Richard Shelby

Mr. SHELBY

Mr. SHELBY. I would be happy to yield to the distinguished Senator from Colorado.

Mr. SHELBY. Mr. President, I would also like to take this opportunity to thank Senator Kerrey for working with me on this bill. We have a good relationship. We have worked hard on the bill, and I think we have accomplished much. I also wish to thank Patty Lynch, who has worked with our staff day in, day out. I thank Chuck Parkinson who has put in hours and hours of work, and also my legislative director, Stewart Hall.

Mr. SHELBY. Mr. President, I know of no other amendments. Does the Senator from Nebraska?

Mr. SHELBY

Mr. SHELBY. Would the majority leader yield?

Mr. SHELBY

Mr. SHELBY. Mr. President, I wish to speak for a few minutes about our ballistic missile defense program and the ABM Treaty with an eye toward dismantling several myths about our missile defense program and the scope of the ABM treaty. Unfortunately, many of the opponents of a deployable national missile defense system, including the President, confuse the central issues at hand in this debate through the perpetuation of two central myths about national missile defense. They maintain consistently that one, deploying a national missile defense system is a return to star wars and two, that such a deployment is an abrogation of the ABM Treaty. Neither of these claims has any grounding in fact. First, the opponents of a deployable NMD system would have the Senate believe that in supporting NMD deployment we are committing ourselves to a long-term research program that would cost this Nation tens of billions of dollars. In addition, they would have the Senate think that this system is a space-based system modeled along the lines of the star wars program of the 1980's. The deployed NMD system called for in this bill is neither a distant technological dream, a space-based system, nor an overly expensive investment for the American taxpayer. This legislation calls for a deployable, multiple site, ground-based interceptor system by the year 2003. Let me repeat--a ground-based interceptor system. The current GBI configuration of a national missile defense system builds off our current advances in theater missile defense--advances that proceed from the concept of ground-based antiballistic missiles. Such a system builds upon existing ground-based interception technology--technology that is currently deployed or is being validated through successful flight tests. The only current limitation on rapid EKV development and deployment is the funding strangulation placed on our NMD program by the current administration. The centerpiece of this system, the Exoatmospheric kill vehicle or EKV, has been in development for 5 years and has demonstrated outstanding technological progress and achievements. The EKV is a real piece of hardware designed to perform a mission that is well within our current intercept capabilities. As opposed to tens of billions dollars in outlays to develop and deploy a ground-based NMD system, a deployable system will require a scant percentage of the funding provided for space-based research in 1980's. In fact, this year's authorization and appropriations bill call for an increase of only $300 million for national missile defense--an amount that is roughly a third of the cost of one destroyer. The opponents of national missile defense also claim that the national missile defense provisions in [[Page S 11236]] this authorization bill would violate the Anti-Ballistic Missile Treaty. While the ultimate goal of multiple site deployment of an NMD system will require modifications to the ABM Treaty, nothing in the range of the coming year's research and development efforts will in fact, violate the constraints of the treaty. Therefore, the committee has, wisely, asked only for a Senate study on the application and relevance of the ABM Treaty to the current missile defense needs of this country. The ABM Treaty is over two decades old. It is based upon a doctrine of deterrence commonly known as mutually assured destruction. While this doctrine was absolutely applicable to the realities of the cold war, it has little place in a nonbipolar world of rogue regimes and proliferating ballistic missile technology. Unfortunately, the current administration continues to adhere not only to a belief that the parameters of the treaty remain valid in today's world, but seem determined to apply unilateral interpretations to the treaty that limit not only our national missile defense program, but also our theater missile defense systems--limitations beyond those expressly contained in the treaty. Therefore, the committee has recommended a provision that would codify TMD speed and range standards for treaty compliance--standards derived from the administration's own November 1993 proposal. Make no mistake, Mr. President, the global political situation and the nature of the ballistic missile threat has changed dramatically from the time of the ABM Treaty's ratification. North Korea is nearing long-range ballistic missile capability. Just 2 months ago, the Chinese fired a truck-launched ICBM, demonstrating just how easy it will be for rogue states to develop and launch ICBM's on the cheap. Mr. President, the threat to the United States from long- range ballistic missiles from rogue regimes will exist by 2003, if such capabilities do not already exist. It is absurd and irresponsible to continue to deny our citizens protections from a real threat, especially if that protection can be provided for limited cost and is based upon technology which is near fruition. I strongly urge my colleagues to see through the myths regarding national missile defense and resist any attempts to weaken the commitment of this act to deploying an NMD system.

