Paul Wellstone

Mr. WELLSTONE

Mr. WELLSTONE. Mr. President, I also want to thank colleagues on both sides. Senator Jeffords has done a great job in our committee. I feel a little awkward because there is a lot in this higher education bill that I worked on myself and with other colleagues in the committee. I think this is a good piece of legislation. I was pleased to vote for it. I am very pleased with the bill's distance education provisions, which I worked on a great deal. I think the Chair also is very interested in these issues, and we worked together on this portion of the bill. Distance education is very important for those of us who come from communities where we really still have strong rural parts to our States. I think the bill's focus on applying Pell grants to summer school is really important, especially for our ``nontraditional students,'' students who are older and going back to school. The bill's coordinated response dealing with violence on campus between local law enforcement and the institutions of higher education is real important; the bill's coordinated response to the problem of binge drinking also is terribly important. I think there is much in this higher education bill that is important for our country. I thank colleagues. I also thank Roger Wolfson, who has been working with me, on my staff, and has really been responsible for some of the good amendments that we were, working with others, able to incorporate into this legislation. I have not covered all in this legislation that I feel very strongly about. But I want to speak to one flaw in this higher education bill. I am going to speak about this with, I guess, some indignation. When we passed this higher education bill on the floor of the Senate, there was an amendment that dealt with the welfare bill, though it was an amendment to the higher education bill--and that is where it should have been. It passed 56 to 42; 11 Republicans joined Senate Democrats in supporting the provision. There were over 125 higher education and civil rights organizations that supported this amendment; there were strong editorials in the Boston Globe, the New York Times, Minnesota Star and Tribune and other newspapers around the country. As I think about Senators who were out here on the floor speaking about this, the Senator who maybe spoke with the most eloquence, certainly the strongest feeling, was the Senator from Kentucky, Senator Ford. Any number of Senators supported this amendment which I am about to describe, even though they also supported the welfare bill. I did not support the welfare bill. They did. I will talk about that in a moment. But this amendment said nothing other than this: That any State that wanted to would be allowed to allow a parent, a welfare parent--almost all of these parents are women; I think the Chair, from what I know of him, would agree with me that men ought to be taking more responsibility for their children as well--that when it comes to single parents, mothers--we would allow States to allow these women to complete at least 2 years of higher education without having any State penalized for doing so. Wyoming would not have to provide these two years, Minnesota would not have to provide these two years, but if Wyoming and Minnesota decide it would be better for these women to be able to complete 2 years of higher education, which could be vocational-technical or another program like a nursing assistant program, then the State should be able to do that and the State would not be penalized. It would not count against the State meeting its work participation requirement. That amendment passed the U.S. Senate, and then it went to conference committee. Mr. President, this is a single photograph. It is of Troyce Williams, but there are a lot of women like her. This all translates into human terms. She is a single mother of four children who is at the Minneapolis Community College, a community and technical college, at which she is trying to get her higher education completed. There are many, many women like her. What I felt good about as a Senator was that after this amendment passed, we got all sorts of calls and all sorts of letters from people all across the country. This was an amendment that would have really made a difference. It would have really made a difference because what a lot of people in our community colleges and in our higher education community were saying was that we were going to speak up for our students. This was a mistake we made when we passed the TANF. When we passed the welfare bill we probably should have been clear at the Federal level we would have some language that would give States the flexibility, if they wanted to, to allow these parents to complete at least 2 years of higher education. Now I am not going to bore anybody here today about all of the statistics that make the point that every single citizen in this country understands: If you are able to go on and complete 2 years or 4 years of higher education, you are going to be in a better position to find a good job and give your children the care you know they need and deserve. This amendment passes. Then we go to conference committee. I am just furious about what happened in conference committee. We met, and the House conferees, the majority House conferees, Republicans, said no to the amendment, and they were not interested in talking about anything else by way of maybe something else we could do that would make a difference. Mr. President, it is just simply bitterly ironic that the very women who are on the path to economic self-sufficiency, because they are trying to complete at least 2 years of higher education, all too often get driven out of school because States feel like they will be penalized if they do not get these women into the workforce. Then they get into the workforce and they find a job at $6 an hour, and then 1 year later they lose their medical assistance and they and their children are worse off. Whereas, if they could complete 2 years of higher education they would be better off. We come to conference committee and I am just going to repeat what happened. I do no damage to the truth, because I want to make a point about what is at stake here--not just on this amendment but, sort of, politics in our country. The Chair may not agree with me, but I get to speak my piece on the floor of the Senate. Now, the Republicans in the House come in and they say, ``We want this Wellstone amendment out.'' Forget my name. I am not important. ``We want this amendment out.'' And I will not use names because there is no one here to debate me and that would not be fair. On the House side, they are not here to debate me. So the person who is kind of the point person in making this argument says, ``This would be a terrible amendment.'' And then I hear everybody saying, ``This welfare bill was hallmark legislation. It is the best thing we have done in a half a century. It is so successful that we cannot touch it--this is nothing less than an effort to undermine this welfare bill.'' Mr. President, first of all, a lot of people who voted for this amendment did not vote for this amendment to undermine the welfare bill. They thought it was a modification that was needed. They thought that the welfare bill would work better if we allowed States to allow these women to complete at least 2 years of higher education. But I am going to make another point. I then turned--and for all I know the Chair was there at the conference committee--I turned to people who made this presentation and I said you keep talking about how successful this welfare bill is, and you talk about the number of people who are no longer on welfare, the number of women and children who are no longer on our welfare rolls. That is true; maybe 4 or 5 million fewer people. My question for you, since you told me how successful it is--even though I would rather debate this in a higher education framework, let me raise this question. Let me raise this question on the floor of the U.S. Senate. We have seen a dramatic reduction in the welfare rolls. Have we seen a dramatic reduction in poverty? Can any of you, from any State, provide me with any data as to where these mothers and children are, what kind of jobs are these