Nick Smith

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Chairman, will the gentleman yield?

Mr. SMITH of Michigan. If the gentleman will continue to yield, the definition would be exactly the same as under current law. We have made an exception for the amendment that was passed last week for resident aliens or green card holders.

Mr. SMITH of Michigan. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, the 1996 elections were marked by many questionable financial tactics in fund-raising for political purposes, but I think the one that must concern us is the vast amounts of illegal donations by foreign contributors. The American people learned of the antics of those such as John Huang, Charlie Trie, and Johnny Chung, all of whom helped funnel illegal foreign funds into the American political process in 1996. So far, Trie, Chung and five others have been indicted for their roles. Current law prohibits foreign nationals from donating to candidates for Federal office, yet it is clear that the penalties are not adequate to deter violations of this nature. This is, I think, made even more difficult by the location of the wrongdoers: outside of American soil. This means that penalties for this particular type of violation must be strengthened, and that is what my amendment does. It increases the maximum penalty from $25,000 to $1 million, and it increases the maximum jail time up to 10 years, at the discretion of the judge. Indeed, this is one of the recommendations of the Senate Committee on Governmental Affairs report: that we increase the allowable penalties. Under my amendment, those who violate the prohibitions against contributions from foreign nationals will be subject, again, to a jail sentence of up to 10 years and/or a fine not to exceed $1 million. I think this common sense measure will serve to deter foreign nationals from illegally donating to American elections, and those who would knowingly assist them. Mr. Chairman, we cannot honestly say we have begun to fix the problems with our campaign finance system until we have made some effort to stifle the problem of illegal foreign donations, and I urge my colleagues to put the House on record as being as repulsed and outraged by the scandal of foreigners seeking to influence the American political system as I am, and I hope we would all vote for this amendment. Mr. Chairman, I reserve the balance of my time. The CHAIRMAN pro tempore (Mr. Miller of Florida.) Is there a Member in opposition to the amendment? The gentleman from California (Mr. Farr) is in opposition to the amendment and claims the time in opposition?

Mr. SMITH of Michigan. Reclaiming my time, my language is optional.

Mr. SMITH of Michigan. I yield to the gentleman from California.

Mr. SMITH of Michigan. I would suggest I am not making existing law more tougher, but if the court decides, for lack of a better word, that the violation is egregious enough or the amount of the contribution or the potential for influence is egregious enough, that court would now have an option that is greater than under existing law. So existing law limits the sentencing term to 1 year and/or not more than $25,000, and as the gentleman understands, this amendment simply increases that option but has no minimum obligation.

Mr. SMITH of Michigan. I am not familiar. I do not know the answer to that.

Mr. SMITH of Michigan. Mr. Chairman, I thank the gentleman from Texas.

Mr. SMITH of Michigan. That is correct.

Mr. SMITH of Michigan. Mr. Chairman, I offer an amendment to the amendment in the nature of a substitute.

Mr. SMITH of Michigan. Mr. Chairman, I have a modification at the desk. It is in writing and I ask unanimous consent that it be agreed to.