Mr. SHELBY

Mr. SHELBY. Mr. President, I am proud to announce the introduction of the Freedom and Fairness Restoration Act in the Senate of the United States of America. Two years ago, the flat tax was not even considered as an alternative in the tax reform debate. One [[Page S 10321]] year ago, thanks to the able House majority leader, the flat tax was introduced in the House of Representatives and took the country by storm. Today, I am here to tell the American people the flat tax has found a home in the Senate and the flat tax is not only a legitimate proposal for tax reform, it is the leading candidate. When considering any proposal for tax reform, one has to ask the question, ``Should the Federal Government coerce free individuals by means of tax policy?'' I believe the answer is a clear and resounding ``No.'' In other words, tax policy should neither encourage nor discourage the personal decisions of free individuals in America. If one accepts this premise, one has to conclude the best alternative for tax reform is the flat tax. No other tax proposal, not the sales tax, and especially not the Gephardt un-flat tax, has the attribute of neutrality. The Armey-Shelby flat tax taxes every dollar in the economy once and only once--all at the same rate. As a result, the Armey-Shelby flat tax does not coerce free individuals into making decisions to take advantage of a special interest tax break or to avoid some tax penalty. The basic premise of the Freedom and Fairness Restoration Act is that free individuals know best how to spend their hard-earned dollars. The current Tax Code, while serving its purpose of revenue collection, has many problems. It contains high marginal rates as well as a hodgepodge of special interest deductions. In addition, the complexity of Federal tax laws cost taxpayers approximately 5.4 billion hours, or $150 billion, just to comply with the current Internal Revenue Code. As a result, the time has come to abolish the old, inefficient tax system and adopt a new, strict flat tax--20 percent for the first 2 years, and 17 percent thereafter. Generous personal allowances--$31,400 for a family of four--will cut taxes for families and provide a level of progressivity many find essential for tax reform. The flat tax will eliminate the double taxation of savings and promote jobs and higher wages. These attributes of the Armey-Shelby flat tax are the keys that unlock the door to economic prosperity and assures freedom and fairness for all.

Mr. SHELBY

Mr. SHELBY. Mr. President, I ask for the yeas and nays on the Glenn amendment.

Mr. SHELBY

Mr. SHELBY. Mr. President, I send an amendment to the desk.

Mr. SHELBY. Mr. President, I believe the bottom line here is balance. The balance is, who should bear the cost of fraud? That is the question before the Senate today. Who should bear the cost of fraud? Should it be the perpetrators, or should it be the victims? It should be the perpetrators, and never the victims. I think that is a bottom line of American jurisprudence. This bill, if it were to pass, would change that, unless we adopted the amendment that I have offered on behalf of myself, Senators Bryan, Boxer, and Sarbanes. This amendment makes sense. Why do we think the Chairman of the Securities and Exchange Commission supports it? We do not need any more Keatings in America. We did not need anything close to that in America. We do not need to pass a bill up here without protection of the innocent people that invest. We should never, never, Mr. President, try to protect the perpetrators of wrong in America. I believe this amendment makes a lot of sense. I urge my colleagues at the proper time to vote for it.

Mr. SHELBY. Does the Senator from Nevada know anywhere in American jurisprudence where the victim is left out in the cold like they would be if this bill passes?

Mr. SHELBY. I thank the Chair.

Mr. SHELBY. Mr. President, I ask unanimous consent that Senators Boxer and Sarbanes be added as original cosponsors.

Mr. SHELBY. Mr. President, I ask that a statement by the Chairman of the Securities and Exchange Commission regarding proportionate liability be printed in the Record.

Mr. SHELBY. I wonder if the distinguished Senator from Nevada would yield for one question.

