Craig Thomas

Mr. THOMAS

Mr. THOMAS. I am sure that is correct. And it is an even more astounding figure than we have. It is set up so we do not think about it a lot. I do not object to the idea of withholding. It is probably the only way to do it. But withholding sort of slips in there and you hear people talking all the time, ``Well, gee, I got money back.'' It is my money. It is my money. Back from where? Anyway, it is a very high figure. But it seems to me--and I wanted to focus on this, and I am going to speak for just a few minutes about this--it is too complicated, much too complicated, and too difficult to figure. Again, an estimate is 4.5 billion hours a year are spent in the preparation of tax returns. That is an astounding number as well. Each of us knows how difficult it is to figure our taxes. They are too hard to enforce. The more complicated, the more difficult it is in the tax system, obviously it is more difficult to enforce. And enforcement is important. You have to ensure that, when you have a tax system, that everyone is treated fairly in that tax system, that everybody contributes what under the law they are supposed to contribute. So the tax system makes it most difficult. Probably there are too many loopholes. They are often called loopholes. The fact is, over time, the Tax Code has been used to affect behavior. When we wanted someone to do something we changed the taxes and made it an incentive to do it. So we have all these series of things which have very little to do, frankly, with paying taxes. They actually have very little to do with the fairness of taxation, but have more to do, in fact, with seeking to modify behavior. Maybe that is a legitimate function of taxes. But I can tell you, it makes it much, much more difficult. It probably makes it much, much more unfair, in terms of the total collection. I think we had, this year, as an example, a real demonstration of how frustrated people are when there was the kind of discussion and acceptance, frankly, of the so-called flat tax. Obviously the most attractive thing about a flat tax was the ease with which it could be collected. There is argument about the fairness of it. Those who have studied it feel it is even more fair. I do not argue with that. Politically, it probably is not going to happen. There are some things like homeowners' interest and those kinds of things that are going to be very difficult, politically, to change. The argument is, of course, if I am an investor in your company and you pay me a dividend, that dividend has been paid after tax, so I should not have to pay it again on the dividend. But when you see someone with a large income from dividends, politically that is probably not going to happen. Nevertheless, the point is, it was very attractive for Americans to talk about a simpler, easier, more fair tax system, whatever it is. I am no expert on that, but I think it must be possible to do that. It must be possible to find a way to come up with a system that makes it easier to enforce. So we get away from the idea of having an agency like the IRS, that has to do the things it has to do. I am not being an apologist for some of the behavior that IRS might use on people to do this. But, nevertheless, the fact remains that they have a terribly difficult job, to enforce this kind of a convoluted tax system. So, Madam President, I think there are lots of things we could too. I have a hunch, if we eliminated a lot of the exemptions, the lower rate would offset some of the things that are now in there as exemptions. We would find it would work better. I think collections would be higher if it were simpler, and we would have fewer problems. There are many reform and simplification ideas out there. Frankly, I would support a plan, obviously, that deals with fairness. You have to be fair as to whoever pays their fair share; simplicity ought to be an issue, we ought to be able to make it much more simple, particularly with some of the equipment that we have now. I think we ought to reduce the burden. We have to pay for the Government we have, but we can do with substantially less. We can do with shifting many of these activities closer to home, so voters would know, when they made a cost- benefit analysis. Expenditures at the Federal level are very difficult to measure. At home, in the school district, when they say we are going to have a bond issue and we are going to build a science room and it is going to take $400,000, then you say OK, is it worth it? Am I going to do it? You have a cost-benefit ratio. How do you do that in the Federal Government, tell me, in a $1.5 trillion budget where even people here are not certain what is in the thing? So we can do that. And the result would be to rein in the role of the Internal Revenue Service and we can do that by simplifying, reducing, making easier a tax system. Madam President, I hope that we do that. I yield the floor.

Mr. THOMAS. Certainly.