mothers receiving? What are the wages? Is there child care available for their 3- or 4-year-old? And when their first and second graders come home alone, sometimes in very dangerous neighborhoods, is there anybody there? I have said this on the floor of the U.S. Senate. I am going to say it again. We all say how much we love children. These children count, too. There are children--I know, I have been in these neighborhoods-- that go home alone, now, because their mothers are working. They are 7 years old. And they are told to go into their apartment and to lock the door and to take no phone calls, and don't go outside. There are children, when there is beautiful weather, they don't play outside because there is nobody there to take care of them. And these single mothers who are working are terrified as to what might happen to them. I asked my colleagues on the Republican side in the House of Representatives, because they eliminate this amendment, since they are talking about how successful the welfare bill is, could they provide me with data? Not one of them could; not one of them. I will debate anybody on the floor of the Senate, and I will debate anybody on the floor of the House on this question. The Swedish sociologist Gunnar Myrdal once said, ``Ignorance is never random.'' Sometimes we don't know what we don't want to know. We don't know what is going on in these States. We don't know what is going on with these mothers and children. I can't believe how punitive people can be. I can't believe how harsh they can be. Not one single argument was made against this amendment. Not one bit of data was presented to show that these mothers and these children are better off now, but they just eliminated it because they had the majority. I am not whining. I am telling people in the country that this one small example, one small story, tells a larger story about what is at stake. I am not out here, by the way, to defend the President's behavior, but I don't think the President is the issue this fall. He is not on the ballot. He will never be on the ballot again running for President. This election, I say to people in Minnesota and people around the country, is about you. I just ask, what are these kinds of priorities? Just eliminate an amendment to the higher education bill that allows States to allow women, mothers of small children, to complete 2 years of higher education so they and their children will be better off? Eliminated. Do you know that this past June, America--I think it was in June--in the same week this Republican majority voted to give a tax break to people with estates worth more than $17 million, they voted to eliminate the Low-Income Home Energy Assistance Program and voted to eliminate summer jobs for kids? Unbelievable. People go to their pollsters and say, ``What are the issues people care about?'' The same Republicans who knocked out this amendment found out it is education--people care about education. They learned how to talk about education--I said ``talk about education''--but they have cut funding for education. They have cut funding for K through 12 education. It is interesting. We are at a crossroads with education. We are going to see a dramatic increase over the next 10 years by about 10 percent of high school students and about 6 percent of middle school students. The average age of our public school teacher is 50. We are going to need to hire about 1.3 million teachers in our country. We can have all sorts of men and women coming into education with creative new ideas, new energy, and all the rest--it is a golden opportunity--but we can't take advantage of a golden opportunity on a tin-plate budget. The same people who are in the majority in the House of Representatives--so punitive, so harsh, so little compassion--voted to deny a single parent, a mother, the opportunity to finish 2 years of higher education so she can do better for her children. They gave a tax break to people with estates worth more than $17 million, but in the same week they eliminated the Low-Income Home Energy Assistance Program so that in my cold-weather State, elderly people, families with children, have a choice of eating or heating, but not both. They eliminate low-income home energy assistance, so people go cold in the winter, and knock out summer jobs for kids. They give speeches about being for education and children and then cut the budgets. That is what is at stake this election. That is what is at stake. My strategy would be for people to turn out this fall. I think the Republican strategy is for people to be turned off this fall, low turnout. I hope that from this example people in the country will realize that there is a lot at stake. If you care about a good education for all of our children, if you are committed to the idea of living-wage jobs, if you are committed to the idea of decent health care for every citizen, if you are committed to improving the standard of living for all the people in our country, if you believe that economic and educational opportunities are important, then I make this appeal to people in the country: Don't let people turn you off to politics. This election this fall is not about President Clinton. We can talk about his behavior at another time. Nobody needs to approve of it. I don't know of anybody who does. But this election, I say to people in the country, is about you; it is about your families. This election this fall--the President is not on the ballot--is about these kinds of issues. I hope people will turn out. I hope you will vote for education. This amendment was knocked out of the higher education bill in spite of the good support of Senator Jeffords. We supported it on the Senate side. I tell you, this Gingrich-House Republican majority agenda is harsh, it is mean-spirited, and if you are committed to education for children, make sure you vote this election. If you believe in the importance of health care and you think good jobs are important, just make sure you vote this election. If you think it is wrong in the same week in the House of Representatives to give a tax break to people with estates over $17 million and eliminate the Low-Income Home Energy Assistance Program and eliminate summer jobs for kids--that is exactly what this majority did in the House--you make sure you vote this election. If you are angry at people in Washington, DC, and the U.S. House and the U.S. Senate because you think that neither party is doing enough about your concerns and you think too much of our decisionmaking is dominated by special interest or big money or you feel locked out or all the rest, make sure you vote. Don't opt out. Don't let people turn you off. There is a lot at stake in elections in our country, and this is but one example. I will get to speak more about this after our caucuses. I see my colleague, Senator Graham. I wanted to start out congratulating my colleagues for the good work on the higher education bill. Roger Wolfson, thank you for your help. I want to tell you that what happened in the conference committee is just outrageous. There is nothing I can do about it, not now. I will bring this amendment back on the first bill I can amend. Of course, for the last couple of weeks there hasn't been an opportunity to amend any bills. I want to make sure people understand what is at stake. In my not too humble opinion--and the Chair is a good friend; I really like him, and I hope it is mutual, so I don't mean this in a personal way--but what is at stake in these fall elections is critical. I say to people in the country, this small story tells a larger story. I shudder at the thought of Speaker Gingrich or, for that matter, on the Senate side as well, there being even more of a majority or more power, because I think it will be an agenda that will move our country back 60 years. People have learned how to talk about education, I say to my colleague from Florida, but the budgets don't reflect that. On the House side, they cut funding for education. There was no action whatsoever on health care. There is very little concern about what I call some really important family-value issues, and this is but one example. Mr. President, I yield the floor to my colleague from Florida. Mr. GRAHAM addressed the Chair.

