Fred Thompson

Mr. THOMPSON

Mr. THOMPSON. Mr. President, I rise today to introduce legislation that will address an inequity in the tax code that affects the citizens of my state and citizens of the other states that do not have a state income tax. Tennesseans are discriminated against under federal tax laws simply because our state chooses to raise revenue primarily through a sales tax instead of an income tax. My bill would end this inequity by allowing taxpayers to deduct either their state and local sales taxes or their state and local income taxes on their federal tax forms, but not both. I am joined today by my colleague from Tennessee, Senator Frist. Under current law, individuals who itemize their deductions for federal tax purposes are only permitted to deduct state and local income taxes and property taxes paid. State and local sales taxes are not deductible. Therefore, residents of nine states are treated differently from residents of states with an income tax. Seven states--Texas, Florida, Alaska, Wyoming, Washington, South Dakota and Nebraska--have no state income tax. Two states--Tennessee and New Hampshire--only impose an income tax on interest and dividends, but not wages. Prior to 1986, taxpayers were permitted to deduct all of their state and local taxes paid (including income, sales and property taxes) when computing their federal tax liability. The ability to deduct all state and local taxes is based on the principle that levying a tax on a tax is unfair. In 1986, however, Congress made dramatic changes to the tax code. The Tax Reform Act of 1986 significantly reduced federal tax rates on individuals. In exchange for these lower rates, Congress broadened the base of income that is taxed by eliminating many of the deductions and credits that previously existed in the code, including the deduction for state and local sales taxes. Mr. President, I believe that our federal tax laws should be neutral with respect to the treatment of state and local taxes. As I have said, that is not the case now. The current tax code is biased in favor of states that raise revenue through an income tax. I strongly support comprehensive reform of the tax code that will address issues such as neutrality, fairness and simplicity. As we work to reform the overall tax code, restoring equality in this area should be a part of the discussion.

Mr. THOMPSON

Mr. THOMPSON. Mr. President, I rise today to introduce legislation that will address an inequity in the tax code that affects the citizens of my state and citizens of the other states that do not have a state income tax. Tennesseans are discriminated against under federal tax laws simply because our state chooses to raise revenue primarily through a sales tax instead of an income tax. My bill would end this inequity by allowing taxpayers to deduct either their state and local sales taxes or their state and local income taxes on their federal tax forms, but not both. I am joined today by my colleague from Tennessee, Senator Frist. Under current law, individuals who itemize their deductions for federal tax purposes are only permitted to deduct state and local income taxes and property taxes paid. State and local sales taxes are not deductible. Therefore, residents of nine states are treated differently from residents of states with an income tax. Seven states--Texas, Florida, Alaska, Wyoming, Washington, South Dakota and Nebraska--have no state income tax. Two states--Tennessee and New Hampshire--only impose an income tax on interest and dividends, but not wages. Prior to 1986, taxpayers were permitted to deduct all of their state and local taxes paid (including income, sales and property taxes) when computing their federal tax liability. The ability to deduct all state and local taxes is based on the principle that levying a tax on a tax is unfair. In 1986, however, Congress made dramatic changes to the tax code. The Tax Reform Act of 1986 significantly reduced federal tax rates on individuals. In exchange for these lower rates, Congress broadened the base of income that is taxed by eliminating many of the deductions and credits that previously existed in the code, including the deduction for state and local sales taxes. Mr. President, I believe that our federal tax laws should be neutral with respect to the treatment of state and local taxes. As I have said, that is not the case now. The current tax code is biased in favor of states that raise revenue through an income tax. I strongly support comprehensive reform of the tax code that will address issues such as neutrality, fairness and simplicity. As we work to reform the overall tax code, restoring equality in this area should be a part of the discussion.

Mr. THOMPSON

Mr. THOMPSON. Mr. President, I lend my strong support for Senate approval of S. 335, the Deceptive Mail Prevention and Enforcement Act. This bill will establish new consumer protections to shield consumers from falling victim to deceptive and fraudulent practices found in some sweepstakes and mail promotions. Thanks to the hard work of the Permanent Subcommittee on Investigations, under the leadership of Senator Susan Collins, we have become privy to the operations of some of these sweepstakes companies. As the hearings pointed out, sweepstakes companies are now sending out more than one billion mailings per year. In the course of these mailings, some recipients have been led to believe that their chances of winning large amounts of money could be increased through the purchase of the promoter's products or merchandise. Whether through the use of unclear and ambiguous language, symbols, or documents, these mailings have been a source of confusion and have lead to some readers spending significant sums of money ordering products in the mistaken belief that this would increase their chances of winning. S. 335, for the first time, would establish specific guidelines and parameters for mailings containing sweepstakes, games of skill and facsimile checks. The legislation requires clear and conspicuous disclaimers that ``no purchase is necessary'' on the sweepstakes claim or entry form. The legislation also improves restrictions on government look-alike mailings. Further, the bill directs sweepstakes companies to adopt procedures to prevent the mailing of these materials to anyone who submits a request stating their intent not to receive these mailings. This bill has the strong support of the Postal Service. In providing the Postal Service with the ability to protect consumers through civil enforcement, the bill further grants the Postal Service administrative subpoena authority. It will also give U.S. district courts the ability to impose nationwide temporary training orders. As a strong proponent of federalism, I think it is important that this bill does not preempt the authority of the state attorneys general and various consumer protection agencies which also combat deceptive mailings. The Postal Service and these agencies have a history of cooperation in the investigation and prosecution of these cases. The Postal Service reports that this collective effort has produced significant results in policing a variety of frauds while enabling state prosecution efforts to investigate questionable promotion practices beyond their state borders. S. 335 will not only improve the Postal Service's ability to investigate and stop deceptive mailings, but it will also help state attorneys general work more effectively against fraud. This bill represents the bipartisan efforts of a number of Senators. S. 335 was unanimously reported out of the Committee on Governmental Affairs with the support of both myself and the ranking minority member, Senator Lieberman. I would like to take this opportunity to acknowledge the hard work put forth by the bill's sponsor, Senator Collins, and other cosponsors of the legislation including Senators Cochran, Levin, and Edwards. In addition I want to acknowledge the role of Senator Campbell in first introducing legislation last year on this issue. His efforts served as the genesis for the successful investigative and legislative efforts we have seen this year. In conclusion, Mr. President, S. 335 presents a balanced and fair approach in protecting consumers from misleading and fraudulent sweepstakes and related mailings, while not unduly burdening those mailers who legitimately use the mail as an advertising medium. I urge all Senators to support Senate approval of S. 335. Mr. President, I yield the floor and suggest the absence of a quorum.

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

Mr. THOMPSON

Mr. THOMPSON. Mr. President, today I rise to submit a resolution recognizing my hometown of Lawrenceburg, TN, as the official birthplace of Southern Gospel Music. Lawrenceburg is not a large town by any means, nor is it altogether prominent in the political landscape. What this humble town lacks in size, however, it more than makes up for with its importance in the history of American music. Since the turn of the 20th century, Lawrenceburg has been the home of Southern Gospel Music, a musical tradition embraced and perpetuated by talented and dedicated artists. The roots of Southern Gospel Music reach back to some of the most gifted songwriters of our time, such as Adger Pace, James Rowe, G.T. Speer, William Walbert, and the great James D. Vaughan. Vaughan went on to found the first Southern Gospel Music quartet in Lawrenceburg in 1910. He also founded, in Lawrenceburg, the Vaughan School of Music and the James D. Vaughan Music Company. This school helped train the first generation of Southern Gospel Music artists, such as V.O. Stamps, Frank Stamps, the Speers, and the LeFevers, while the music company published millions of shape-note Southern Gospel Music songbooks during its existence from 1902 until 1964. Lawrenceburg was also integral in getting the word out to the world that Southern Gospel Music was on its way. Along with the many traveling quartets originating from the training ground of the Vaughan School of Music, Lawrenceburg was the home of the first influential Southern Gospel Music newspaper, The Vaughan Family Visitor, which began publication in 1914. Eight short years later the first Southern Gospel Music radio station WOAN was founded, also in Lawrenceburg. With the endorsement of the Southern Gospel Music Association, which has designated Lawrenceburg the birthplace of Southern Gospel Music, I proudly ask my colleagues to support this resolution recognizing Lawrenceburg, TN, as the official birthplace of Southern Gospel Music.

Mr. THOMPSON

Mr. THOMPSON. Mr. President, I rise to oppose this amendment. Employer sponsorship of defined benefit pension plans have been declining over the last few years, mainly due to the increased regulatory burden that Congress and the IRS has placed on employers who offer these plans to employees. This amendment would also substantially impair the employer's ability to design and change their pension plans to meet the changing needs of the business and of the employees. In addition, it would punish good corporate citizens who maintain pension plans while leaving other companies free to terminate their plans in order to get from under this new law. We have dealt with the concerns that participants do not know or understand changes to their pension plans with the more expansive disclosure requirements that are contained in this bill. We should focus on revitalizing the defined pension system, rather than adding new burdens on employers who voluntarily establish these plans. For these reasons, I urge my colleagues to oppose this amendment. Mr. President, I make a point of order against the amendment under section 305 of the Budget Act on the grounds that it is not germane.

