Paul Simon

Mr. SIMON

Mr. SIMON. Mr. President, I send an amendment to the desk in behalf of myself and Senator Levin, and ask for its immediate consideration.

Mr. SIMON. I assure my colleagues I will just take a few minutes. Amendment No. 393 (Purpose: To provide for expedited judicial review)

Mr. SIMON

Mr. SIMON. Mr. President, Stanley O. Ikenberry, a giant on the national stage of higher education policy, will retire this year after an exceptional tenure of 16 years as president of the University of Illinois. President Ikenberry announced his decision last year to give the university's board of trustees ample time to carefully select a successor, and the board now has chosen James J. Stukel, chancellor of the University of Illinois at Chicago, to become the 15th president of the university. Few posts are as stressful and delicate--and as public and influential--as the presidency of a major university. Stan and Judy Ikenberry have handled the pressures superbly, with grace and warmth and character. Stan Ikenberry has kept a firm hand on the tiller and a clear eye on the horizon in charting the university's progress during his stewardship. The Ikenberry era has been an intense period of growth and vigor that has seen improvements across the breadth of the university's activities and has solidified the campus' stature as a world-class university and center of research. During his tenure institutions such as the university's National Center for Supercomputing Applications have been established, and the university activities in Chicago have been strengthened with the chartering of the University of Illinois at Chicago. Under Stan Ikenberry's leadership, the University of Illinois last fall became one of the first campuses in the Nation to offer the new direct student loan program to its students. Stan Ikenberry and the University of Illinois are helping to prove the merits of this bold new program that is benefiting not only students but also taxpayers and schools. I well recall that when another major university in our State became indecisive about the chance to establish and offer a permanent home to an annual Paul Douglas Ethics In Government Award, Stan Ikenberry seized the opportunity, and the award program is now underway, based in Urbana-Champaign. Stan Ikenberry is a statesman who has enriched American higher education. Governors, lawmakers of both political parties in the State legislature and in Congress, and his colleagues in the higher education community all have relied heavily on Stan Ikenberry's insight, wisdom, and leadership skills. I have had the pleasure and the opportunity of working with Stan Ikenberry on a wide range of issues of importance to the university and to national education policy. Among many, many others who have worked in this field, I am grateful for Stan Ikenberry's wisdom, for his constancy, and for his leadership. President Ikenberry has much more to contribute to the Nation when he moves later this year into other pursuits. To his great credit, he plans on resuming college-level teaching in the field of higher education administration. We extend to Stan and Judy Ikenberry our deep appreciation and our very best wishes for their future endeavors.

Mr. SIMON

Mr. SIMON. Mr. President, I yield myself such time as I will consume. Mr. President, I sympathize a great deal with the remarks of Senator Stevens. I want to have a line-item veto that I can vote for. I also agree with Senator Stevens that we ought to be looking not only at appropriations, we ought to be looking at tax breaks. I personally would like to give the President, in theory what I would like to do is maintain a good balance of power. But there are constitutional problems with doing that. I, in theory, would like to give the President authority to have a line-item veto or to reduce an appropriation, and that it would take a specific vote of a majority of the House and a majority of the Senate to override that. That forces a vote on our part. That way we cannot have some of these abuses that we hear about. But I think probably more significantly, the ability to reduce an appropriation would save more dollars, frankly, than just the ability to line-item veto something. Senator Stevens is correct. The majority of years Presidents request more money than we appropriate. The American public would be surprised to learn that. Six of the eight Reagan years, for example, the President requested more money than we appropriated. So Congress has been responsible in this area. The President ought to be able to force a vote on some of these things. A very practical problem we faced in Illinois, the State library made a technical error and Illinois libraries were going to lose $11 million in Federal funds. I looked around for a bill I knew the President would sign, and I tacked that on. Now, what I favor is a system where if the President did not approve that, he could force Members to vote. Frankly, if I cannot get 51 Members of the Senate or a majority in the House to support it, it should not pass. I think that is the direction that we ought to go. The difficulty with that is, apparently to do that statutorily, we run into a constitutional impediment. That is why my former colleague from Illinois, Senator Dixon, and I, had a constitutional amendment which would have made that possible. I still favor that idea. The difficulty with the proposal by my colleagues, Senator Bradley and Senator Hollings, of having separate bills for every item is, first, it will be a lot of paperwork; second, it does not deal with the problem of reductions in appropriations; third, Congress is going to be very creative and we will lump sum a lot of things together so we do not have as many lines in all that. I hope we can get something worked out. Senator Stevens is correct, also, in saying the total amount saved is not going to be large. My guess is if we get something that is worked out, we will be fortunate if we save $5 or $6 billion a year. That is no small amount, but with a $200 billion deficit, that is nowhere near the kind of money that we need. That is why we need the balanced budget amendment so we look more comprehensively. I hope again, Mr. President, we can work something out. I yield the floor. Mr. ASHCROFT addressed the Chair.

Mr. SIMON. I promise. Mr. President, let me say to my friend from North Dakota that the balanced budget amendment does not get into all kinds of details. The balanced budget amendment does not change one iota from the way we handle the trust funds right now. It does not change our present practice. I favor statutorily changing it. I agree with Mr. Krauthammer that the great threat to Social Security is debt. I think any real analysis has to come to that conclusion. But I favor statutory protection along the lines that Senator Conrad suggested.

Mr. SIMON. Will my colleague yield for 1 minute?

Mr. SIMON. Yes, Mr. President, I thank my colleague for yielding. If I may, this will sound like a politician talking when I say I think Senator Conrad and Charles Krauthammer each has a very valid point. The point that Senator Conrad makes that we should be balancing the budget without using the Social Security trust fund to do so I think is a very valid point, and it is a point that he and his colleague, Senator Dorgan, have made very forcefully. The point Mr. Krauthammer makes is that the great threat to Social Security is debt, because we are headed toward monetizing our debt and devaluing our dollar. We are headed down the Mexican route right now. The only way I see of stopping that is the balanced budget amendment. So, what I favor is passing that balanced budget amendment. I hope, somehow, we can get some statutory modifications that can satisfy some who, like Senator Conrad, are very genuinely sincerely concerned about the Social Security trust funds and protecting them. His point is valid. The Krauthammer point, that the real threat to Social Security is debt, is also a very valid point. I thank my colleague from Arizona for yielding. Several Senators addressed the Chair.

Mr. SIMON. Will my colleague yield?