Mr. WELLSTONE

Mr. WELLSTONE. I will be pleased to yield the Senator from Kentucky 10 minutes.

Mr. WELLSTONE

Mr. WELLSTONE. I want to mention to my colleague from Kentucky that tomorrow in Minnesota we are going to have a service for Muriel Humphrey--Senator Humphrey. Both Humphreys were Senators. I wish to express the appreciation, love and affection all of the people of Minnesota feel toward the Humphrey family. Much has been written about Muriel Humphrey. I had a chance to get to meet her. I did not know her nearly as well as other Minnesotans, but I can tell you she was a wonderful person, very caring toward her family, very caring toward the great Senator Hubert Humphrey, a really fine Senator--the first woman to serve in the Senate from the State of Minnesota in her own right--and, I think most important of all, a wonderful, wonderful model for public service. It is a great loss for Minnesota. It is a great loss for our country. Muriel Humphrey will be a very special person to all of us in Minnesota for many years to come. We will never forget her. I yield the floor.

Mr. WELLSTONE

Mr. WELLSTONE. I know it is the end of the day and colleagues are anxious to go home.

Mr. WELLSTONE. I am sorry.

Mr. WELLSTONE. Mr. President, I ask unanimous consent that a letter which I sent to the President about Kosovo be printed in the Record.

Mr. WELLSTONE. Mr. President, I thank my colleagues who have come to the floor today to speak about Kosovo for their words. Mr. President, I rise to call for urgent Presidential action to forestall a humanitarian catastrophe in Kosovo. Unless immediate and determined action by the U.S. and our western allies is taken to address this situation, it is clear we will begin to face a massive loss of civilian lives with the onset of winter in the region as early as mid-October. The western media offers new reports daily on the rapidly deteriorating situation there. Candid assessments by Administration officials acknowledge the growing crisis. Systematic and brutal military action by Serbian forces, accelerated during their summer-long offensive against UCK forces, has forced an estimated 300,000 or more ethnic Albanians to flee their homes. In recent weeks Serb forces have shelled entire villages, not just rebel positions, forcing more civilians to flee. While many have fled as refugees to neighboring countries, most of these displaced persons remain inside Kosovo and are now vulnerable to exposure, starvation, disease and further Serb military attack. I understand that Assistant Secretary of State for Refugees Julia Taft concluded during her recent visit there that over 210 villages in the region have already been looted, and many torched, by Serbian security forces. With winter approaching, international relief agencies now fear that tens of thousands of refugees without food or shelter could face death. By some estimates there are 50,000 to 100,000 people in Kosovo living out in the open, without any shelter. Unless they can return to their homes or be provided adequate shelter within the next few weeks they may die of exposure. Our respected former colleagues Senator Bob Dole recently returned from Kosovo warning that there is a ``human catastrophe in the making.'' President Clinton said last week that there is a potential for a ``major humanitarian disaster'' in Kosovo and that it is ``important that we move as quickly as possible with our allies to avert a tragedy.'' The President cautioned: ``We don't want a repeat of Bosnia.'' The President is right. We cannot wait any longer to take more vigorous action to force Serbia to cease making this crisis worse and to allow necessary humanitarian relief into the area. Serbia must comply with the persistent demands of the Contact Group: (1) cease attacks on civilian populations, and withdraw its forces used to repress civilians; (2) permit the establishment of an effective international observer group in Kosovo; (3) allow refugees and displaced persons to return to their homes safely, under international supervision; (4) allow unimpeded access for humanitarian organizations and supplies; and (5) make rapid progress in the dialogue with the Kosovar leadership. In recent days there have been some positive developments in the UN Security Council and in NATO which indicate that those organizations may be ready to take necessary action. The Security Council is contemplating a resolution stating that the situation in Kosovo ``constitutes a threat to peace and security'' that impels the council to demand an immediate cease-fire. This demand would be in accordance with Chapter 7 of the UN charter. There are indications that Russia may be willing to support this resolution. The resolution does not call for the use of force, but I note that Chapter 7 authorizes the use of armed force by NATO members to compel compliance with the council's orders. Parallel progress is being made at NATO headquarters in Brussels where the U.S. has asked the North Atlantic Council to canvass member countries to determine which countries are willing to provide personnel and equipment to military operations in Kosovo. This action will be useful in precipitating consultations between NATO governments and their respective parliaments and bringing into the open the debate on military options. I applaud these developments and call on the UN and NATO to accelerate them. I also want to commend U.S. Ambassador Chris Hill for his persistent diplomatic efforts. The U.S. should continue to work toward a political solution to this problem along the lines pursued by Ambassador Hill. At the same time, though, we must also proceed with a more vigorous and sustained high-level multilateral effort to pressure President Milosevic to comply fully with Contact Group demands. Mr. President, I want to outline some steps that I hope the administration will proceed with. I urge the Administration therefore to proceed immediately with a series of steps designed to prevent the looming humanitarian crisis and to prepare for possible implementation of more forceful options developed by NATO planners. I urge the administration today on the floor of the U.S. Senate to proceed immediately with these steps. These actions include: Moving forward now, under NATO auspices, with the pre-deployment phase of NATO military plans on Kosovo, including securing base rights agreements in the region, immediately assessing the contributions of each NATO member in the event military action is necessary, and then forward-deploying appropriate levels of NATO military forces and equipment, thus preparing us to take any appropriate military action that may be necessary to secure Serb compliance with Contact Group demands, and with international law regarding the treatment of Kosovar citizens; bolstering border security efforts through preventive NATO force deployments which can increase regional stability and assist in international monitoring and anti-arms smuggling efforts; leading an immediate multilateral effort, at the United Nations and through regional bodies like the European Union, to tighten the existing sanctions regime on Serbia, and to re-impose the total airflight and investment bans, and other sanctions lifted after signing of the Dayton Peace Accords, and to consider reimposing the trade embargo, coupled with renewed enforcement initiatives to prevent the flourishing of black markets under a full embargo; accelerating U.S. and NATO logistical support for the ongoing international humanitarian aid effort in Kosovo, including pre-deployment of humanitarian supplies in Kosovo in anticipation of winter distribution by NGOs--but only in a way which avoids absolutely the prospect of a repeat of the disgraceful ``safe haven'' disaster of Srebenica; pressing for more extensive access for human rights monitoring in Kosovo by internationally recognized organizations, including the Organization for Security and Cooperation in Europe, and non- governmental monitors, and providing appropriate support and assistance for their efforts; and encouraging the International Criminal Tribunal for the Former Yugoslavia immediately to send its Chief Prosecutor to Belgrade and Kosovo; increasing aid and intelligence support to the Tribunal; and assisting them in placing forensics teams on the ground there, thus signaling to all parties that the Tribunal is committed to prosecuting war crimes committed in Kosovo including attacks on innocent civilians, and has begun to actually gather evidence to support potential indictments against perpetrators--and their commanders and political leadership to whom they answer. I believe it is essential that these actions be taken as quickly as possible. We must act now, before the onset of winter in Kosovo, to prevent a potential humanitarian tragedy of historic proportions. I also recognize that these steps in themselves may not be sufficient to force Serbia to comply with the Contact Group's demands in a timely manner, and that further NATO military actions may need to be considered if the situation in Kosovo has not substantially improved, the massacres of civilians continues, and unimpeded access for humanitarian relief workers has not been granted. Mr. President, again, I thank my colleagues who have spoken today on this matter. I do think it is important that we speak out. I think in the last couple of days we have seen positive developments in the U.N. Security Council and NATO which indicate that these organizations may be ready to take necessary action. But I wanted to outline today some options which I believe we need to consider and which I think will communicate a message to Milosevic that we are deadly serious; to talk actually about taking military action is very serious. It is always the last option. But I believe, at the minimum, we can do some predeployment phases of NATO military plans. I think we can bolster some of our border security efforts. I think we can tighten the sanctions regime on Serbia. I think we can accelerate United States and NATO logistical support for international humanitarian aid efforts in Kosovo. I think we can press for more extensive access for human rights monitoring by some internationally recognized organizations. And I think we can make it clear that we are going to give the International Criminal Tribunal all the support it needs as well. None of this may be enough--I want to say this one more time in this Chamber. None of these steps may be sufficient to force Serbia to comply with the contact group's demands in a timely manner and further military action may be necessary. But if these actions are not taken as quickly as possible, we are--Senator Dole is right--going to see a humanitarian crisis of tragic proportions. We are going to see a lot of men, women and children who are going to die unless we take action. I yield the floor.