Mr. THOMPSON

Mr. THOMPSON. Mr. President, I think Senator Gramm is bringing a very important principle to the table, one that we need to address: If we are going to have a tax cut, what kind of tax cut should we have? What is best for the economy, and what is fair? There was a consensus in this country, 10, 15 years ago, that we needed to have a tax policy based upon a broader base and lower rates. That is essentially the tax bill that came out in 1986. We came down to two tax rates. We had a 15-percent and a 28-percent tax rate. There was a broader base, where more people were paying taxes, but lower rates. In the 1990s, we have gotten away from that. We have gotten away from that principle and gone, instead, toward what has been referred to as targeted tax cuts. That its basically the Government--we, the President--that decide, on an individual basis, who deserves the tax break or tax cut in any particular year. Usually it is based upon how much clout they have, or some notions of fairness of a particular congressional makeup at some particular time. So now we have wound up with higher rates and a narrower base. We now have five income tax rates instead of the two we had back in 1986 in addition to phaseouts. The Tax Code, not only do we have additional rates, it has become more progressive, even in addition to those rates. I do not think a lot of people are aware of this. I think most Americans think initially, basically, they can look at tax rates and see what their tax burden is. But then you look at all the phaseouts that we have. Congress has decided in its wisdom that people of a certain income level do not deserve some of the deductions, exemptions, and benefits that others deserve. So we have a personal exemption phaseout. We have an itemized deduction phaseout at basically the $124,000 level for individuals. I am talking about individuals and not couples, in terms of the dollar amounts I am using. The personal exemption phaseout; itemized deduction phaseout, limitation of only being able to deduct that amount over 2 percent of itemized deductions; a 7.5 percent floor on medical deductions; a 10 percent adjusted gross income floor on casualty deductions; a $500 child credit that phases out at an income level of $75,000; a dependent child credit that begins to be phased out at an income level of $10,000--if you make that much it begins to be phased out; a deductible IRA, $30,000; an education IRA, $95,000; the HOPE credit, college credit, begins to be phased out at $40,000 for an individual. So we want to help you go to college, we want to help your kids go to college--as long as you do not have a job, basically is what that amounts to. We have a life-time learning credit of $40,000; student loan interest deductions, at $40,000 it begins to be phased out; education savings bond interest--if you make $52,000 you begin to lose that; elderly/ disabled credit, $7,500; adoption credit/exclusion, $75,000; DC first time homebuyer--if you make $75,000, you begin to have that phased out as a taxpaying individual; rental real estate losses; rehabilitation tax credit--on and on and on. In addition to continuing to raise the tax rate--the highest one in 1986 was 28 percent and now it is up to 39.6 percent plus the maximum-- plus the limited itemized deductions and phaseout of personal exemptions, you wind up with an effective rate of over 40 percent. When you remove the cap on Medicare tax, plus these phaseouts, you are looking at, in some cases, close to an effective 45-percent tax rate, something like that. My only point is that, as we decide how to go forward, we need to understand that we have a progressive system as far as our income Tax Code is concerned, and that is the way it ought to be. A lot of people believe it is that way. But every time we have a tax cut, we cannot say let's give everybody the same dollar amount back in taxes regardless of how much they paid in because we have a very progressive system. We have progressive tax rates up to 39.6 percent, with phaseouts so that if you are making any money, if people are working hard and making a pretty good living, they begin to lose the deductions and credits. That makes it even more progressive. We come along and say we are going to give a tax cut now, and we say if the other guy is paying twice as much in taxes as I am, give him a tax cut. He lost all these exemptions because he is making good money. He is paying twice as much in taxes. But we come along with a tax cut and we say they are going to both get the same amount back? I do not think that makes much sense. Let's say the economy was good and we were able to have successive tax cuts over a period of time and we gave the same dollar amount back to everybody regardless of how much they were paying in taxes. We would have a narrower and narrower base all the time and fewer and fewer people paying any taxes at all. We would continually be taking people off the tax rolls. We already have 43 million people who do not pay taxes. As progressive as our Tax Code is, as does the Senator from Texas, I make no apologies for the proposition that when it comes time for a tax cut, let's base the tax cut on how much people are paying in. We have to ask ourselves a fundamental question: Are we interested in punishing folks who make a good living or are we interested in collecting money for the Federal Government to pay legitimate Government expenses? History shows every time we have had a reduction in tax rates, we have more money. Every time the Government reduces rates in any appreciable amount, the Government winds up getting more money. In the 1920s, it was true. In the 1960s, under President Kennedy, who said a rising tide lifts all boats, it was true. In the much maligned 1980s, which laid the groundwork for the greatest economic prosperity this world has ever known, it was true. Increased revenues in the twenties was 61 percent over a 7-year period. In the sixties, a revenue increase after inflation was about 33 percent. In the eighties, after cutting the tax rates, revenues increased 28 percent because it reduced the incentive to hide income, to shelter income, and to underreport income. Similarly, the share of the tax burden paid by the rich rose dramatically as the rates fell. By cutting rates, we get more money out of the rich. Do we want to be concerned about how much somebody is making and try to hold that down or do we want the money for the Federal Government? I thought the idea was to have a fair Tax Code but to raise the money for the legitimate expenses of the Federal Government. In the 1920s, they called rich $50,000. I guess things have not changed that much. But in 1921, the rich paid 44 percent of the income tax. In 1928, after the rate cut, they paid 78 percent of all taxes. The gap was not quite as pronounced later on, but in 1963 under President Kennedy, at the time of the cut, the rich were paying 11.6 percent of all the taxes being paid. In 1966, they were paying 15.1 percent. In the 1980s, we were talking about the top 10 percent----

Mr. THOMPSON. We need to, as we go along, take that $505 billion that our budget sets aside for these programs and have every one of them come up here and justify themselves. Some of them need increases. Some of them need cuts. In my opinion, some of them need total elimination, and I make no apologies for that. But the idea that we are cutting this, and we are cutting that, and we are going to keep people from reading, the President of the United States telling these young boys and girls that we are going to cut 480,000 children from learning to read, that is kind of a new low. We do not know really what to do any more with this stuff. The first thing you do is get kind of angry, and then you are just kind of sad, shaking your head, that that sort of stuff is coming out of the White House. So let's get back to the facts. Let's get back to reality. We can have a good debate as to how much money we ought to spend on these programs. That is what we ought to do. But let's not try to convince the American people that we have made a determination that somewhere in our budget we are cutting kids off from learning to read or that we are doing any of these other things--any of these other scare tactics that are always used by people who think that the American people are not quite as smart as they really are. I yield the floor. Several Senators addressed the Chair.

Mr. THOMPSON. With the committee chairman's approval, I yield myself 10 minutes.

Mr. THOMPSON. Mr. President, on the amendment there are certain basic things we can all agree with about education. I think most of us realize the economic prosperity we have today has to do with our productivity. Our productivity, in turn, has to do in large part with the technological advances we have had, and that, in turn, is based upon a well-qualified workforce. The needs for that kind of workforce, that kind of background and training in the future, are going to be even greater because we are exploding with information in an information age for sure. There is no question about that. Our economic stability and security in the long term in large part is going to depend on the education system we have. That, of course, does not necessarily equate to Federal spending on education. Unfortunately, for some years now we have seen that we have almost an inverse relationship between the amount of Federal money spent on education and the quality of education we seem to be getting. Nonetheless, we all agree there is a part of this effort that should fall on our shoulders. This amendment suggests our budget does not address this education problem sufficiently. I think it has been a good discussion. I think it is one we ought to have. Every time I begin thinking we can have good discussion about this, I pick up something, such as the Daily Report for Executives of July 29 that is entitled, ``GOP Tax Plan Would Hurt Schools, President And Administration Aides Say.'' Clinton told representatives of Boys and Girls Nation at the White House that the Republican tax plan would eliminate funds to help 480,000 children learn to read. On and on for other things. I know when I came to Washington, one of the main things I wanted to do was keep children from reading. We spend a lot of time, we stay up late at night, figuring out how we can keep kids from learning to read. The President is just verifying this with these young people. I hope the President, as badly as he is misleading them, has more credibility with the young people of this Nation than I think he has. Now we hear about cuts. We have been hearing about cuts of 30 percent, cuts of 40 percent, and now cuts of 50 percent. People must wonder what is going on. Senator Domenici says that is not accurate. He points out that although we have a baseline freeze after the spending caps are lifted, there is an additional $505 billion in our budget proposal that can be used for whatever discretionary spending this President and this Congress decide they want to spend it on. How do we come up with these cuts? It is a Washington, DC, cut. A Washington, DC, cut is when you project out what you want spending to be, and then any spending that is less than that constitutes a cut. It is not a real cut. It is an increase, but it is less than what the projection would be. If you are going by that kind of rationale, then the President is proposing cuts up to 26 percent, if you figure in his Social Security plan, because he does not really keep up with the projections that are being argued. Go back to 1991 and project increases from 1991 up to today. Look and see what that is. It has been about 4.2 percent during that period of time. What the other side is doing is projecting that out ad infinitum. If we cut back any of those programs, even though the dollar is an increase, it is less than what they projected it ought to be, so that constitutes a cut. The fact is, if we did what our colleagues on the other side suggest, we would lock in basically the projected increases we would have-- inflation plus--we would lock those in, basically making them, I suppose, mandatory programs instead of discretionary programs. We would not do what Congress is supposed to do, and that is sit down and decide what our priorities are, what programs should be cut, and what programs should not be cut. Obviously, many of us think some programs should be increased. We are hearing a lot now about our hospital programs, our children's hospitals, veterans, certainly military in some respects. Certainly, there are going to have to be some increases as we go along, but I think the primary point I want to make is that there are also going to have to be some decreases. There are going to have to be some cuts. Those are the kinds of things we are going to have to decide. We cannot decide here in advance, because some projection is not reached, that we are going to cut a particular program to keep kids from reading--pick your own favorite program, the worst thing you can come up with, and say that particular program is going to be cut. That is not true. That is not accurate. That does not represent what the situation is. Again, we have to decide what is going to be cut. We have to decide what is going to be increased, taking a baseline, taking a freeze, not including inflation, and adding $505 billion to it over 10 years. Why do I say that some things ought to be cut? One of the things--I guess the primary thing--we are supposed to be doing in the Governmental Affairs Committee is seeing how our Government is operating. We spend an awful lot of time in oversight in that committee which I chair. We see agencies, Departments of Government, year after year come before us and they have been delineated by the GAO as prime objects of waste, fraud, and abuse. They are on the list year after year, but we keep funding these programs. We keep increasing the funding for these programs, whether they are working or not. There are billions of dollars of scarce resources diverted from their intended purposes many times in waste, fraud, and abuse. The President in his budget does not find one agency, that I can determine, that he believes could be operated more efficiently or in which money could be spent better. All of these programs deserve an increase by definition. They are Federal Government programs. They deserve an increase. If you want to reduce funding for a Department or an agency, then you can pick the program on the other side they say you are cutting. The honest truth is that no one knows really how much the Federal Government loses annually cumulatively to waste, fraud, abuse, and error. One reason is that most agencies do not keep track of such losses. We try to keep track for them, as best we can. Here are a few things we have learned: The Health Care Financing Administration made erroneous Medicare payments that siphoned off between 7 and 14 percent of the overall Medicare budget, $12 billion to $24 billion, depending on which year you are talking about. In 1997, it was $24 billion. In 1998, they improved; it was only $12 billion. The Supplemental Security Income Program--cumulative overpayments of $3.3 billion, including newly detected overpayments of $1.2 billion just last year. The Department of Housing and Urban Development made overpayments in its rent subsidy program of almost $1 billion. The Department of Agriculture made overpayments in its Food Stamp Program that amounted to about $1 billion, or 5 percent of the total program. I have others here. The Federal tax debt. We have Federal tax debt and nontax debt delinquencies, money owed to the Government, not collected, of $150 billion. I have other items. I mentioned the Medicare payments. The Department of Energy: Through 1980 to 1996, the Department of Energy terminated before completion 31 major systems acquisition projects after expenditures of over $10 billion. They spent $10 billion and then terminated the projects; $10 billion was essentially wasted. Defense contract overpayments: No one knows how much the Government overpays each year in contracts for goods and services. However, during the recent 5-year period, defense contractors returned $4.6 billion in overpayments to the Department of Defense. Earned income tax credit, $4.4 billion. I mentioned SSI. Student loan defaults, $3.3 billion. Food stamp overpayments, rent subsidy. A total of $196 billion. I yield myself another 5 minutes. Mr. President, $196 billion, and that is just on the waste, fraud, and abuse side. This is what is going on with regard to our Government now and these agencies across our Government. Look at the cross-cutting and the duplication, the hundreds of programs that are all designed to do the same thing. The left hand of Government does not know what the right hand is doing. No one is taking action to sort through this morass to find out which programs are working and are not. They keep being refunded every year at the full amount or an increased amount. According to the GAO, in program area after program area, unfocused and uncoordinated cross-cutting programs waste scarce funds, confuse and frustrate taxpayers and other program customers, and limit overall program effectiveness. Last year Congress tried to address the number of education programs. We are all for education. We are all for spending education money wisely. We have $505 billion of discretionary spending set aside, some of which we can spend on education. But we found out there were 39 Federal agencies running more than 760 education programs at a cost of $100 billion a year. Is that effective use of taxpayers' money? One example is homelessness where 50 Federal programs, run by eight agencies, seek to provide services to homeless people. We have eight agencies--the Departments of Agriculture, Health and Human Services, Housing, Urban Development, Education, Labor, Veterans Affairs--and two independent agencies--FEMA and the Social Security Administration--all running these programs, overlapping, duplicating with $1.2 billion in obligated funds addressing the homeless. GAO found these programs provide many of the same services, such as housing, health care, job training, and transportation, and more than 20 programs operated by four different agencies, offsetting housing, such as emergency shelters, transitional housing, and other housing assistance. In another report, the GAO identified 26 Federal grants at a cost of approximately $28 million that exist to help evaluate the effectiveness of various school-based violence programs. I know that is something that the Presiding Officer and I have talked about many times, as to how we get our arms around this. But $28 million to evaluate these violence programs in schools, to see which of them are doing any good? At least three Federal Departments--Education, Health and Human Services, and Justice --support school-based violence prevention research and programs. However, GAO found that these individual Departments have not mounted a comprehensive strategy for addressing school violence. They are just all kind of out there doing their own thing--getting some money, coming to Congress, saying: My goodness, you can't cut back on this. You have to give us some money. We fund these various programs that are all out there doing their own things--uncoordinated--obviously, wasting a good deal of money. It is not that you do not want the effort made; it is that you want to have the effort made with a little common sense and not take people's hard-earned money and throw it down a rat hole. We have a fragmented Federal approach to ensure the safety and quality of the Nation's food. As many as 12 different agencies administer over 35 inefficient programs, putting the American public at greater danger of foodborne illnesses. But there have been virtually no decreases for nonmilitary discretionary programs in the President's budget. This is supposed to be part of our job. That is why we passed the Performance and Results Act. These agencies are now supposed to come to us in Congress and tell us of the effectiveness of their programs. I assume that because we want that information, we want to do something with it, and what we want to do with that information is not use it to continue to fund these Departments that are wasting money and permitting fraud to be perpetrated upon us to the tune of billions and billions of dollars. Some of these programs are mandatory spending programs. Some of them are discretionary spending programs. But it is all money that would have been in those Departments had it not been siphoned off, had it not been stolen, had it not been wasted. It would have been reflected in the budgetary requests when they came before us. The requests would be less, and we would be giving them less money if they were operating halfway the way they are supposed to. My point is, again, this idea that our friends on the other side of the aisle have, that they want to have this projected rate of increase that we can't deviate from at all, is a notion that would go against every basic precept of efficiency and the proper functioning of Government. I yield myself another 3 minutes.

