Fred Thompson

Mr. THOMPSON

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. THOMPSON. I ask for the yeas and nays on the Thompson amendment, and ask that vote occur immediately following that on the Harkin amendment.

Mr. THOMPSON. I ask unanimous consent, pursuant to that understanding.

Mr. THOMPSON. I agree with that. Are we prepared to vote?

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. THOMPSON. I call for the regular order, Mr. President.

Mr. THOMPSON. I was not aware the amendment was set aside. I called it up. No one moved that it be set aside that I am aware of. Maybe I am mistaken. I thought we were on it. Senator Harkin is prepared to address it.

Mr. THOMPSON

Mr. THOMPSON. Mr. President, this amendment addresses a certain provision in the Postal-Treasury appropriations bill at section 642. It is a section that deals with procurement policies. It is a section that deals with a problem of goods that are produced by child labor--a problem about which we are all sensitive. I do think that this provision should not be in this bill. I offer this amendment to amend the provision, leaving in the portion that addresses the child labor issue, but taking out certain portions that I believe are clearly unconstitutional and unneeded. In the first place, Mr. President, this is an area of some complexity--the procurement laws and regulations of this country. It is an area that is within the jurisdiction of the Governmental Affairs Committee, of which I am chairman. Our committee has spent a good deal of time dealing with this issue. We have passed legislation over the last two Congresses that deal with our procurement policies in this country. We have passed the Federal Acquisition Streamlining Act of 1994--this is a provision that Senator Glenn sponsored--and we passed the Clinger-Cohen Act of 1996--all dealing, at least in part, with the problem of Government procurement, and procurement practices and policies. I think, as most people who deal with this realize, it is certainly a balancing act. There are considerations that have to be given to the contractors. There are considerations certainly that have to be given to the Government--what is fair. We want to place reasonable requirements and restrictions with regard to the practices and policies that the Government uses when they go out and acquire goods and services, and so forth. Everyone comes in and gets a seat at the table, and we hash those things out. We have been doing that in a free and open debate for some time now. We discover now that with regard to this provision, instead of it going through the regular process, instead of our having debate on the issue, and instead of us having a discussion on the issue, we find that it winds up being a substantive provision with regard to policies that apply across the board and winds up as a part of this appropriations bill. I do not believe that is a good way to legislate. We hear a lot of times complaints about amendments on appropriations bills. But here we actually have a provision within the appropriations bill which, as I say, really substantively addresses an issue not only under the jurisdiction of the committee that has been wrestling with this problem for some time but without any really public discussion or debate. What does this 642 require? First of all, it requires that the Secretary of Labor publish a list of items that might have been produced by child labor--``might have been produced'' by child labor. I am not sure whether or not there is another provision in the law that places a requirement on people based upon the determination that certain items might have had a certain origin, or anything of that nature. But be that as it may, there is nothing wrong with putting something on a list in and of itself. Then the provision says that the Government may not require an item on that list unless the person or company providing the goods or services certify that it was not a product of child labor. In other words, apparently the best the Government can do, or the requirement that the Government has, is simply to come up with whether or not an item might have been produced by child labor. But then the supplier of the goods has to certify, based on that list, that in fact it was not produced by child labor. Then, 642 goes on to say that the contract may be terminated based upon violation of this provision and that the contractor may be disbarred. So far, so good, although this is, I believe, very, very troublesome language that is used here. But so far, so good. You are debarring someone. You are terminating the contract, if there is any indication that child labor is used. I must point out that this activity is already not only grounds for debarment but a crime. It is already a crime to place materials produced by child labor in interstate commerce, punishable by a $10,000 fine per child employee and 6 months imprisonment. In addition, under 18 U.S.C. 1581, whoever holds or returns any person to a condition of peonage shall be fined not more than $5,000, or imprisoned not more than 5 years, or both. As far as the criminal law is concerned, anyone who would be in a disbarment situation would be violating a very severe criminal law. But, be that as it may, so we are duplicative. So what? What is the big problem with that? The biggest problem with all of this is not what I have been discussing so far, although as we see troublesome language duplicative, it is already a criminal act in the Federal Acquisition Regulations. It already has cause for disbarment for the commission of any other offense indicating a lack of business integrity or business honesty that seriously and directly affects the responsibility of the Government contractor or subcontractor. I can't think of anything that would be more indicative of a lack of business integrity than using child labor. So not only do we have a criminal act prohibiting this activity, but we have a regulation now saying that you can disbar on the basis of this activity. But, again, as I say, so far, so good, as far as I am concerned. So we are duplicative. So we use vague language. The problem that is the major one in this particular section has to do with the provision that is on CB, a capital B, which says the following: That an acquisition contract has to include the following language: A clause that obligates the contractor to cooperate fully and provide