Mr. SIMON

Mr. SIMON. Mr. President, I appreciate the column of James Glassman, which has appeared on the financial pages of the Washington Post twice a week and, I was pleased to see, on the editorial page the other day. In a column titled, ``Down Goes the Dollar,'' he suggests that we ought to be looking at our deficit if we really want to do something about the dollar. Unfortunately, the lesson of recent history is that we will pay attention to the deficit for a short time, then other things will preoccupy us, and our interest in reducing the deficit will diminish. That is why we need a constitutional amendment. In his excellent column he quotes Alan Greenspan in response to a question by Representative John Kasich about what would happen if we actually moved to balancing a budget. The Chairman of the Federal Reserve Board, Alan Greenspan, replied ``There would be some strain.'' Then, he says, as borrowing fell, so would interest rates, and ``the effects would be rather startling.'' Real incomes would rise, and we'd be ensured that our kids would live better than we have, he said. Alan Greenspan's remarks coincide completely with what Data Resources, Inc., the Congressional Budget Office, and the General Accounting Office [GAO] have told us. The GAO report to us in June 1992 said that two decades after we balanced the budget, the average American would have an increased income of 36 percent. That is a startling figure. And they suggest, if we simply stumble along as we are doing now, that's what we will do in terms of our standard of living, with a possible slight increase or slight decline; or, as appears more likely, the deficit gradually grows, their prediction is for economic chaos. No one should have any illusions. Our failure to address our fiscal problems discourages financial markets in this country and around the world. I urge my colleagues to read the James Glassman column, and I ask that it be printed in Record. The column follows: [From the Washington Post, Mar. 14, 1995] Down Goes the Dollar (By James K. Glassman) Dinner for two at Aubergine in Munich now costs more than 400 American dollars (including a half-decent wine), and a room at the Imperial Hotel in Tokyo runs $600 a night. But if you aren't planning a trip to Germany or Japan, the recent decline in the dollar won't affect you much. At least not yet. Benign neglect can sometimes solve currency problems, but the dollar is so weak right now that the only way to preserve its status as the world's reserve currency may be a sharp increase in interest rates. ``We fear that the ending of this will not be pretty,'' wrote Ray Dalio, an astute financial analyst, in a fax to his clients last week. Exchange rates are a complicated and emotional subject. No one really knows why they go up and down, but there's certainly a glut of explanations for the latest crash in the dollar: ``The Mexican crisis is almost certainly the single biggest factor,'' said economist John Mueller of Lehrman Bell Mueller Cannon in testimony before a Senate committee. ``It comes down to a lack of confidence'' in the ability of new Treasury Secretary Robert Rubin, wrote Hobart Rowen of The Post on Sunday. Charles Ramond, whom runs the currency consulting firm Predex in New York, says that the dollar will keep falling simply because it's too popular, especially in emerging countries--``the best U.S. brand since Coca-Cola.'' And with so many greenbacks floating around the world, the dollar has been cheapened as a ``store of value.'' But there's another explanation that's easier to understand: Our twin deficits--in trade and in the federal budget--are forcing us to borrow too much. Through the early 1980s, the United States was the world's biggest creditor; now we're the world's biggest debtor. When foreigners lend to us, they have to trade their own currencies for ours. Now, the Japanese, for example, are saying that they'll only part with about 90 yen to buy a dollar, in 1985, they pared with 263 yen. If the dollar keeps falling fast, these lenders my become reluctant to make dollar investments at almost any price (that's what happened with peso investments in Mexico). The only way to lure them will be with higher interest rates. Dalio believes that if the Federal Reserve moves quickly (it meets March 28), then the rate hike may only have to be one percentage point, or two or three. That would probably mean a recession, but if the Fed waits longer, ``the eventual rate hikes and economic damage will have to be more severe.'' The truth is that the Fed has shown little appetite for raising interest rates to attract foreigners to the dollar. But the dollar's weakness may force the Fed's hand for a different reason--something economists call ``imported inflation.'' To make up for a falling dollar, foreign manufacturers have to raise the prices they charge for goods they import to the United States. Thus, it's likely that Japanese cars, for example, will cost more here. If that happens, U.S. automakers will raise their prices, too, slipping under the Japanese umbrella. In his testimony before the House Budget Committee last Wednesday, Alan Greenspan, the Fed's chairman, admitted that imported inflation could be a problem and that ``it is important to contain such pressures''--which the Fed does by raising interest rates to dampen economic activity. Of course, there's a better way to strengthen the dollar: The government could stop borrowing $200 billion a year by balancing the budget. In fact, the defeat in the Senate of a constitutional amendment to do just that--and the subsequent beatification in the press of Saint Mark Hatfield, the only Republican dissenter--may even have ignited the dollar selloff. If so, then Congress will soon get a chance to show the international markets that it's serious. Tomorrow, the House Appropriations chairman, Rep. Bob Livingston (R-La.), is bringing a bill to the floor that will cut spending by $11 billion immediately. That may not sound like much, but it's actually revolutionary. In the past, Congress has used floods and earthquakes as excuses to raise spending in the middle of the year through ``dire emergency'' supplemental bills. Also tomorrow, Rep. John Kasich (R-Ohio), the budget chairman, will produce a list of reductions totaling nearly $200 billion. Those cuts would merely pay for the tax reductions in the ``Contract With America,'' but again, they should encourage the markets. Then, in May, Kasich will present what he calls ``The Big One''--the spending cuts to bring the budget into balance by 2002. Even if the tax reductions are trimmed by the Senate--and many House Republicans privately hope they will be--balancing the budget won't be easy. That's why Kasich asked Greenspan for some spine-stiffening words for rubbery members of Congress. ``What would you tell the American people the reasons would be for making some tough Wednesday. In the short run, Greenspan replied, ``There would be some strain.'' Then, as borrowing fell, so would interest rates, and ``the effects would be rather startling.'' Real incomes would rise, and we'd be ensured that our kids would live better than we have. ``That's an awesome statement, Mr. Chairman!'' said Kasich, practically bouncing out of his seat.