Mr. THOMPSON. Mr. President, no one in this chamber thinks other than that we want a real, sound, solid, and solvent Social Security system and Medicare system. Most of us, however, realize we will only have that if we have fundamental reforms in those systems, such as that proposed by the Medicare commission at which the President scoffed. This amendment will serve to actually make Social Security and Medicare less sound. It will actually delay the process of real reform. The solvency dates that are used in this legislation are taken from the President's proposal and will invariably result in pouring more and more general revenues into these entitlement programs, delaying the day when we have to face up to the fact that we have to have fundamental reform. Our bill sets aside 75 percent of the surplus for Medicare, Social Security, debt retirement, and other spending priorities. With regard to the 25 percent remaining, there is no reason to delay tax cuts. If we saved every penny of the surplus, put it into Medicare and Social Security, it would not do one thing toward solving the fundamental problem. This language is not germane to the bill now before us; therefore, I raise a point of order, under section 305(b)(2) of the Congressional Budget Act of 1974.

Mr. THOMPSON. In the 1980s--1981--the rich were paying 48 percent of the taxes. In 1988, they wound up paying 57 percent of the taxes. We do not get a lot of credit taking up for the rich, but our responsibility as public servants is to look out for the country and have policies that are going to get the most money and not try to be too concerned about who is going to get this share of the economic pie: I am going to get yours; you are not going to get mine. Our concern should be with making that economic pie better. As far as an across-the-board cut is concerned, every serious observer nowadays thinks it is sound economic policy. Lawrence Lindsey, former Federal Reserve Board member, George Shultz, former Secretary of State, and even the oft quoted Chairman Greenspan--there may be some discussion as to when he thinks a tax cut should come about, but he says when it comes about, it ought to be an across-the-board rate reduction. This is sound economic policy. I know the prospects for this particular amendment, but all of this business about soak the rich and unfairness, we need to keep a little balance and keep things in mind. If we want more money, if we want to be fair--first of all, we have to recognize we have a very progressive system in this country, so when it comes time for a tax cut, let's pay some attention to the idea of across the board and not have politicians deciding the detailed targeted tax cuts for their favorite people, but make it across the board. It is more fair, and it will get more money for the Federal Treasury. I yield the floor.

Mr. THOMPSON. I ask for another 3 minutes.

Mr. THOMPSON

Mr. THOMPSON. Mr. President, today I rise to introduce the Taxpayer's Defense Act of 1999. I am pleased to be working with my good friend from Missouri, John Ashcroft, who has been a leader on this issue in the Senate. I also want to thank Chairman George Gekas for all of his hard work and leadership in the House. Our objective is clear and simple: no federal agency should set or raise a tax without the approval of Congress. America was founded on the principle that there should be no taxation without representation. In The Second Treatise of Government, John Locke said, ``[I]f any one shall claim a power to lay and levy taxes on the people * * * without * * * consent of the people, he thereby * * * subverts the end of government.'' Consent, according to Locke, could only be given by a majority of the people, ``either by themselves or their representatives chosen by them.'' The Boston Tea Party celebrated Americans' opposition to taxation without representation. And the Declaration of Independence listed, among the despotic acts of King George, his ``imposing Taxes on us without our Consent.'' First among the powers that the Constitution gave to the Congress, our new government's representative branch, was the power to levy taxes. The logic of allowing only Congress to establish federal taxes is clear: Congress considers and weighs the economic and social issues that rise to national importance. While any agency or government office may view its own priorities as paramount, only Congress can decide which goals of the people merit spending hard-earned taxpayer dollars. Only Congress can determine how many taxpayer dollars should be spent. Congress' decisions are made through an open political process that the public can see and participate in. And if the public is unhappy with a tax, they can hold Congress and the President responsible on election day. The accountability of lawmakers is a core feature of our representative democracy. But over time, Congress has delegated more and more of its legislative authority to unaccountable federal agencies. The Taxpayer's Defense Act would help restore constitutional balance and authority by requiring congressional approval for a rule that sets or raises a tax before the rule could take effect. Unelected agency officials could not directly establish or raise a tax, but would still have a chance to advance their proposals through an open political process in Congress. Few would publicly dispute the American principle of no taxation without representation. But increasingly, in ways often subtle or hidden, federal agencies are taking on--or receiving from Congress--the power to tax. Federal agency taxes pass the costs of government programs on to American consumers in the form of higher prices. These secret taxes often are regressive--hitting many who struggle to get by. They also put a drag on the economy. These taxes take money from everyone, and they are imposed without accountability. One big example of agency taxation is the Federal Communications Commission's Universal Service Tax. ``Universal service'' is the idea that everyone should have access to affordable telecommunications services. It originated at the beginning of the century when the nation was still being strung with telephone wires. The Telecommunications Act of 1996 included provisions that allowed the FCC to extend universal service, ensuring that telecommunications are available to all areas of the country and to institutions that benefit the community, such as schools, libraries, and rural health care facilities. Most importantly, the Act gave the FCC the power to decide the level of ``contributions''--taxes--that telecommunications providers would have to pay to support universal service. The FCC must determines how much can be collected in taxes to subsidize a variety of ``universal service'' spending programs. It charges telecommunications providers, who pass the costs on to consumers in the form of higher telephone bills. The FCC recently nearly doubled the tax to $2.5 billion per year, and Administration's budget have projected a rise to $10 billion per year. This agency tax is already out of control. The FCC's provisions for universal service have many flaws. These include the three ``administrative corporations'' set by the FCC. The General Accounting Office determined that the establishment of these corporations was illegal, and the FCC has collapsed them into one, no less questionable corporation. The head of one of these corporations was originally paid $200,000 per year--as much as the President of the United States. It seems that the more you look, the more you find that a number of federal agencies have been given, or discovered on their own, the power of tax. Congress has given taxing authority to the Nuclear Regulatory Commission and the U.S. Department of Agriculture. Because these taxes are within statutory parameters, we have less concern with them than others, but they are still taxes. And an important principle is at stake: no taxation within representation. The Constitution gives the taxing power only to Congress. In practice, we often see a direct correlation between an agency taxing and the agency overspending taxpayer dollars. Congress must retain the power and accountability of the purse. More egregious examples are those where agencies have spontaneously discovered the power to tax. There's the FCC's telecommunications tax, and two new taxes, past and proposed, on Internet domain name registration. The first, sponsored by the National Science Foundation, collected more than $60 million before a federal judge put a stop to it. The second, under the aegis of the Commerce Department, proposes to charge $1 per Internet domain name per year. What Commerce Department official stands to be voted out of office if he or she sponsors an increase in this tax? The burden of this activity falls, of course, on the American taxpayer, whose money is being taken, laundered through the Washington bureaucracy, and returned (in dramatically reduced amounts) for purposes set by unelected agency staffers. This is why we must require the FCC, and all agencies, to get the approval of Congress before setting future tax rates. Some of my colleagues may question why Congress should shoulder the responsibility for taxes. Let me just note that in a recent fee-dispute case, the FCC argued, amazingly, that it had the unreviewable power to raise taxes. As the Court of Appeals put it: [A]ccording to counsel, the Commission could impose a tax on an unregulated railroad or a tax on an individual for eating ice cream . . . . This is a preposterous position, one that we will not countenance. As this court [has] said . . . ``it goes without saying that the bald assertion of power by [an] agency cannot legitimize it. Unable to link its assertion of authority to any statutory provision, the [FCC's] position in this case amounts to be bare suggestion that it possesses plenary authority to act within a given area simply because Congress has endowed it with some authority to act in that area. We categorically reject that suggestion.''--Comsat Corporation v. FCC, 114 F. 3d 223, 227 (D.C. Cir. 1997) (citations omitted). Should tax dollars be used for federal programs? In what amounts? Or should Americans spend what they earn on their own, locally determined priorities? Requiring Congress to review agency taxes would answer this question. This legislation would create a new subchapter within the Congressional Review Act for mandatory review of certain rules. The portion of any agency rule that establishes or raises a tax would have to be submitted to Congress and receive the approval of Congress and the President before the agency could put it into effect. The Act would allow the agencies to formulate tax proposals for Congress to consider under existing rulemaking procedures. It is a version of a bill introduced last Congress by Chairman Gekas in the House and John Ashcroft in the Senate. Once submitted to Congress, a bill noting the taxing portion of a regulation would be introduced (by request) in each House of Congress by the Majority Leader. The bill would then be subject to expedited procedures, allowing a prompt decision on whether or not the agency may put the rule into effect. The rule could take effect once a bill approving it was passed by both Houses of Congress and signed by the President. If the rule were approved, the agency would retain power to reverse the regulation, lower the amount of the tax, or take any otherwise legal actions with respect to the rule. Mr. President, the rallying cry of ``no taxation without representation'' has been heard in America before, and now we are hearing it again. Congress must not allow unelected bureaucrats determine the amount of taxes hardworking Americans must pay. While preserving needed flexibility, the Taxpayer's Defense Act will allow elected officials alone to decide whether to raise taxes, and where to direct precious tax dollars. I ask unanimous consent that a copy of the Taxpayer's Defense Act be printed in the Record.