Mr. SHELBY. Mr. President, I think what we need to do here this morning is focus on what we are really doing here; focus between a wrongdoer, perpetrator of wrong, and the victim of the action. It is not the process of intimidation--I would reject that--but the process of wrongdoing that we should be concerned with. We should not, Mr. President, we should not protect the perpetrator of wrongdoing over the victim. That turns American jurisprudence upside down. I believe here in the Senate today that we should be thinking about the innocent victim and not the perpetrator, not the people who put these things in motion and then they want a statute to protect them to some extent. That is what that is about here. I think, if the Members of the Senate would really focus on the content of this bill and what it will do to the innocent victim, they would feel a lot better about the amendment. The phrase ``hijacking'' was using. That is right, ``hijacking.'' Who is going to be hijacked if this bill passes? I will tell you who it is going to be, it is going to be the innocent victims, it is going to be the innocent people who are going to be hard pressed to press their claims or to collect anything for the wrongdoing in the future. I am real concerned and really disappointed that this bill before the Senate will do more to impair the rights of the small investors in America--and there are millions of them--than it will do to place checks on abusive conduct and frivolous litigation. None of us are interested in frivolous litigation. There is no room for that in our courts. You know, that is one of the reasons, I suppose-- one of the reasons, not the only reason--this bill was brought. But there are bona fide cases in America and there will be in the future where, if this bill passes, the innocent victims will not be able to redress their injuries. Mr. President, I ask unanimous consent that an article that appeared in Newsweek by Jane Bryant Quinn, ``Losing Your Right To Sue? Congress may make it hard for you to pursue a case of securities fraud,'' be printed in the Record.