Mr. SIMON

Mr. SIMON. Mr. President, occasionally, there is good news. We tend to concentrate on the negative news. I am on the mailing list for the Armenian Information Service publication, New Watch, and in their March 8, 1995 edition the lead article is an Associated Press story of March 1, 1995 with that title, ``Armenia and Turkey Move Towards Conciliation.'' I hope that turns out to be reality. That is my hope for the sake of both Armenia and Turkey and stability in the region. Everyone ends up a winner if this turns out to be true. I commend the leaders of Armenia and Turkey for moving toward reconciliation. And I ask that the item be printed in the Record. The article follows: [From the Armenian Information Service, Mar. 8, 1995] Armenia And Turkey Move Towards Conciliation Turkey and Armenia seem on the verge of opening a new era in their relations. Turkey and Armenia appear willing to normalize ties, basically for mutual economic benefits, despite a history of diplomatic and historical conflict. ``Turkey is ready to contribute to regional peace with confidence-building measures,'' Ferhat Ataman, the foreign ministry spokesman, said in regard to Armenia. He did not elaborate. But a government official, speaking on the condition of anonymity, said Turkey might consider opening its air space to Armenia ``especially after Armenia's recent gestures to please Turkey.'' The official was referring to Armenian President Levon Ter-Petrossian's decision to close down a major opposition party, the Dashnaks, which demands an apology from Turkey for an alleged genocide and claims territory in eastern Turkey. ``An Armenian envoy told us that Ter-Petrossian and the Armenian people were willing to normalize ties with Turkey,'' Ataman said. Jirair Libaridian, Ter-Petrossian's chief advisor, was in Ankara last week on the invitation of the Foreign Policy Institute, which works closely with the foreign ministry. ``Normalization of ties will be the most natural move,'' Libaridian said then. The roots of Turkish-Armenian conflict go back 100 years. Armenians accuse the Turks of killing 1.5 million of their people during World War I. Turks say about 300,000 Armenians perished during their deportation as a result of killings, famine or disease. Although Armenia has suffered more from Turkey closing its borders and airspace, Turkey also feels the pinch. ``My city is suffering a total economic collapse. If we were allowed to have at least limited border trade with Armenia it would provide some sort of relief,'' said Mayor Tuncay Mutluer from the eastern border city of Kars. Ankara has bigger financial concerns at stake. When Washington threw its support behind a pipeline project from Central Asia through Turkey, it pointed to Armenia as a possible route. Glen Rase, director for international energy policy at the U.S. State Department, told a conference in London this week that ``a route through Armenia might well prove to be the most attractive from a foreign policy standpoint if it had the effect of moving Armenia and Azerbaijan closer to peace.'' Turkey's close historical and cultural ties with Azerbaijan remain an obstacle in the process of improving ties with Armenia. Azerbaijan already feels uneasy about a Turkish- Armenian rapprochement. ``It will be a betrayal of Baku,'' said Vefa Gulizade, Azerbaijan's presidential advisor, during a visit to Ankara last week. ``It is necessary to emotional,'' Ataman responded. Turkey rules out diplomatic relations with Armenia unless Azerbaijan's territory is set free. But Ankara apparently feels the pressure from Washington for better relations with Armenia. ``On Turkey- Armenian relations, which are so frayed with history, emotion, misunderstanding and conflicting views of history, our view is very simple Your two countries must work together, must find ways to move on to the future,'' Richard Holbrook, Assistant U.S. Secretary of State, said last month.

Mr. SIMON

Mr. SIMON. Mr. President, let me talk about the other issue that is before us and that is striker replacement. In every Western industrialized nation with four exceptions permanent striker replacement is illegal. The exceptions are Great Britain, Hong Kong, Singapore, and the United States. We have by tradition not done that. The Presiding Officer used to be in business in North Carolina. I used to be in business in Illinois. And we operate within certain traditions in addition to the law, and those traditions we have generally followed. We are starting to move away from those traditions and I think that is not a healthy thing. One of the reasons that is happening is because such a small percentage of our work force is organized. When you exclude Government employees, only 11.8 percent of working men and women in the United States belong to unions. That is far lower than Canada, which is around 35 percent; Western Europe 40 to 90 percent; Japan somewhat similar. George Shultz, who was both Secretary of State and Secretary of Labor under Republican administrations, made a speech not too long ago in which he said we have an unhealthy amount of our working force that belongs to unions, because we are not getting some of the factors there that we ought to have. One of the things that is happening as a result of that is our wages are not going up. When wages do not go up then corporations and employers do not buy labor-saving devices, so we become less productive per man-hour. Today the United States, in manufacturing pay per hour, we are $14.77. France is $15.23; Canada is $16.02; Italy, $16.41; Austria, $17.01; Netherlands, $17.85; Denmark, $18.60; Belgium, $18.94; Finland, $20.76; Switzerland, $20.83; Sweden, $20.93; Germany, $21.53; Norway, $21.86. I can remember, back in 1986 we were still at the top of the heap. That is not that long ago. And the Presiding Officer will forgive me for saying he is old enough to remember, along with me, when there was a huge gap between the United States and the other countries. I can remember serving in Germany in the Army from 1951 to 1953 when the average German was just really struggling. I do not know what their percentage of U.S. wages at that point the wages of the United States. I mention all of this simply to suggest that what we need in this area of labor-management relations is balance. I do not think the President's action takes away any of our prerogatives. The President's action does not pass what we turned down here, Senate Resolution 55, striker replacement. That called for a major overhaul of our labor- management relations. The President's action simply says, if you are going to have a Federal contract, you cannot have permanent striker replacements. I think that makes sense in labor-management relations. I think it also makes sense in terms of quality of product. If anyone thinks that permanent striker replacements provide the same quality of work as a former employee, take a look at baseball today. Striker replacements are not the same quality as those who played for the major leagues. So I think it makes sense from the viewpoint of quality product that we buy. I think it makes sense from the viewpoint of labor-management relations. I hope that--we have had one cloture vote and we are going to have at least one more--we continue to prevent the passage of the Kassebaum amendment. Again, my belief is that what we need is a careful balance between labor and management. I think things have moved somewhat out of balance. I would add I also am a great believer in labor and management working together much more. The Germans have what they called mitbestimmung, where there is a labor representative on a corporate board who is there except when they talk about labor-management relations. Then he or she absents himself or herself. The advantage of that is they get to know the problems of the corporation and the corporation gets to understand the viewpoint of labor. I think we should not wait until we are near time for contracts to expire and then all of a sudden we sit down and start working together. So my hope is that we will continue to block the passage of this amendment and that we can move ahead in a constructive direction, not only on this issue but on many other issues in labor-management relations. Mr. President, I do not see anyone else seeking the floor right now. If so I question the presence of a quorum.