Mr. THOMPSON

Mr. THOMPSON. Mr. President, today I rise to introduce the Taxpayer's Defense Act of 1999. I am pleased to be working with my good friend from Missouri, John Ashcroft, who has been a leader on this issue in the Senate. I also want to thank Chairman George Gekas for all of his hard work and leadership in the House. Our objective is clear and simple: no federal agency should set or raise a tax without the approval of Congress. America was founded on the principle that there should be no taxation without representation. In The Second Treatise of Government, John Locke said, ``[I]f any one shall claim a power to lay and levy taxes on the people * * * without * * * consent of the people, he thereby * * * subverts the end of government.'' Consent, according to Locke, could only be given by a majority of the people, ``either by themselves or their representatives chosen by them.'' The Boston Tea Party celebrated Americans' opposition to taxation without representation. And the Declaration of Independence listed, among the despotic acts of King George, his ``imposing Taxes on us without our Consent.'' First among the powers that the Constitution gave to the Congress, our new government's representative branch, was the power to levy taxes. The logic of allowing only Congress to establish federal taxes is clear: Congress considers and weighs the economic and social issues that rise to national importance. While any agency or government office may view its own priorities as paramount, only Congress can decide which goals of the people merit spending hard-earned taxpayer dollars. Only Congress can determine how many taxpayer dollars should be spent. Congress' decisions are made through an open political process that the public can see and participate in. And if the public is unhappy with a tax, they can hold Congress and the President responsible on election day. The accountability of lawmakers is a core feature of our representative democracy. But over time, Congress has delegated more and more of its legislative authority to unaccountable federal agencies. The Taxpayer's Defense Act would help restore constitutional balance and authority by requiring congressional approval for a rule that sets or raises a tax before the rule could take effect. Unelected agency officials could not directly establish or raise a tax, but would still have a chance to advance their proposals through an open political process in Congress. Few would publicly dispute the American principle of no taxation without representation. But increasingly, in ways often subtle or hidden, federal agencies are taking on--or receiving from Congress--the power to tax. Federal agency taxes pass the costs of government programs on to American consumers in the form of higher prices. These secret taxes often are regressive--hitting many who struggle to get by. They also put a drag on the economy. These taxes take money from everyone, and they are imposed without accountability. One big example of agency taxation is the Federal Communications Commission's Universal Service Tax. ``Universal service'' is the idea that everyone should have access to affordable telecommunications services. It originated at the beginning of the century when the nation was still being strung with telephone wires. The Telecommunications Act of 1996 included provisions that allowed the FCC to extend universal service, ensuring that telecommunications are available to all areas of the country and to institutions that benefit the community, such as schools, libraries, and rural health care facilities. Most importantly, the Act gave the FCC the power to decide the level of ``contributions''--taxes--that telecommunications providers would have to pay to support universal service. The FCC must determines how much can be collected in taxes to subsidize a variety of ``universal service'' spending programs. It charges telecommunications providers, who pass the costs on to consumers in the form of higher telephone bills. The FCC recently nearly doubled the tax to $2.5 billion per year, and Administration's budget have projected a rise to $10 billion per year. This agency tax is already out of control. The FCC's provisions for universal service have many flaws. These include the three ``administrative corporations'' set by the FCC. The General Accounting Office determined that the establishment of these corporations was illegal, and the FCC has collapsed them into one, no less questionable corporation. The head of one of these corporations was originally paid $200,000 per year--as much as the President of the United States. It seems that the more you look, the more you find that a number of federal agencies have been given, or discovered on their own, the power of tax. Congress has given taxing authority to the Nuclear Regulatory Commission and the U.S. Department of Agriculture. Because these taxes are within statutory parameters, we have less concern with them than others, but they are still taxes. And an important principle is at stake: no taxation within representation. The Constitution gives the taxing power only to Congress. In practice, we often see a direct correlation between an agency taxing and the agency overspending taxpayer dollars. Congress must retain the power and accountability of the purse. More egregious examples are those where agencies have spontaneously discovered the power to tax. There's the FCC's telecommunications tax, and two new taxes, past and proposed, on Internet domain name registration. The first, sponsored by the National Science Foundation, collected more than $60 million before a federal judge put a stop to it. The second, under the aegis of the Commerce Department, proposes to charge $1 per Internet domain name per year. What Commerce Department official stands to be voted out of office if he or she sponsors an increase in this tax? The burden of this activity falls, of course, on the American taxpayer, whose money is being taken, laundered through the Washington bureaucracy, and returned (in dramatically reduced amounts) for purposes set by unelected agency staffers. This is why we must require the FCC, and all agencies, to get the approval of Congress before setting future tax rates. Some of my colleagues may question why Congress should shoulder the responsibility for taxes. Let me just note that in a recent fee-dispute case, the FCC argued, amazingly, that it had the unreviewable power to raise taxes. As the Court of Appeals put it: [A]ccording to counsel, the Commission could impose a tax on an unregulated railroad or a tax on an individual for eating ice cream . . . . This is a preposterous position, one that we will not countenance. As this court [has] said . . . ``it goes without saying that the bald assertion of power by [an] agency cannot legitimize it. Unable to link its assertion of authority to any statutory provision, the [FCC's] position in this case amounts to be bare suggestion that it possesses plenary authority to act within a given area simply because Congress has endowed it with some authority to act in that area. We categorically reject that suggestion.''--Comsat Corporation v. FCC, 114 F. 3d 223, 227 (D.C. Cir. 1997) (citations omitted). Should tax dollars be used for federal programs? In what amounts? Or should Americans spend what they earn on their own, locally determined priorities? Requiring Congress to review agency taxes would answer this question. This legislation would create a new subchapter within the Congressional Review Act for mandatory review of certain rules. The portion of any agency rule that establishes or raises a tax would have to be submitted to Congress and receive the approval of Congress and the President before the agency could put it into effect. The Act would allow the agencies to formulate tax proposals for Congress to consider under existing rulemaking procedures. It is a version of a bill introduced last Congress by Chairman Gekas in the House and John Ashcroft in the Senate. Once submitted to Congress, a bill noting the taxing portion of a regulation would be introduced (by request) in each House of Congress by the Majority Leader. The bill would then be subject to expedited procedures, allowing a prompt decision on whether or not the agency may put the rule into effect. The rule could take effect once a bill approving it was passed by both Houses of Congress and signed by the President. If the rule were approved, the agency would retain power to reverse the regulation, lower the amount of the tax, or take any otherwise legal actions with respect to the rule. Mr. President, the rallying cry of ``no taxation without representation'' has been heard in America before, and now we are hearing it again. Congress must not allow unelected bureaucrats determine the amount of taxes hardworking Americans must pay. While preserving needed flexibility, the Taxpayer's Defense Act will allow elected officials alone to decide whether to raise taxes, and where to direct precious tax dollars. I ask unanimous consent that a copy of the Taxpayer's Defense Act be printed in the Record.