access for any official of the United States to the contractor's records, documents, persons, or premises, if requested by the official for the purpose of determining whether forced or indentured child labor was used to mine, produce, or manufacture any item furnished under this contract. I believe this is clearly unconstitutional. I know the intent was good. We all have the same intent with regard to the end result here. But we have picked out a particular area--not drug dealing, not selling faulty parts for an airplane that crashes and kills our pilots, and not faulty parts that go on machines that kill our Armed Forces--all the terrible things that could happen. We have picked out one and have given some Government officials, any Government official, total, unlimited access to the books, records, and persons of anyone whom they choose to exercise that with regard to. There is a body of law, of course, with regard to unwarranted administrative searches. Under certain circumstances, warrantless administrative searches are permissible. But we have to keep in mind that under those circumstances, under the warrant clause of the Constitution, there is no probable cause requirement. So these are dangerous things that the courts have said you have to be careful with, and you have to have certain requirements in the statute giving you the right to carry out these warrantless searches, if they are going to be constitutional. First of all, the Government needs to have a substantial interest. I think that is covered here. Second, the regulation of the business had to serve that interest. I am willing to concede that. Third, statutory safeguards are needed to provide an adequate substitute for a warrant requirement. We have a warrant requirement. Whether we are dealing with the most heinous criminal activity imaginable, we have generally been speaking about a warrant requirement, a due process requirement, under the Constitution. But the courts have said that if you do not have that, if you are going to carry out a warrantless administrative search, you have to have certain statutory safeguards. They have discussed what they are. None of them is here, Mr. President. First of all, there is total discretion with regard to the Government official as to which business he decides to check on that day, or which individual. There is no probable cause requirement, or no evidentiary requirement at all. He has total and complete discretion under this language to decide which business he wants to check on. That is constitutionally suspect from the outset, according to the court cases. Second, any official of the United States can do it. I don't know if that includes me or not, or the staff. But any official of the United States, I guess from fire marshals to officials over at the Department of Energy, or whoever. Third, there is no statutory procedure for challenging of the warrant at all. Some of the statutes say that if the concern refuses to consent to this kind of process, search and seizure, there is a statute, a civil provision, whereby it can be contested. That is not here. Lastly, it is not just the premises that we are talking about here, but it has to do with all records and documents and persons apparently that are subject to this particular provision. It is a provision that has not been applied to and cannot constitutionally be applied to the most heinous criminal activities imaginable. And although these are certainly reprehensible activities we are dealing with, they cannot amend the Constitution of the United States with regard to all of the various things for which a person or a business can be debarred. Your imagination is the only limitation as to what those things might be. There could be some very, very terrible things, as I indicated, and this is one of them. But here we have selected this particular activity and placed a burden on the supplier of Government goods that, frankly, cannot withstand constitutional scrutiny. The bill in section 642 has an exception, and it says that this section does not apply to a contract that is for the procurement of any product, article, material or supply containing a product that is mined, produced or manufactured in any foreign country or instrumentality if the foreign country or instrumentality is a party to the agreement on Government procurement annexed to the WTO agreement. In other words, this provision that I have just been talking about does not apply to a foreign country if it is a party to the WTO agreement or a party to the North Atlantic Free Trade Agreement. As I understand this, if a country is a party to the WTO agreement or is a signatory or a party to NAFTA, they are not covered by this, and presumably goods coming from that country would not be covered by this, so a manufacturer in a country that is a part of NAFTA or WTO presumably would not be covered by this. The United States of America is a party to NAFTA, but goods emanating from this country would not be covered by this. Now, I am not sure in practical terms how this would work out or what kind of problems this would present, but I do not see why companies of a foreign country should be exempted from this law when companies from this country are targeted by this law and are having these, what I believe are fairly clearly unconstitutional, requirements and burdens placed on them. So the proper action would be to bring this language back to the Governmental Affairs Committee and consider it in the normal course of Senate business. But the fact remains that the language is pending before the Senate so we must deal with it. So, Mr. President, I am offering an amendment which will give Federal agencies the ability to debar or suspend companies. And I repeat that. This will give, if there is any question--I don't think there is any question that they have the ability to do that now. It is against the Federal law, and it is provided for in the FAR. But in case there is any question about that, my amendment will give Federal agencies the ability to debar or suspend companies which use forced or indentured child labor, but in a way that is consistent with the current procurement system of the delicate balance that has been worked out which has specific regulatory history and due process requirements, and not in the vague way that this language addresses it. Mr. President, I yield the floor. Mr. KOHL addressed the Chair.