Mr. SIMON

Mr. SIMON. Mr. President, yesterday my colleague Senator Murkowski and I rose to speak about the U.S. Government's shameful treatment of the democratically-elected leader of loyal friend of the United States. We were speaking of President Lee Teng-hui of Taiwan, who has been informed that, despite an invitation, he will not be admitted to the U.S. to attend his class reunion at Cornell this June. To admit President Lee, we are told, could jeopardize important interests we have in a key bilateral relationship, our relationship with China. Sometimes, though, the U.S. is prepared to run such risks. Despite strong objections from the United Kingdom, our longstanding ally, we have admitted Gerry Adams, the leader of the Sinn Fein, to our country. Indeed, Mr. Adams is receiving a level of attention that a head of state might envy; he will even be welcomed to the White House on St. Patrick's Day. I recognize the need to take risks for peace sometimes; the possibility of a fair and lasting solution in Northern Ireland may be worth taking a few chances for. But shouldn't we also be willing to take a few chances for Taiwan, a country that, in its adoption of democratic principles and its commitment to free market economics, can serve a model to many other countries in Asia? Other countries including, I would stress, China itself. An editorial in today's Wall Street Journal does a particularly good job of highlighting the inconsistency between the welcome the U.S. extends to Mr. Lee. I ask that the editorial ``Two Visitors'' be printed in the Record. The editorial follows: Review and Outlook--Two Visitors Gerry Adams can tour the United States, but Lee Teng-hui can't. Gerry Adams will be feted and celebrated Friday at the White House, but when Lee Teng-hui's plane landed in Honolulu last year, the U.S. government told him to gas up and get out. The Gerry Adams who is being treated like a head of state by the Clinton Administration is the leader of Sinn Fein, the political arm of the Irish Republican Army. The Lee Teng-hui who has been treated like an international pariah by the Administration is the democratically elected President of the Republic of China, or Taiwan. The disparate treatment of these two men tells an awful lot about the politics and instincts of the Clinton presidency. Gerry Adams's face will be all over the news for his Saint Paddy's Day party with Bill O'Clinton at the White House, so we'll start with the background on the less-publicized President of Taiwan. Cornell University has invited President Lee to come to the school's Ithaca, N.Y., campus this June to address and attend an alumni reunion. In 1968, Mr. Lee received his doctorate in agricultural economics from Cornell. The following year, the American Association of Agricultural Economics gave Mr. Lee's doctoral dissertation, on the sources of Taiwan's growth, its highest honor. In 1990, Taiwan's voters freely elected Mr. Lee as their President. He has moved forcefully to liberalize Taiwan's political system, arresting corrupt members of his own party. Last year, The Asian Wall Street Journal editorialized: ``Out of nothing, Taiwan's people have created an economic superpower relative to its population, as well as Asia's most rambunctious democracy and a model for neighbors who are bent on shedding authoritarian ways.'' Asked last month about President Lee's visit to Ithaca, Secretary of State Christopher, who professes to wanting closer links with Taiwan, said that ``under the present circumstances'' he couldn't see it happening. The Administration doesn't want to rile its relationship with Beijing. The Communist Chinese don't recognize Taiwan and threaten all manner of retaliation against anyone who even thinks about doing so. That includes a speech to agricultural economists in upstate New York. This, Secretary Christopher testified, is a ``difficult issue.'' Sinn Fein's Gerry Adams, meanwhile, gets the red carpet treatment at 1600 Pennsylvania Avenue. Mr. Adams assures his American audiences that the IRA is out of the business of blowing body parts across the streets of London. He promises the doubters that if people give him money, it won't be used to buy more guns, bullets and bombs for the high-strung lads of the IRA. Now before the Irish American communities of Queens and Boston get too roiled over our skepticism toward Northern Ireland's most famous altar boy, we suggest they take their grievances to John Bruton, who is Irish enough to be the Prime Minister of Ireland. He, too, will be at Bill Clinton's St. Patrick's Day party for Gerry Adams, and he has a message for the two statesmen: The IRA has to give up its arms. ``This is an item on the agenda that must be dealt with,'' Premier Bruton said Monday in Dublin. ``It's a very serious matter. There are genuine fears felt by members of the community that have been at the receiving end of the violence.'' We don't at all doubt that somewhere amid the Friday merriment, Mr. Clinton will ask Mr. Adams to give up the guns and that Mr. Adams will tell the President that is surely the IRA's intent, all other matters being equal. It is hard to know precisely what motivates Mr. Clinton to lionize a Gerry Adams and snub a Lee Tenghut. The deference to China doesn't fully wash, because when Britain--our former ally in several huge wars this century--expressed its displeasure over the Adams meeting, the White House essentially told the Brits to lump it. Perhaps the end of the Cold War has liberated liberal heads of state into a state of light-headedness about such matters. We note also this week that France's President Francois Mitterrand has been entertaining Fidel Castro at the Elysees Palace. But it's still said that Bill Clinton has a great sense of self-preservation. So if he's willing to personally embrace Gerry Adams while stiffing the Prime Minister of England and forbidding the President of Taiwan to spend three days with his classmates in Ithaca, there must be something in it somewhere for him.

Mr. SIMON

Mr. SIMON. Mr. President, I hope we can work out some bipartisan efforts here on this issue, but let me add that there is a lot of talk attacking affirmative action that is just nonsense. I see Senator Dole nodding that he is in agreement. Affirmative action can be a very good thing. It is like religion--it can be abused. It does not mean religion is wrong. But regarding affirmative action, if there is a company that hires 1,000 people and they all happen to be white males, I do not think we ought to have to prove that there is some discrimination. We ought to be able to say to that company that there ought to be some diversity. You ought not to have to lower your standards at all. But there ought to be some minorities, there ought to be some disabled people and some women in your work force. The case at hand--and I have to say I do not remember all of the details--but a high school which has a majority of minority students there in the business section of that high school had nine teachers, all of whom happened to be white. They had to reduce the number of teachers. The two teachers who had the least amount of seniority both happened to be hired the same day. One was white and one was black. That school made a decision on the basis of race that they felt it was important to have minority representation in the business section of this school. I am not saying that their decision was necessarily right, but I think it is an understandable decision and I think the situation has been distorted. I think there are times when there should be some agreement. I dealt with a city in Illinois that had some civil rights violence. It was 40 percent black. They did not have a single black on the police force or the fire department. We worked out an agreement that the next person they would hire would be someone who was African-American. I think that just makes sense. We did not say, ``Lower the quality,'' or anything. That is affirmative action. I think it makes sense. I am sure Bob Dole, Senator Faircloth, Senator Baucus, like Paul Simon, you try to have some diversity in your office. You do not lower standards. Two of the lawyers in my office are Jayne Jerkins and Carlos Angulo. I will put them up against any staff members in the U.S. Senate. One happens to be African-American; one happens to be Hispanic-American. They are just quality people. But I have consciously in my office tried to have some diversity. And I think that is a healthy thing. That is affirmative action. It does not mean you lower standards or anything else. So I think before we do too much attacking of affirmative action, let us recognize it can be a very good thing. Can it be abused? Yes, like any good things can be abused. But we should seek, as part of the American ideal, that we are going to have opportunities here for all Americans. I think that has to continue. Mr. DOLE addressed the Chair.

Mr. SIMON

Mr. SIMON. Mr. President, before I comment on the Kassebaum amendment that is before us, let me comment on a hearing I just came from that Senator Kassebaum and Senator Jeffords have chaired, on the whole question of health care and where we are going. The last few witnesses commented on the whole question of ERISA's assumption of responsibilities that prohibits States from moving ahead to have health care coverage for all their people. Frankly, we cannot have it both ways. The American people are, more and more, demanding some kind of health care protection. I had three town meetings a week ago Saturday in Illinois. One man got up at one town meeting and said, ``I am 59 years old, I have had a heart attack, I cannot get health insurance that I can afford. What is going to happen to me?'' When he said it, it started triggering others getting up, standing up, telling their stories. Every other Western industrialized nation protects all their people. We are the only one that does not. If that is a conscious decision we want to make, not to protect all of our citizens--and incidentally the number now is about 41 million that are unprotected and the projections that were made in the hearing yesterday are that will go to 50 million 5 years from now. We have gone from 67 percent of employers covering their people in 1980, down close to 50 percent now. The problem is getting worse. But if the Federal Government is unwilling to act, we, at least, have to be willing to let North Carolina and Illinois and other States that want to protect all their citizens act. We can set it up in such a way that companies that are engaged in interstate commerce that protect their employees will be exempt by the State so we do not present a problem for business. But we cannot have it both ways. There are just too many people who are hurting. Mr. President, 50 million people in 5 years means one out of five Americans--really more than that, because those over 65 are already covered through Medicare. But more than one out of five Americans are without health care coverage. That is just not the kind of choice we can make. The people in the gallery up there, one out of five are not covered. No one wants to volunteer for that.