Mr. WELLSTONE. I thank the Senator.

Mr. WELLSTONE. I did not realize that.

Mr. WELLSTONE. Mr. President, could I ask my colleague for his indulgence for 2 minutes?

Mr. WELLSTONE

Mr. WELLSTONE. My last question, I say to my colleague--and I look forward to coming to the floor and having a further discussion about this. I hope we are wrong. But I think this discussion of political economy, both in terms of what is happening to the global economy and also what is happening in our own economy, is going to become a very, very critical issue. We are seeing it already in agriculture. But this is just the beginning. But this is my last question. Is it not also true that, when they talk about the alleged danger of unemployment continuing to go down, that this would also bring up the bargaining power of wage earners? It wouldn't be just a matter of unemployment going down. This would also mean that people in a tight labor market would see their wages go up and would have a better chance of working at living-wage jobs? I think the Federal Reserve Board tends to be more responsive to bond holders, financial people, and the creditors, and they want to keep interest rates up. Isn't it also true that having real interest rates so high is one of the reasons we have a maldistribution of wealth and income today in this country? We have this paradox of some people being able to purchase all the goods that make life richer in possibility. But then we also have so many families--maybe the majority of families in our country--who cannot. Maybe this is one of these hidden issues that we don't talk about, with everything swirling around in Washington, that so many families are still struggling to make ends meet and do well by their kids. What would be the harm in moving toward full employment? What would be the harm in making sure that wage earners make better wages? What would be the harm in having more people have access to living-wage jobs? Isn't the whole question of real interest rates one piece of it?