Mr. SHELBY. Mr. President, something I thought was ironic here, if you look at S. 240 it starts out and says: A bill to amend the Securities Exchange Act of 1934, to establish a filing deadline and [listen to this] to provide certain safeguards to ensure that the interests of investors are well protected. Is that what this bill is really about? I submit that it is not. I hope the Members of the Senate will focus on this amendment because it has a lot of merit to it. It will strengthen this bill. It will strengthen the rights of victims in America, victims of securities fraud. I do commend my colleague from Nevada, Senator Bryan, for his cosponsoring this, and his leadership in this direction. [From Newsweek, June 26, 1995] Exhibit 1 Losing Your Right To Sue? Congress may make it hard for you to pursue a case of securities fraud (By Jane Bryant Quinn) Talk about a twist of fate. Rep. Christopher Cox, a California Republican, wrote a tough, aggressive bill on securities-law reform, which passed the House of Representatives in March. If it becomes law, investors who think they've been defrauded will find it incredibly hard to bring a class-action lawsuit to recoup their loss. Just two months after this bill passed, Cox found himself tagged by just such a suit, brought by some victims of the noxious First Pension fraud. In a second suit last week, First Pension's court-appointed receiver charged Cox, among others, with contributing to the hoax. ``Defamatory and wildly false,'' Cox fumes. First Pension handled the paperwork for tax-deferred retirement accounts. It also sold clients fraudulent real- estate investments and secretly tapped their accounts for cash. The company is in receivership, its principals in jail and its customers out $136 million. To recover some money, investors are going after the supporting players. That includes Cox and his former law firm, Latham & Watkins. Cox's job was to set up a company that could have absorbed the purported mortgage investments. The lawsuits allege that he knew, or recklessly failed to find out, that the mortgages weren't sound. Says Cox, ``I did not know. First Pension concealed the fraud.'' So is Cox the innocent victim of scorched-earth lawyering? Or is he an enabler who deserves to be called to account? The courts will decide this specific case. But the issue encapsules the conflicts that swirl around securities-law reform. The objective of reform is to staunch what companies claim is a flood of frivolous lawsuits. Greedy lawyers, they say, sue on flimsy grounds. The companies pay as the cheapest way out. But the Cox bill and another bill before the Senate would stifle honest lawsuits, too. Among other things, they: Preserve a Supreme Court decision that sharply limits the time for bringing a securities suit. Formerly, you had three years to sue in federal court, starting from when the fraud was discovered. In 1991, the court cut that back to just one year but in no event more than three years after the date you bought. So if a crook can deceive you long enough, you lose the protection of these laws. Most of First Pension's investors have been caught in that trap, says San Diego attorney Michael Aguirre. The scam began more than a decade ago but investors just recently found it out. So they can't sue for securities fraud, either in federal or state court. Aguirre is suing for common-law fraud, but says that it's not an easy fit. Preserve another Supreme Court decision that lets some of the people who helped with a fraud escape liability for the loss. It's the lawyers/accountants/consultants self- protection clause (although those who are central to the fraud remain on the hook). This rule would have limited the sums recovered by those who bought bad bonds from the notorious Charles Keating, chief of the Lincoln S & L. Keating's company went broke and he went to jail. His duped investors got most of their money back, says San Diego lawyer Bill Lerach, but only because they successfully sued the minions who helped him operate. (I do think, however, that marginal players shouldn't have to foot the entire bill. Some sort of proportional payment is fair, as the proposals suggest.) Make it harder to sue a company that grievously misleads investors. Under current law, it's OK for execs to make good- faith business predictions, even if their guess is wrong. They're liable only for deliberate fibs. But because they worry about lawsuits, they may suppress even reasonable forecasts that might help investors make a decision about the stock. Hence, this proposal, which makes it safer for managers to talk. But like so much else in these slipshod bills, it goes too far. A shady promoter could safely say almost anything. You'd call it a lie; he'd say it was innocent optimism. To win a lawsuit you'd have to prove that the speaker intended to deceive--which is pretty tough to do. Cox's bill (but not the bill in the Senate) could protect even a deliberate lie. Put investors and their lawyers at risk of owing the defendants' legal fees if they lose their case. Cox scoffs at the thought that judges would actually order individuals to pay. ``The lawyer would pay'' and adds the cost to your fee, he says. But the mere threat of owing a corporation's costs will scare people off--and scare all but the best-funded lawyers, too. Sen. Richard Bryan has a better idea. He proposes a screening process that would test the merits of a suit. If the screener thought it was frivolous--and you brought it and lost--then you'd risk paying all the costs. Ditto on the other side, if the company refused to settle what looked like a meritorious claim. Some reasonable, Bryan-like compromises need to be reached because Congress (especially the House) is throwing a bomb at a problem that just needs a switchblade. There's not even a litigation explosion, says James Newman, publisher of Securities Class Action Alert in Cresskill, N.J. The number of lawsuits is up, but that's because more are filed in each dispute. The number of companies sued remains in a constant range. There were only 140 in 1993, he says. Another myth is the oft-heard claim that ``vulture lawyers'' automatically sue if a company's stock falls by 10 percent in a single day. Baruch Lev, a professor at the University of California, Berkeley, tested a version of this idea for the three years ending in 1990. Of 589 companies whose stock price dropped by more than 20 percent in the five days around the time of a disappointing earnings report, only 20 were hauled into court. And rarely on the strength of the price drop alone, says Jonathan Cuneo, general counsel of the National Association of Securities and Commercial Law Attorneys. In many of these cases, he says, ``executives are telling the public that everything is going to be great while they're bailing out and selling their own stock.'' There's some good stuff in these bills, especially in the Senate version. They stop lawyers from paying a bounty to people who find them clients, block stockholders who sue for a living and try to discourage frivolous suits. But they overreach. In a nation of laws, you're disenfranchised if you lose your day in court.