Mr. SIMON

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

Mr. SIMON

Mr. SIMON. Mr. President, I see my colleague from Wisconsin about to take the floor. I see he has a cartoon about tax cuts. If he is going to speak about tax cuts, I want him to know I agree with him 100 percent. If there is anything irrational--and he will disagree with my next statement--if there is any illustration that shows why we need a balanced budget amendment, we would not be considering tax cuts right now in both political parties. If we had a balanced budget amendment, we would be focusing on balancing the budget. But I agree 100 percent with my colleague that this is not the time to be moving in the direction of tax cuts. Mr. President, I yield the floor. Mr. FEINGOLD addressed the Chair.

Mr. SIMON

Mr. SIMON. Mr. President, let me comment also on the North Korean situation. When Senator Murkowski and I were in North Korea in December, we landed with the first official American plane to land in North Korea since the Korean war. It is important that both the United States and North Korea live up to our agreements. The situation in Korea is the most volatile anywhere in the world where there are American troops. We have 36,000 to 37,000 American troops just south of the border in Korea. You have about 1 million troops in total facing each other with no communication. Even in the situation with Pakistan and India, there is communication between the two Governments. There is no communication between North Korea and South Korea. North Korea is unlike any other government on the face of the Earth right now. It is a very tightly controlled dictatorship. The radio stations only have one station. The television stations only have one station. It is like Albania must have been back in the old days of communism. I think it is important that the United States assist--while making clear to South Korea that we are going to be loyal to our friends there--in communication between the two countries. Thanks to President Carter, a meeting had been set up between the President of South Korea and Kim Il-song, the leader of North Korea. Then he died fairly suddenly back in July of last year, and that did not happen. Senator Murkowski and I are working on the possibility of getting some North Korean and South Korean Parliamentarians together, some kind of minimal contact, so that there is some understanding between the two sides, so that what happens on the other side in both cases is not viewed with paranoia. I would add, I think it is extremely important that North Korea permit South Korea to build the nuclear plants that we talked about. That was the understanding in the agreement that we had with North Korea and they should not back down on that agreement. I hope we can be of some assistance to North Korea, which feels very isolated now. It is isolated. It has to make this transition from an old-fashioned, extremely monolithic communism to at least a more moderate communism, if their such a phrase, as in China and Vietnam. But I think we can play a constructive role there, and I hope we will.

Mr. SIMON

Mr. SIMON. Mr. President, let me speak briefly on both the Taiwan situation and the North Korean situation. I am pleased to cosponsor the concurrent resolution of Senator Murkowski. I commend him for his leadership on this. We ought to maintain a good relationship, if possible, with the People's Republic of China, but they should not be permitted to veto our standing up for human rights. Senator Murkowski mentioned that when President Lee landed in Hawaii at a military base on his way to Costa Rica, he was not permitted to stay overnight. The base commander was not permitted to come out and greet him. Is this the President of a dictatorship? We treat dictators better than we treat the freely elected President of Taiwan. Taiwan is doing everything that we say a country should do--free press, a multiparty system, holding elections--and yet we treat them as a pariah. We treat them as they used to treat people with leprosy. It is very interesting what happened in Germany. There were two Germanys, and we recognized both Governments. Neither Government was particularly happy that we did it, but it did not prevent the two Germanys from coming together. And that should be our attitude toward Taiwan. I realize that right now formal recognition is not going to be in the cards for Taiwan. But, at the very least, we ought to say to the President of Taiwan, President Lee, who wants to come over to go to his school reunion at Cornell, who was not permitted to do that last time, that he should be able to come to his school reunion at Cornell. There is also a meeting on United States-Republic of China economic relations. He would like to combine the two. Why should he not be permitted to come and attend those? As one Senator, I think our conduct toward Taiwan has, frankly, been an embarrassment. If the People's Republic of China squeals some because we show some deference to the leadership of Taiwan, I think we just have to understand that is going to be part of the process.