Mr. SMITH of Michigan. It is an option. And/or, or both, yes.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I rise today to join friends and family in honoring the distinguished service of Colonel Randall R. Haglund, commander of the Defense Logistics Information Service (DLIS) in Battle Creek, Michigan. Since 1995, Colonel Haglund has directed DLIS to help ensure our nation's military readiness. I am honored to wish him well on his retirement. Throughout his tenure as commander, Randy Haglund distinguished himself as a superior leader who successfully guided DLIS through some difficult times. I know that I valued his knowledge and advice as I promoted the work of this facility in Congress. Due in no small part to his efforts, DLIS not only remained in Battle Creek, but was expanded and modernized. Among his many achievements was his leadership role in the integration of the Central Contractor Registry (CCR) with existing systems. This innovation will provide better and more accurate information to military operations worldwide. Randy also was able to reengineer several major processes by incorporating new programs such as the Logistics Information Network (LINK) and the Electronic Catalog (E-Cat). I'm no expert on these programs, but I know very well that Randy's efforts proved once again the important role DLIS plays in our nation's defense. In addition to his other duties, the Under Secretary of Defense asked Colonel Haglund to lead an independent review of the DoD Cataloging Centralization and Consolidation program, a major reengineering effort. Through his leadership, the team successfully completed the initial centralization and consolidation plan. Colonel Haglund's greatest legacy surely is the improved efficiency of the Defense Logistics Information Service and Department of Defense. His hard work saves the taxpayers nearly $150 million a year. This is an accomplishment that we can all appreciate. Randy has received many military honors, including the Meritorious Service award with gold star, the Navy Commendation, the National Defense Medal and the Defense Superior Service Medal. As a veteran, I have great respect for those who have earned a leadership role in our armed forces and I value very highly the contributions people such as Randall Haglund have made to safeguard our nation in an unpredictable world. Time and time again Colonel Haglund has proven to be an exceptional man and leader. For these reasons, Bonnie and I wish the Colonel, his wife, Barbara, and their three sons the very best in all of their future endeavors. We in Battle Creek shall miss him.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Chairman, I rise to ask Members to vote no on this amendment, and that we keep our promises.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I rise today to honor some wonderful foster grandparents in Lenawee County who recently received recognition for their fifteen years of service. It's my pleasure to offer my congratulations and best wishes to three foster grandparents in particular--Mickie Diebel, Theta Luscumb, and Marie Schwalm. Since January 1983, Maxine (Mickie) Diebel has provided love and support for children with special needs. These youngsters, first at the Adrian Training School and currently at McKinley Elementary School, have flourished due in large part to Mickie's nurturing and guidance. Mickie has been a magnificent role model and mentor to the young girls who have looked to her for help and support. Mickie, thank you for your dedication so much of your time and effort to improving the lives of kids. Theta Luscumb has been a foster grandparent since 1983. She began at Michener Elementary School but since 1991, Theta has worked at the Onstead Middle School. She is a wonderful source of advice and support to the children who have the privilege to look to her as a role model. An accomplished horsewoman, Theta shares that skill with her kids. Theta, I salute you for your dedication to area children. Marie Schwalm has been a foster grandparent since 1993. At the Blissfield Elementary School, Marie has demonstrated commitment, compassion, and wisdom in her dealings with young people. Even though she has some trauma in her personal life, nothing has obstructed her determination to serve as a voice of support for kids. Marie, thanks for your dedication. Those who make an extra effort to help nurture kids and nudge them in the right direction undertake a public service that benefits us all. We owe these women and the many other foster grandparents in Lenawee County and across the nation a debt of thanks.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I rise today to honor Siena Heights University in Adrian, Michigan. On July 1, 1998, Siena Heights College will officially change its name to Siena Heights University. Siena Heights was founded in 1919 by the Adrian Dominican Sisters, and for nearly 80 years, has served the needs of southeast Michigan. Currently Siena Heights has seven degree completion centers that stretch across southeast Michigan. It is a student-centered education facility that serves a wide range of students, from traditional students to adults seeking to complete their degrees. Siena Heights is also a mission-driven University that is always ready to respond to the changing needs of society. I know the faculty and student body share my belief that learning is a life-long experience. On the first day of July, when the name change is official, I am certain that Siena Heights will continue to fulfill its great commitment to educational excellence. I join our community in saluting this wonderful institution for its dedication to higher education and congratulate the university on its name change.