Mr. SHELBY. Mr. President, the amendment that I am offering I am offering on behalf of myself and the Senator from Nevada, Senator Bryan. S. 240, which is the bill before us, provides for proportionate liability for defendants found guilty of reckless conduct by limiting joint and several liability to defendants found guilty of knowing securities fraud. As an equitable matter, I generally support proportionate liability as between wrongdoers. Less culpable defendants should not, I believe, necessarily be liable to the same extent as more culpable defendants. I think that is just common sense. However, proportionate liability should not act to deprive the innocent victim of a full recovery--in other words, defraud people of their basic rights. Much more important than ensuring equity among defendants, I believe is ensuring that as between the wrongdoer and the innocent victim, it is the wrongdoer that bears the burden--yes, Mr. President, bears the burden--of any uncollectible judgment caused by an insolvent defendant, not the victim. S. 240 turns the principle on its head. S. 240 before us today would make the innocent victim bear the loss of an insolvent defendant by capping the liability of proportionate defendants to only an additional 50 percent of their share. Beyond that, the victim bears the loss. Additionally, S. 240 would only allow the victim to recover his full damages against the remaining defendants if his or her net worth is less than $200,000 and the victim's damages are greater than 10 percent of their net worth. Mr. President, why we would want to place restrictions on a victim's full recovery, to limit a defendant's liability is beyond me in the first place. But the provision also fails in its purpose. Many retirees own their own homes and have significant equity in their property. Many have saved and invested for years and years for retirement. This is not a bad thing. We usually encourage such behavior. Yet, many older retirees would be precluded from a full recovery here because their net worth is over $200,000 and their damages are less than 10 percent or $20,000. Why we would want to intentionally punish an individual who is productive, who saves and invests for the future, is not completely clear to me. Further, Mr. President, I must seriously question, as others have, a bill like this that makes a judgment that these productive members of our society should somehow be less entitled to recovery because they have more net worth than the next guy. Mr. President, as I have stated, this amendment that I offer on behalf of myself and Senator Bryan is simple. It would strike the net worth and damage requirements and make proportionate defendants responsible for the uncollectible share of an insolvent codefendant in proportion to their percentage of responsibility or culpability. It puts the victim before the defendant, as I believe it should in this society, as it rightly should. I urge my colleagues to support it. This bill has some good things in it, but this is not one of them. I think it is time we think up here today--and I hope we will--about the victim and not the perpetrator of fraud and abuse in securities. I urge my colleagues to support this amendment.

Mr. SHELBY. Mr. President, I would like to commend Chairman D'Amato, Senators Domenici, Dodd, and Gramm for their hard work in trying to forge a consensus behind reforming our securities litigation system to weed out abuses and eliminate frivolous suits. I am concerned and disappointed, however, that the bill before the Senate will do more to impair the rights of the small investor than it will to place checks on abusive conduct and frivolous litigation. For this reason, I continue to oppose S. 240. Earlier this spring, Senator Bryan and I introduced a bill aimed at striking a balance between preserving the rights of the small investor and eliminating incentives for frivolous and abusive litigation. Senate bill 667 incorporated many of the widely supported provisions incorporated in the bill before us like prohibiting 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, our bill addressed many of the concerns that Chairman Levitt and the SEC have raised against S. 240 regarding pleading requirements, liability standards, and statute of limitations issues. While the bill before us responds to some of these concerns--it still fails to ensure adequate protection of the rights of the innocent victim of securities fraud and effectively leaves the little guy who seeks redress for professional wrongdoing out in the cold. On several key issues, S. 240 fails to preserve the important role that legitimate private securities litigation plays in checking abusive conduct and, in fact, makes it more difficult for the small investor to gain access to the courts and obtain full recovery for securities fraud. I believe that individual investors, particularly small shareholders, must be assured a full recovery against professional wrongdoers if we are to maintain integrity in our securities markets. Like Chairman Levitt and many other colleagues, I believe the bill can still be improved. I, therefore, intend to offer a couple of amendments that I believe will help assure that meritorious claims are not inhibited in our effort to prevent frivolous and abusive ones. Mr. President, S. 240 makes important reforms, many of which I support. Sadly, however, the bill would come at too great a cost to the small individual shareholder. I urge my colleagues to oppose S. 240 as currently drafted and support amendments to reinstate important investor protections against securities fraud. Amendment No. 1468 (Purpose: To amend the proportionate liability provisions of the bill)