Mr. THOMAS

Mr. THOMAS. Mr. President, as you know, for some time now, we have attempted to have the freshmen of the Senate come on to the floor, from time to time, to talk about issues we think are important. We call this ``Freshman Focus.'' We appreciate this time to do that. I will be joined by at least one of my associates, very soon. Many of the others have departed for home. Mr. President, we wanted to talk a little today about choices-- choices that we have in a Government like ours, the one that President Lincoln said was a Government ``of the people, by the people, and for the people,'' which we all, of course, want to maintain. In order to do that, then each of us, as citizens, as the people who will run this Government, need to make choices, need to make decisions, and need, of course, to be as informed as we can be with respect to those choices. In order to be informed voters, and in order to participate in those decisions that will guide the country, not only in the short term but in the long term, I think we have to decide what those fundamental choices are and then, of course, decide for ourselves how we approach them. And there are fundamental choices, choices that have impact over time, choices that affect this country and the way it is organized, in its purpose, and its goals--not just the short-term issues that sort of are instant gratification for each of us. Of course there are those, and we always like that. But the fact is that there are basic issues that really will affect the way we operate over the years, not only for those of us who are now voting, but for our kids and our grandchildren. Those are the ones that, it is my belief, we should really focus on and seek to bring out in our own minds, at least how important they are. I am concerned, because it seems to me that we are increasingly moving away from basing our views on those fundamental decisions and we get engrossed in all the short-term kinds of things that we talk about. This administration, frankly, has done more to seek to blur issues than any administration that I have ever seen. It is fairly easy to do that. It is fairly easy to say, ``Yes, I am for that, too.'' I think the best example that I have seen over the last number of years--and particularly in this session--is where we have spent a great deal of time talking about balancing the budget and a balanced budget amendment to ensure that that in fact happens. I don't think there has been a soul that has risen and said: ``I am not for balancing the budget.'' They have said, ``I am for balancing the budget, but. . .'' So we establish that initially, at least in rhetoric, and don't do that. We haven't balanced the budget in 25 years. So it is very easy to blur the issues, very easy to make it difficult to ascertain where people are on these issues. And issues is what elections are about. Those are the choices that you and I have to make as November comes. I think it is more and more difficult to really identify where people are, where parties are, where candidates are, for a number of reasons. It is almost an irony that--just imagine, 50 years ago, 100 years ago, how little information we all had about what went on in our Nation's Capital or around the world. Now, because of technology, we know instantly. If we fire a rocket at Iraq, we know about it right away, and we actually see it. Despite that technological opportunity to know more, it seems as if it is more difficult for us to clarify the choices that we have. One of the reasons, of course, is the media. We get much of our information--most of our information and, indeed, almost all of your information--through public media. I don't think it is any secret that the media most often tries to pick out those things that are controversial and emotional, and those things that create debate rather than the ones that clarify the issues. I understand that. That's the way it is. But it makes it difficult. More and more of our decisions and our choices and our information come from advertising, political advertising, which is generally designed to skew issues in one way or another. It is not the exclusive province of either party, but it is something that is done, almost entirely, in almost all the ads we see. So that does not help to clarify issues. We see right here in this Chamber all kinds of amendments. Yesterday was a great example of amendments designed simply for some kind of political statement, which really had nothing to do with the bill we talked about. Frankly, it had very little to do with the prospect of it passing. But it was something thrown out there to create an image. It makes it difficult to decide on choices. We even find, Mr. President-- like yesterday--a delay tactic going on here. Instead of moving forward, because we have a couple more weeks to finish a lot of work, we spent 25 hours on one bill, with 100 amendments. Why? I think simply to delay. I think simply to increase the potential--frankly, the possibility of a shutdown of the Government and Congress would be blamed for that. So, when you're dealing with things like that, it is very difficult to really come down on the bona fide choices and directions that will guide this country into the future. There are differences. There are choices. There are legitimate choices and, frankly, they are fairly clear. It is a legitimate choice, but there are those who want more Government, who think there ought to be more taxes, who think that money collected in taxes and spent by the Government is better spent. I don't happen to agree with that, but I agree that it is a legitimate choice. Indeed, if we can make it a little more clear between those kinds of things, then people could choose. The other choice, of course, is less Government, moving Government closer to people through the State and local governments, and actually having tax relief so people spend more of their own money rather than collecting it and spending it out through the Federal Government. Those are choices. Those are quite different, and that is what elections are about--to decide which of those directions we want to take. Imagine, for a minute, that you have a ballot. You go into the polling booth and the ballot has on it a number of issues. You check those issues that you agree with. What is your choice on the issue of a balanced budget amendment? Do you want that? You go down a series of questions of that kind, and then, rather than selecting a candidate, because of what you have selected with the issues, the candidate is automatic. The ones who represent what you most nearly represent is your choice. That would be an interesting exercise, wouldn't it? I suppose you could talk about the size of Government--smaller, larger? Federal Government--smaller, larger? Cost? Do you think the cost is too much? Do you think the Federal Government costs too much as it increases, or should it be less? It is possible to be less. Tax relief? If we pay nearly 40 percent of our income on average in taxes, should we have tax relief, or have the system continue like it is? Yes or no? Welfare reform? We have talked about that for the last 2 years. The President had it in his campaign in 1992. Finally, after the third time, it was passed and signed. Now, of course, the same people who said they were for welfare reform are now saying, ``Well, as soon as we get back in Congress, we will change it. We will take out some of that stuff. We really do not want this welfare reform.'' So welfare reform ought to be one of the questions for voters. Do you want welfare reform? Regulatory relief? We talked a lot about that. We tried to do that this year. Lots of people are not for regulatory relief. Many of us on this side of the aisle are. They are legitimate issues, and legitimate choices. So, Mr. President, I simply want to say that I hope as we move on in this election that each of us has a responsibility to vote, each of us who has the responsibility in this kind of Government to participate in the decision as to where we go in the future, take a look at the issues and choose, because there will be fairly clear choices, but it may be hard to determine that. I guess that is the essence of what I am talking about this morning-- that we need to have choices. I believe that we have two pretty different philosophies--one for more Government, more taxes, more regulations; one to reduce the size of Government, have tax relief, reduce the regulations so that we have more jobs and more economic growth. Those are the clear choices. Mr. President, I am pleased to be joined by the Senator from Minnesota, who also wants to comment on some of the choices that are available to us as part of today's Freshman Focus. I yield to my friend.