Mr. WELLSTONE. Mr. President, there is no doubt that more and more Americans are turning to the consumer bankruptcy system and the financial protection it offers. More than 1.3 million families filed for bankruptcy last year. Where there is fraud and abuse we must take steps to reduce and eliminate it. But this bill will not help reduce fraud. It will encourage riskier lending habits by credit companies. It will lead to more credit being extended to poor families. It will ensure that those families will file more bankruptcies. It will force these families to file different types of bankruptcies, the kind of bankruptcy that ensures that they will never be free of their debt and able to restart their lives. This is a complex issue and I must provide some background in order to explain my stance. There are two types of bankruptcies that individuals can file: Chapter 7 and Chapter 13. Under current law, individuals can choose either type. Chapter 7 bankruptcy allows debtors to discharge all their debt (besides child support, taxes, home loans, and student loans). Chapter 13 bankruptcies discharge no debt, but allow debtors to bargain directly with their creditors on reduced debt and payment schedules. Under the bill we passed today, Chapter 7 bankruptcies, which have provided a new start to millions of families over the years, will become a thing of the past. First of all, a judge now will have discretion to reject a debtor's Chapter 7 claim, and require her to file under Chapter 13, if it can be proven that the debtor has the ability to pay off 30% of her debt over the next five years. Secondly, any of the debtor's creditors can enter the court-- without legal counsel--and require the court to make a judgement as to whether the debtor can afford this 30%. Thirdly, if the judge believes that the debtor can pay off this 30%, the debtor's attorney--and this is unheard of in the law to date--will be forced to pay the cost of the Chapter 13 Trustee. This is a hugely expensive tax on bankruptcy attorneys and they will certainly avoid taking on new Chapter 7 bankruptcies. The truth is that this bill treats all debtors as likely criminals. Yes, bankruptcies in this country are up. But debtors now wait longer to file bankruptcy and are deeper in debt than those who filed bankruptcy a decade ago. Furthermore, increased filings can be attributed to job loss, divorce, increasing health care costs, declining real wages--and most importantly--an entire industry of easy credit which ten years ago did not exist in any where near today's scale. Harvard Business School researchers David Moss and Gibbs Johnson state ``the evidence suggests that shifts in the volume of and distribution of consumer credit--rather than declining stigma [of bankruptcies]--are the most likely sources of the recent surge in consumer filings.'' They add that the surge of filings that began in the late 1980s can be attributed to ``consumer creditors [which] began reaching substantially further down into the income distribution beginning in the mid 1980s.'' It should also be noted that credit-card mail solicitations have skyrocketed, from 3.1 million mail solicitations in 1996 to over 881 million mail solicitations in 1997. Yet it is this consumer credit industry that benefits most from this bill; because it is this industry that will use this bill to prevent individuals from discharging their credit card debt. Simply put, this bill will increase the amount of money that credit card companies would receive from low-income bankrupt debtors. Meanwhile, opponents argue that sophisticated individuals with good legal advice will be able to get around the bill's new changes (as is often the case with financial laws). Who will benefit from this bill? I will quote Senator Metzenbaum, Public Citizen, and Consumers Union: ``The only reason we're having this debate is because the credit industry, primarily the credit card industry, has spent well-orchestrated millions on ads and lobbyists demonizing American families in crisis.'' Even the title of a Wall Street Journal article says it all: ``As Bankruptcies Surge, Creditors Lobby Hard to Get Tougher Laws; But Whether Many People Shirk Bills They Can Pay Remains Open To Debate; Changing the Lender's Image.'' I quote from that article: ``As the legislation moves quickly through Congress, many academics, lawyers, and judges who specialize in bankruptcy question why. A government-appointed commission spent two years studying the matter and was deeply divided. Five of its nine members found no major abuse of the system or need for a crackdown: only two endorsed anything like the bills Congress is embracing. More than 100 jurists wrote lawmakers to urge them to slow down.* * * A major reason [for the bill]? A multi-million public-relations and lobbying blitz run largely by companies with the most to gain: credit card issuers and other lenders.'' Who will suffer under this bill? When job loss, divorce, or medical emergency strike, some families have no choice but to file for bankruptcy in order to stabilize themselves. Divorced women file for bankruptcy in greater proportions than divorced men. Victims of abuse file for bankruptcy, often from debt incurred entirely by those who abused them. Single parents are forced into bankruptcy after any substantial period of unemployment. African Americans and Hispanics are dramatically over-represented in bankruptcy. With health insurance in its current state, families that suffer even one major medical emergency often find themselves in need of bankruptcy protection. But this bill responds to the need of these families by basically re- instituting life-long debtor's prison. All to the benefit of easy- credit companies. I could not in good conscience support this bill.

Mr. WELLSTONE. I agree.

Mr. WELLSTONE. I ask my colleague, this concept that he is talking about--NAIRU--is the idea that if you reduce employment too much, you automatically set off an inflationary spiral?

Mr. WELLSTONE. If the Senator will yield, I will not take much more time. I have two quick questions, I say to my colleague from Florida, because I know he is waiting. I will ask the question to the Senator from Iowa who gives the lengthy answers. I think it is just incredible, I say to my colleague from Iowa, it is just incredible how this whole issue of real interest rates and monetary policy--which has such a critical impact on small business, on farmers, and on industry and housing --is taken off the table. We are even unwilling to give our best judgment as to what the Federal Reserve ought to do. It is amazing to me. Let me ask you this question: Would you agree----

Mr. WELLSTONE. I want to hear the Senator's answer, because this is a critical issue. Would you agree that our taking the lead in lowering short-term interest rates also would be critical to what the Germans might do, what the other G-7 countries might do? Shouldn't this be put in the context of a coordinated response at an international level, dealing with this contraction of the international economy, dealing with this problem of deflation? Maybe you could spell out a little bit what you mean. In other words, the Senator talked about the effects of high real interests rates within our country, but could we not also say another part of the argument is the effect on exchange rates? That a strong dollar ultimately means other countries will try and export their way out of crisis? That they will dump a lot of products on our market and end up competing with workers in our country? Aren't you really saying that, in the absence of something being done through monetary policy, we are not going to be able to get enough demand going in these countries? That we are not going to have enough economic stimulus? That people are not going to have money to buy products, which would help create jobs? And that the major problem is not going to be what you were talking about--inflation, which the Fed seems to be excessively focused on--but deflation? Am I not correct that that is part of what is going on?

Mr. WELLSTONE. Bill Greider, who wrote, ``One World: Ready or Not,'' has been talking about this for some time. In part, you are talking about the effects of monetary policy within our country. But you are also talking about our taking the lead in trying to fashion a coordinated response at an international level to deal with what has happened. We have a depression in part of the international economy.

Mr. WELLSTONE. Will the Senator yield?