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

Mr. THOMPSON. If the Senator will yield, I have absolutely no objection. I was not aware of Senator Harkin's situation, and I will certainly defer it until he can be here. I have no objection.

Mr. THOMPSON. Mr. President, I thank my distinguished friend from Colorado. Amendment No. 3353 (Purpose: To require the addition of use of forced or indentured child labor to the list of grounds on which a potential contractor may be debarred or suspended from eligibility for award of a Federal Government contract)

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

Mr. THOMPSON

Mr. THOMPSON. Mr. President, I want to join my colleagues in expressing my sincere condolences to the families of the two Capitol Police officers who gave their lives last Friday defending the Capitol and all of us who work here, as well as the many Americans who come here from around the country to see their government in action. Officers J.J. Chestnut and John Gibson are American heroes in the truest sense of the word. Their actions last week unquestionably prevented a terrible tragedy from becoming even more deadly. I know I speak for every member of Congress in expressing my respect and gratitude to them, their families, and their colleagues on the Capitol Police force. At the first sign of trouble, Officers Chestnut and Gibson acted on instinct, doing what they were trained to do and saving lives in the process. When an event like this happens, I think many of us react according to instinct, and our instincts differ depending on the varying experiences we've had. As most people know by now, my colleague from Tennessee, Senator Frist, also acted on instinct when he heard the news of Friday's shootings. Upon returning to his office from speaking on the Senate floor and learning what had happened, Senator Frist immediately called the Capitol physician's office to see if they needed assistance, and then rushed over to the scene of the shootings to lend a hand however he could. He assisted in treating one of the two fallen police officers, administered CPR, made sure that he made it safely to a waiting ambulance--and then went back inside to treat another of the victims. After restarting this second victim's heart, he rode with him to D.C. General Hospital to ensure that, if paramedics had to open up his chest on the way to the hospital, he would be there to provide assistance or do the procedure himself. Mr. President, Senator Frist's actions are both a reminder of the very different routes each of us took in coming to the United States Senate, and of the importance of preserving the diversity of backgrounds that we have in this body. His instinct as a heart surgeon and trauma specialist took over last Friday, and he rushed to the scene to provide whatever help he could--just as he's done hundreds of times before when patients were relying on him. I want to take this opportunity to salute my colleague from Tennessee for his heroic actions last Friday, and for all of the other times he's provided medical assistance since coming to the Senate three and a half years ago. Many people will remember that a couple of years ago, one of our constituents, a man from Cleveland, Tennessee, had a heart attack in the Dirksen Building, just outside of Senator Frist's office. Senator Frist immediately came to the rescue, and saved this Tennessean's life. Now that's what I call constituent service. Mr. President, the events of last Friday have affected all of us very deeply. We will not soon get over the memory of the tragedy that occurred inside ``the people's house'' or of the heroic sacrifice made by Officers Chestnut and Gibson. Again, I want to offer to their families and Capitol Police colleagues our sincere condolences and our deepest thanks.

