fraud, and, in fact, makes it harder for the small investor to gain access to the courts and obtain a full recovery for securities fraud.

Mr. SHELBY. If the Senator from Nevada will yield just for a few brief comments?

Mr. SHELBY. I believe in any piece of legislation we need balance. We need balance for the people who are the issuers of stock in the public domain. But, on the other hand, we need some safeguards for the investor. If you do not have balance in a situation, you are going to have trouble later. I believe this bill is not a panacea. This bill is fraught with danger. I think it is a bad bill the way it is constructed today, but it could have been a good bill if we had stayed with the basics and if we were able to work out a bipartisan approach to a very serious thing, and that is excessive litigation. No one, I believe, in his right mind could do anything but agree that a lot of litigation is out of control in America. But how do you balance that? I believe we have that responsibility and obligation, to make sure it is balanced, especially when you are dealing with people who probably are not going to be as sophisticated about the marketplace as people who come to the marketplace, but will invest their life savings and will invest everything they have. And what remedy will they have in the future as victims? I think this is what some of this is about.

Mr. SHELBY

Mr. SHELBY. How will they be paid? We have not received the directive from the IRS. But I hope they will be paid on what they collect, a percentage of what they collect. In other words, I certainly would not want to pay them a salary. I do not believe they would be as diligent or that they would work as hard. Billions of dollars in America is collected each day, probably based on incentives. Incentives do matter. As with the Department of Education debt collection contracts, the base compensation, I hope, would be calculated as a percentage of account dollars collected, or included in repayment schedules agreed to by the debtors. Also, a competitive environment would be structured so that it would reward productive contractors who comply with the law and who do not generate debtor complaints, do not abuse people and penalize unproductive or compliant ones. That is who we look forward to working with.

Mr. SHELBY. An hour from now is 4:45.

Mr. SHELBY. We have a lot of Members. We will give you all the time and try to respond to whatever you want.

Mr. SHELBY. Sure.

Mr. SHELBY. This is a lot different, if I can respond. That is different from an IRS auditor coming in and auditing Mr. and Mrs. John Jones' account, and the more they found, the more they get working as an IRS employee. These efforts will be directed at collecting debts that are not in dispute, debts that have been arrived at as owed, debts that have basically been forgotten, as I said, to the tune now of $70 billion. There is a lot of difference between that and protecting someone who the IRS is auditing or having a tax dispute with. This is not a tax dispute. This is a debt owed. There is a lot of difference.

Mr. SHELBY. Mr. President, I ask unanimous consent that the fiscal year 1994 compliance option request regarding the budget, where the IRS requested this, be printed in the Record.

Mr. SHELBY. Mr. President, I move to reconsider the vote by which the conference report was agreed to.

Mr. SHELBY. Mr. President, today with my distinguished ranking member, Senator Kerry, I bring to the Senate the conference report for H.R. 2020, the fiscal year 1996 appropriations for the Department of the Treasury, the U.S. Postal Service, the Executive Office of the President, and certain independent agencies. The conference report we are presenting today contains total funding of $23,161,490. This bill is $339,457,000 below the appropriations provided in fiscal year 1995. It is $15,797,000 below the House-passed bill and $1,735,000,000 below the President's request. Of the totals in this bill the conference is recommending $11,263,514,000 for new discretionary spending. The balance, $11,889,400,000 is for mandatory programs. The $11,263,514,000 the committee proposes for domestic discretionary programs is almost $1.8 billion below the President's request. Let me repeat that, Mr. President. This bill is nearly $1.8 billion below the President's fiscal year 1996 request. It is also $340 million below the amount appropriated for the accounts funded in this bill in fiscal year 1995. Reaching this level has not been an easy task. We have had to make some very difficult decisions, while trying to ensure that funds are made available to carry out essential Government services. Mr. President, this bill includes $10,303,999,000 for the Department of the Treasury. The conference report includes $121,908,000 for payment to the Postal Service fund for free mail for the blind, overseas voting, and payment to the Department of Labor for disability costs incurred by the old Post Office Department. The President receives $156,844,000 to exercise the duties and responsibilities of the Executive Office of the President. This conference report contains $7.5 million for the operations of the Office of National Drug Control Policy. The fact that we have included funding for the drug czar's office does not mean I am satisfied with the current drug policy of this administration. I have made my feelings on the ineffectiveness of this office known before. I will not take the time of my colleagues to restate it again today. I do want to reiterate that the committee will revisit funding for ONDCP in 1996. I certainly hope we will see some changes. This bill includes $545,002,000 for construction of new courthouses and Federal facilities. This funding provides the General Services Administration the ability to let construction contracts for buildings which construction can begin in fiscal year 1996. There is no funding for projects where no construction awards can be made in fiscal year 1996. There is $11.8 billion in mandatory payments through the Office of Personnel Management for annuitant and employee health, disability and retirement, and life insurance benefits. There is approximately $375 million for other independent agencies. Mr. President, this bill proposes to terminate the Advisory Commission on Intergovernmental Relations and the Administrative Conference of the United States. Funds are provided for ACIR to complete the unfunded mandates study, and provide for the orderly closedown of the two agencies. Mr. President, this subcommittee continues to be a strong supporter of law enforcement. We have done what we can to ensure that the law enforcement agencies funded in this bill have the resources to do the job we ask them to do. There has been considerable discussion since this bill was reported from the subcommittee about the level of funding for the Internal Revenue Service. The level of discussion continued through the conference. The conference report exceeds the bill passed by the Senate by $31 million. The Senate conferees worked with the conferees from the other body to do what we could to resolve the differences between the two Houses to balance processing and enforcement, while continuing tax systems modernization efforts. Mr. President, let me be perfectly clear on this. As I said when the Senate first deliberated this bill, that the committee's options were limited. Many may disagree with the choices we have made, but we had to work with limited resources. Funding for the IRS makes up 65 percent of the discretionary spending in this bill. There is no other way to reach savings called for in our 602(b) allocation. Mr. President, this bill, as we all know has been held up because of discussions on the legislative language popularly called the Istook amendment. The amendment in disagreement is language offered by Senator Simpson, which I support. The other body insisted that the Senate recede from its position in amendment No. 132. Senator Simpson, the sponsor of this amendment, has indicated that he will support the motion to recede on this amendment so we can send this bill to the President. I personally want to thank Senators Simpson and Craig for all of their hard work on this issue. I yield to Senator Kerrey, the subcommittee's ranking member.