Mr. THOMPSON

Mr. THOMPSON. Mr. President, I thank the Chair. I thank the chairman. First of all, I want to align myself with the comments of our previous speaker, Senator Kerrey. I think he is right on all points. I think the question really boils down to a very simple one; that is, whether or not with a $3 trillion surplus it is reckless and dangerous to give 25 percent back to the people who created it. Or stated another way, now that we apparently are going to be in surplus, is this a time for a tax cut or a tax increase. The President actually over the next 10 years proposes a tax increase and $1 trillion more in spending as opposed to the tax cut we have proposed. So it is really a very basic philosophical difference that we have here. First of all, I look at the tax burden we have today. The reason we have this surplus, of course, is because of unprecedented revenues that are flowing into the Federal Treasury. The primary reason for that is the unprecedented portion of Federal income tax revenues that are flowing into the Treasury. The income tax portion of the gross domestic product has now reached 10 percent, which is an all-time high in the history of the United States of America. The average two-earner income family is paying 38 percent in taxes. Someone reminded me the other day that even the serfs in feudal times only had to pay a third to their masters, and these families are paying 38 percent. Tax day now is May 11. We are working for the Government until May 11 of every year. Tax revenue has doubled just since 1987. We have this record level of tax revenues as a share of our gross domestic product. What do we do about that? This bill, first of all, is addressed to the lower and middle-income taxpayer. It is addressed to the small businessperson who is out there working every day to make a living. It gives some relief to those who want to save. It gives some relief to folks who want to invest. It gives some relief to folks who want to marry. And it gives some relief to folks who maybe after paying taxes all of their lives, when they die, don't want to have the family farm or their business sold just to pay the tax man again. It gives some relief to all of those folks. It will not hurt the economy, as previous speakers have pointed out. As Chairman Greenspan has pointed out, it is phased in. It is only about $38 billion for tax relief for the first 2 years. The President has more spending in his proposal--over $50 billion during the same period of time. If you worried about the stimulus effect of the economy, talk to the President. Don't talk to us about this bill. It reduces the Federal debt more than the President's proposal does. But in response to this kind of tax burden, and in response to this reasonable--as Senator Kerrey said ``no brainer,'' really not even a close call--response to a situation like that where we have this unprecedented situation, we have seen an unprecedented amount of inside-the-beltway hyperventilation. The President, the Vice President, and members of the White House have taken to the airwaves wringing their hands, and a different part of the sky has fallen every day. We are going to pollute the streams, our kids are not going to be educated, our military is going to go in disrepair, and the Republicans are not looking out for the military anymore. And, that old reliable standby, ``We are going to harm Social Security and Medicare if we have tax cuts.'' It is called ``dangerous''--a ``dangerous tax cut.'' I think that assumes a level of ignorance among the American people that does not exist. I don't have time to talk about all of the accusations and charges and points that have been made to do anything but have tax relief this year. I will discuss one or two in the limited amount of time we have. Perhaps we can address the others later. With regard to Social Security and Medicare, of course we all know it is a problem. Senator Kerrey pointed out the nature of the problem a minute ago again. It is not as if we don't understand the problem. It is not as if we will not have to face up to it. The question is when. We have a demographic time bomb on our hands that will affect Social Security and Medicare. We are an aging society. Some people say that is not a bad problem, that we are living longer. That is right. However, we have to make some changes precisely because of that if we are not going to ruin our kids and grandkids. In the year 2030, we will have twice as many people over the age of 65 as we have today. Currently, we have almost four workers for every retiree; in 2030 we will have two workers for every retiree. After the baby boomer generation we will have a smaller population, and a smaller and smaller workforce, with a doubling of the people drawing out these funds. It will not work. We have made some progress, at least in advancing the debate on these issues on a bipartisan basis. It is the first time I have seen issues of this magnitude and of this importance seriously addressed on a bipartisan basis. It is very encouraging. We had a Medicare commission with Democrats and Republicans, chaired by Senator Breaux, that addressed this Medicare problem in a serious fashion. The President's response to that was to scuttle the majority will of that Medicare commission trying to make fundamental reforms because they told us something we already knew; that is, we can't just keep pouring money into a broken, worn out, outdated system. I think as Senator Breaux once said: You put gasoline into an old, beat up, worn out car and it is still going to be an old, broken down, beat up old car. Instead of pouring more money on top of the system, we need fundamental reform. We tried to do that. The President's response was to scuttle it. On Social Security, we had bipartisan bills in the Senate, with Democrats and Republicans working together for serious Social Security reform biting the bullet. It is not the easiest thing politically to do but somebody has to do it. The Democrats and Republicans together are doing it. The President was looked upon to have a little leadership. Perhaps in these last couple of years he will want to exert some leadership when he is not having to run for reelection. His response was not to show leadership, but to back away from serious reform, saying he will put $100 million worth of IOUs into the Social Security trust fund which does nothing to save Social Security, and represents nothing more than a tremendous tax burden down the line when those treasuries are redeemed by our kids and grandkids. While they are saying you can't have a tax cut, you can't have a tax cut, we have to save all this money for Social Security and Medicare, at the same time they are doing everything in the world over at the White House to prevent any real reform for Social Security and Medicare. What about the question should we be saving all of the surplus for Social Security and Medicare and others? The short answer is we are taking 75 percent of these surplus dollars and devoting it to those very areas by means of a lockbox, by means of setting aside Social Security, Medicare, other spending priorities. Mr. President, 75 percent goes to those things. I think the more important point we will hear time and time again is the President and Vice President on the airwaves hoping people will believe we are doing something bad to Social Security and Medicare if we pass a tax cut. The primary point is that these surpluses we are talking about are pretty much irrelevant to Social Security and Medicare. As the Comptroller General pointed out, if we put every penny in savings, if we put every penny of surplus into Social Security and Medicare, it would do nothing to change or rectify the fundamental inherent problems we face with those two programs. I think we can cite the Comptroller, as well as GAO, in saying the President's proposal actually makes the Social Security and Medicare situation worse by pouring additional water into a leaky bucket with the hole in the bottom getting bigger and bigger and bigger, and all the time having to pour more and more water on top. What we are doing is buying a little time from the day of reckoning and convincing people in the short run all they have to do is concentrate on the short run. Don't think about down the road. Don't think about your kids or grandkids. We will not address serious reform but we will start dipping into general revenues instead of having some control with dedicated tax dollars, FICA tax money, dedicated to these particular programs. Then we can keep up with it and see how we are doing, know when we are in trouble. Forget that. We dip into general revenues. We have an extra amount and we will dip into general revenues without any control, without any way to tell how we are doing. That is totally, totally irresponsible. Yet after doing everything they can to undermine the Social Security and Medicare long-term problem solution the Democrats and Republicans have been trying to work on, after doing everything they can to work against that, they, in turn, use that as a shield to say: Because we are not willing to address that, you have to go along with us and spend an extra $1 trillion to temporarily buy a few more years. Then they hope somebody will come down the road later on with more political courage to address the problem. I think that is outrageous. Tax cuts have nothing to do with that problem. We set aside 75 percent of the surplus for those matters to start with, but tax cuts have nothing to do with the fundamental problem we are facing. The only reason I can see for this kind of overreaction to a tax cut with these unprecedented surpluses is that the administration feels like a person who has been wronged, an injustice has been done to them, on the premise that it is the Government's money to start with and somebody has improperly tried to take that money away from them. For some folks, there will never be a good time for a tax cut. Over the last few years, the President recommended three tax increases in times of deficits. Now we have a time of surpluses and his response is more tax increases. I think it is a debate not just over tax dollars; it is a debate over power. The folks in Washington don't want to give up power. It is a question of who is going to make decisions with regard to people's lives. Will Washington collect money and dole it out as we see fit? Or are we going to leave it in the taxpayers' hands, at least 25 percent of the amount of money about which we are talking? It is not this tax cut that is dangerous. What is dangerous is a government that can never, ever go but in one direction: eating a bigger and bigger percentage of what we produce in this country. What is dangerous is an administration that will use this kind of debate to mask over the fact it is not willing to face up to timely problems. That is what is dangerous. I think the American people see that. I think the American people support this bill. I support this bill and urge its passage.

Mr. THOMPSON. Mr. President, I thank my friend from Michigan. I thank the Presiding Officer. Stepping back from what we have been talking about for the last few minutes, I will go back and address the issue at hand concerning the lockbox. I think it is important to keep in mind what we are about here and what the essential question is. The essential question remains whether or not when we are faced with projected substantial surpluses, 25 percent of that amount should be returned to the people who created those surpluses. That is the American taxpayer. I think that question should answer itself. Another way to put it is whether or not, in view of these surpluses, we need a tax cut or a tax increase. You would think that question would answer itself. You would think that certainly in a surplus situation you would have to seriously consider tax cuts under those circumstances. We have a tremendous tax burden right now. Taxes are taking a greater and greater share of our economic productivity. Income taxes alone have reached the level of 10 percent of gross domestic product, the highest they have ever been in this country. A two-earner family nowadays pays 38 percent of their income in taxes. You would think that surely we could reach agreement that now is the time for a decent tax cut for the American people. If not now, when? Our Democratic colleague, Senator Kerrey from Nebraska, put it well earlier today. He said: I don't even think it is a close call--that under these circumstances we should have a tax cut. But what we are dealing with now, with regard to the Democratic amendment, is another reason why they say we should not have a tax cut. We have seen time and time again over the last few days almost utter hysteria in this town primarily from the White House, the President, the Vice President, and their spokespeople wringing their hands giving one reason after another after another why we cannot possibly have a tax cut under these circumstances. It is going to destroy the economy; old folks are going to be put out on the street; we are going to pollute the environment; women's health issues are coming into play. It is substantial overkill, and it is based upon the fact that they are not telling the truth about the elements of what they are trying to do; that is, essentially give us a tax increase instead of a tax cut and spend an additional $1 trillion-plus. Now what we have as part of the reason why we can't have a tax cut is we want to protect Medicare and Social Security, and, in this particular amendment we are addressing, the question of a Medicare lockbox. I think one of the essential questions before this Congress is, What is the responsible way to protect Medicare? We all know we have a substantial problem. We all know we are going to have to address it. What happened in response to that was a bipartisan effort by the Medicare Commission, chaired by Senator Breaux from Louisiana. They came up with real reform because everybody knows you can't keep pouring money on top of a system that is broken, that is flawed, that is out of date, that is uneconomical, and that everybody says has to be changed. We can disagree on how to do it, but everybody says and recognizes that we have to have fundamental reform. The difficulty with that is a political difficulty. It is not one of not knowing what to do; it is having the political nerve and wherewithal to sit down and get the job done. This commission addressed it. This commission did it, Democrats and Republicans together. But the President pulled the rug out from under that effort. That was a real chance to do some Medicare reform. That would be the only thing that was going to save Medicare. It is fundamental reform. The President pulled the rug out from that effort. He says now, since we have this Medicare problem and essentially since they have pulled the rug out from the reform effort that would do something to solve the problem, that we have to look to general revenues. We can't have a tax cut now so we have to take this surplus and dedicate a huge chunk of it for so-called fixing Medicare. The fact of the matter is that will not fix Medicare. It will not even help Medicare. It will be counterproductive. There will be some transition costs as we move from a failing system--it still does a lot of good, but it is a failing system--to one of real reform. There will be some transition costs. The Republican proposal has over $500 billion of revenues in our proposal that can be used for Medicare or any other reason. Pouring more money in, setting it aside, and calling it a lockbox-- and by the way, nobody goes to jail if they get inside the lockbox--I don't think fools anybody. We are making a commitment to set the money aside and not mess with it. I take that commitment seriously. There is nothing keeping Congress from coming in the next day and doing something about it. The fact of the matter is we are not helping the system by saying we are going to set aside some money for Medicare without addressing fundamental reform. A lot of people want prescription drugs as an additional entitlement. At a time when we have a real fiscal problem with the system itself, laying another entitlement on will provide additional challenges we will have to meet. However, there is even a way to do that if it is accompanied with fundamental reform. Instead of doing that, what we have in a proposal similar to the President's proposal, just another variation, is saying another reason we cannot have a tax cut is because we need to set aside the general revenues, the surplus, to save Medicare. It will not save Medicare. That approach will actually wind up hurting Medicare. I was looking at testimony of the Comptroller General on this issue. He was talking about the President's proposal. It has to do with the idea of setting aside general fund revenues, general surpluses, and claims we will use that to solve the Medicare problem. It is fallacious; it is phony. The Comptroller General says even if all future surpluses were saved, we would be saddled with the budget over the longer term and at current tax rates could fund little else but entitlement funds for the elderly population. Reforms reducing the future funds of Medicare and Social Security and Medicaid are vital to restoring fiscal flexibility for future generations of taxpayers. The Comptroller General says if we took all the money and poured it into the programs, we are really not doing very much other than perhaps buying a little bit of additional time to allow us to pour more money into a leaky bucket, when the hole in the bucket at the bottom is getting bigger and bigger, and we are pouring more general revenues, under the assumption, I suppose, that we can do that forever without ever having to make real reform. He says: I feel that the greatest risk lies in extending the HI [the hospital] trust fund solvency, while doing nothing to improve the program's long-term sustainable. Or worse, in adopting changes that may aggravate the long-term financial outlook for the program and the budgets. The Comptroller is saying we are aggravating the problem. You are actually doing harm if you think by putting a little more money on top of this program you can forestall real reform and you can fool the American people into thinking they don't have to make some tough choices and have real reform such as the Medicare Commission came up with. It is making you stand off from the problem and not address the problem. We are facing a demographic time bomb. In the year 2030 we will have twice as many people over the age of 65. We will have about half as many worker-per-retiree ratio. It will be twice as bad by the year 2030. We know we have to do something. I am afraid I must conclude that although saving Medicare and Social Security has worked very well for some people who have used it as a way of having to face up to the fundamental problems those two programs present, the real answer to the question that is presented tonight with regard to the Medicare lockbox amendment is that, once again, it is being used as yet another excuse, along with ``it will ruin the economy, it will pollute the atmosphere, it will destroy the military.'' It is being used simply as another excuse as to why we cannot have a tax cut. For folks who believe the money ought to come to Washington, there is never a good time for a tax cut. There is never a good time for it. It is about power. It is fundamentally about who makes decisions in our society. Anyone believing Washington should have control of this, thinks even in a surplus situation that 25 percent of it can't be returned to the American people. I say if not now, when in the world could we ever do it? Certainly, we are not doing Medicare any good. We are not doing Medicare any good by standing here and trying to convince the American people that by setting aside a few more general revenue dollars for this system, when we have failed to reach fundamental reform, that we can do that and we will be doing something good for Medicare or the country. If we can't have a tax cut with a $3 trillion surplus, I don't know when we will ever have one. The President, in three different years, has recommended tax increases in a deficit situation. Now we have a surplus situation. One would think the answer to that would be a tax cut. Now he comes back and suggests another tax increase. It doesn't make sense. I suggest the Medicare lockbox proposal be defeated.