Mr. WELLSTONE. Mr. President, for some reason I don't understand, as well, why Senators are unwilling to speak to this issue and provide our judgment about what should be done. We don't talk about monetary policy much. The Business Roundtable says, ``The President and Congress should encourage the Federal Reserve to lower U.S. interest rates.'' The Business Roundtable doesn't fit into the label ``liberal,'' although I think that label is irrelevant. Why has the Business Roundtable taken that position? What is it about real interest rates that is so important to the people you represent in Iowa and the people I represent in Minnesota? Can we talk for a moment about that?

Mr. WELLSTONE. I thank the Chair. I thank my colleague from Iowa. I do not think I am going to be able to do justice to the question that is before us. There was a bit of confusion. We were over hearing President Nelson Mandela and lost some valuable time on the floor, although I must say I would have never traded that experience to hear President Mandela. Mr. President, for the last few months, we have been so absorbed with the crisis at the White House I am afraid we have neglected another crisis that might end up having a far greater impact on ordinary working Americans. I am talking about a global economic crisis whose effects are already being felt on our shores. The situation in the global economy today is much more than troubling; it is dangerous. I believe we must act now to stop the world from slipping into a deflationary spiral. And by the way, I would like to give Bill Greider, and his book ``One World: Ready or Not,'' just a little bit of mention. I think Bill Greider deserves a tremendous amount of credit. That book, written about two years ago, was really prophetic about where the international economy might go. As I said, I believe we must act now to stop the world from slipping into a deflationary spiral. Surely part of the solution--not the whole solution--is for the Federal Reserve to cut short-term interest rates significantly. I hope that Alan Greenspan, Chairman Greenspan, today in his testimony will, indeed, signal that he is ready to do that. This may be only one part of the solution, but it is an important part, and that is what this Sense-of-the-Congress resolution is all about. Mr. President, this global economic crisis is unlike anything many of us have ever experienced in our lifetimes. For the first time since the 1930s, we see the GDP falling in over one-quarter of the world economy. Last week, President Clinton called this ``the greatest financial challenge in the last half-century.'' And he was right. If we choose to do nothing, we will have little hope of escaping from this crisis unscathed. As Chairman Greenspan recently testified, we cannot forever be an oasis of growth when so much of the world's economy is contracting. Lowering interest rates will address the global crisis in several ways. It will supply some much needed liquidity to a world economy starved by massive currency devaluations. It should help restart capital flows to crisis countries. Lower rates should also weaken the dollar, making it easier for foreign borrowers to repay their dollar- dominated debt. Boosting the yen against the dollar should make other Asian countries more competitive and help stabilize their economies. The end result should be higher world economic growth and less instability in the financial markets. Mr. President, I cannot emphasize enough how important this Sense-of- the-Congress amendment is, because we are attempting to send a signal here. I come from the Midwest. We see a contraction in the farm economy. We see farmers driven off the land because of record-low prices. But what I also see is an absolutely impossible situation right now where what is happening in this world economy is surely going to affect us. And there is no question that, by lowering interest rates in coordination with other countries--like Germany and the G-7 countries-- we can at least increase demand. If there is one thing we must do, it is increase demand in all of our economies so that people will be able to consume, so we will have markets to sell to. Bill Greider was right. The major threat right now, not only to the international economy but to our own economy, is not inflation. It is deflation. All the arguments about the NAIRU--the Non-Accelerating Inflation Rate of Unemployment--don't stand up. It is not true that when you have low levels of unemployment you automatically set into gear an inflationary spiral in your economy. That has not happened. There is no evidence that it will happen. The No. 1 enemy right now is not inflation, but the whole question of deflation, the whole question of a depression in a good part of the international economy which is going to dramatically, crucially, affect the quality of our lives, our children's lives and our grandchildren's lives. The Federal Reserve Board, led by Mr. Greenspan, must lower short- term interest rates. They are too high. It makes no sense whatever-- from the point of view of the best macroeconomic management, from the point of view of economic performance, from the point of view of stimulating demand in these economies, from the point of view of coordinating with other countries like Germany--for the Federal Reserve Board not to lower the federal funds rate. That is what this resolution calls for. That is why I am pleased to join my colleague from Iowa. This is why a rising chorus of voices is now calling for lower rates. Many of them are conservatives. They include the Wall Street Journal, Jack Kemp, the National Association of Manufacturers, the Business Roundtable, Stephen Roache, C. Fred Bergsten, Roger Altman, Steve Forbes, and many others. But there are also many who don't share my sense of alarm. A few may simply be afraid to say anything that could trigger a panic. Others may not see any need to take precautions against a forecasted hurricane-- especially when the skies directly above us are sunny and clear. Well, maybe they are right. Maybe this storm will veer off course. But what if they're wrong? Some of my colleagues may well say, ``We already have low interest rates. The Fed hasn't raised short-term rates for a year and a half.'' True enough. But if you adjust those rates for inflation, they've actually been rising for some time. Chairman Greenspan himself testified earlier this year that ``Statistically, it is a fact that real interest rates are higher now than they have been on the average of the post World War II period.'' In fact, the inflation-adjusted federal funds rate hasn't been this high since 1989. Unfortunately, there has been a strong bias, at the Federal Reserve and elsewhere, against lowering rates, though this may be changing as we speak. The reason for this is simple: an inordinate fear of inflation. But inflation today stands at 1.6 percent, down from 3 percent in 1996. Where is the evidence of any inflationary pressure on the horizon? This downward trend cannot be attributed solely to the Asian crisis, either: the producer price index fell for the first seven months of 1997, before the crisis even began. To quote Bruce Steinberg, chief economist at Merrill Lynch, ``People who cry about inflation are in some other universe of reality right now.'' Moreover, an expected slowdown in economic growth should douse any possible inflationary pressures. Corporate earnings in the second quarter were down 1.3 percent from the previous year. Economic growth slowed from 5.5 percent in the first quarter to 1.6 percent in the second. The OECD predicts lower U.S. growth next year. Chairman Greenspan himself has acknowledged that ``there are the first signs of erosion at the edges, especially in manufacturing.'' Manufacturing capacity utilization is at a six year low, commodity prices are falling, and farm debt is the highest it's been since 1985. And the Fed says its monetary policy must be based on forecasts of economic conditions 6 to 9 months in the future! In his speech last week, President Clinton recognized that these new circumstances call for a reexamination of some of our most basic economic assumptions. ``For most of the last 30 years, the United States and the rest of the world has been preoccupied by inflation,'' he said. ``But clearly the balance of risks has now shifted, with a full quarter of the world's population living in countries with declining economic growth or negative economic growth. Therefore, I believe the industrial world's chief priority today, plainly, is to spur growth.'' The Federal Reserve's obsession with inflation-fighting can be traced back to the so-called NAIRU [Non-Accelerating Inflation Rate of Unemployment] theory. What NAIRU boils down to is this: it's a belief that lowering unemployment too much will cause inflation to spiral out of control. Tragically, this theory has too often stood in the way of policies that would reduce unemployment. Yet it seems to have little, if any, correlation to our actual economic experience. For four years now we've had unemployment rates below 6 percent. They've been under 5 percent for well over a year. During that time, inflation has been falling, not rising. The fact is, there's little reason to believe low unemployment causes inflation to come unhinged. It seems to me that this NAIRU theory is about as out- moded as the Nehru jacket. And frankly, I have serious doubts whether either of these fads was ever really defensible. In the past, the Fed has focused on fighting inflation over all other considerations, which puts it at odds with its own statutory mandate. Let me remind my colleagues, once again, that the Federal Reserve is a creature of Congress. The 1946 Employment Act directs the