Mr. THOMPSON

Mr. THOMPSON. Mr. President, in May the President issued Executive Order 13803 which purported to set out a new definition of ``federalism.'' However, it explicitly replaced President Reagan's Executive order on federalism and, in reality, the new order undermines federalism. Furthermore, it was written in secret without even any consultation with State and local officials. Every major State and local government group opposes this so-called federalism order, and they have asked the President to withdraw it. My amendment expresses the sense of the Senate that the President revoke his May 14th order and help restore the proper respect for State and local government and in our Federal system by reinstating both President Reagan's and his own prior orders on this subject. The Founding Fathers believed that the Federal Government had limited powers. The tenth amendment states that the powers not delegated to the States are reserved to the States or to the people. The public clearly wants important decisions to be made closer to home and not dictated from Washington, DC. Unfortunately, President Clinton's order will undermine federalism and promote Federal meddling into local affairs. President Clinton's order revokes President Reagan's Executive Order 12612 which was a clear commitment to the tenth amendment principles of a limited Federal Government. The new Clinton order shifts the Reagan presumption against Federal involvement in State and local matters to a presumption for Federal intervention. President Clinton's new order also revokes his own 1993 Executive Order 12875 which directed the Federal Government to avoid unfunded mandates. To add insult to injury, the White House never talked with State or local governments while the new order was being developed. Ironically, it was issued from England. More ironically, White House officials did not consult with local officials on an Executive order which itself calls for more consultation with local officials. In a recent Washington Post article, one anonymous White House official admitted, ``This was a mistake. We screwed up.'' Mr. President, I agree. The White House belatedly has offered to delay the order and take comments from State and local officials, but the Clinton administration has shown no willingness to rescind this order, as State and local officials have requested. State and local officials were understandably irritated that the White House shut them out of this process. But more importantly, they immediately saw through the rhetoric that was coming out on this matter and saw the real purpose of the Executive order. State and local officials know that the order is basically a Government power grab at the Federal level that will undercut their ability to serve the public, and that is why they are so exercised about it. President Clinton was asked to rescind the order by the ``big seven,'' as they are called--big seven State and local government groups. They include the National Governors Association, the National Conference of State Legislature, the Council of State Governments, the National Association of Counties, the U.S. Conference of Mayors, the National League of Cities, and the International City/County Management Association. Mr. President, this order will promote Federal intrusion into local decisionmaking, and it shows contempt for the ability of State and local officials to manage their own affairs. We don't want that. That is not the message that has been coming out of this Congress. That is not even the message that has been coming out from prior Executive orders by this administration, as late as 1993. Even though, as I say, it was promoted as a concept that would enhance federalism, and it has a lot of good language in there about the principles of federalism, when you get right down to it, it rescinds the basic presumption that when Federal agencies look at a matter, it basically presumes, unless it is very clear, that the matters should be resolved at the State and local level. That is a presumption that has worked very well for us, and I urge the adoption of this amendment. I ask unanimous consent that a letter from the seven state and local organizations, an article from the Washington Post, and a letter from Governor Voinovich of Ohio be printed in the Record.

Mr. THOMPSON. If the Senator will yield, I will be most happy to proceed in that direction. I suggest perhaps I consult with the Senator from South Carolina. I have the Executive orders here.

Mr. THOMPSON. Very well.

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

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

Mr. THOMPSON. Mr. President, this amendment is offered to protect and preserve federalism. If there is one concept in recent years that has gained in credence, it is the concept of federalism. We have seen a lot of innovation happen in this country that has started at the State and local level. We have paid credence to it with regard to welfare reform and other measures. The Supreme Court, in recent years, has struck down cases based upon the tenth amendment. The tenth amendment has been reinvigorated, and I think we have come together as a nation in many respects in our belief that many of our problems need to be addressed at the State and local level, and that is what our original framers of the Constitution had in mind. Not only is it constitutionally sound but it has worked in practice. Mr. President, I ask unanimous consent that Majority Leader Lott and Assistant Leader Nickles be added as cosponsors. They have long fought for the principles of federalism.

Mr. THOMPSON. Mr. President, I call up my amendment No. 3256 and I send a modification to the desk.