Mr. SIMON

Mr. SIMON. Mr. President, one of the members of the Presbyterian clergy with whom I have had the chance to work on historical projects and other things is the Reverend Robert Tabscott. He sent me some observations he made 21 years ago about our former colleague, Senator Bill Fulbright. Bill Fulbright was a remarkable public servant. I had the chance to work with him on exchange programs and other matters in the area of foreign policy. To get a little more perspective on the impact of Senator Fulbright on people, it is good to read what Robert Tabscott wrote almost 21 years ago. I ask that the tribute be printed in the Record. The tribute follows: [November 1974] The Senator (By Robert Tabscott) Reaching back in my memories I was first appreciative of William Fulbright in the early fall of 1961 when he eulogized the fallen Dag Hammerskijold. Six years later in Mississippi I read his book, ``The Arrogance of Power.'' It was a watershed for me: a provocative word in a hard and sterile time. The book challenged the American dream of opulence and power and called for a rediscovery of the values of Jefferson and the American revolution. But more, it was a fervent appeal for a new tolerance among us for people of differing philosophies and cultures. The book shook my patriotic myths and aroused a circumspection for which I shall always be grateful. So when it became possible to interview the Senator on one of my recent visits to Washington, I was beside myself. Meeting him in the privacy of his large comfortable office, it was hard to imagine him as an international figure. He was surrounded by half-packed cartons of books (a prelude to his departure from the Senate), a cumbersome stack of magazines and papers, several botties of mineral water and at least a week's supply of health foods and vitamins. Entering the office, I stood motionless. ``Sit down,'' he said in a sonorous voice. I was extremely nervous and he waited for me to gain my composure. ``You will have to excuse me,'' I said, ``but this is quite an occasion for me.'' Graciously, he coaxed me on. ``Well I am glad I could give you this time.'' I described my work and the Rockefeller grant and asked if I could take notes. He smiled and said, ``I don't know if I will say anything important, but you may.'' And so I did. J. William Fulbright was born in Missouri sixty-nine years ago. But he grew up in Arkansas, enjoying the benefits of a well-known and prosperous family. He won honors at the University in Fayetteville and was awarded a coveted Rhodes scholarship. His three years at Oxford were indelible. He read Tennyson, Lord Byron, Dryden, inspected Norman Churches, sought out Canterberry and Stradford and buried himself in English history and political thought. In 1928 he settled for a time in Vienna. From there he ventured with a friend to Salonika, Athens, and the Balkans. But his mind probed even further into Chinese history, Russian literature, and Creek philosophy. At 34 he became the president of the University of Arkansas. Two years later during a political controversy he was asked to resign by the governor. He refused and was promptly fired. It was 1942. That spring, young Fulbright decided to run for Congress. Contrary to almost everyone's expectations, he was elected. By 1945 he had become the junior senator from Arkansas and had launched a career that would span thirty years and bring him international prominence. We probably know William Fulbright best as chairman of the Senate's Foreign Relations Committee and for his untiring efforts to achieve detente with Russia and a better understanding of world Communism. For that he has been labeled a liberal and Communist sympathizer. His greatest and most difficult years were between 1950 and 1973. At times he stood alone as he did against the maniacal red crusade of Joseph McCarthy, or as a persistent critic of two Administrations' Vietnam policies. On other occasions he has been painfully silent as he was during the Little Rock crisis and throughout most of the Civil Rights movement. The Senator is far from the hero his supporters have wanted him to be. But what is significant is that he has remained a man of conscience and integrity who has not sought to cover his inconsistencies but has acknowledged the painful struggle of public service and the burden of political compromise. Two events illustrate that tension. On August 6, 1964, President Johnson requested Fulbright to introduce the famous Tonkin Resolution which gave the chief executive authority, ``* * * to take all necessary measures to repel any armed attack against forces of the United States and to prevent further aggression.'' That action put us into a land war in Asia. Only two Senators, Morse of Oregon and Gruening of Alaska, voted against the resolution. But by February, 1965, Fulbright had become disillusioned. He was alarmed, ``* * * by the tyranny of Puritan virtues, of the dogmatic ideology of false patriotism and a resurgence of manifest destiny in American life.'' The Senator would later confess that the Tonkin Resolution was one of the most regrettable mistakes of his public life. In 1957, 19 senators and 77 representatives from the eleven states of the old Confederacy, drafted a manifesto attacking the Supreme Court's historic decision on segregation. ``The court,'' they said, ``had substituted naked power for established law.'' The signers pledged themselves ``* * * to resist integration through all lawful means and by any lawful means.'' J. William Fulbright signed the Manifesto. But there were reasons, he contended. It was an election year and there was great pressure in the south. He could leave his southern colleagues and go his own way or stay with them and be assured of remaining in the Senate. Better to compromise and to fight again. He was convinced that he could not survive if he stood alone. He chose to remain silent. Many were shocked and disappointed because of his actions. But when you consider the events of the last decade there were few men and women in public life who stood apart to face the crisis of Little Rock, Vietnam, Selma, Kent State or Attica. At a time when the South needed the wisdom of its statesmen, not one major figure dared to challenge the old myths. It was left to a heroic company of black men and women and an unlikely army of students, teachers, ministers, editors, lawyers, judges, and businessmen to stir the nation's conscience and to open a way for politicians to follow. reason and reflection. Some consider him a child of the Enlightenment. Intellectually he is much like Adlai Stevenson or Woodrow Wilson. He speaks of Jefferson and DeTocqueville, but I would venture he is more Hamiltonian in his philosophy. If he were to put this in theological terms, he would probably say that God's special gift to man is his capacity for reason. A biographer has described him as ``* * * a complex human being, at times, witty, erudite, earthy, sardonic, melancholy, shrewd, innocent to the point of nievete, and candid--but never indifferent.'' Someone else said, ``Fifty years from now when they talk of Senators, they will remember Fulbright.'' Great men and women are not perfected; they endure. They survive the best and worst that is in them to become. In the end, they stand apart because they are real, but in so doing, they are always just beyond our grasp. Most politicians like their constituents, lack the intellectual penetration to form independent judgments and therefore accept the prevailing opinions of their society. But there are always a few who, assessing the circumstances, speak their minds and call us to growth and maturity. At the end of his book, ``The Arrogance of Power,'' William Fulbright, wrote: ``For my own part I prefer the America of Lincoln and Adlai Stevenson. I prefer to have my country the friend rather than the enemy of demands for social justice; I prefer to have the Communists treated as human beings, with all the human capacity for good and bad, for wisdom and folly, rather than embodiments of an evil abstraction; and I prefer to see my country in the role of a sympathetic friend to humanity than its stern and painful school-master.'' When you consider the recent revelations of our government's involvement in the overthrow of the government in Chili, Fulbright's words are apocalyptic. He stands apart. When I left the Senator's office, the long shadows of an October afternoon had filled most of the street. Already the leaves had begun to fall and a tinge of cold passed through the air. A season was passing. I walked on through the park toward the Capitol, warmed and grateful for what I seen and heard. I realized that I had been with a remarkable man whose wisdom, if remembered, could make a difference in our world.