Mr. THOMAS

Mr. THOMAS. Madam President, the theater that is the annual China MFN debate has once again--predictably--fully run its course. The President recommended extension, United States business and our Asian trading partners held their collective breath, there was a lot of rhetoric on the floor of the House condemning China for a variety of serious misdeeds, and in the end a vast majority of the House voted to renew MFN yet again. In the wake of the debate, I believe that we should take a serious look at scrapping this annual drama and replacing it with a more pragmatic and workable solution. That the yearly MFN debate should be scrapped seems evident from an examination of its relative pros and cons. What is gained by the annual debate? Aside from an opportunity for some in Congress to air their grievances with the PRC, not much. What is lost, on the other hand? Quite a bit. First, the debate regularly disrupts our bilateral relationship by making the Chinese feel unfairly singled out, and not without reason. Most favored nation is a misnomer. Although the phrase implies some special treatment that the Uunited States passes out discriminately, it is actually the normal trading status with all our trade partners. Only seven countries, the majority of which we consider pariah states, are not accorded that status: Afghanistan, Azerbaijan, Cuba, Laos, North Korea, Vietnam, and Serbia. In addition, one of the main reasons given by proponents of revoking China's MFN status is that country's arguably abysmal human rights record. But while other countries have equally disturbing human rights records, no one has moved to revoke their MFN status. Turkey has long persecuted its Kurdish minority; Russia has killed hundreds of civilians in Chechnya; Indonesia invaded East Timor and continues to occupy the island illegally, jailing and killing Timorese dissidents; Nigeria jails and executes opponents of the Government-- yet all four enjoy most favored nation trading status. Second, the annual debate is damaging to the interests of U.S. companies doing business in the PRC. Companies find it very difficult to make long-term investment plans when they have to worry every year that the MFN rug might be yanked out from under them. From the Chinese side, the annual MFN renewal requirement raises the risk of doing business with U.S. firms; so instead, they have a strong incentive to do business with our European competitors who have no such constraints. Third, the threat of revoking China's MFN--an empty threat in my view--is not an effective foreign policy tool. Revoking China's MFN status would hurt us more than the Chinese--the economic equivalent of cutting off your nose to spite your face. In 1995, United States exports to China directly supported around 200,000 American jobs. Revoking MFN, and the Chinese retaliation that would surely follow, would only serve to deprive us of a rapidly growing market. China is perfectly capable of shopping elsewhere for its needs, and our allies are more than happy to fill any void we leave. We recently saw a prime example of that willingness; last month Premier Li Peng traveled to France where he signed a $2 billion contract to buy 33 Airbuses--a contract that Boeing thought it was going to get. Fourth, instead of using MFN as a carrot-and-stick with the PRC, I believe the best way to influence the growth of democratic ideals, human rights, and the rule of law in China is through continued and reliable economic contacts. I think anybody who has been to China, especially over the course of the last 15 years, has seen that for themselves--most dramatically in southern and eastern China. It is clear that economic development and contact with the West through trade has let a genie out of the bottle that the regime in Beijing will never be able to put back. We must continue to encourage that trend as we turn the corner to a new century. The whole MFN renewal issue is an outdated relic of the cold war--a war that's over. The Jackson-Vanik amendment, the basis for the yearly MFN renewal requirement, was not designed with China in mind and was not created as a way to better a country's overall human rights record or its adherence to international or bilateral trade or nuclear proliferation agreements. Rather, it was originally designed to pressure the Soviet Union to allow the free emigration of Soviet Jews to Israel and other countries. Over the years, its application has moved from covering freedom of emigration from any country with a command or nonmarket economy to a tool for expressing United States displeasure with a variety of China's sins. It is somewhat ironic that of all the different issues raised by Members of Congress arguing to revoke the PRC's MFN status, I have never heard China's emigration policies mentioned even once. With the demise of the cold war, and changing world realities, we would do better to repeal Jackson-Vanik and replace it with a more workable and pragmatic alternative. We should extend permanent MFN status to China, retaining of course the option of revoking that status should the need truly arise. That extension would remove a series of irritants from our relationship, but would not adversely affect our ability to address China's various transgressions. We retain a whole series of options to deal with the many areas of friction in our bilateral relationship that are more narrowly tailored--and therefore more effective--than the overkill method of MFN revocation. For example, a wide variety of unfair trade practices can be addressed through provisions of the Trade Act of 1974--commonly called the Special 301 provision--as with the recent intellectual property rights dispute. Similar legislation is in place to deal with nuclear or other weapons proliferation. I am not an apologist for the PRC--far from it. The Chinese are failing to honor many of their commitments to us, such as intellectual property rights and nuclear proliferation--note the recent well-founded allegations that the PRC has assisted Pakistan in building a missile production facility. They want to gain entry to the WTO on their own, not the WTO's terms. Their progress on the human rights front has been negligible at best, as evidenced by a rash of recent crackdowns in Tibet and Xinjiang. They are actively pursuing the purchase of Russian SS-18 ICBMs and MIRV technology. They have laid claim to the vast majority of the South China Sea, to the consternation of five other claimant countries. They have conducted a series of aggressive and inflammatory military exercises this year off the coast of Taiwan. But despite all these issues, the revocation of China's MFN status is not a constructive remedy. It is high time that scrap this annual ritual, and replace it with a more thoughtful and pragmatic approach that builds on our efforts, rather than tears at this important relationship. I was glad to see during the latest debate that acceptance of this position seems to be growing among Members of Congress. Madam President, while it is too late in this legislative year to take up the issue in the Congress, I hope that before we go through this dance again next year that Members from both sides of the aisle, from all the relevant committees, can sit down and formulate an alternative. The upcoming period after our sine die adjournment would be a perfect time to do so.

Mr. THOMAS

Mr. THOMAS. It is fine with me.

Mr. THOMAS. I believe I probably have about 2 minutes, and Senator Glenn has 1\1/2\ minutes. So I would guess less than 5 minutes.

Mr. THOMAS. That is fine.

Mr. THOMAS. Mr. President, I would agree with the Senator if what he is saying were the case, and I think it is not. We have indicated that the statute requires under the Efficiency Act what we are asking here: that there be this effort to communicate in the private sector and measure that cost. The problem is this one right here. This is March 1996, called the ``Revised Supplemental Handbook, Performance of Commercial Activities, Executive Office of the President, Office of Management and Budget.'' It says: The cost comparison requirements of this supplemental handbook will not apply to existing or renewed ISSA's or the consolidation of commercial services. So it is not just a function of the law not being lived up to but, in fact, is a change that has been put in place by OMB. So that is what we are seeking to do. We are not seeking to change the law. We are not seeking to change the basic operation of this statute, but we are saying that there are changes made by Executive order which remove that requirement that those activities that are being carried on by one agency for another, not the activities for themselves, one agency for another, that the requirement continue to exist as it has in the past, that we see if there are commercial activities available at a lesser, more efficient cost. This is simply an effort to put back in place the requirement that has been in place for a very long time, that for the activities that are acquired from another agency within Government, that there be an effort to determine if it can be done more cheaply, more efficiently in the private sector. This is not a new idea. This is an idea that now exists in law but has been taken out of the law by OMB. This would put it back. It is not broad. I hope very much that the Senator from Ohio, and his committee, will take a look at this whole broad thing. But in the meantime, I think we need to return where we were so that private industry can be part of this idea. We have used it for a very long time. It has to do with being more efficient. It has to do with good Government. It has to do with strengthening the private sector. I certainly urge my colleagues to vote aye. Mr. President, I ask for the yeas and nays.

Mr. THOMAS

Mr. THOMAS. Mr. President, I send a modification of the amendment to the desk.