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, the gentleman from Minnesota (Mr. Minge) and I, and the gentleman from Wisconsin (Mr. Neumann) are introducing legislation, H.R. 4033, that makes changes in the way government borrows from the Social Security trust fund. It does two things. It provides that from now on when we calculate whether there is a budget surplus or deficit, OMB and CBO, the administration and Congress, shall not consider the money we borrow from the Social Security trust fund as revenue in determining whether or not there is a deficit or surplus. The other provision in that bill says that from now on when we borrow any money from the Social Security trust fund, it is going to be in the form of marketable Treasury bills rather than the blank IOUs that we have been using in the past. If the current revenue spending stream continues, it would mean, for the first time in many years, we could have a balanced budget without considering the $90 billion borrowed from Social Security. It is the right track, and we need to keep on that track by passing H.R. 4033. Let us be very honest and clear, borrowing from the Social Security should not be considered revenue and the amount borrowed should be secured by marketable Treasury bills rather than the existing politically dependent nonmarketable IOUs.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Chairman, I move to strike the last word. Mr. Chairman, I just want to comment additionally on food safety. And I would like to point out what was done in terms of funding, what was done in the research authorization bill passed through the Committee on Agriculture and ultimately, law. Food safety was given a high priority. We designated in that legislation that food safety research should have a priority, both in the detection of food-borne pathogens and in reducing food-borne pathogens. In the effort to make sure that the food that America eats is healthy both the Research Authorization bill and this appropriation bill gives priority. I would like to point out to my colleagues we included language in the authorization bill important in assuring coordination of the activities of the Department of Agriculture, the Centers for Disease Control and the Food and Drug Administration. We directed that those three agencies of government start working together now to coordinate their efforts in the event of a health risk from food-borne pathogens. A very important part of our food safety efforts must be preparedness. USDA has already designated food safety efforts as a priority. Food and Drug has already designated it as a priority, and the Centers for Disease Control has of course always had it as a priority. The coordination of efforts at the local, state and national level is important as is research and education. I think most of us agree that this is a very important aspect of how we make sure that disease outbreaks from food-borne pathogens is minimized. As we become more and more dependent on additional food products coming in from the other countries, because of new regulations, and I might add amendments, that put our farmers at a competitive disadvantage, food safety will become an ever more important issue.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, the gentleman from Minnesota (Mr. Minge), a Member of Congress, and I have introduced a bill, H.R. 4033, that deals with some of the mistakes I think that we have been making regarding Social Security and how we calculate and how we treat the money that government borrows from Social Security, that we borrow from the Social Security Trust Fund, and then spend that money on other programs. The legislation accomplishes two objectives. First of all, we say that from now on, when the general fund or the government borrows from the Social Security Trust Fund, instead of the blank IOUs, in the future it will be required that we have marketable Treasury bills. Right now what happens is when there is a surplus coming in from Social Security, and Social Security is a pay-as-you-go program, so existing workers pay in their Social Security tax, immediately that is sent out to existing retirees. Anytime there are more revenues coming in than what is paid out in benefits, it goes into what is called the Social Security trust fund. It is not really a trust fund, though. It is simply considered and treated as additional revenue for the general fund to spend on other social programs. Number one, what we say in this legislation and what we are proposing is that these become marketable treasury bills that the Social Security trustees can walk around to the corner, to the nearest bank, anyplace, and if they need that money to pay benefits, they can do it without coming and begging to Congress to pay back the money that has been borrowed. The second thing that we do in that bill is say that from now on when we talk about deficits and surplus, we are not going to consider the extra money that is coming in from Social Security, that goes into the Social Security trust fund and is spent on other programs, as revenue in terms of deciding whether we have got a deficit or surplus in this