Mr. THOMPSON

Mr. THOMPSON. Mr. President, I want to ask my colleagues for their help to bring much-needed improvements to our federal regulatory system. In March, the Governmental Affairs Committee favorably reported S. 981, the ``Regulatory Improvement Act,'' by a 10-5 vote. At the time of the markup, the administration sent a letter to me and Senator Levin expressing a number of concerns with the bill. Over the past few months, we have worked to resolve those concerns, which largely involved adding clarifying language to the bill. In addition, some sections of the bill were modified, and a couple were dropped. On July 16, we received a letter from Jack Lew, the Acting OMB Director, on behalf of the administration. The letter says the administration supports the legislation with the proposed changes and will cooperate with us to pass it. These changes are explained in the accompanying summary of the managers' amendment that Senator Levin and I would support. I am pleased that the President recognizes that we need this legislation to deliver the effective and efficient regulatory system that the American people expect and deserve. Most of us recall the partisan and ultimately destructive debate on this issue in the last Congress. Reforming regulation is an area fraught with distrust. It is tempting for opponents of reform to try to score political points by scare tactics. We have to set aside political posturing if we're going to get the job done. Just last week, former Majority Leader Howard Baker told us, ``it ill behooves America's leaders to invent disputes for the sake of political advantage, or to inveigh carelessly against the motives and morals of one's political adversaries. America expects better of its leaders than this, and deserves better.'' I hope we heed that good advice. There's no doubt that improving the regulatory process is one of the toughest challenges we face. Regulation affects virtually every aspect of our lives. There are over 130,000 pages of federal regulations, and 60 agencies continue to issue new rules at a rate of 4,000 a year. The costs are hundreds of billions of dollars annually, and the public expects better results. As the costs of regulation rise with public expectations of better results, the need is greater than ever for a smarter way of regulating. We have to find ways to do more good while reducing the waste in the current system. The evidence is overwhelming that we can achieve greater benefits at far less cost by regulating smarter. Hearings of the Governmental Affairs Committee, investigations of the General Accounting Office, the work of other congressional committees, and many scholarly studies show a striking consensus on this point. Our Committee also has found that the administration's Executive Order 12866 and other initiatives to reinvent regulation have not been as effective as was hoped. I want to thank the 19 cosponsors who have joined me and Senator Levin to improve the regulatory process. The Regulatory Improvement Act will promote the public's right to know, improve the quality of government decisions, and make government more accountable to the people it serves. Ultimately, it will help improve the quality of our lives. That is why we have the support of State and local government, businesses of all sizes, farmers, educational organizations, think tanks, scholars, and the administration. We have a rare opportunity to reform the regulatory process. Let's pull together and get the job done.