Mr. THOMAS. Mr. President, I want to explain the amendment, if I may, and then ask that we have a vote on it. It has to do with the Federal Government's policy of more than 40 years that the Government should not compete with the private sector in areas in which the private sector can legitimately function. In fact, the Government should rely on the private sector to supply commercially available goods and services. However, this policy is too often ignored. For example, the Defense Science Board calculates that out of 850,000 full-time positions needed to provide commercial services for the military, 640,000 are held by Federal employees rather than private sector personnel. I want to go back and talk about commercial services, however, because the modification that I sent to the desk exempts emergencies and exempts factors that are not routinely commercial completely from the bill. There is a new administration policy that prompts this particular amendment. OMB has come out with a policy that grandfathers existing Interservice Support Agreements from cost-comparison requirements. In other words, it says if you have had this kind of Interservice Support Agreement, it is not even necessary to inquire as to what the cost would be if, indeed, there would be savings in the private sector. The Interservice Support Agreements permit one Federal agency to provide goods or services to another agency. This new policy gives agencies until October 1, 1997, to go out and recruit business from other agencies, without performing any cost analysis. The administration implicitly argues that this entrepreneurial approach to Government will save the taxpayers money--and they don't even know what the cost comparisons are. Some examples of existing ISSAs are: Aerial photography, mapping services, laboratory services, printing services. Other specific examples are: A U.S. Geological Survey was hired by the Bureau of Reclamation to participate in the High Plains Groundwater Recharge Program. The project took twice as long and cost three times as much as the private sector standard. In Jacksonville, FL, the Navy Public Works Division recently completed a state-of-the-art environmental lab to provide routine hazardous waste characterization. These services are already available from the private sector, and the Navy intends to offer these services now to other Government agencies. Mr. President, this is not the concept that most of us have for Government. It is common sense, I think, that activities that are integral to Government, activities for emergencies, for defense, activities such as plane wrecks and all these things, those things, of course, are excluded under the bill. But when we are talking about routine services that can be provided commercially in the private sector, then they should be. There are a few examples of direct Government competition with the private sector. So there is a new policy that encourages the Federal Government to compete with the private sector. I think that is philosophically wrong. Certainly, it hurts small business. There isn't even competition for projects --no public solicitation--the private sector never knows if there is a need that they could fulfill. We did this, by the way, in the Wyoming legislature when I was there. We had a bill that said that in those areas where the function can be commercially carried out, there ought not to be competition by the Government, that there ought to be at least an analysis of the cost, and a fair analysis, so these things can be done, to the extent that it is possible, to save the taxpayers money and do it in the private sector. Numerous studies have shown that outsourcing can save the Government $9 billion to $10 billion annually. Further, it seems to me that this process of having extra commercial activities carried on by Government agencies circumvents the appropriations process. If an agency is able to do the work for another agency, it is likely to have more resources and employees than it really needs to fulfill its primary mission. It may be wasting taxpayers' resources and may need to be cut back. If an agency appropriations is cut and it recruits business, it is circumventing the appropriations process. The amendment that we have simply indicates that none of the dollars in this particular appropriations can be used unless, and the rule says: A requirement for a comparison between the cost of providing the property or service concerned through the agency concerned and the cost of providing such property or service through the private sector. It is very simple. It simply says that you have to take a look at letting the private sector do this and get the cost of that before one agency provides it to the Government sector for another agency. I emphasize that we have been doing it for 40 years. This is a new OMB policy. It is a rule for the supplemental handbook. By the way, as to the handbook itself, I think we are going to hear--and we have heard from one agency, the Defense Department specifically--``Well, we will be curtailed on a number of these essential support emergency activities.'' Let me give you the modification first of all. It makes it clear that the amendment does not apply to national security. Furthermore, this OMB rule has an exemption. Nothing in this amendment would change advanced planning for contingencies; therefore, contingencies or emergencies, such as the Value Jet crash in the Everglades. There are two protections from that kind of thing. One is the rule itself, and the other as the amendment to this bill. So it just seems to me that if you believe in the idea that the Government ought to be contained to those things that are uniquely Government activities and that beyond that we ought to go to the private sector, we have a broader bill that we have had for some time. We intended to have hearings on it. The hearings have been postponed twice--once at the request of the minority. So we have been prepared to have hearings on the broader bill. This one simply deals with the newest OMB supplemental handbook proposition. It says that you have to continue to do what you have been doing; and that is consider the cost of doing it in the private sector. It is hard for me to imagine that anyone can object to the difficulty of doing things that can be done in the private sector, and doing them in the private sector if they are going to save us money. The idea that you can't do it in an emergency is not a valid one. It is not valid because of the handbook exemption. It is not valid because of the modification that we have put on the bill. This kind of thing, of course, simply expands Government. I mentioned that we introduced S. 1724, the Freedom From Government Competition Act. It causes the Government to go outside. It causes OMB to study those things that are inherently governmental functions. Senator Stevens plans to hold a hearing on this bill in September. The Small Business Committee in the House has already held several hearings. But this is a smaller issue. While I am delighted that Senator Stevens will be holding hearings on the broader bill, there is really no reason for small businesses to be caught under this Clinton administration ISSA policy, the Interservice Support Agreement policy. The amendment is very simple. It merely reaffirms existing law. It would prohibit the appropriation of funds of one agency to provide commercially available goods and services for another agency unless the cost comparison is done and more oversight is conducted on the agreement to provide more information about what we are doing. The amendment will create private-sector jobs, which is what we talk about all the time on both sides of the aisle. It will help small businesses. It will save taxpayer dollars and make Government smaller and more efficient. Mr. President, the bottom line is we want Government to cost less. This is a way to do that. So I urge my colleagues to support this amendment. It is a commonsense amendment, a good-government amendment, and a pro taxpayer reform amendment. Mr. President, I yield the floor. Mr. GRAMS addressed the Chair.

Mr. THOMAS. The idea that is far-sweeping and far-ranging is that this has been in place for all these years until now. OMB simply changed it. It puts it back where it was, before OMB changed this. So the idea that it is an unknown is simply not true. It is simply not the case. It simply says to OMB, you cannot enforce these new rules that you put out that have changed what we have been doing now forever. So that is really what it amounts to. I think it is very important that we move on these. We have had some other debates today about whether there have been hearings or whether there have not been hearings. It depends on which side you are on as to whether that is important. But the fact is, this is a relatively minor change and one that simply puts us back to where it is. If, in the hearings that subsequently occur, there is evidence that the OMB change is appropriate, then I urge the committee to authorize, in committee, them to do that. In the meantime, I think we ought not remove the requirements, the simple requirements that if you are going to offer a service to another agency--not services for yourself, offer them for another agency, which is a growing tendency within Government--that, first of all, you have to consider the outrageous notion of seeing if there is an alternative that is less expensive. That is really not very difficult. It is really not a new idea. Most people who do significant work contracting try to get more than one idea of what it costs. That is what we are talking about here. As a matter of fact, I mentioned the idea that the statute on efficiency continues to exist. The problem is OMB is not abiding by it. That is the problem. It does continue to exist. It does say, yet, in the statute, that we ought to be doing this stuff in the private sector. The problem is, it is not being adhered to. The procurement act provides that an agency ``can provide another agency with goods and services if the goods and services cannot be provided by contract as conveniently or cheaply as a commercial enterprise.'' That is the law, but the rule negates that. That is what we are talking about. It is not a widespread change, not an unknown. It simply says we ought to go by what it says in the economy act, and not change it by OMB. So, I suppose if we are going to deal with a broader bill, which I hope we do--I hope we make some conversions more to private sector use--then I agree we ought to take a look at it in the committee. This part of it, however, simply says, live under the law. It simply says, do not change the law. Go ahead and ask that, when you want to provide services to another agency, that the private sector ought to be examined first to see if, indeed, that is a more efficient and more effective way to provide those services. Mr. President, I ask for the yeas and nays.