Mr. SHELBY

Mr. SHELBY. Mr. President, one of the many controversial provisions of the 1994 crime bill was the requirement that states have in place an array of dubious programs, including social rehabilitation, job skills, and even postrelease programs, in order to qualify for the prison construction grant money contained in the bill. This requirement is yet another manifestation of the criminal rights philosophy, which has wreaked havoc on our criminal justice system. This view holds that criminals are victims of society, are not to blame for their actions, and should be rehabilitated at the taxpayers expense. In their zeal to rehabilitate violent criminals, proponents of this ideology have worked overtime to ensure that murderers, rapists, and child molesters are treated better than the victims of these acts and that these criminals have access to perks and amenities most hard- working taxpayers cannot afford. Award-winning journalist Robert Bidinotto has revealed myriad abuses. For example, at Mercer Regional Correctional Facility in Pennsylvania, hardened criminals have routine access to a full-sized basketball court, handball area, punching bags, volleyball nets, 15 sets of barbells, weightlifting machines, electronic bicycles, and stairmasters facing a TV, so the prisoners do not have to miss their favorite show while working out. Or consider David Jirovec, a resident of Washington State who hired two hit men to kill his wife for insurance money. His punishment? Regular conjugal visits from his new wife. At Sullivan high-security prison in Fallsburg, NY, prisoners hold regular jam sessions in a music room crowded with electric guitars, amplifiers, drums, and keyboards. In Jefferson City, MO, inmates run an around-the-clock closed-circuit TV studio and broadcast movies filled with gratuitous sex and graphic violence. Perhaps the winner in the race for rehabilitation is the Massachusetts Correctional Institution in Norfolk, MA. There, prisoners sentenced to life in prison--known as the Lifers Group--held its annual Lifers Banquet in the $2 million visitor's center. These 33 convicts-- mostly murderers--and 49 of their invited guests dined on catered prime rib. This is just the tip of the iceberg. These are not isolated incidents, but have become commonplace in our criminal justice system. Violent criminals have by definition committed brutal acts of violence on innocent women, children, the elderly, and other citizens. That the government continues to take money out of the pockets of law-abiding taxpayers--many of whom are victims of those behind bars--to create resorts for prisoners to mull around in is incomprehensible. The rationale for this system is likely summed up by Larry Meachum, commissioner of correction in the State of Connecticut: ``We must attempt to modify criminal behavior and hopefully not return a more damaged human being to society than we received.'' Mr. President, I reject this liberal social rehabilitation philosophy. I introduced legislation yesterday, the Prison Work Act of 1995, which has a different message: prisons should be places of work and organized education, not resort hotels, counseling centers, or social laboratories. It ensures that time spent in prison is not good time, but rather devoted to hard work and education. This is a far more constructive approach to rehabilitation. Specifically, the Prison Work Act repeals the social program requirements of the 1994 crime bill and instead makes the receipt of State prison construction grant money conditional on States requiring all inmates to perform at least 48 hours of work per week, and engage in at least 16 hours of organized educational activities per week. States may not provide to any prisoner failing to meet the work and education requirement any extra privileges, including the egregious items listed above. The critics of this legislation are likely to portend that it is too costly or too unworkable. However, as prison reform expert and noted author John DiIulio has pointed out, one-half of every taxdollar spent on prisons goes not to the basics of security, but to amenities and services for prisoners. However, these extra perks would be severely restricted under my legislation. No one failing to meet the work and organized study requirements would have access to them, and since the inmates would be occupied for 11 hours per day fulfilling the work and study requirement, the opportunity for these costly privileges would be reduced. Moreover, to reduce operation costs even further, prison labor could be used to replace labor that is currently contracted out. Thus, these programs could easily be implemented. The other charge will likely be that the Federal Government should not micromanage State prison efforts. However, this bill does not micromanage at all. Rather, States have been micromanaged by the Federal courts which have mandated that States provide prisoners with every possible amenity imaginable. For example, Federal Judge William Wayne Justice of the Eastern District Court required scores of changes in the Texas prison system, designed to improve the living conditions of Texas prisoners. These changes increased Texas's prison operating expenses tenfold, from $91 million in 1980 to $1.84 billion in 1994-- even though the prison population only doubled. This legislation will empower State and local prison officials to operate their systems in a cost-efficient manner, and will give them the much needed protection from the overreaching Federal courts. More importantly, it will put the justice back in our criminal justice system and ensure that criminals are not treated better than the victims.