Mr. SIMON

Mr. SIMON. Mr. President, for a number of years, my Chicago office was run by someone for whom I have come to have great respect, Bettylu Saltzman. Recently, she was honored by the American Jewish Congress, along with Elaine Wishner, for her leadership. That happened 6 or 8 weeks ago. Just recently, I had the opportunity to read her acceptance remarks. Her eloquent remarks urge people to be sensitive and understanding, to reach out to all human beings, while being proud and sensitive of our individual traditions. While the remarks are addressed to a Jewish audience, those of us who are Christians can learn from reading her remarks also. I should add, Bettylu Saltzman, in these remarks, follows a great tradition. Her father, Philip Klutznick, served as one of our Ambassadors to the United Nations and served as Secretary of Commerce under Jimmy Carter. But more important than the offices he held was the way he held them. He called for reaching out when it was unpopular, as Bettylu mentions in her remarks. I am proud to have a citizen like Bettylu Saltzman in the State of Illinois. At this point, I ask that her remarks be printed in the Record. The remarks follow: It's a great honor to be here tonight. And while I remember Golda Meir's famous admonition--``Don't be humble; you're not that great''--it's hard to avoid, when sharing an honor with Elaine Wishner and joining the ranks of the other outstanding women who have been recognized in the past seven years. I don't know if I belong among them, but I'm proud to stand with them, as they are truly people who have made a difference--giving of themselves to make the world a better place for all of us. the cause of justice which is an essential part of Jewish values and Jewish tradition. Since its inception, the American Jewish Congress has personified that tradition. And for the past ten years, the Commission for Women's Equality has provided valuable and enlightened leadership. I'm delighted to lend my name to that important effort. But this evening also is gratifying because it marks a kind of milestone in my own evolution. Though I come from a family with a deep commitment to Judaism and Israel, it is only in recent years that I have really come to terms with what that means to me. I am the only girl among five children and I believe that is the reason I was largely deprived of the religious and cultural education that might have given me an earlier and richer appreciation for Jewish history and tradition. Like many contemporary Jews, I struggled with the relevance of religion in my life, when religion seemed remote and ritualistic. And, as a much younger woman, I tried to find my place in Jewish life, in a community in which such participation was strictly dictated by a few, so-called ``mainstream'' organizations, in which men dominated and alternative points of view were not particularly well received. My own metamorphosis began with the realization of the underlying lessons and values that form the foundation of Judaism--values that are as relevant and important today as they were thousands of years ago. We Jews believe that it is our responsibility to repair the world--Tikkun Olam, and a commitment to justice is a recurrent theme in our history. The entire prophetic tradition commands us to show compassion and seek justice. We do this not just for our fellow Jews, but for all human beings. Listen carefully to this quote from Leviticus inscribed on the Liberty Bell--``Proclaim liberty throughout all the land unto all the inhabitants thereof''. That is why I'm proud to serve with Susan Manilow on the board of Mount Sinai Hospital, where Ruth Rothstein labored so long and hard to see to it that Chicagoans of all races, religions and creeds are provided with excellent health care. It is why I served on the board of the Crossroads Fund and continue to serve on the board of the Jewish Council on Urban Affairs. Recently I was introduced to someone who recognized me as a trustee of Mount Sinai Hospital--a position of which I am justifiably proud. So, I was quite disturbed when this person admonished me that I should spend more time worrying about Jews, instead of poor people in the inner city. Ethics, morality and the commandment to help others, are central to our tradition and our way of life. Through such activities, I have found my place in the Jewish community and in the process I have come to understand my Jewishness in a much deeper sense. I share this thought because of the current debate on Jewish continuity, and my belief that if we are to encourage the perpetuation of Jewish awareness, we must discourage the kind of thinking that would dismiss a Mount Sinai Hospital or Jewish Council on Urban Affairs as an invalid way of expressing one's commitment to Jewish values. The same is true of attitudes toward how one can best express support for Israel, and whether there is room for different approaches and views. Over a decade ago, my father Philip Klutznick, courageously spoke of the need to bridge the chasm between Arab and Jew. He said we cannot afford, nor should we want, Israel to live in a perpetual state of war, and suggested that Israel's survival demanded an end to the conflict. Though he devoted much of his life to the Jewish community and support of Israel, he was censured by some members of the community, who accused him of treachery and betrayal. Today, once again, there was an horrendous terrorist attack at a bus stop north of Tel Aviv. Many lives were lost and many more Israeli citizens were maimed. But does it behoove us to give in to the enemies of peace, who perpetrate these atrocities in the Middle East or any place else in the world? I hope not. I do not believe that due to the heroic actions of Israeli and Arab leaders, my father's dream of peace is several steps closer today. I am vice president of the New Israel Fund, an organization dedicated to promoting social justice and democracy within Israel. I support the work of the Fund because it is consistent with my belief that maintaining a civil and just society takes vigilance and hard work, beginning at the grassroots, and because continued political, economic and moral support for Israel from America and the world community depends upon its survival as a healthy and robust democracy. This endeavor is the way I have chosen to act on my commitment to Israel, though in the past, the New Israel Fund was not an organization that was always warmly welcomed into the Jewish community. But my hope, as we carry on this debate about Jewish continuity, is that we think more expansively, understanding that there are many ways to demonstrate our devotion, each as valid as the next. If one chooses to invest time and resources in an organization like the New Israel Fund, that is a triumph for the community, because it means one more person committed to justice, equality and the principles of Judaism. In times when we are concerned about Jews in America drifting away, we simply cannot afford to disqualify and discourage those who are reaching out to find their place in the community. And I hope I don't offend, when I include in that category the young couples, Jew and non-Jew, who ask a rabbi to join them in marriage. By seeking rabbinic involvement they are making an important choice. By refusing them, we simply insure the likelihood that one more couple will be lost, and one more family isolated from our traditions. My point is that we cannot address the issue of Jewish continuity without broadening our horizons and opening our arms. Rigidity will not lead to greater Jewish identification--inclusiveness will. As the years go by, I grow more and more appreciative of the meaning and value of Judaism, the sense of rootedness and belonging, and the opportunity to participate in Jewish life in ways in which I feel most comfortable. That's a wonderful gift, which I want my children and future generations to share. But for that to happen they must embrace our traditions and as a community we must enhance the attractiveness of a variety of paths leading to meaningful Jewish experiences; not devalue or marginalize choices that diverge from the middle of the road. Tonight, you have honored me for the manner in which I have chosen to connect with those traditions, and in doing so, you have sent an important message that there are many meaningful ways to fulfill our obligations as Jews. For that, as much as for this wonderful award, I thank you very much.

Mr. SIMON

Mr. SIMON. Mr. President, I want to join my colleague from Idaho in his efforts in this area. I would give the President a little more credit than he might in terms of what the President did in 1993. There is no question we made some progress on the deficit. But the budget that has been submitted by the administration is illustrative of the fact that these things kind of ebb and flow. They go up and down like a roller coaster. Right now, I think the mood in Congress, after our lengthy discussion of the constitutional amendment, is we want to do something. And I think we may pass some statutory action to move us in that direction. I have no confidence, however, that statutory action this time, any more than in the past, is going to get us there. Because while today the mood is ``Let's do something about the deficit,'' tomorrow, who knows what the mood will be? And so we will move away from that. So I join my colleague in believing that that is the direction in which we have to go and one of these days, I believe it will happen. Mr. President, if no one else seeks the floor, I question the presence of a quorum.

Mr. SIMON. I withdraw my request. (Mr. CRAIG assumed the chair.)