country. Right now we hear a lot of bragging about the fact that we are going to have a surplus, a surplus in the unified budget that might be as high as $60 billion, $70 billion this year, maybe up to $100 billion next year. But because we are borrowing that $70 billion to $100 billion next year from the Social Security trust fund, it is not really a surplus. So we say from now on, when OMB and CBO scores whether or not we have a deficit or surplus, we are not going to consider the amount that we borrow from the Social Security trust fund as revenue in terms of pretending that we really have a surplus in this country. I think it is important that we be visible. I have got a letter from Chairman Allen Greenspan, Chairman of the Fed, that says, ``Look, what's important is that we have transparency, that there is a clear understanding of what is happening in this country.'' I suggest, Mr. Speaker, and I suggest to the American people that there is not a clear understanding as we brag about a surplus when we are depending on the amount that we are borrowing from the Social Security trust fund as revenue to justify in our calculations that there really is a surplus. I just quote from Allen Greenspan: On the first issue, my basic point would be that the financial markets of switching from investments in nonmarketable to marketable treasuries have little or no effect. It is important that we be transparent, it is important that we be honest with ourselves in the way we calculate these surpluses so that we can make real and honest policy decisions. Federal Reserve System, Board of Governors, Washington, DC, June 18, 1998. Hon. Nick Smith, House of Representatives, Washington, DC. Dear Congressman: I am pleased to respond to your request for my thoughts on the bill you have drafted, H.R. 4033, which would direct the investment of social security trust funds to marketable securities and require that budget surpluses or deficits be reported net of social security flows. On the first issue, my basic point would be that the financial market effects of switching from investments in nonmarketable to marketable Treasury securities should not be significant. The crux of this matter is that it is the net borrowing requirements of the federal government, on a consolidated basis that encompasses the trust funds, that are key in terms of pressures in financial markets. If the trust funds were simply to purchase marketable rather than nonmarketable securities, the net borrowing from the public would remain the same. Under the circumstances, the question would seem to boil down to a matter of which approach is most attractive in terms of dealing with the technical problems of public debt management. The preceding remarks effectively anticipate what I would have to say about the second issue regarding accounting. A unified budget concept that encompasses the net flows into or out of the trust funds most effectively captures the short- run influence of the government's fiscal activities on the financial markets and the economy. From this standpoint, it would not be desirable, to my mind, to suppress the unified accounts. On the other hand, a budget accounting that separates out social security receipts and outlays may provide an insight into the longer-term financial condition of the federal government that would be helpful in the planning and policymaking process. As with many issues in accounting, the one-size-fits-all approach is likely to be suboptimal. What is important is that the relevant information be presented in as transparent a fashion as possible, so that eveyone can appreciate the financial consequences of policy actions. I hope that these comments are helpful. Please let me know if I can be of further assistance. Sincerely, Alan Greenspan, Chairman.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Chairman, I thank the gentleman for his efforts to pass comprehensive and common sense bankruptcy reform that will greatly benefit our economy and our taxpayers by lowering interest rates and increasing availability. On a particular issue, many States such as my home State of Michigan have experienced a sharp increase in the number of long-term placements of children by court order. Tom Robison, the Eaton County, Michigan, probate court administrator, tells me that the cost of just one placement can be as high as $50,000 per year. Federal courts have determined that when parents declare bankruptcy, they are currently allowed to discharge the debts owed to that particular court and the taxpayer for the costs of this long-term placement. I introduced H.R. 3711 last April to specifically state in law that such expenses of caring for children could not be discharged by bankruptcy. I thank the chairman for agreeing to this provision we have asked for to make sure that debts owed to the State and municipality or State court of proper jurisdiction for this purpose are not dischargeable. I wanted to clarify, however, that the definition of ``municipality'' is meant to include probate courts and other local governmental units that have to pay the cost of this care. For that purpose, I would like to enter into this colloquy with the distinguished chairman of the subcommittee, the gentleman from Pennsylvania (Mr. Gekas). Mr. Chairman, I would ask the gentleman from Pennsylvania (Mr. Gekas), if the term ``municipality'' as defined by section 101 of the Bankruptcy Code includes State courts?