Mr. SHELBY

Mr. SHELBY. Mr. President, I rise today to bring to the attention of my Senate colleagues the retirement of Charles Land, publisher of the Tuscaloosa News. After 40 years of service to the News, the city of Tuscaloosa, and the State of Alabama, Charlie has decided to turn over the job of publishing the Tuscaloosa News, and hopes to spend more time working in the community, golfing, fishing, and writing. I would like to take just a few moments, Mr. President, to recognize the outstanding professional and community leadership Charlie has provided over the years. A native of Memphis, TN, Charlie Land grew up in Tuscaloosa, attended Tuscaloosa public schools and the University of Alabama, and served his country for 3 years in the U.S. Army. Charlie's newspaper career began in high school, where he covered sports for the school paper--an experience that helped prepare him for his first position at the Tuscaloosa News as a sportswriter. In 1966, he was named Alabama Sportswriter of the Year, and his success led to a series of promotions at the News. In 1978, Charlie was named publisher of the Tuscaloosa News, and since then he has been a leader in the newspaper industry not only in Alabama, but throughout the southeast. He has served as president of the Alabama Press Association, a board member of the Southern Newspaper Publishers Association, president and board member of the Alabama Press Association Journalism Foundation and has won several State writing awards from the Associated Press and the Alabama Press Association. In addition to this professional success, Charlie Land has been an outstanding civil leader, dedicating his time and energy to many worthy causes. He is currently the chairman of the President's Cabinet at the University of Alabama as well as a member of the National Steering Committee and chairman of the Journalism Department division for the University of Alabama Capital Campaign. In the past, Mr. Land has served as board member of Crimestoppers, president of the United Way of Tuscaloosa County, president of the Greater Tuscaloosa Chamber of Commerce, and a board member of the Society of Fine Arts. Mr. President, Charlie Land's dedication to his community and his professional abilities are apparent, and I could mention the many, many awards and honors he has received in recognition of his work. But, as much as Charlie is a business and community leader, he is also a friend and advisor to many organizations and individuals in Tuscaloosa and the State of Alabama. Recently, the Chamber of Commerce of West Alabama organized a tribute in honor of Charlie Land. The people who have worked with him over the years praised him for having done so much for Tuscaloosa. ``When Charlie is your friend, you need few others,'' one attendee said. Others commented on his extraordinary insight and great skills as a listener and advisor. Charlie Land's insight, dedication, attitude, and abilities have made him an invaluable member not only of the Tuscaloosa News, but also of the greater Tuscaloosa community. His retirement may mark the end of a remarkable newspaper career, but the contributions he has made to the newspaper industry, the arts, and Tuscaloosa area business and development will be his legacy. Mr. President, I would like to thank Charlie Land for many years of dedication and work on behalf of the people of Tuscaloosa and the State of Alabama. I know that the leadership and advice he provided the Tuscaloosa News will be missed, but I am confident that he will continue his involvement in community and civic activities. I thank him for his work, and wish him the best in his retirement.