Fed to pursue policies of ``maximum employment, production, and purchasing power.'' The 1978 Humphrey-Hawkins Act amendments call for policies of ``full employment,'' ``balanced growth,'' and ``reasonable price stability.'' Instead, it seems the Fed sees its mandate as stifling real wage growth. Sometimes Washington seems like a different world than the one where most Americans live, and never more so than when it's engulfed in scandal. But it can seem like a pretty odd place even in more normal times. In testimony before Congress, Fed Chairman Greenspan has seemed to express satisfaction that job insecurity keeps workers from demanding higher wages. More recently he has voiced concern that wages are rising, despite the fact that wage growth has not kept up with productivity. I'm not sure which is more outrageous: that anybody in a position of power in this country would say such things, or that so few people would be bothered by them. In all fairness, the Fed has resisted the temptation to raise short- term rates for some time now. That's probably because falling unemployment has not led to higher wages until very recently, and inflation has continued on its downward path. But now, in the seventh year of this economic recovery, we are finally starting to see signs of wage growth. Real wages have risen 2.6 percent annually for the typical American worker since 1996, though they have still not regained their 1989 levels. And the trend toward income inequality has also begun to slow. This is good news, and it is a tremendous breakthrough. The mystery of falling wages and rising inequality over the past three decades turns out to be not so mysterious after all. The fact is, we know how to raise wages and reduce inequality. We do not have to reinvent the wheel. Among other things, we need to maintain low unemployment over a sustained period. We've done this before and we can do it again. Surveying the U.S. economy since World War II, economist James Galbraith finds that income inequality has generally risen when unemployment was above 5 percent and fallen when unemployment was below 5 percent. Simply put, we need to pursue a policy of full employment. The 1998 Report of the Council of Economic Advisers hails recent trends in income inequality and concludes, ``Maintaining a full employment economy is essential if this progress is to continue.'' The experience of the last two years should drive that lesson home. It would be a tragedy if an unjustified fear of rising wages or an economic downturn kept us from continuing that progress. With economic growth falling overseas and the growing danger of deflationary aftershocks here at home, I believe the Fed needs to cut interest rates now. There are few things, I think, that would improve the lives of ordinary working Americans more than full employment. As the 1998 Report of the Council of Economic Advisers says: A high employment economy brings enormous economic and social benefits. Essential to personal economic security is the knowledge that work is available to those who seek it, at wages sufficient to keep them and their families out of poverty. A tight labor market encourages the confidence of job losers that they will be able to return to work, lures discouraged workers back into the labor force, enhances the prospects of those already at work to get ahead, enables those who want or need to switch jobs to do so without a long period of joblessness, and lowers the duration of a typical unemployment spell. . . . Wasted resources from not producing at potential, together with the human cost of unemployment, are intolerable; the elimination of this waste is the principal benefit of a sustained return to full employment. As James Galbraith argues in his powerful new book, Created Unequal, lower interest rates and full employment help sustain not only a healthy economy, but also a healthy society. Lower rates make it easier to balance the budget. They help reduce inequality by lowering unemployment and reducing poverty, by preserving a competitive dollar that doesn't destabilize wages, and by checking the unearned income of top earners. They ease social strains by pushing up wages and lifting the burden of private debt. For all these reasons, in a full employment economy, citizens are more able and willing to make necessary investments in education, training, infrastructure, research, and other public goods. But the flip side of this picture is not so rosy. Inequality has been rising since about 1970, and today is the highest it's been since the Great Depression. Growing inequality brings out the worst in us. It eats away at middle class solidarity. It encourages those who feel secure about their life chances to disavow any connection to their brethren in need. Growing inequality finds expression in bitter struggles over issues such as affirmative action, welfare, crime, entitlements, and even intelligence. And if income inequality had not so undermined middle class solidarity, I don't think the campaign to privatize Social Security would have ever gotten off the ground. There are specific responses to each of these challenges, but the larger issue is the erosion of solidarity among Americans of different economic circumstances. The answer, it seems to me, is clear. We must rebuild that solidarity with higher wages and lower inequality. These lessons have a direct bearing on one of the paramount issues before Congress today: an America with rising wages and declining inequality is an America that need not worry about the future of Social Security. What is true for the American economy is equally true for the world economy. The best global citizens are countries that generate their own domestic demand, and healthy demand depends on rising wages and lower inequality. There's been a lot of talk about virtuous cycles lately. Well, when income gains are broadly shared, it creates a virtuous cycle of mass purchasing power, growth, savings, and new investment. We can promote this kind of good citizenship by helping other countries raise their wages from the bottom up--through higher minimum wages, recognition of labor rights, and fiscal and monetary stimulus. This kind of policy would be good not only for them, but for us too. And it would be good for the global system as a whole. We cannot forever be the buyer of last resort. We cannot forever help other countries develop economically by absorbing all their manufacturing exports. They need to create their own domestic demand. Trade should be a complement to healthy demand at home, not a substitute for weak demand. Otherwise we cannot escape the trap of excess production and overcapacity, with too many goods being produced and not enough prosperous consumers to buy them. As the AFL-CIO urged back in January, ``The United States, Europe, and Japan must work together to stimulate domestic demand in the developing economies and avert a dangerous tendency toward global deflation.'' Needless to say, we haven't been doing that. It certainly hasn't helped that, working through the IMF and other multilateral institutions, we have imposed deflation on countries in Asia and the rest of the world. We have depressed foreign demand by insisting that other governments cut spending, close banks, weaken labor laws, and raise interest rates. And we've insisted that they deregulate financial markets to remove any checks on often destabilizing flows of foreign capital. As the AFL-CIO said back in February, ``These terms may solve some short-term credibility problems with foreign investors, but will necessarily exacerbate the tensions, inequality, and instability of the global economy.'' That, I believe, is exactly the problem facing us today. This is a time for bold new thinking. In his speech last Monday, President Clinton called on Chairman Greenspan and Secretary Rubin to convene a meeting of their counterparts in the G-7 and key developing countries within the next 30 days to strengthen the international financial architecture for the 21st Century. Fifty years ago, he said, we learned to tame the cycle of booms and busts that had plagued national economies, and we must now do the same for the international economy. But what does that entail, exactly? Countries must be able to reap the benefits of free-flowing capital in a way that is safe and sustainable, the President said. The IMF should emphasize pro-growth budget, tax, and monetary policies. The World Bank should embark on a new ``social compact'' initiative focusing on job assistance and basic needs of children and the elderly. The World Bank and the Asian Development Bank should both double their support for the social safety net in Asia. Meanwhile, it was reported yesterday that British Prime Minister Tony Blair has joined the call to restructure the institutions and rules governing the global financial system. And the IMF just released a report endorsing the kind of capital controls Chile has maintained for years to discourage destabilizing short-term capital inflows. This appears to represent a 180 degree about-face from its previous dogged insistence on liberalizing capital markets. These are extraordinary developments. I believe they are a sign of the seriousness of the crisis we face. They also indicate that deeply entrenched assumptions are now being reexamined. That's something we should welcome and encourage. I believe we can prevent the worst from happening, but we must act now. These are times that cry out for American leadership. The most pressing need, and our most immediate priority, must be to deliver a preemptive strike against deflation. At the next meeting of the FOMC, Federal Open Market Committee, on September 29, the Fed should lower interest rates significantly.