Mr. THOMAS. We will ask when there are more people here.

Mr. THOMAS. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. THOMAS. Yes, I yield. Unanimous-Consent Agreement

Mr. THOMAS. Mr. President, I send an amendment to the desk and ask for its immediate consideration.

Mr. THOMAS. Mr. President, I ask unanimous consent that the pending amendment be laid aside.

Mr. THOMAS. Mr. President, I appreciate the comments of my colleague from Ohio. Let me see if I cannot respond to some of them. First of all, they talk about a hearing. We have delayed hearings twice now. We have asked for hearings, had them set up, they have been delayed--once at Senator Glenn's request. I think it is time we move forward with this proposition. It is a narrow amendment. It is not a broad amendment. It is not a wide-reaching amendment. As a matter of fact, it deals only with circular No. A-76 and the language there where OMB has said, effective October 1997, ``The cost comparison requirements of this supplemental handbook will not apply to existing or renewed ISSA or consolidation of commercial services.'' This is not the broad bill that we have asked for a hearing on. It is not nearly as broad as I think it ought to be to effect this idea that we ought to be doing these things in the private sector. This notion that somehow we are going to get more efficiency out of doing it out of Government is one, I think, we have gotten long past. So we will be doing that, and we will be going further. This one only has to do with the changes that have been made by OMB. The idea, of course, that it will affect the letter that the Senator read from the Department of Defense probably is not applicable in the first place. However, we have, in order to make sure that is not the case, amended and changed--modified the amendment with the language that ``the regulations would not apply to contingency operations associated with a national emergency.'' Clearly, I think that does that. I want to interject here to ask unanimous consent that Senator Stevens, the chairman of the Governmental Affairs Committee, and Senator Frahm be added as cosponsors to this amendment.

Mr. THOMAS

Mr. THOMAS. I object.

Mr. THOMAS

Mr. THOMAS. I suggest the absence of a quorum.

Mr. THOMAS

Mr. THOMAS. I want to thank Bishop H. Hasbrouck Hughes, Jr., for being here. Bishop Hughes has just retired from 8 years as the resident bishop of the Florida Conference of Methodist Churches. He has served nearly 40 years in various capacities in Virginia. Most importantly of all, the bishop's daughter, Kathi Wise, works for us in our office, and has been on the Hill for 18 years. We are very proud of her and very pleased to have you here, sir.

Mr. THOMAS

Mr. THOMAS. Mr. President, I thank the Senator for arranging for time to talk about taxation. It seems to me that it is one of the things that all of us talk about most of the time in various ways, and we need to talk about it. I would like to move away a little bit from the specifics of the amount that we talk about and the specifics of even how it is done and, rather, talk a little more about the philosophy of taxation. I will talk a little bit about the strategy of taxation. I think it is important, over time, that we really take a look at where we want to go, what the choices are with respect to Government, with respect to taxation, where you and I will be, where our kids will be, and where our grandkids will be in terms of the strategy and philosophy of taxation over a period of time. It is a broad question. The numbers I have seen now, Mr. President, indicate that, on the average, American families pay 38 percent of their income in total taxes. Now, that is a lot of money. That is a lot. Think about how long you work out of the year in order to pay your taxes. I believe in May, or late May, is tax day. So without the detail, I think that is a philosophy of taxes. Obviously, there have to be taxes paid in a democracy, in a civilized society, to cover those kinds of things that clearly have to be done by Government, whether it be defense, interstate commerce, or whatever. There is no question about that. But it seems to me what we really ought to be thinking about, as we are into an election cycle, and indeed into an election, is the fact that there are choices. There are fairly clear choices as to where we go with Government and where we go with taxes. And there is a direct relationship between the two things. We are not just talking here about numbers, about arithmetic, and we are not just talking about addition; we are talking about Government. Obviously, the more Government that we ask for, the more Government that we want, and if we are going to be fiscally responsible, of course, the more taxes we have to come up with to pay for that. So there are choices. That is what elections ought to be about. I must tell you that I am a little concerned that over the years--and this campaign is more so than any that I think I have ever seen, where the choices are pretty badly blurred. We don't really have spelled out, as we should have, the clear choices that voters have to make. That is what elections are for--making choices. Taxes, of course, is one of them. But it is really secondary to how much Government you are going to have. And that is a choice that we make. Some people want more Government; others choose less. I happen to, as you can tell from my comments, be on the less side. But it is choice. You have to talk about the role of government. What do you think the Federal Government ought to be doing? What are the roles? What are the roles of the State and local governments? I have just come back, as most of you have, from my State--in my case, Wyoming--where you get involved in lots of things. Most recently, frankly, was a fundraiser for the museum at the University of Wyoming honoring Alan and Ann Simpson. An effort was made, voluntarily, to do something in our town, in our State, for the museum for the university. I spoke earlier to the emergency medical people in Cheyenne, people who volunteer to do things in their communities. These are very important, life or death matters in small towns. There is no hospital there. So if something happens, you use the emergency medical service. It's done by local government and voluntarism. It has to do with choices and the role of government. Federal involvement? Obviously, some things are inherently Federal, such as interstate commerce, and many of those things. So I guess I am taking a very difficult topic and trying to make it simple for myself. There is a strategy of where we go, where you want to be in a number of years, and in terms of the size and role of government and, consequently, the taxes that are paid with it. Too often, it seems to me, we get involved with the details--and they are important--of how you tax, who you tax, how you enforce it, and all those kinds of things, which are critical. But overshadowing all that and overriding that is a strategy and a philosophy. There are different philosophies, and they are legitimate. Unfortunately, they are not altogether clear. There is a gentleman at the University of Wyoming who is very clear. He is a very liberal man, and it is a legitimate view. He thinks there ought to be more Government and there ought to be more taxes. He believes government can spend the money better than you and I can in families. That is a legitimate view. But it is a choice. Quite often, right here, those basic differences are sort of submerged and we begin to talk about details when we really ought to start with the question of philosophy, of where you want to go. I think it is important to recognize that there are differences. One of the things that we need to think about, strategically, of course, is what is the impact of high taxes? What is the impact on the economy? Clearly, if there is less money taken in taxes, more money is invested in the system, more money is invested in the economy, more money is invested to create jobs, more people are able to earn and take care of themselves. That is inherently clear. It is a very efficient way of allocating funds in the market system. The other question you have to ask yourself, of course, is whether money is spent better by being collected in taxes and then spent by the Government on behalf of the people, or is it indeed spent better when you and I and our families in this country decide for ourselves where to spend our money? A further question, of course, is, what are the incentives? This is a system of economic incentives. We work and we invest because there is a chance to be successful, there is a chance to be profitable, there is a chance to do well. That is what the system is about. That is what the incentives are. So taxes seek to take away some of that. I guess I want to stress again that taxes are a legitimate thing, but we have to decide what it is we want. It is very key, I believe, to where we go in the future. So there will be a great debate around tax relief. I think maybe, in the case of tax relief, it will be fairly clear. The differences are fairly clear and people can make the choice. One of the things, of course, inherent is that, at least to some degree--and I am not a economist and I know it only goes so far-- reducing tax levies and tax percentages increases the total taxes that come in, because it encourages the investment and more and more activity. So, Mr. President, I hope that as we talk about our choices, you and me, as citizens, as we come to making the decisions that are inherent in an election, that we take a look at the philosophy of taxes. Are we better off if we could reduce that 38 percent, have some tax relief, have more money to invest, have more money to spend, and more money to generate for the economy, or not? Mr. President, I suggest that one of the real issues for us is--and my philosophy obviously is that we ought to have less government--that we ought to do more closer to the people, and more in the States and localities where we can do it more efficiently. Our real task is to look forward to the future as to where we go with young people, where they will be, where they will be paying taxes, and whether they will have the freedom to choose to spend vis-a-vis other questions that we face. Mr. President, I appreciate the opportunity. I appreciate my friend from Georgia providing for this debate, this discussion, about an issue that affects all of us and that we will decide in November. I yield the floor.