Mr. THOMPSON

Mr. THOMPSON. Mr. President, I am delighted to join my colleagues today as an original cosponsor of an exciting new proposal to reform Social Security. We all know that the Social Security program gets in serious financial trouble when the Baby Boomers start retiring early in the next century. The Social Security actuaries tell us that, just 15 years from now, in 2013, Social Security will begin paying out more in benefits than it receives in taxes and will have to begin redeeming the treasury bonds issued to the Trust Funds. By 2032, the Trust Funds will be exhausted, and the program will be running annual cash deficits of hundreds of billions of dollars. As more and more people become aware of these financial realities, Social Security has quickly ceased to be the untouchable third rail of politics. In my view, it should soon become the brass ring of politics. Entitlement reform is one of the greatest challenges our nation faces, and we should all be reaching for the solution that will enable Social Security to provide for our grandchildren like it did for our grandparents. Fortunately, right now we have a tremendous window of opportunity for real reform. Our economy is strong; the federal budget is balanced for the first time in 30 years; and the Congressional Budget Office is actually projecting budget surpluses each year for the next decade. Just as important, the 76 million Baby Boomers are still in the workforce paying taxes into the Social Security system. If we wait until this enormous group stops paying taxes and instead begins drawing benefits, the fixes will have to be much more severe. Over the past 15 months, Senators Judd Gregg and John Breaux, along with Congressmen Jim Kolbe and Charles Stenholm, have served as congressional co-chairmen for the National Commission on Retirement Policy, sponsored by the Center for Strategic and International Studies. This 24-member group of politicians, businessmen, and policy experts developed and unanimously approved a broad proposal for reforming Social Security. The Senators and Congressmen then crafted bipartisan legislation based on the commission's recommendations. The outline of the Gregg-Breaux plan is simple. It would reduce the Social Security payroll tax by 2 percentage points and divert the money into a mandatory savings account for every worker under age 55. The accounts would supplement--not replace--benefits guaranteed through the traditional system. Workers could pick from a limited number of investment funds dealing in stocks, government bonds, or a combination of the two, much like the Thrift Savings Plan available to members of Congress and federal employees. The benefits of current retirees and workers age 55 or older would not be affected by the private accounts, and benefits to survivors of deceased workers and the disabled would also be protected. Meanwhile, Gregg-Breaux would make changes to the remaining pay-as- you-go system to bring it into actuarial balance. It would accelerate the scheduled increase in the retirement age, raising the age for full benefits to 70 and the age for early retirement benefits to 65 by 2029. It would reduce the Consumer Price Index by half a percentage point so that it more accurately reflects the rate of inflation, and it would scale back benefits to wealthier retirees, who are likely to fare better with their individual accounts. Unlike several of the proposals that are on the table, however, the Gregg-Breaux plan does not raise taxes, period. In fact, the payroll tax is reduced from 12.4 to 10.4 percent and never rises above 10.4 percent again. Some groups continue to insist that only minor adjustments are needed to put Social Security back on sound financial footing. What they often won't tell you is that all of these adjustments would either raise taxes or cut benefits. For me, it's clear that ``reforming'' Social Security in this way will no longer suffice. These kinds of traditional reforms were last used by the 1983 Greenspan Commission to ``fix'' Social Security for 75 years. Today, we know the program will be in trouble again in 2013, when tax revenues are no longer sufficient to pay promised benefits. Instead of taxing Americans at ever-higher rates while scaling back their retirement benefits, our goal should be to enable all workers to accumulate a level of wealth that will allow them to retire with a basic level of economic security. That's why private accounts are a central part of the plan I support. Private accounts would give working-class Americans the same access to the power of compound interest that the rich enjoy today. This notion terrifies those who want to keep workers as dependent on government as possible, but more and more people acknowledge that private accounts are the best way to simultaneously solve the two crises facing Social Security--the impending insolvency of the program due to enormous demographic shifts, and the lower and lower rates of return for each new generation of workers. First, private accounts would allow younger workers to take advantage of the higher returns available to private investment. Second, because these workers would be giving up some of their future claims on traditional Social Security benefits, the unfunded liability of the program would be reduced. As the American people learn more about the issue of Social Security reform, public opinion on the issue of private accounts has clearly shifted. Depending on how the question is phrased, between 60 and 80 percent of Americans now say they favor letting workers invest some portion of their Social Security tax payments. Most of the current reform plans have an element of private investment, and I am pleased that several of our Democratic colleagues in the Senate have openly endorsed them. In my view, reforming Social Security is the most significant political issue on the horizon for the foreseeable future, and I am encouraged that the American people and elected officials on both sides of the aisle recognize its importance to our nation's continued prosperity. History has shown us that an issue of this magnitude can only be addressed successfully through a bipartisan process. The Gregg- Breaux plan is a thoughtful approach to reform, and I expect it to wield considerable influence in shaping the important debate that lies ahead.