Mr. SMITH of Michigan. I yield to the gentleman from Pennsylvania.

Mr. SMITH of Michigan. Mr. Chairman, I thank the gentleman.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Chairman, I thank the gentleman for yielding me the time. Mr. Chairman, very briefly, each one of these bars represents how much money has been spent by the Federal Government for each one of these years, 1994 through 2003. In 1994 we started out at $1.4 trillion. We are ending up in the committee's budget at $1.9 trillion. What happens? I am going to draw a line here. The budget of the gentleman from Wisconsin (Mr. Mark Neumann) suggests that we stay with inflation, and we actually reduce very slightly the spending over the next 5 years. The Democrat or the Spratt budget actually suggests that we increase spending. It is important to know that we have to live within inflation.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I wanted to take a moment today to point out to my colleagues someone in my district who epitomizes the dedication and commonsense leadership we all should value in our local government officials. On Friday, June 12, 1998, Rance Leaders will retire as City Manager of Battle Creek, Michigan, after serving with distinction for 10 years. Today, our community will salute Mr. Leaders with a gala retirement celebration for his years of service to Battle Creek. Mr. Leaders has served the people of Battle Creek, Michigan, for 18 years, first starting as Assistant City Manager in 1980. When Gordon Jaeger retired in 1988, the City Commission, then led by Mayor Al Bobrofsky, selected Mr. Leaders as Battle Creek's City Manager, effective June 1, 1988. Rance served our country in the United States Marine Corp during the Vietnam Conflict and also worked for the U.S. Department of Housing and Urban Development prior to working for the city of Battle Creek. Tonight's salute, dubbed ``Operation Compass,'' honors an outstanding leader in the community. I wholeheartedly believe that Mr. Leaders is deserving of such recognition for its leading role in revitalizing Battle Creek--the best-known city of its size anywhere in the world. Mr. Speaker, as you know, I'm pretty proud of Battle Creek. The town, as millions of Americans know, is affectionately called the ``Cereal City,'' because it is the birthplace of modern breakfast cereal. It was once home to over 100 cereal companies and today is home of the world headquarters of the Kellogg Company. Mr. Leaders has been a key catalyst for many positive changes within the City. He has worked to create better partnerships with regional units of government and most of all among the citizens of Battle Creek. Today, according to some surveys, citizens' trust in city government has risen from 45 percent in 1990 to 83 percent in 1997. One of his favorite sayings might be one any leader should remember--especially here in Congress--``None of us is as smart as all of us.'' Rance worked to strengthen Battle Creek's global reputation by working in collaboration with all parties to continue to attract business to Battle Creek's Fort Custer Industrial Park. Most recently, I was honored to join city officials as Western Michigan University opened its elite International Pilot Training Center in Battle Creek to train airplane pilots from all over the world. Rance also worked on several projects including the Emmett Street overpass, Full Blast, a premier youth recreation facility, removal of the pedestrian mall to increase economic development in the downtown area, and most recently, Kellogg's Cereal City U.S.A., a museum recognizing Battle Creek's breakfast cereal heritage. I personally have had the pleasure of working closely with Rance Leaders since 1993 when the Department of Defense sought to close several agencies at the Federal Center located in downtown Battle Creek. Rance helped us convince the Department of Defense that the work performed at the facility was cost-effective and at a lower cost than that cited by the federal government. Because of our coalition's efforts, the Federal Center remains in Battle Creek and its operations are expanding. As other cities have faltered, the transformation that Battle Creek has experienced over the last 10 years is nothing short of miraculous. Rance Leaders deserves much praise and recognition for his accomplishments. And there is so much more that I could highlight. But perhaps it will suffice to say that Rance Leaders truly exemplifies the spirit of Battle Creek, a city that will continue to thrive due in no small part to his efforts. Mr. Speaker, for all of these reasons, and on behalf of the citizens of Battle Creek, I am very proud to offer this tribute to Rance Leaders, retiring City Manager of Battle Creek, Michigan. I know that Rance enjoys sailing and may take some time to explore other areas of our world. But all of us hope he stays anchored in Battle Creek. Thank you, Rance, and good luck. Bonnie and I wish you the very best.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, very briefly, this debate is important, because the White House spins the President's budget as a glorious solution of how government can solve problems by spending money. Nobody has talked about where the money comes from. That is the purpose of this debate and vote. Everything in this bill is the President's budget proposal for tax and fee increases. I think it is important that we look at where the money comes from because it comes out of the pockets of working families in this country. In the President's budget, it takes $129 billion out of those pockets. I thank the gentleman for yielding to me.