Mr. THOMAS

Mr. THOMAS. Mr. President, I am pleased the conference report contains section 3154, which requires the Department of Energy [DOE] to carry out a study to determine the extent and valuation of natural resource damages at DOE sites. I authored this provision as chairman of the Senate Energy Committee's Subcommittee on Oversight. Frankly, I was shocked to find that the Department had not yet done their own study of this potentially huge future liability, and that is why I introduced this amendment. It is vital that the Department of Energy obtain comprehensive and accurate information regarding the extent and valuation of natural resource damages at DOE sites. This is especially important if we are to make realistic budget assumptions today and set realistic budget goals for the future. Unfortunately, there has not been a reliable study done on this issue to date. During the course of Superfund hearings held in the Environment and Public Works Committee, significant questions have been raised about the Department of Energy's liability for natural resource damages at their Superfund sites. Department officials first estimated liability in the hundreds of billions of dollars. Since that time, GAO has looked at the situation, as has CEQ. However, the CEQ and GAO estimates are quite different. GAO estimates a high range of $15 billion while CEQ says the high range is $500 million. The disparity between these two studies is troubling, as is the fact that DOE has never done their own study. This amendment directs DOE to conduct their own study, to use realistic assumptions about liability based on the real world experience private parties have already had, and to report to the Congress 90 days after enactment. This real world experience is the methods in the current natural resource damages assessment regulations, and should be consistent with the position asserted by public trustees in suits against private parties and with the position supported by the administration pertaining to damages against private parties. While I would be happy to work with DOE to ensure they have enough time to do a credible job, it is important that they complete their work before we move to reauthorize the Superfund program next year and before next year's appropriations cycle. Finally, I want to emphasize that the intent of this section is purely for oversight functions. This section in no way should be interpreted as a reflection of support for the current operation of the natural resource damages provisions of CERCLA. I in no way endorse the methodologies used by public trustees under the current natural resource damages regulations. I simply believe that if private parties face these regulations today, and if the Department of Energy is the single largest potentially responsible party in the country, then we ought to use the same standard in estimating DOE liability at these sites. I look forward to receiving this study and to possible future hearings on this issue. Mr. President, I want to thank Chairman Thurmond and Senator Nunn for their help on this matter.

Mr. THOMAS

Mr. THOMAS. For the information of all Senators, this morning the Senate will begin 5 hours of debate on the Department of Defense authorization conference report. In accordance with the unanimous- consent agreement reached on Friday, the vote on the Department of Defense conference report will occur at 2:15 on Tuesday, and therefore there will be no rollcall votes during today's session. Also today, following the debate on the conference report, there will be a period for morning business with Senator Daschle or his designee in control of the time from 3:30 to 4:30 and Senator Coverdell or his designee in control of the time from 4:30 to 5:30. On Tuesday, the Senate will debate the Defense of Marriage Act beginning at 9:30 to 12:30, with a vote occurring on that measure immediately following the 2:15 vote on the Department of Defense conference report. After those two consecutive votes, there will be 30 minutes of debate to be followed by a vote on S. 2056, the employment discrimination bill. Finally, as a reminder, following those votes on Tuesday, the Senate will begin consideration of the Treasury, Postal appropriations bill, with additional votes expected on that bill. All Senators can expect busy sessions this week with rollcall votes possible throughout each day and evening as the Senate completes action on the remaining appropriations bills. Mr. President, I suggest the absence of a quorum.