Mr. THOMPSON

Mr. THOMPSON. Mr. President, I am delighted to join my colleagues today as an original cosponsor of an exciting new proposal to reform Social Security. We all know that the Social Security program gets in serious financial trouble when the Baby Boomers start retiring early in the next century. The Social Security actuaries tell us that, just 15 years from now, in 2013, Social Security will begin paying out more in benefits than it receives in taxes and will have to begin redeeming the treasury bonds issued to the Trust Funds. By 2032, the Trust Funds will be exhausted, and the program will be running annual cash deficits of hundreds of billions of dollars. As more and more people become aware of these financial realities, Social Security has quickly ceased to be the untouchable third rail of politics. In my view, it should soon become the brass ring of politics. Entitlement reform is one of the greatest challenges our nation faces, and we should all be reaching for the solution that will enable Social Security to provide for our grandchildren like it did for our grandparents. Fortunately, right now we have a tremendous window of opportunity for real reform. Our economy is strong; the federal budget is balanced for the first time in 30 years; and the Congressional Budget Office is actually projecting budget surpluses each year for the next decade. Just as important, the 76 million Baby Boomers are still in the workforce paying taxes into the Social Security system. If we wait until this enormous group stops paying taxes and instead begins drawing benefits, the fixes will have to be much more severe. Over the past 15 months, Senators Judd Gregg and John Breaux, along with Congressmen Jim Kolbe and Charles Stenholm, have served as congressional co-chairmen for the National Commission on Retirement Policy, sponsored by the Center for Strategic and International Studies. This 24-member group of politicians, businessmen, and policy experts developed and unanimously approved a broad proposal for reforming Social Security. The Senators and Congressmen then crafted bipartisan legislation based on the commission's recommendations. The outline of the Gregg-Breaux plan is simple. It would reduce the Social Security payroll tax by 2 percentage points and divert the money into a mandatory savings account for every worker under age 55. The accounts would supplement--not replace--benefits guaranteed through the traditional system. Workers could pick from a limited number of investment funds dealing in stocks, government bonds, or a combination of the two, much like the Thrift Savings Plan available to members of Congress and federal employees. The benefits of current retirees and workers age 55 or older would not be affected by the private accounts, and benefits to survivors of deceased workers and the disabled would also be protected. Meanwhile, Gregg-Breaux would make changes to the remaining pay-as- you-go system to bring it into actuarial balance. It would accelerate the scheduled increase in the retirement age, raising the age for full benefits to 70 and the age for early retirement benefits to 65 by 2029. It would reduce the Consumer Price Index by half a percentage point so that it more accurately reflects the rate of inflation, and it would scale back benefits to wealthier retirees, who are likely to fare better with their individual accounts. Unlike several of the proposals that are on the table, however, the Gregg-Breaux plan does not raise taxes, period. In fact, the payroll tax is reduced from 12.4 to 10.4 percent and never rises above 10.4 percent again. Some groups continue to insist that only minor adjustments are needed to put Social Security back on sound financial footing. What they often won't tell you is that all of these adjustments would either raise taxes or cut benefits. For me, it's clear that ``reforming'' Social Security in this way will no longer suffice. These kinds of traditional reforms were last used by the 1983 Greenspan Commission to ``fix'' Social Security for 75 years. Today, we know the program will be in trouble again in 2013, when tax revenues are no longer sufficient to pay promised benefits. Instead of taxing Americans at ever-higher rates while scaling back their retirement benefits, our goal should be to enable all workers to accumulate a level of wealth that will allow them to retire with a basic level of economic security. That's why private accounts are a central part of the plan I support. Private accounts would give working-class Americans the same access to the power of compound interest that the rich enjoy today. This notion terrifies those who want to keep workers as dependent on government as possible, but more and more people acknowledge that private accounts are the best way to simultaneously solve the two crises facing Social Security--the impending insolvency of the program due to enormous demographic shifts, and the lower and lower rates of return for each new generation of workers. First, private accounts would allow younger workers to take advantage of the higher returns available to private investment. Second, because these workers would be giving up some of their future claims on traditional Social Security benefits, the unfunded liability of the program would be reduced. As the American people learn more about the issue of Social Security reform, public opinion on the issue of private accounts has clearly shifted. Depending on how the question is phrased, between 60 and 80 percent of Americans now say they favor letting workers invest some portion of their Social Security tax payments. Most of the current reform plans have an element of private investment, and I am pleased that several of our Democratic colleagues in the Senate have openly endorsed them. In my view, reforming Social Security is the most significant political issue on the horizon for the foreseeable future, and I am encouraged that the American people and elected officials on both sides of the aisle recognize its importance to our nation's continued prosperity. History has shown us that an issue of this magnitude can only be addressed successfully through a bipartisan process. The Gregg- Breaux plan is a thoughtful approach to reform, and I expect it to wield considerable influence in shaping the important debate that lies ahead.