Mr. SHELBY. The Senator is correct. The committee has received the assurance of OPM that full staffing will be retained at the FIPC in Boyers with the recognition that many of the employees will be converted from the Federal payroll to the employee stock ownership plan.

Mr. SHELBY. We would be happy to do so.

Mr. SHELBY. How much time does the Senator want?

Mr. SHELBY. I ask for the yeas and nays.

Mr. SHELBY. Mr. President, have the yeas and nays been ordered?

Mr. SHELBY. Yes.

Mr. SHELBY. Mr. President, I believe some good is going to come out of this debate here on the floor of the Senate because I agree with the Senator from Arkansas that the IRS should and must protect the privacy of all taxpayers not to hand over their tax returns to anyone else, and we are not going to do that in this. Let me go back to something. The IRS, Internal Revenue Service, actually requested this proposal 2 years ago. The approved budget for the Internal Revenue Service in fiscal year 1994 included funding, at the request of the IRS, totaling $5.790 million in startup funds and 41 full-time equivalent employees. I will quote the IRS document: This will enable the Internal Revenue Service collection to contract for a test to determine the effectiveness and cost- benefit of having private sector collection agencies work a portion of the delinquent taxes inventory not being worked due to resource constraints, and so forth. The funds, unfortunately, were reprogrammed to cover costs of locality pay. Let me repeat, Mr. President, there are $70 billion in America in these closed accounts or dormant accounts, uncollectible, growing at the rate of $10 billion a year. I do not know how much of these dormant accounts--$70 billion now, and next year it will be $80 billion, getting on up toward $100 billion. That is a lot of money in America. If these taxes are owed--and most of them are not even disputed, it is my understanding--we should collect them. These are owed taxes. If we can collect them, it helps us in our expenditures here in the Congress. It means people are not going to be deadbeats in this country, and that we will have to levy fewer taxes elsewhere. I think it is a good start. It is a pilot program, and I think it makes sense. I do want to continue to work with my friend from Arkansas to make sure that the American taxpayers' privacy is protected. Their returns are not put out of the IRS, but as far as what they owe and who they are, I do not see any privacy on that. That is everywhere in America today. You can pick that up on a credit report.