Mr. WELLSTONE. Parliamentary inquiry, Mr. President. Has the amendment been called up? Amendment No. 3616 To Amendment No. 3559 (Purpose: To express the sense of the Congress regarding the reduction of the Federal Funds rate by the Federal Open Market Committee)

Mr. WELLSTONE

Mr. WELLSTONE. I thank the Chair.

Mr. WELLSTONE. Mr. President, I ask unanimous consent that John Bradshaw, who is a fellow in my office, be allowed to be on the floor for the duration of this statement.

Mr. WELLSTONE

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

Mr. WELLSTONE

Mr. WELLSTONE. Mr. President, I have not heard my colleague from Utah respond to this. I haven't heard one colleague on the other side of the aisle respond to the data or to the facts. I have heard them try to hide behind the argument that raising the minimum wage was going to lead to a loss of jobs. Since increasing the minimum wage in the prior year, the Bureau of Labor Statistics reported 517,000 new jobs. Sometimes we do not want to know what we do not want to know. I have not heard any refutation of that at all. So my question is, Why in the world would we not value work and give dignity to work by raising the minimum wage, which is so important to women in the workplace, so important to children, so important to families? Then my colleague from Utah moves on to another argument concerning child care. In all due respect, that is what is so sad about this debate. If we really wanted to do our best by families and value families, we would be raising the minimum wage, we would be investing in affordable child care--which this Republican-led Senate will not do. We would have universal health care coverage, which this Republican-led Senate will not do. In child care, I hope the tradeoff is not to say that we are not going to be able to provide good child care for children unless we continue to devalue the work of men and women in child care. Many of them barely make minimum wage or barely above it. That is why we have a 40-percent turnover every year. This is not acceptable. We can raise the minimum wage, which is important for women, important for these working families, important for children, important for young people who are trying to work their way through school. We can invest in the health and skills and intellect and character by investing in affordable child care. We can invest in health care. This Republican-led Senate has done none of these things. In all due respect, in all due respect, the reason that 75 or 80 percent of the people in the country believe we should raise the minimum wage is because they have some sense of fairness and justice. We raised our salaries by $30,000 just a few years ago. We gave ourselves a cost-of-living increase that amounts to a $1.50 increase per hour, we make $130,000-plus and say we need to make that. And yet, we will not raise the minimum wage from $5.15 to $6.15 over a 2-year period so people who work hard will not be poor in America and their children will not be poor? This is really outrageous. I hope we get a majority vote.