Mr. THOMPSON

Mr. THOMPSON. Mr. President, I rise to express my support for Senate approval of the conference report on the Internal Revenue Service Restructuring and Reform Act. This landmark legislation, which is the product of years of hard work by many parties, will make long-overdue reforms to the IRS. As a member of the Conference Committee responsible for crafting this agreement, I believe we have made great strides in developing a statutory framework to increase the accountability of the IRS and to protect the rights of taxpayers in their dealings with the IRS. There have been numerous congressional hearings over the past year that have clearly highlighted the need to overhaul IRS operations. In the course of these hearings, Congress has reviewed all aspects of the Service's operations and found an agency in serious need of reform and repair, especially in the area of taxpayer service. As the Chairman of the Committee on Governmental Affairs, I had a particular interest in how the IRS's management structure could be improved to better serve the American public. To that end, I am pleased that this conference agreement will overhaul the structure of the IRS and provide significant new management and personnel tools to assist the IRS Commissioner in restructuring the Service. Commissioner Rossotti has demonstrated his commitment to working with Congress to meet this mandate. The conference agreement creates a new Oversight Board for the IRS to direct these reform initiatives. The Board is composed primarily of private individuals with expertise in the areas of management, customer service, information technology and taxpayer compliance, and it has been granted wide-ranging authority to oversee management of the IRS and the administration of tax laws. Of great interest to me have been the issues surrounding membership on the Oversight Board of an IRS employee or employee representative. The conference agreement does provide for an IRS employee or employee representative to serve on the Oversight Board, and I am pleased that the conferees adopted my proposal to eliminate the Senate bill's blanket waiver of criminal conflict of interest ethics laws as they applied to the employee representative on the Board. However, I still oppose Congress giving the President the authority to waive these criminal laws for the employee board member. There are many individuals qualified to be an effective employee representative who would not need to be exempted from federal ethics laws in order to serve on the Board. Waiving criminal laws in order to accommodate one member of the Board establishes a troubling and dangerous precedent. The conference agreement also grants significant new personnel authorities to the IRS. These new authorities are intended to help Commissioner Rossotti bring in high-quality private sector professional, administrative and technical personnel to address the many management problems facing the agency. These authorities break new ground in terms of federal personnel pay and management policies. By granting these authorities to the IRS, Congress will have high expectations that the reform agenda is indeed carried through. Mr. President, the provisions I have noted are only a part of the important reforms contained in this restructuring bill. The conference agreement also contains many changes that will directly affect the relationship between the IRS and taxpayer to provide greater protections of the rights of taxpayers. For example, this legislation will shift the burden of proof in tax disputes from the taxpayer to the IRS, and it will increase penalties against the IRS for violations of these rights. The conference agreement would provide relief to so- called ``innocent spouses'' who, under current law, can be held responsible for huge tax bills incurred by a former spouse. The agreement also provides significant relief to taxpayers with regard to interest and penalties that are applied by the IRS. Finally, it should be noted that this legislation provides further tax relief for Americans. The conference agreement will eliminate the 18 month holding period that was included in the Taxpayer Relief Act of 1997 for assets in order to qualify for the lowest tax rate on capital gains. Under this agreement, any gain realized on the sale of assets held for at least one year will be taxed at a rate of 10 percent for taxpayers in the 15 percent tax bracket, and at a rate of 20 percent for all other taxpayers. In addition to reducing the tax burden on Americans, this provision will simplify the unnecessarily complex capital gains provision that was included in the 1997 bill. Mr. President, enacting these far-reaching reforms is only one step Congress can take to provide relief to taxpayers. Next, we need to do away with the current complex tax code and replace it with one that is simpler and fairer. In approving these reforms, we should also keep in mind that our ultimate goal is to reduce the tax burden on hard-working American families.

Mr. THOMPSON

Mr. THOMPSON. I thank my colleagues from Kentucky and Delaware. Mr. President, just a couple of brief points that I think need to be made in order to put what we are doing in context. I think the legislation is good legislation and it is needed. However, I think what we are doing here is taking a step toward Congress intervening in the sanctions process, as we have sometimes, and I think that is good. But I think we need to keep in mind that most of these sanctions have been passed in times past because of concerns of nuclear proliferation. Proliferation has come about because of detonation by countries that have been carried out in their own countries, such as India and Pakistan. Proliferation has also come about because of exports from one country to another, to a troublesome country, to a rogue nation or a nation that we feel might pose some danger to us. So, while we are fashioning a particular remedy for a particular purpose with regard to these sanctions, we need to keep in mind that it is in a much larger context that we are going to have to address this. Because, while we want to liberalize the administration's discretion with regard to sanctions in this area, we need to keep in mind that what is also going on right now is the situation where Congress, time and time again, has expressed concern that the administration has not used the sanctions that are available to it. We have a situation right now where we have imposed sanctions on India because of detonations, and India's response is that they are doing so in large part because of our relationship with China. China, on the other hand, continues to be the world's greatest distributor of weapons of mass destruction around the world, and as they do so, the President waives sanctions on China. More recently, the administration has decided to exercise its waiver authority and not to sanction the Russian company Gazprom for energy investments in Iran which violate the Iran-Libya Sanctions Act. So, while it may be appropriate and needed for Congress to intervene to liberalize the application of sanctions in the area that we are dealing with today, we need to keep in mind that while we are bashing sanctions--and I personally believe that they have been greatly overapplied, are indiscriminate, there has not been sufficient distinction with regard to countries that pose a threat or not----