Mr. THOMAS

Mr. THOMAS. Had the administration done its job, Congressman Peterson would have been spared the surprise and awkwardness of having his hearing postponed for several months. It is unfortunate that he has become a victim of this administration's unfortunate tendency to be reactive, rather than proactive, in its foreign policy decisions. In some other circumstances, Mr. President, I might worry about a delay in sending an ambassador to a particular country and the effect such a delay might have on our foreign policy. Since May the State Department has been strongly urging the Senate to take up the Peterson nomination at the earliest possible date because ``it is vital to U.S. interests that we have an Ambassador in place there.'' With that sense of urgency, the Department was continually requesting that the nomination be placed on a fast track. That sense of urgency is unabated, but the White House has terminally undercut its own argument by stating that even if the Senate gave its advice and consent in this session to avoid a constitutional problem it would not officially commission and send him to Hanoi until after the expiration of his present term--in other words not until next January--to avoid constitutional complications. It seems to make little sense to hold a hearing now on a nominee who all sides agree is constitutionally barred from taking office until the next Congress convenes. Thankfully for Congressman Peterson, our delay will not appreciably add to the time he will now be kept from his new position. Second, the postponement it is not about what I view as the administration's hurried move to normalize relations with the SRV. It will not come as a surprise to anyone that as a Senator I have opposed normalization in the past. My opposition was not based on my dislike of that country's communist dictatorship, or even its brutal repression of its own people--although in this administration's somewhat hypocritical view these two bases seem sufficient to deny diplomatic recognition to other countries such as Cuba, North Korea, and Burma. Rather, I did not believe that we should reward Hanoi with normalization when, in my opinion and the opinion of many other Members of this and the other body, Hanoi had not been sufficiently forthcoming with information about our country's missing and dead servicemen. I acknowledge that the President has wide latitude in the conduct of foreign policy, he has made the decision to normalize relations, and the Congress has more or less decided to go along with that decision. I have repeatedly stated that I will not stand in the way of that process simply because I disagree with the original decision. Third, the decision to postpone is decidedly not--I repeat not--about politics. While it has become somewhat ``normal'' in the Senate for a committee controlled by one party to hold up action on the nominees proposed by a President from the opposing party at the close of an election year, such is not the case in this committee this year. The distinguished full committee chairman, Mr. Helms, made it clear several months ago that it is his intention to move all matters pending before the committee--whether nominations, legislation, or treaties--out to the full Senate in time for them to be acted upon before the Senate adjourns sine die sometime in October; I fully support that position. In addition, I have never managed issues within the jurisdiction of my subcommittee in anything less than a fully bipartisan spirit. I firmly believe that to be effective, U.S. foreign policy is an issue that should be insulated from the currents and eddies of partisan politics. Toward that end, I have never raised objections to an ambassadorial nominee solely because he or she was a Democrat, or a political, as opposed to a career, nominee. First, I would not have scheduled, and then rescheduled, this nomination hearing if I had not had every intention of moving forward with it. Nor would I go on record as publicly committing myself to make the Peterson nomination my first of 1997. Fourth, this is not a question of the committee making a mountain out of a molehill. It is not some arcane issue to which we can turn a blind eye. It exists in black and white in the Constitution, the very document that many Members of this body carry with them daily and which all of us have sworn to uphold. Some might ask, ``What would it harm to simply overlook the problem?'' What would it harm, Mr. President? Simply put, I believe strongly that it would harm the Constitution and the Senate. There is an enormous temptation to chisel at the margins of the Constitution. The temptation becomes almost irresistible when the corner chiseled at is deemed a nuisance and the likelihood is very remote that anyone would bring a lawsuit against those holding the chisel. The ineligibility clause would seem to fall into this category. But a constitutional violation is no less a constitutional violation simply because the offended provision is perceived to be a minor one, or because of the absence of a judicial ruling to that effect. The President has taken an oath to uphold the Constitution; so have I, and I take that oath very seriously. The duty extends to every part of that document, not just to those portions that are considered convenient or more expedient than others. We should not turn our backs on the Constitution simply because we agree Congressman Peterson is a good candidate or because the State Department would rather that he have his hearing now as opposed to later. Given the Constitution or the administration's convenience, the choice is clear.