Mr. SIMON

Mr. SIMON. Mr. President, for the benefit of my colleagues, I wrote a newspaper column intended to end much of the confusion surrounding Social Security and its role in the recent debate on the balanced budget constitutional amendment. I ask that the text be printed in the Record. The column follows: A Reality Check on Social Security and the Balanced Budget Amendment There is some confusion about the role of Social Security and the Balanced Budget Amendment. Let me answer a few of the questions that people are asking: Would the Balanced Budget Amendment treat Social Security any differently than it is being treated now? No. And if you are confused on this point, don't feel badly. One of the senators who participated in the debate didn't understand this either. Does the Balanced Budget Amendment voted on recently treat Social Security differently than the amendment voted on in 1994? The wording is identical on anything related to Social Security. Would the Social Security system be better off with or without a Balanced Budget Amendment? Much better off with a Balanced Budget Amendment. The great threat to Social Security is the growing federal debt. If it continues as projected, the United States government will eventually ``solve'' its problem like all nations with huge debts have historically done, by printing more and more money, making the dollar worth less and less. When you debase the value of the dollar, you also debase the value of the United States bonds that are the security for Social Security. If the dollar becomes worth ten cents, the bonds held by Social Security also drop 90 percent in value. That devastates Social Security. Those of us fighting for a Balanced Budget Amendment are trying to prevent this economic catastrophe from happening, but that is where we are now headed. As a strong defender of Social Security, why didn't you vote to exempt Social Security in the Balanced Budget Amendment? For two reasons. First, I believe everything should be in the budget. As soon as you start making exceptions, where do you stop? I also believe it is important to include Social Security because in less than 30 years, Social Security will spend more than it takes in. We should have an obligation to protect Social Security well into the future, and not use the excuse that it isn't our responsibility. Second, to make an exception of Social Security would permit a huge loophole in the amendment. Future Congresses could put welfare under Social Security, senior citizen housing, and virtually anything else. Since the word ``security'' is used, a creative Congress could even put the defense budget under Social Security. Will there be changes in Social Security programs? Apart from balancing the budget, there will have to be, for the long-term future of Social Security. My guess is that those on Social Security retirement now will experience no change in their retirement, but to prepare for a less rosy future, for example, increase in the tax for Social Security on employers and employees, and some type of gradual increase in retirement age, worked out with the senior groups. If we were to raise the retirement age by one month a year for twelve years, over that period the retirement age would be raised by one year, and save billions of dollars for the retirement fund. Also, Medicare will face serious shortfalls in only a few years. Here I favor changes now. For example, why shouldn't everyone with an income of over $100,000 a year pay for his or her own physician's fees? Hospital coverage and other features could remain the same. That one change would save billions of dollars. Do Senators like Kent Conrad and Byron Dorgan of North Dakota have no valid point of concern? They do. Since 1969 the federal government has included Social Security surpluses in our budgets so that the deficits would not look so bad. I have joined Sen. Fritz Hollings of South Carolina in trying to stop that practice, but administrations of both parties like to make their budgets look better. During the evening negotiations on the Balanced Budget Amendment on the night the vote was first scheduled, Sen. Conrad was able to get an agreement to gradually move away from this practice, but he finally rejected the offer. One of my colleagues in the Senate told me, ``Sen. Conrad was on the verge of a great victory for the Social Security cause and for sensible budgeting, but he blew it.'' I believe that judgment is premature. It is still possible that something can be worked out. For the sake of Social Security recipients, and for the sake of the future of our country, I hope something will be.

Mr. SIMON

Mr. SIMON. Mr. President, my colleagues from Massachusetts, Senator Kennedy, yesterday recited a long list of items where the new Congress has declared war on working Americans. One item that he mentioned is the attack on student financial aid: 75 percent of all college student aid comes from the Federal Government, much of that in the form of loans. The only significant Federal student aid subsidy that reaches middle-class families is the Federal payment of interest while students are in school. Now, it seems that this benefit is in danger in the House of Representatives. Mr. President, I have argued that as far as student aid is concerned, we should not be balancing the budget on the backs of students while banks and middlemen continue to receive excessive subsidies in the Student Loan Program. Two weeks ago, a letter I wrote to the Washington Post made the point that the Guaranteed Student Loan Program is not the private sector system that its proponents would have us believe it is, and that it is riddled with dangerous conflicts of interest. In a response that appeared in yesterday's Washington Post, Roy Nicholson, the chairman of USA Group, charges me with vilifying and ``attempt[ing] to silence'' him, while ignoring ``the substance of the debate'' on student loans. Ironically, Nicholson does not respond to the substance of the inspector general's concern, raised in my letter, that ``billions of dollars of the Nation's [student loan] portfolio are at risk because many guaranty agencies * * * have a clear conflict of interest.'' Mr. President, I ask that the two letters and the inspector general report be printed in the Record at the conclusion of my remarks. Guaranty agencies like USA Group are supposed to act as bank regulators on behalf of the U.S. Government. Since banks have little financial incentive to put serious effort into collecting payments on Government-backed student loans, it is the guarantors' responsibility to ensure that--before taxpayers reimburse banks for a default--the bank actually did try to collect. But what if, as in the case of USA Group, the guarantor works not just for the Government, but for the banks, too? Clearly, this is a case of the shepherd moonlighting for the wolf. The inspector general provides a number of examples of how these arrangements put taxpayer dollars at great risk. Last year, a specific incident involving USA Group made this conflict painfully clear. In an effort to address the default problem, Congress 2 years ago directed the Education Department to oversee the loan collectors. But last June, when the Department tried to implement the new rules--something that guarantors, as protectors of the taxpayers, should support--USA Group sued to stop the rules, arguing that it was not fair to them as contractors for the banks. The student loan industry has decided that the only way to keep their entitlements in the face of President Clinton's money-saving reforms to the Student Loan Program is to portray the reforms as big Government, in contrast to the current private sector system. Don't be fooled. It is not a private sector system when the Government takes virtually all the risk of default through entities it backs with the full faith and credit of the United States. Mr. President, taking a closer look at what is really going on in the Guaranteed Student Loan Program is not ``the politics of vilification'' or an ``attempt to silence.'' It is what the substance of the debate should be. It should come as no surprise to my colleagues that people do try to take advantage of Federal programs. I do not consider it out- of-bounds to describe the structures and perverse incentives that lead to abuse. risky Guarantee Program be phased out and replaced by the Direct Student Loan Program, which is working remarkably well at the first 104 colleges involved this year. He is also proposing that guaranty agencies return $1.1 billion in excess Federal reserves over the next 5 years. These money-saving proposals should be seriously considered by Congress. Yet committee chairmen in both Houses are talking only about ways to put brakes on the Direct Loan Program. Mr. President, we cannot afford to ignore the enormous abuses in the Guarantee Program. I urge my colleagues to take a closer look at both the Guaranteed and Direct Student Loan Programs, and to focus our efforts on providing assistance to students and taxpayers. The material follows: [From the Washington Post, March 2, 1995] Conflict of Interest in the Student Loan Program In opposing President Clinton's money-saving reforms of the student loan program [``Clinton, GOP Split Over Student Loans,'' front page, Feb. 14], USA Group argues that it supports the ``competition'' in the current ``private-public partnership.'' Ironically, the only things ``private sector'' about USA Group are its salaries. As a guarantor responsible for helping to oversee banks' roles in the student loan program, USAG has no private investors or contributors. Every penny of the $141,087,845 that USAG had in the bank in 1993 came from federal entitlements set by lobbying Congress, not through private- sector competition. Furthermore, USAG has taken those taxpayer funds and used them to start other businesses, including becoming lenders-- putting USAG in the position of regulating its own banking activity. The Education Department's inspector general has called this a ``clear conflict of interest,'' putting ``billions of dollars of the nation's [student loan] portfolio as risk.'' USAG paid its chairman $527,833 plus benefits in 1992, even though it is a ``charitable'' organization and its employees are essentially public servants. Taxpayers and students can do without ``partners'' like these. Paul Simon

Mr. SIMON

Mr. SIMON. At 11:30.