Mr. SHELBY. Mr. President, I appreciate the remarks of my good friend from Arkansas. He is to be commended over the years for being very involved in pushing legislation for years and years and articulating the position of the taxpayer as far as the IRS is concerned. We all know that that is known as the Taxpayers' Bill of Rights. That was long in coming, and the Senator from Arkansas should get most of the credit for it. A lot of us worked with him, but he was the leader in this, and I commend him so. On this bill here, let me share some of it. In December 1991, the IRS completed an internal study that addressed, among other things, legal, financial, policy, and design considerations involved in contracting out collections. The study concluded that the IRS should test the use of private collection companies, provided that legal issues regarding activities that the IRS could contract out and funding sources were resolved. This proposal before us encourages that. In September 1992, the OMB issued a policy letter indicating that private companies can do collection-related functions such as locating taxpayers, making telephone calls to remind taxpayers of tax delinquencies, mailing tax notices, and providing lockboxes for receipt of payments. This proposal encourages that. In December 1992, the IRS chief counsel's office issued guidance for IRS' use of contracting with private collection companies. It concurs with the OMB letter. In discussing the disclosure issue, the guidance said that the IRS has the authority to contract out certain collection-related activities and that the appropriate safeguards would be in place. This proposal would allow the IRS to ensure the appropriate safeguards are in place. As the Senator from Arkansas brings up--and he is absolutely right-- the appropriate safeguards must be in place. The IRS must, Mr. President, oversee this. The IRS will oversee this. This is a pilot program. The 1993 GAO report indicated, Mr. President, that the IRS was moving forward with the plans for a pilot test which would start as early as October 1993--we are behind on that--and that the IRS' long- range plans included expansion if the test worked. The Vice President's reinvention proposal indicates that a pilot test should be developed. And considering the fact that taxes remain uncollected in the United States and that the number of IRS personnel continues to grow, and the only apparent way the IRS is able to increase revenues is to spend more money and hire more people, should we not try something new? I say yes. This proposal allows the IRS to create the plan. They can address all of the concerns that have been raised, not only by the Senator from Arkansas, but by others, including this Senator. I firmly believe, Mr. President, that we should use all of the resources available to ensure that tax scofflaws are tracked down and those of us who pay our taxes are given more for our money. Let me continue. The conferees have included, Mr. President, a provision which will create the pilot program allowing private law and collection activities to pursue delinquent tax bills under the direction of the IRS, Mr. President; no one else. This proposal is intended to be innovative. It gives the authority to the IRS to make the decisions. The IRS will be able to use all of the safeguards available to ensure taxpayers and disclosure problems. Many businesses and States already use private collection sources in an attempt to manage and to supplement their basic resources. The GAO reported in 1993 that 28 States with individual income tax problems used private collection companies in collecting taxes. Only 6 of the 28 States felt they were ineffective. Several questions have been raised by the Senator from Arkansas, and they should be, about the private collection initiative. Some of those questions are basically these: Is privatizing certain collection activities on delinquent tax debt a good idea? The answer, I believe, is yes. Currently, approximately $70 billion, Mr. President--$70 billion--is owed to the IRS in delinquent tax debt upon which the IRS has ceased active collection efforts, and this amount is growing by roughly $10 billion a year. This proposal before us would allow private firms to provide limited collection services on that debt at no cost to the taxpayers, unless the debt is collected, because these accounts are currently lying dormant at the IRS and will remain so. What prevents private collectors from engaging in abusive collection practices or disclosure of confidential information? The Fair Debt Collection Practices Act and the Privacy Act of 1974 prohibit harassment of debtors and other unfair collection practices, as well as the unauthorized disclosure of debtor information to third parties. Violations of these provisions can subject collectors to millions of dollars in actual and punitive damages. Let me go into this a minute. What type of taxpayer records will they have access to? This was raised by the Senator from Arkansas. The only information that contractors would receive would be the debtor's name, the address, the phone number, the Social Security number, employer, and amount owed, just as they would with any nontax debt in America. Mr. President, the debtor's tax return would not--and I repeat, would not--be disclosed to the contractor. Who will these contractors be? Private collection companies that specialize in collecting overdue debts. An example of the best pool of candidates from which to choose would be those collectors currently working under the Department of Education's private sector collection activities for student-related debt contracts. Who will train them? According to GAO, one of the reasons for using private collection companies is for the IRS to learn from the techniques that are being used in the private sector to collect overdue taxes. Consequently, the training of employees who will be performing this function should be, I believe, done by private collection companies that will be contracting with the Internal Revenue Service, under the supervision and guidelines of the Internal Revenue Service. With respect to special expertise that is needed for collecting tax debts, the IRS should and would provide the speciality training. No one else. On which cases will the collector's work? Currently not collectible accounts, that is what they are called, Mr. President, as classified by the IRS since these accounts are now lying dormant at the IRS, $70 billion of them. One approach would be to send cases to private contractors that are otherwise noncollectible, primarily where there is an inability to locate the taxpayer and, in such cases, a contractor should be able to invest more resources to locate them than the IRS can spend. Another approach would be to take cases that are deferred, meaning that there is a small enough balance due that the moneys are left uncollected until some other credit shows up in the system, such as a refund, that is then offset against the deferred amount, and replace these with private collectors. What type of collection services will they provide? The contractors will be responsible for generating letters to be mailed in most cases by the IRS and making phone calls to debtors. The letters and calls would be designed to remind debtors of their outstanding tax debt and to seek assurances from the debtor that the debt will be repaid. The contractors would not, Mr. President, be authorized to receive funds, compromise debts, sue debtors, seize property, or levy against assets. At this time, it would seem to make sense to me to test a program where private contractors locate and call taxpayers by telephone and inform them of how much they owe, how high interest and/or penalties are accumulating, their options, and the actions the IRS can take if they do not pay. However, the contractor would not make the final decision and should not make the final decision whether or not to enter into an installment agreement or to take any other collection action. The bottom line is that this is a pilot program. IRS has full control. They should have full control. The points I have tried to respond to are examples. IRS will be making the decisions. I believe that any ideas should be considered. I believe this is a good proposal that we have come forth with.

Mr. SHELBY. Mr. President, I now ask unanimous consent that the vote occur on adoption of the conference report to accompany H.R. 2020, the Treasury-Postal Service appropriations bill, at 4:45 p.m. this evening, and that the Senate recede from the Senate amendment in disagreement at that time.

Mr. SHELBY. Yes. The subcommittee will carefully review this project in our deliberations next year for court construction for fiscal year 1997.