Mr. THOMAS. Mr. President, I come to the floor today as the chairman of the Subcommittee on East Asia and Pacific Affairs of the Foreign Relations Committee to outline for my colleagues a decision that I and the distinguished full committee chairman Mr. Helms have made to postpone the nomination hearing of Congressman Douglas ``Pete'' Peterson to be Ambassador to the Socialist Republic of Vietnam (SRV). At the outset let me say, as I did to Congressman Peterson yesterday, that the reason for the postponement--and I will address this in greater detail in a moment--is the White House's failure to meet the constitutional requirements for the nomination; it has nothing to do with Pete Peterson as a nominee. If the White House had avoided this oversight, we could have moved ahead with this nomination--a nomination I believe most of the committee would support--without all the fits and starts and delays. The President nominated Congressman Peterson for the position of Ambassador to the SRV on May 23, 1996. His file was received by the full committee in June and was finally complete and ready for consideration by the committee on June 25. The full committee scheduled a confirmation hearing on the Peterson nomination and three others for July 23, which I was to chair in my capacity as chairman of the subcommittee of jurisdiction. However, because of a series of conflicts with the Senate schedule, the hearing had to be postponed twice; first to July 29 and then to September 5, after the August recess. But at the same time this series of postponements was taking place, the distinguished Senator from North Carolina [Mr. Helms] and I were growing concerned over a legal issue which had come to our attention regarding to the nomination. On July 17, our legal staffs informed us that a provision of the Constitution might preclude Congressman Peterson from serving as Ambassador. We contacted the White House, and asked for a detailed clarification of the issue from them. At the same time, we asked the Office of Senate Legal Counsel [SLC] to provide us with their opinion. Mr. Jack Quinn, Counsel to the President, provided us with a letter outlining the administration position on July 22; their legal opinion from the Office of Legal Counsel [OLC] at the Department of Justice followed after the close of business on July 26. The SLC opinion was delivered to us the same day. After carefully reviewing the opinions of the OLC and the SLC over the August recess, and the legal authorities cited in them, we have concluded that the constitutional issue requires us to postpone Congressman Peterson's nomination hearing until January next year in order to meet the requirements of the Constitution. Mr. President, article I, section 6, clause 2 of the U.S. Constitution provides in part: No Senator or Representative shall, during the Time for which he was elected, be appointed to any civil Office under the Authority of the United States, which shall have been created, or the Emoluments whereof shall have been increased during such time. . . . In other words, this provision of the Constitution--called the ineligibility clause--prohibits a Member of Congress from being appointed to a civil position in the Government which was created, or for which there was a salary increase, during that Member's term of office. The first time the ineligibility clause arose as an issue was during the Presidency of George Washington; the second was during the administration of President Arthur. In both cases, the President's interpreted the provision literally and it was concluded that the Constitution prohibited even the nomination of a Member of Congress to an office created during his term--thus equating nomination with appointment. As President Arthur's Attorney General stated: It is unnecessary to consider the question of the policy which occasioned this constitutional prohibition. I must be controlled exclusively by the positive terms of the provision of the Constitution. The language is precise and clear, and, in my opinion, disables him from receiving the appointment. The rule is absolute, as expressed in the terms of the Constitution, and behind that I can not go, but must accept it as it is presented regarding its application in this case. Under a literal reading, then, Congressman Peterson cannot be even considered for the nomination until after January 3, 1997--the expiration of his present term. It would seem to me that if President Washington found a nomination similar to Congressman Peterson's void from the outset because of the ineligibility clause, that reasoning should be good enough for the Clinton administration. Even if we assume for the sake of argument that a literal construction of the clause is not warranted here--and that we have to determine exactly which act or series of acts constitutes an appointment under the clause--an examination of the facts in Congressman Peterson's case yields the same conclusion. It has been argued that some precedent exists to support the conclusion that appointment requires both the acts of nomination and of confirmation by the Senate. For example, in Marbury versus Madison, Chief Justice Marshall wrote: These . . . clauses of the Constitution and laws of the United States which affect this part of the case [governing the appointment of U.S. marshals] . . . seem to contemplate three distinct operations: 1. The nomination. This is the sole act of the President, and is completely voluntary. 2. The appointment. This is also the act of the President, and is also a voluntary act, though it can only be performed by and with the advice and consent of the Senate. 3. The commission. To grant a commission to a person appointed might, perhaps, be deemed a duty enjoined by the Constitution. ``He shall,'' says that instrument, ``commission all the officers of the United States.'' The acts appointing to office, and commissioning the person appointed, can scarcely be considered as one and the same; since the power to perform them is given in two separate and distinct sections of the Constitution. Although that case is not controlling in the Peterson situation because it did not involve the ineligibility clause, assuming that it governed here would still preclude our taking up the Congressman's nomination before the expiration of his present term. Under the reasoning of Marbury, Congressman Peterson would be appointed within the meaning of the ineligibility clause at the time the Senate were to give its advice and consent. Given the facts of his case, it would be unconstitutional for this body to confirm the Congressman by a floor vote prior to the next Congress. Moreover, Chairman Helms and I consider the nomination hearing to be an integral part of the process of advice and consent. It is, after all, the only time that the Senate as a body--through its Foreign Relations Committee--has a chance to personally examine and question the nominee and his qualifications for office. The committee then prepares a written report urging the full Senate to a particular course of action in voting for or against the nomination. We would, therefore, consider it constitutionally inadvisable to proceed with a hearing on a constitutionally ineligible nominee such as in this case until January next year--when the constitutional issue is no longer a problem. Next, Mr. President, we must consider whether the office of ambassador is a ``civil office of the United States'' and thus is governed by the clause. The OLC opinion contends that ``there is a difficult and substantial question'' whether it is a civil office, and that the only precedent it could find ``assum[ed] (without discussion) that it should be considered to be such an office. In accordance with that precedence [sic], we shall assume here, without deciding, that the Ambassadorship to Vietnam would be a `civil Office' within the meaning of the ineligibility clause.'' While the OLC opinion thus concedes the point for purposes of this particular argument, I believe that an examination of the history of the ineligibility clause, as well as the nature of the office itself, clearly establishes that it is a civil office contemplated by the provision. The early drafts of what became the ineligibility clause did not limit the prohibition to civil office, but encompassed all offices of the United States. During the debates at the Constitutional Conventions, however, the Framers came to realize the danger in having the clause prohibit what might be some of the most able military men in the country from serving in the Armed Forces in time of war. Many officers from the Continental Army had become Members of Congress; if a war had broken out, the fledgling country would have been deprived of much of its officer corps because the then-proposed ineligibility clause would have prevented their joining until the expiration of their respective terms of office. So the adjective ``civil'' was added, to distinguish it from the military. This is in line with the dictionary definition of civil: ``of ordinary citizen or ordinary community life as distinguished from the military or ecclesiastical.'' So as contemplated by the Framers, an ambassadorship is clearly ``civil'' in nature. Similarly, an ambassadorship is clearly a Federal office, as that term is defined both in law and practice. For example, in United States versus Hartwell, the Supreme Court stated that ``a[] [Federal] office is a public station, or employment, conferred by the appointment of government. The term embraces the ideas of tenure, duration, emolument, and duties.'' Ambassadors are appointed by the President, and serve for the duration of a President's term or until they retire or are reassigned; they are paid from the Treasury; and they have a well- defined and customary series of duties they perform--all the criteria of a Federal office. I would also note that article II, section 2 of the Constitution declares that ``the President shall nominate, and . . . shall appoint ambassadors . . . and all other officers of the United States.'' Note, Mr. President, the use of the term ``all other.'' This infers that ambassadors are part of the class of ``officers of the United States.'' In view of these facts, it can hardly be argued that an ambassadorship is not a civil office of the United States, and thus falls within the clause's prohibition. Finally, Mr. President, the ineligibility clause requires us to determine whether the office of Ambassador to the SRV is one which was created during the Congressman's term of office. As I previously mentioned, Representative Peterson was most recently elected on November 8, 1994, for a term that began on January 4, 1995, and that will end at noon on January 3, 1997. The President formally extended full diplomatic recognition to the SRV for the very first time in August 1995 and nominated Mr. Peterson to be Ambassador to the SRV on May 23, 1996. The White House has taken the creative position that: ...based on the facts and circumstances of this case, the office of Ambassador to Vietnam has not yet been created. If the Senate confirms Mr. Peterson, the President will not create the position of Ambassador to Vietnam until after noon on January 3, 1997. Therefore, so long as the Office is created at a time after Mr. Peterson's term of office . . . has expired, he can be appointed to the Office of Ambassador [without running into constitutional problems]. Rather than paraphrase the OLC argument, Mr. President, I ask unanimous consent the relevant portions be printed in the Record.