Mr. THOMPSON. I thank the Chair, and I thank Senator Roth. It must seem strange to those watching this debate that people on both sides who have the same interest come to such different conclusions about how to get where we both say we are trying to go. There is no controversy with regard to the need to do something about Medicare and Social Security. We all know that. There is no controversy about the need to do something not just for ourselves but the next generation and the next generation after that. I think that is why many of us came to the Congress and to the Senate. We wanted to give back a little bit. We wanted to look forward. We wanted to do some of those tough things that maybe we thought anybody couldn't do and we could maybe come in for a little while and do that. Yet here we are, with such diametrically different views as to what will accomplish that. That is what makes good debates, and we have heard a fine presentation with regard to this amendment. But I think it is totally shortsighted and misguided. In the first place, let's not forget what we are about. We are about the question of whether or not we should have a tax cut with a projected $3 trillion surplus. Some people are suspicious of these projections. I am suspicious of most projections. We know it will not be exactly right. We just don't know which direction or how much. But this Congress gets together quite often and passes tax cuts. If a little farther down the road we have been proven to be incorrect with regard to our projection, it won't take us very long to come in here and raise additional revenues if they are needed. It happens all the time, in my opinion, whether they are needed or not. On the other hand, if we spend an additional trillion dollars, as the President suggests, that is gone. If we add on additional entitlements without the ability to pay for it when our entitlements are eating us alive in terms of squeezing out spending for everything else, we will never reverse that process. I fail to see the danger, the treacherous nature of a tax cut, because we can raise taxes anytime we want to. But right now on the table we have a $3 trillion projected surplus. It is really very simple. What do we do with that? We say that actually less than 25 percent of it, a little over 23 cents on the dollar, should go back to the taxpayers. The rest of it goes to debt reduction, Social Security, whatever we choose to spend with regard to Medicare or any other items of preference on which we believe we need to spend money. And we can't tell that year to year. Some people say we are cutting money from education and the environment and all that. It is not true. It is absolutely not true. We got together as a Congress with the President a couple of years ago and agreed to abide by some caps. That was the deal. We are trying to stay with that deal. After that deal runs out in 2002, we, as a Congress, can spend the money however we want to. My personal opinion is, we need to put some more money into some things and we need to take some money out of things on which we are spending money. That is what Congress is all about. So this business that we are going to be cutting this program and cutting that program would lead someone watching us to believe that in our proposal we are slashing this and slashing that. That is what the President is going around and saying, and he is misleading people when he is doing that. When we increase, we have certain constraints. There is no question about that. I make no apologies for it. I think it is a good thing. It is what we agreed to do. Even past that, we should have certain constraints. But within that framework, we have the ability to spend more money on some things and less money on others. That is as far as discretionary spending is concerned. Now, with regard to Medicare and Social Security, the proposal before us basically takes our natural sentiment to be very concerned about Medicare and Social Security, because they are in trouble, and says let's hold everything off until we solve that problem. That sounds like a good idea, if this proposal that is before us right now would solve that problem. It would not. It would exacerbate the very problem we say we are trying to solve. This amendment would say we can't have any tax cuts until we pass legislation that will make Medicare solvent to the year 2027 and make Social Security solvent to the year 2075. What is magic about those dates? What about the year after 2027? We have been talking about what is going to happen in the year 2030. We are going to have twice as many people over the age of 65 at 2030. Why would we want to make it solvent to the year 2027 when we are going to be right in the middle of crunch time? There is no magic to these dates. Where these dates come from is the President of the United States. These are President Clinton's dates. These are the dates to which he says what he is doing will extend Medicare and Social Security. And they won't. I think that most economists, most objective observers, the Comptroller General, the CBO, and everyone else who has taken a look at it basically acknowledged that. But it is suggested that we wait before we have any tax cuts until we agree on legislation that will solve these problems by those dates. Can you imagine that process? Can you imagine our agreeing on what legislation in effect accomplishes that? I can tell my colleagues--and I think most observers I have read who have a job in looking at these things would conclude--that the President's proposal does not do that. What the President basically proposes--and he is able to say this with a straight face because it is so complicated; it is difficult to understand--is saying, okay, we have trouble with Medicare and Social Security. For the most part we have dedicated sources, FICA taxes, to take care of most of all that. But we have trouble with that now. So instead of disciplining ourselves, let's go to the general revenue, because we have some extra now, and instead of reforming Medicare and Social Security and doing those things that the Medicare Commission tried to do, instead of doing those things that some bipartisan Senators--the Senator from Virginia is on one bill that I am on--instead of doing those fundamental things to really solve Medicare and Social Security, let's just transfer some general revenues over into those items to serve as a temporary fix--in Medicare's case, until 2027. I don't know what the idea is that we are supposed to do. I guess the idea is none of us will be around here to have to answer for it by 2028. But let's look at it individually. Since this amendment is predicated upon the President's proposal, I can only assume that it takes the position that the President's plan works and the President's plan will actually get us solvency by these dates. But with regard to Social Security, I think both the majority leader and the Speaker of the House have reserved bill No. 1 on both sides for the President's Social Security bill, where he can submit his legislation that he says will effectuate his plan in order to save Social Security. It hasn't come yet because I think most people realize it is not a serious plan. It is a transfer of trillions of dollars of IOUs in the Social Security trust fund, the creation of a new debt that will constitute a burden on future taxpayers. You talk about looking out for the future. This is not looking out for the future; this is not looking out for our children and our grandchildren, by transferring trillions of dollars in IOUs that will have to be redeemed some day. Then the President, of course, doesn't make these transfers until starting 2011 because that is outside the purview that we are looking at, and CBO and all these other commentators. So nobody is really able to evaluate it very effectively. And then it takes the money he says will come from all of this and he has the Government invest it. He has the U.S. Government invest it. Chairman Greenspan says that is a terrible idea. When you get right down to it, after all is said and done, there are only three ways to solve this problem, in terms of Social Security: You have to increase taxes, you have to cut benefits, or you have to come up with a way that will produce more off the investments than are being made. Now we have bipartisan legislation over here--the Senator from Virginia and I--on a bill that we think will do that. That is the only kind of thing that will do that. Transferring more general revenue funds--as I put it earlier, putting more water into a leaky bucket, when the hole in the bottom of the bucket is getting bigger every day-- will only carry us so far, they think until 2027 on Medicare and 2075 on Social Security. It might. It might get us that far if we put enough general revenue funds in while we have a surplus. I assume it very well might get us to 2027. So what. Don't we have an obligation past that? Don't we have an obligation to do something more fundamental? It doesn't take a genius to say you have some extra money, let's just pour it on top of a broken system, or, as one of our Members likes to say, putting more gasoline into an old run down, beat up, decrepit automobile doesn't change the nature of that automobile. So the President's plan with regard to so-called saving Social Security is not a serious proposal. The President's own budget--the document that he submits, the ``Analytical Perspectives of the Budget of the United States Government, Fiscal Year 2000''--says that: Under the proposals in the President's budget, the trust funds balances are estimated to increase by approximately 70 percent by the year 2004, raising to $2.8 trillion. That is the part of the plan the President says will take Social Security out and keep it solvent until the year 2075. But the President's own folks continue: These balances are available to finance future benefit payments and other trust fund expenditures--but only in a bookkeeping sense. These funds are not set up to be pension funds, as are the funds of private pension plans. They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. The existence of large trust fund balances, therefore, does not, by itself, have any impact on the Government's ability to pay benefits. It is a shell game. His own folks, in this thick document, basically tell it like it is. When you hear him talk about it, of course, it is a little bit different. It makes you believe it is real money and you are setting something aside, and so forth. It is not. The only way we can reform this problem, and the only way we are going to get our arms around it, is to increase FICA taxes. We don't want to do that. The working man is overburdened as it is today. Cut benefits. We don't want to do that, or come up with a system that is going to produce more revenue than the investment that our Social Security system has today, which is virtually nil. We can put a little part of it in the stock market, and even if the market crashed, unless we had unprecedented decades of low market, it would produce much more than what the Social Security system is producing today. Those are the only things we can do. I do not believe these other things are serious in the effect they would have. Of course, again--and I mentioned it several times today--we are dependent upon the President's support, I guess, to pass a bill that will do these things when, on the other hand, he is doing everything he can to prevent reform. We had a bipartisan Medicare commission. We have these bipartisan bills. As far as the commission is concerned, the President did everything he could to defeat the recommendations there. Democrats and Republicans--and Senator Breaux chaired that commission, a Democrat--worked together and came up with solutions. The President would not support it. He would rather have a temporary political issue than a long-term solution to this problem. That is very disappointing. Many of us who were critical of the President some time ago thought that in his last couple of years in office he might want to step forward and do this and leave that kind of legacy. He could have done that. It is a wasted opportunity, and I regret that. So that is the Social Security plan, one that doesn't consist of real economic assets and will have to be financed by raising taxes borrowed from the public or reducing benefits. What about Medicare? As I understand it, the President's proposal there basically transfers $327 billion from the general revenue. CBO takes a look at it and says it will make Medicare more solvent for several more years. It doesn't have a number on it. But this is what the professionals who look at this say about that. This is what CBO says about the President's Medicare financing. Again, is this the solution to the Medicare problems we have? Is this the reason why we can't have tax cuts because this is what we need to do? I don't think so. Listen: The President is proposing to augment Medicare's financing by making transfers from the general fund of the U.S. Treasury to the program's trust funds. That sounds familiar--Social Security and Medicare. Consistent with the policy outlined in the President's budget for fiscal year 2000, CBO estimates that $288 billion would be transferred from the general fund to the Hospital Insurance trust funds over the next decade. That transfer would delay by several years the projected date on which the HI [Hospital Insurance] trust fund will become insolvent by committing future general revenues to the program. It would do nothing to address the underlying rapid growth in spending for Medicare that will eventually outrun the revenues dedicated to the program. Just on borrowed time, headed toward a cliff. This plan does nothing to fundamentally alter that. The Comptroller General, talking about the President's proposal-- again, this amendment is based upon the numbers, as I understand it--if I am wrong about that, I can be corrected. But they are the same numbers that the President has been using throughout his plan. The Comptroller General says: I feel that the greatest risk lies in extending the HI trust fund solvency while doing nothing to improve the program's long-term sustainability, or worse, in opting for changes that may aggravate the long-term financial outlook for the program. What he is talking about is something that might not only not do any good in terms of a fundamental sense but will aggravate the problem. If we deceive ourselves into believing that by using general revenue moneys we are really doing something to solve the Social Security/ Medicare problem, it will put off real reform and wind up hurting Social Security and Medicare. It encourages us to wait. We can't afford to wait for fundamental reform. We have in excess of $500 billion in our proposal that can be spent for transition costs, Medicare, any other discretionary spending proposals that we as a Congress decide to spend it on. That is general revenue money, too. There is no question about that. But, fundamentally, both sides have to come together on an agreement that this is not the sort of thing that is going to solve that problem. It has nothing to do with tax cuts. If we don't fundamentally solve the Social Security problem, a tax cut is going to be irrelevant. If we don't fund it, they are going to be irrelevant to that. It has nothing to do with that basic problem. By keeping the economy strong, cutting taxes for working people, letting them keep a little bit more of their own money, it doesn't directly benefit these programs but it helps the people whom these programs ultimately are designed to benefit. In conclusion, basically we have no legislation before us and no proposal that would effectuate this amendment in terms of what kind of legislation are we talking about to reach these magic dates. Second, the President's position, which I think these dates are based upon, is a flawed one for the reason that we have set out. Lastly, not only is this not reform, but it goes against reform. So, indeed, we come full circle. I agree with my colleagues that my heart is in the same place as theirs. I want to figure out a way for us to come together and really do something about Medicare and Social Security. I want to find a way to do something about not just ourselves up to 2027, or however long some of us might still be around here--not myself, but the next generation and the generation after that. Let's look seriously and see whether or not this is the sort of thing that is going to get us there, or whether buckling down and doing the hard work, the hard, politically risky work--because if you use the words, you are running some kind of political risk--and not be diverted with false reasons as to why we shouldn't have a tax cut. We have had more reasons in one day than you can shake a stick at as to why the world would come to an end if we had a tax cut. There is no good time for a tax cut for some people because a tax cut has more to do with than just dollars and cents; it has to do with the exercise of who is going to make decisions in this society. Money is power. Where the money lies is where the power lies. Is it going to be in the pockets of the American people, or is it going to be in our pockets? Some say we have been a little bit too reticent ourselves because we say of the surplus dollar that only 25 percent or less should go into the American people's pockets. But to call that dangerous, to call that gluttonous, to call that selfish greatly exceeds the mark. I urge the defeat of the amendment. Thank you, Mr. President.