Mr. SHELBY

Mr. SHELBY. Mr. President, over the past few days Members on the other side of the aisle basically have claimed to represent the best interests of hard-working Americans. They stood up with charts and made passionate speeches, and say they know better. They criticized the Domenici budget, although they have no budget of their own. I believe that the budget resolution debate has been demagogued to death. This debate has been turned into an issue of who is compassionate and who is not, and rich against poor, even though the Senate budget resolution does not include $1 yet in tax cuts. Never mind we do not touch Head Start. Never mind that we do not touch the School Lunch Program. Mr. President, never mind that we do not cut Social Security. Never mind that we preserve Medicare, which will go bankrupt unless responsible leaders take action. [[Page S7215]] I believe we need tonight to discuss the real issues, like our tremendous national debt and our endless string of deficits. I believe that people on the other side of the aisle do not want to debate basically the fact that we are the biggest debtor nation in the world. People on the other side of the aisle I believe do not basically want to debate the fact that the dollar is, overall, losing its value against most major currencies, and that hard-working Americans are losing purchasing power every time the dollar depreciates. No, Mr. President, they will not debate the real issues. Mr. President, I was once told that on the other side of the aisle people see what they want to see, and that the Republicans have the unfortunate tendency of seeing what is there. I would like to show you what is there. Because what is there are the real issues. I want to share with you a chart, if I can, a chart that shows the Federal Government's net financial assets beginning in the year 1946, which is over here, through 1993. Instead of an upward spiral, you see a downward spiral because these are real issues. This chart comes from data contained in the 1995 Economic Report of the President. It shows the Federal Government's net financial assets, as I said, from 1946 to 1993. As one can see on the chart, the Federal Government is depleting the national wealth of the United States every year. It is going down. But look at it over here, how fast it is going down. The greatest country in the world, Mr. President, the United States of America, the great economic leader of our time, possessed net financial assets of nearly $3 trillion in 1993. Far from saving our children and investing in our kids for tomorrow, the spending machine of the Federal Government is squandering away our resources at a record rate. The chart says it better than we can. In fact, net financial assets of the Federal Government have been decreasing at a rate of 7.1 percent a year over the past 20 years, while private wealth has grown only 3.2 percent. The Federal Government is depleting national wealth at a rate twice as fast as the private sector can create. This is a trend that we cannot simply sustain as a Nation. There is a direct impact in the rise in Government budget deficits, which is to worsen the current account balance and place upward pressure on interest rates. Our current account stood at $104 billion in 1993. This means we either sold $104 billion in assets to foreign entities, borrowed $104 billion from foreign entities, or a combination of the two. Although a current account deficit in and of itself is not a bad thing, the accumulation of persistent current account deficits over time leads to an overwhelmingly external debt that we have today. These deficits identify a systematic shortfall of savings below investment due to an expansion consumption relative to income. The implication is that we borrowed to finance current consumption, expenditures that have no real effect on economic growth or future income in this Nation. In other words, the Government is borrowing abroad to finance the excess of expenditures over income. Projections of higher current account deficits run well into the foreseeable future, which does not bode well for this country. The increase in interest rates caused by budget deficits increase the cost of capital, home mortgages, car payments and any other goods that are financed. If the other side of the aisle really wants to help the hard-working, middle-class Americans, it seems to me they should help them reduce the cost of living instead of adding, Mr. President, to their already tremendous burden. It is true that hard-working, middle-class Americans need relief, but on the other side of the aisle I think a lot of the people just cannot accept the notion that relief does not have to come in the form of a check, Mr. President, in the form of a check from the Government every month. No, they do not have to accept the notion of freedom and free markets. They still believe that Americans depend on Government for their livelihood. I reject that notion wholeheartedly. I understand the unpleasantries of debt-stricken countries. We all do. Let me tell you that the restrained growth in this budget resolution is more compassionate, more beneficial and more tolerable than any experience of a bankrupt country. The immediate gratification of consumption does not outweigh the tremendous long-term benefits of a balanced budget. Democrats supposedly believe in a balanced budget. However, they have presented no proposal that I have seen. President Clinton supposedly believes in a balanced budget, but he has not presented one here that I know of. President Clinton, I understand, will not even support a $16 billion rescission package much less the $175 billion in cuts necessary to balance the budget this year. And $16 billion, Mr. President, is only 9 percent of this year's deficit. Come to find out it is only .3 percent of the $4.8 trillion debt. The actions of President Clinton and his party do not match their words. Their idea of deficit reduction is the Omnibus Budget Reconciliation Act of 1993 that we all know included the largest tax increase in history. Did it reduce the deficit, Mr. President? Yes. Only temporarily, for a year or two. But if one looks at the outyears, deficit spending just keeps going up as far as the eye can see. What do we have to show for our $241 billion tax increase? Nothing, I would submit--nothing but increasing deficits and reduced disposable income for hard-working Americans. The Congressional Budget Office has outlined the potential economic impacts of balancing the budget by the year 2002. They project long- term interest rates will fall by almost 2 percentage points. They also project an increase in real GNP of almost 1 percent, just from practicing a little fiscal discipline. Mr. President, a balanced budget is good for America today, tomorrow and forever. That is why I am going to support the Domenici budget. I suggest the absence of a quorum.

Mr. SHELBY. I need 15 minutes.

Mr. SHELBY

Mr. SHELBY. Mr. President, regarding the amendment we have worked out and that has been voted on, I agree with the senior Senator from Alabama. We can both count. We were counting votes and we were looking reality in the face. Our State of Alabama is unique among the 50 States in that, as I have said before on the floor, we have had a wrongful death statute that assesses punitive damages only where someone is killed and there is a civil action because of the death. Most States in the Union--I guess all of them except Alabama--have compensatory damages. If I had my ``druthers,'' I would leave this like it was or like it is today, but this will give the Alabama Legislature until September 12, 1996, to consider changing it, if this proposed legislation were to become law. Mr. President, I suggest the absence of a quorum.

Mr. SHELBY. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. SHELBY. Mr. President, I ask unanimous consent that I be allowed to amend the Shelby-Heflin amendment, which is slated to be voted on in a few minutes, by inserting at the end of the amendment: ``This paragraph shall cease to be effective September 1, 1996.''