Mr. THOMPSON. If the chairman will cede me a couple other minutes, just a couple of points. I have enjoyed this discussion very much. It is a serious discussion about a serious problem. My only real disappointment is to learn that the Senator from Florida has twice as many grandchildren as I have. But all we ask is for an opportunity to catch up. But I think there are a lot of things we do agree on. We agree that there is a crisis. We agree that we need fundamental reform in Medicare and Social Security. We agree that the longer we delay in doing that, the worse the problem is going to be. So the question is, Are we doing the right thing by temporarily papering over the problem to extend it a few years, knowing that is not going to fundamentally solve the problem, giving us an excuse not to really address the fundamental problem or should we push and pressure ourselves to go ahead and address the fundamental problem? That is really the issue here today. I think that is where we have a disagreement. When I said that there is no relationship between this Medicare/ Social Security problem on the one hand and tax cuts on the other, I did not mean to say if you keep more of the tax money and pour more of it into Medicare and Social Security, you could not delay it a little longer. That is certainly true, but fundamentally there is no relationship. The reason I said that was because of what the Comptroller of the United States said. In his testimony in July before the Finance Committee, he said: Even if all future surpluses were saved-- Taking every penny of the surplus, not one dime of tax cuts-- we would nonetheless be saddled with a budget over the longer term that the current tax rates could fund little else but entitlement programs for the elderly population. Reforms reducing the future growth of Medicare, as well as Social Security and Medicaid, are vital under any fiscal and economic scenario to restoring fiscal flexibility for future generations of taxpayers. That is the reason I say that even if we put all this aside --we are throwing a lot of numbers around here--take all of it, pour it into Medicare and Social Security, so we can tell people we saved it for a few more years, it really would not address the fundamental problems. Is it incumbent on us to have a temporary solution or to force ourselves to have a longer-term solution? I think it is the latter. That is kind of what it boils down to. My friends talk about the size of this tax cut. The economy is projected to be $9 trillion next year. The net tax cuts next year alone are $4 billion, so the tax cuts are less than one-twentieth of 1 percent of the economy next year--less than one-twentieth of 1 percent. I am told that the tax cuts over the 10-year period would be 3.4 percent of total Federal revenues, and it would be under 1 percent of the gross domestic product. So that is not a huge tax cut if you look at it under those terms, in terms of the share of the economy, especially in light of the fact that taxes, especially Federal taxes-- especially Federal income taxes--are mushrooming as a share of our total economy. It is eating up more and more and more as a share of our total economy. We may have good times now, but that is not guaranteed. We are in a world standing as an island, as it were, at the present time while those all around us have problems. Our friends in Asia, our friends in Japan, some of our friends in Europe, some in South America, all have economic problems. So we have to be mindful of that as we go along. Quite frankly, there are some who say, when we have a deficit, certainly we can't afford to cut taxes; we have a deficit. And listening to the debate today, apparently some of our same friends, when we have a surplus, say we can't cut taxes because we really don't know whether or not we will have the surplus. So that does not leave us much room for a tax cut. I have enjoyed the debate. I yield the floor and thank the chairman and my good friends from Florida and Virginia for such an interesting discussion. Mr. ROBB addressed the Chair.

Mr. THOMPSON

Mr. THOMPSON. I thank the Chair. I join in the expressions of my colleagues in expressing my profound sadness and regret at the fate that has befallen our colleague and members of his and the Bessette family.

Mr. THOMPSON

Mr. THOMPSON. Mr. President, I will also make some comments about the reorganization of the Department of Energy with regard to its nuclear activities. I heard my colleagues speaking earlier on this subject. I think it is one of those great times in the Senate where Members from both sides of the aisle can come together and try to get something done for the benefit of the country and for the benefit of our safety in a troubled world. It is a historic opportunity. Perhaps to lend a little bit of a different perspective or additional perspective, I should say, with regard to some of the work we do in the Governmental Affairs Committee, it has to do generally with the operation of Government. We continually face instances where the Government is not performing the way it should. The taxpayers are not getting their money's worth. We continually see instances of waste, fraud, and abuse. We have what is known as the high risk list; that is, those Departments and agencies which are most prone to waste, fraud, and abuse. We see the same agencies year in and year out. We have reports year in and year out about these kinds of problems. It is affecting the way our people look at their own Government, which I think is probably the most important underlying problem that we have in this country. This lack of faith and trust in Government has become a recurring theme in recent nonpartisan and bipartisan surveys of public opinion toward Government. This trend is definitely in the wrong direction. A poll released by the Counsel for Excellence in Government last week found that just 29 percent of Americans say that they trust the Government in Washington to do what's right most of the time. This is down even from last year's poll, which found only a 38 percent level of trust. The National Academy of Public Administration recently released a national election study poll this June that pegged the percentage of Americans who trust Government at a meager 32 percent. According to the Pew Research Center for the People and the Press, it is poor Government performance that is the leading indicator, the leading factor, in Americans' distrust of the Federal Government. An overwhelming majority of the public--74 percent--say that the Government does only a fair or poor job in managing its programs and providing services. The National Academy of Public Administration reports that survey respondents complain about Government failures, stating that Government becomes part of the problem, is too big, serving others, doing nothing, and wasting money. So we have seen that over a period of years. Time and time and again, we have had reports bringing this to our attention. All too often, we wind up talking about it and doing very little about it. But now we find that we are faced with a different kind of lack of performance as far as our Government is concerned. Maybe we can afford certain breakdowns. Maybe we can afford certain fraud, inefficiencies, and waste, but we are facing a different kind now, and that has to do with our national security. Time and time again, we see instances where the right hand within a department does not know what the left hand is doing. We recently received the inspector general's report from the Department of Justice which demonstrated that we on the Governmental Affairs Committee did not receive evidence and did not receive materials showing people with strong ties to the Chinese government at the same time they were making political contributions in this country. Six inspectors general gave us a report recently regarding how our export control system was working. We found out that it is not working very well at all. We don't know very much, sometimes, about who is doing the exporting. We don't know much about who the end users are and what they are doing with these dual-use technologies we are sending them, some of which can be used for military purposes. The law requires that we train our licensing officers. But we are not following that law. We have no training programs with regard to our licensing officers. We are supposed to be checking up on our foreign visitors there and making sure that when they visit the labs, they are not coming away with information that they should not be having. We are not doing a good job there. The law requires that we keep up with the cumulative effect of the exports we are sending to these other countries, but we are not doing that either. We found out recently that, with regard to trying to get materials regarding someone who is a suspect, actual espionage activities broke down interdepartmentally between the Department of Energy and the Department of Justice because of a lack of communication. We were trying to get a search warrant there; it never came about. If we had the correct information and had been really talking to each other and had a system whereby we could exchange information after asking the right questions, we would not even have needed that search warrant. These are all instances where the Government is not performing in the way the Government should be performing. And now we see a systematic breakdown with regard to the security at our national laboratories. This is bad enough in and of itself at any time. But I think it is especially disturbing now that we understand more and more that we are living in a different world than we have been living in in times past. I think that after the end of the Cold War, when we didn't have the big Soviet Union threat anymore, we let our guard down in this country. We thought that we could place less emphasis on preparedness, readiness, national security, and things of that nature. The Chinese were in no position to pose a direct threat to us, and we felt the Soviet Union certainly was not. Yet as we look around the world, we see that new threats are developing. We got the Rumsfeld report, and we understand now that rogue nations around this world are rapidly developing biological, nuclear, and chemical capabilities that pose a threat to this country. Then we have the Cox report, which tells us what we have lost with regard to our own national laboratories, in terms of nuclear technology and perhaps even nuclear materials. The President's own Federal foreign intelligence advisory committee, led by Senator Rudman, now points out the difficulties that we are having in that regard. It is a different world. So we must ask ourselves: If not now, when? If we can't, at long last, after all these reports--and Senator Rudman pointed out that there had been over a hundred reports over the years pointing out the problems that we were having at our national labs. Yet very little was done. So it takes a tremendous amount. We have seen in these nonmilitary matters, non-national security matters, how difficult it is. The Government has gotten too big and complex, with layer upon layer of assistants and deputy assistants in these departments, and we are having less and less accountability and more and more complexity, more and more of the right hand not knowing what the left hand is doing. So now, at long last, when we have someone, such as the President's own commission, report to us that within the Department of Energy there is no accountability, that it is dysfunctional, that it is saturated with cynicism and disregard for authority, that it is incapable of reforming itself, that it will do whatever is necessary, apparently, to delay reform, certainly this must get our attention. I believe from listening to my colleagues and the way this thing is developing, perhaps maybe at long last our attention has been gotten. And what is being proposed now in terms of reorganization is a very straightforward approach. It is not nearly as radical as some people would like to go. Many people would like to take matters of nuclear safety, our laboratories and nuclear materials totally outside the Department of Energy and set up a totally different entity to deal with them. This bill doesn't do that. It keeps it within the Department of Energy. The Secretary of Energy continues to set the policy for the department. And the newly created Under Secretary for Nuclear Stewardship reports to the Secretary and is under the supervision of the Secretary. So you still have direct lines of reporting. You have more accountability. You have a simplified reporting system. You would not have any more of this Rube Goldberg- type of organization chart that we see within the Department of Energy, under which you could not tell who is responsible for what. At long last, as difficult as it is to reform Government, as difficult as it is to stop waste, fraud, and abuse, when we are told about it every year, told about it all the time, now that we know we have this significant problem with regard to the most significant matter that can plague a country, dealing with national security, surely we can take the necessary steps in order to turn this thing around. I know there will be amendments proposed. I have never seen a piece of legislation that perhaps could not stand a bit of improvement. I do not really know the thrust of the amendments that will be proposed. But I urge my colleagues that, as we go along in considering these amendments, ask the question: Does this enhance or does this defuse accountability? We need accountability more and more throughout Government. We can very seldom place responsibility anywhere anymore for mishaps in Government. But here we must have it. We certainly must have it with regard to the Department of Energy and our nuclear stewardship. I am delighted with the way this has progressed. The changes are not a draconian, and it is a revolutionary approach. It is an approach that will enhance accountability. It gives us an opportunity not only to do something with regard to national security in this country but perhaps to take some first steps toward restoring the American public's faith in their own Government. I yield the floor. Mr. COVERDELL addressed the Chair.

Mr. THOMPSON

Mr. THOMPSON. Mr. President, I rise to express serious concerns which I have about the amendment offered by the Senator from Connecticut regarding investigation procedures at the Office of Inspector General for the Department of State. These concerns are not mine alone, but have been brought to the attention of the Governmental Affairs Committee by a number of inspectors general. The amendment requires the Inspector General for the Department of State to provide each individual mentioned in a report an opportunity to refute any allegation or assertion made regarding that person's activities. While I understand the Senator from Connecticut's concerns, I fear that the amendment as written could have serious repercussions for law enforcement. For example, providing allegations and assertions to each individual mentioned in a criminal investigation prior to a referral, no matter how tangentially involved, could compromise a subsequent investigation by the Department of Justice. In addition, it could reveal sources of information and subject those sources to reprisals and chill future cooperation from potential witnesses. Second, the amendment could create rights that witnesses and targets of other investigations do not have. It is unclear what litigation or grievances could result from a failure to follow the amendment. Third, there are a number of unsettled issues in the amendment such as what constitutes ``exculpatory material'' and whether a subject, witness, or an individual with only marginal relevance to the investigation is entitled to review the actual report. Fourth, I understand the State Department Inspector General is concerned that the reporting requirement could be used to second-guess discretion that she uses in her investigations. Finally, by using the ambiguous term ``assertions,'' the amendment puts an unnecessary burden on the Inspector General after the report is complete to seek out each person named and allow them to comment on even the most innocuous assertions relating to them. This will unduly delay the investigative process and put a strain on the office's resources. In addition to these concerns about the amendment itself, I am also concerned that it is being offered without any hearings at all or consideration by the Governmental Affairs Committee. As the Chairman is aware, the Governmental Affairs Committee has jurisdiction over the Inspector General Act. If there are in fact legitimate concerns that the amendment is intended to address, then perhaps it should apply to all inspectors general rather than singling out this particular one. Despite these reservations, I understand the Foreign Relations Committee has worked hard to craft this amendment. Therefore, I will not object to its consideration at this time if the Chairman of the Foreign Relations Committee will agree to work with me in conference to address the concerns that I have raised.

Mr. THOMPSON. I thank the Chairman for his work on this bill and I look forward to working with him in conference. office of the inspector general Mr. Dodd. Mr. President, I want to thank the Chairman of the Committee, Senator Helms, for accepting my amendment as it relates to individuals named in reports of investigations prepared by the Office of the Inspector General at the State Department. This amendment would provide these individuals with an opportunity to comment on information contained in the report as it relates to them and to provide explanatory or exculpatory information that may be relevant to the investigation. Mr. Helms. It is my understanding that it is not the intention of the Senator from Connecticut to override key provisions of the Foreign Service Act, the Inspector General Act of 1978, the Privacy Act of 1974 or whistleblower protections with this amendment. Mr. Dodd. That is correct, Mr. President. As you will note from the way the amendment has been drafted, I in no way intend to undermine the ability of the Inspector General to carry out her duties. Subsection (c) of my amendment makes it clear that I do not seek to override or call into question existing provisions of law that govern the investigative practices of the Inspector General or statutory protections of individuals such as those contained in the Privacy Act of 1974 or provisions of section 2303(b)(8) of title 5 (relating to whistleblower protection.) I have offered this amendment because I believe that both fundamental fairness and good government dictate that an individual mentioned in a report of investigation be given an opportunity to provide information as it relates to him, so that the fullest picture is set forth in the final report of investigation of the Office of the Inspector General. Mr. Helms. Am I correct in saying that it is not the intention of the Senator from Connecticut that the full report of investigation be turned over to each and every person named in a report, but rather that an individual be advised of allegations regarding him? Mr. Dodd. The Senator is correct. I do not seek to have the report made available to every named individual, simply be shown or briefed orally on the substance of those portions, that bear directly on that individual, consistent with appropriate privacy and whistleblower protections. Nor do I seek with this amendment to grant individuals access to the investigative files, notes, or interim memos that may have been developed during the course of the investigation by the Office of the Inspector General. I also do not want to overburden the Inspector General in cases where an investigation results in nothing of any significance and the case is simply closed. Certainly in such instances the Office of the Inspector General need not go through the process of providing information to any individual who might have been named in the course of an investigation. Finally I recognize that there may be certain instances where an ongoing criminal investigation would be compromised if information were made available to an individual. That is why I chose the words ``shall make every reasonable effort'' to provide a measure of flexibility to the Inspector General. She may determine under certain circumstances that it is inadvisable to make information available. If she does so, she must simply inform the Committees of jurisdiction of the instances in which she has not made information available to an individual, as part of her reports to Congress, including the rationale for doing so. This information may be provided on a classified basis if necessary. Mr. Helms. Mr. President, I believe this clarifies any questions with respect to this amendment and I believe that the managers are prepared to accept this amendment. Mr. Dodd. I thank the managers for their assistance with this matter.

Mr. THOMPSON

Mr. THOMPSON. Mr. President, I rise to introduce the ``Truth in Regulating Act.'' This legislation would establish a 3-year pilot project to support Congressional oversight to ensure that important regulatory decisions are efficient, effective, and fair. The foundation of the ``Truth in Regulating Act'' is the right of Congress and the people we serve to know about important regulatory decisions. Through the General Accounting Office, which serves as Congress' eyes and ears, this legislation will help us get access to the important information that Federal agencies use to make regulatory decisions before the horse gets out of the barn. So, in a real sense, this legislation not only gives people the right to know; it gives them the right to see--to see how the government works, or doesn't. And by providing us with information that agencies use to make regulations, it will enable Congress to ensure that agency regulations are consistent with Congress' intent and the authority that Congress has delegated to the agencies by statute. This will make the regulatory process more transparent, more accountable, and more democratic. It will help improve the quality and fairness of important regulations. This will contribute to the success of programs the public values and improve public confidence in the Federal Government, which is a real concern today. Under the 3-year pilot project established by this legislation, a Committee of either House of Congress may request the Comptroller General to review an economically significant rule as it is being developed. The Comptroller General shall submit a report no later than 180 calendar days after a committee request is received. This should allow Congress ample time to decide whether it wants to disapprove the rule under the Congressional Review Act. The Comptroller General's independent analysis of the rule shall include: an analysis of the potential benefits of the rule, the potential costs of the rule, any alternative approaches that could achieve the goal in a more cost-effective manner or that could produce greater net benefits, the extent to which the rule would affect State or local governments, and a summary of how the results of the analysis of the Comptroller General differ, if at all, from the results of agency analyses. The Comptroller General will have the discretion to develop the procedures for determining the priority of requests. Mr. President, it is my hope that the ``Truth in Regulating Act'' will encourage Federal agencies to make better use of modern decisionmaking tools, such as risk assessment and benefit-cost analysis. Currently, these important tools often are viewed simply as options--options that aren't used as much or as well as they should be. The Governmental Affairs Committee has reviewed and developed a voluminous record showing that our regulatory process is not working as well as intended and is missing important opportunities to achieve greater benefits at less cost. On April 22, I chaired a hearing in which we heard testimony on the need for this proposal. The General Accounting Office has done important studies for Governmental Affairs and other committees showing that agency practices--in cost-benefit analysis, risk assessment, and in meeting transparency and disclosure requirements of laws and executive orders--need significant improvement. Many other authorities support these findings. All of us benefit when government performs well and meets the needs of the people it serves. I want to thank Blanche Lincoln, George Voinovich, Bob Kerrey, and John Breaux for joining me as original cosponsors of this bill. All of us on both sides of the aisle should pull together to improve the quality of our government. I urge by colleagues to support this important legislation. I ask unanimous consent that the ``Truth in Regulating Act'' be printed in the Record.

Mr. THOMPSON

Mr. THOMPSON. Mr. President, I rise to introduce the ``Truth in Regulating Act.'' This legislation would establish a 3-year pilot project to support Congressional oversight to ensure that important regulatory decisions are efficient, effective, and fair. The foundation of the ``Truth in Regulating Act'' is the right of Congress and the people we serve to know about important regulatory decisions. Through the General Accounting Office, which serves as Congress' eyes and ears, this legislation will help us get access to the important information that Federal agencies use to make regulatory decisions before the horse gets out of the barn. So, in a real sense, this legislation not only gives people the right to know; it gives them the right to see--to see how the government works, or doesn't. And by providing us with information that agencies use to make regulations, it will enable Congress to ensure that agency regulations are consistent with Congress' intent and the authority that Congress has delegated to the agencies by statute. This will make the regulatory process more transparent, more accountable, and more democratic. It will help improve the quality and fairness of important regulations. This will contribute to the success of programs the public values and improve public confidence in the Federal Government, which is a real concern today. Under the 3-year pilot project established by this legislation, a Committee of either House of Congress may request the Comptroller General to review an economically significant rule as it is being developed. The Comptroller General shall submit a report no later than 180 calendar days after a committee request is received. This should allow Congress ample time to decide whether it wants to disapprove the rule under the Congressional Review Act. The Comptroller General's independent analysis of the rule shall include: an analysis of the potential benefits of the rule, the potential costs of the rule, any alternative approaches that could achieve the goal in a more cost-effective manner or that could produce greater net benefits, the extent to which the rule would affect State or local governments, and a summary of how the results of the analysis of the Comptroller General differ, if at all, from the results of agency analyses. The Comptroller General will have the discretion to develop the procedures for determining the priority of requests. Mr. President, it is my hope that the ``Truth in Regulating Act'' will encourage Federal agencies to make better use of modern decisionmaking tools, such as risk assessment and benefit-cost analysis. Currently, these important tools often are viewed simply as options--options that aren't used as much or as well as they should be. The Governmental Affairs Committee has reviewed and developed a voluminous record showing that our regulatory process is not working as well as intended and is missing important opportunities to achieve greater benefits at less cost. On April 22, I chaired a hearing in which we heard testimony on the need for this proposal. The General Accounting Office has done important studies for Governmental Affairs and other committees showing that agency practices--in cost-benefit analysis, risk assessment, and in meeting transparency and disclosure requirements of laws and executive orders--need significant improvement. Many other authorities support these findings. All of us benefit when government performs well and meets the needs of the people it serves. I want to thank Blanche Lincoln, George Voinovich, Bob Kerrey, and John Breaux for joining me as original cosponsors of this bill. All of us on both sides of the aisle should pull together to improve the quality of our government. I urge by colleagues to support this important legislation. I ask unanimous consent that the ``Truth in Regulating Act'' be printed in the Record.