Paul Wellstone

Mr. WELLSTONE

Mr. WELLSTONE. Mr. President, I know we are going to start on the minimum wage amendment. May I have 1 minute to call up two amendments and then lay them aside?

Mr. WELLSTONE. Mr. President, I call up amendments Nos. 2537 and 2538.

Mr. WELLSTONE. Madam President, I think I will speak for 10 minutes. But I think it will be less because I want the Senator to have a chance to respond to the Republican arguments.

Mr. WELLSTONE. I thank the Senator.

Mr. WELLSTONE. Madam President, first of all, let me say in a very personal way that when I was teaching and hoping to become a Senator, this is what I imagined it would be. I could come to the floor of the Senate and support an amendment introduced by Senator Kennedy, that I would be lucky enough to have Dale Bumpers' desk and be able to sit next to Senator Kennedy and come out here and fight for what I think is just elementary economic justice. I am very proud to rise to speak in behalf of this amendment. On behalf of 176,000 Minnesotans who would be helped by this, much less the workers and their children--there would be many more citizens--I thank him. On behalf of another 11 million-plus workers in the country who would benefit from this $1 raise over 2 years, I thank him. I say to all of my colleagues--Democrats but especially Republicans on the other side of the aisle--wherever I have traveled in our country--I start with my State of Minnesota--no matter where it is in Minnesota, in the city, or in rural areas, or in the suburbs, or whether it is the Deep South, whether it is L.A., East L.A. or Watts, or whether it is, inner-city Baltimore, or whether it is rural Minnesota--the one thing that people come up and say over and over again more than anything else is: We want to be able to have a job at a decent wage so we can support our families, so our children can have the care we know they need and deserve. When I went to visit the part of the country where my wife Sheila and her family come from, Appalachia, Harlan County, it was the same thing. That is what people want to be able to have --a living-wage job, to be able to earn enough of an income so they can support their children, so they can do right by their children. That is what this amendment is all about. To talk about raising the minimum wage from $5.15 an hour to $6.15 an hour over 2 years so we don't lose what we gained in 1997 is a matter of elementary justice. I heard Senator Kennedy say this. I guess I need to emphasize this one or two times myself. I don't know how Senators or Representatives can vote for a $4,600 increase for ourselves when we are already making $130,000-plus a year and say we need this because we have children who are in college and because we need to make sure we have enough money to cover expenses and then turn around and vote against a $1 increase over 2 years from $5.15 an hour to $6.15 an hour. Our economy is booming. In many ways we are doing well. But the fact is that I still think, using Michael Harrington's term--the Senator from Massachusetts will remember that book--we still have ``two America's.'' We have one America with greater access for all the things that make life richer in possibilities and we have another America that still struggles to make ends meet. Rising tides lift all boats. But in some ways, we haven't been growing together. We have been growing apart. A minimum-wage worker now makes $5.15 an hour. The average CEO in our country makes $5,100 an hour. Let me say to every Senator that this is matter of elementary justice. This is, as Senator Kennedy said, a family value issue. It makes a huge difference, if you are able to make an additional $3,000- plus a year because of this increase in the minimum wage. That means you will be able to pay your utility bills, and you do not have to worry about being shut off. It means your children will be warm as opposed to cold in a cold winter in Minnesota or in Maine, Madam President. It means you will be able to buy clothing for your children. It means you can afford your rent. I hope and I pray it will mean we will not have so many women and so many children in our homeless shelters with 40 percent of these families having the head of the household working full time--people who work 52 weeks a year, 40 hours a week, and they are still poor in America because they don't make enough of a wage to support themselves and their families. This is a family value issue. I don't know of any issue before the Senate and I don't know of any debate that we have had in the Senate that speaks more loudly and clearly to family values. Colleagues, Republicans included, vote for this Kennedy amendment if you want to support your children. Vote for this Kennedy amendment if you want to support families. Vote for this Kennedy amendment if you want to support hard-working people who shouldn't be poor in America. Vote for this amendment if you want to support women. Too many women are the ones who are working full time and still don't make a living wage. This is a matter of justice. There is a matter of family values. This is a matter of doing the right thing. I hope we will have a majority vote for this amendment. Finally, I will admit it. I will make a blatant political point. I don't know how in the world anybody in this Chamber can vote a $4,600 salary increase for himself or herself saying we have to have this to make ends meet--and that is from the $130,000 salary at the beginning--and say no, no; we can't vote for people to have the chance to make enough of a wage so they can do a little better for themselves and, more importantly, a little better for their children. Mr. President, $5.15 an hour to $6.15 an hour, a $1 increase, 50 cents a year over 2 years ought to pass with 100 votes. I yield the floor.

Mr. WELLSTONE. Madam President, I thank the Senator for his question. I wish I had emphasized that more, I say to the Senator. I can think of so many poignant conversations with people in which they were saying: Given the wages we make, every last hour we can work, we work. We have no other choice because that is the only way we can put food on the table. However, it means we have very little time to spend with our children. It is not what we want. It is not the way we want it to be. I think this is so important for families. I yield the floor.

Mr. WELLSTONE. Will the Senator yield for a question?

Mr. WELLSTONE. I am listening to this for the first time. This has not been a part of this debate. There are 73 million Americans right now who are entitled to overtime pay. Is the Senator saying part of the Republican amendment effectively repeals the overtime pay provisions of the Fair Labor Standards Act, which act has been in effect for 60 years? This is a cornerstone of fairness for working families in this country. Is that what the Senator is saying?

Mr. WELLSTONE. Mr. President, one final question for the Senator. If companies are going to now be able to make the payment in bonuses and do an end run, basically, around the Fair Labor Standards Act, which is so important to 73 million Americans who right now are entitled to that overtime pay, then am I not correct that what the Republicans are proposing is not a step forward, it is a great leap backward; that this overturns 60 years of sweat and tears of workers' commitment to getting a fair pay for fair work, including overtime work? They give a minimum wage increase with one hand and then they basically repeal part of the Fair Labor Standards Act with the other hand. People need to understand this, I say to the Senator.

Mr. WELLSTONE

Mr. WELLSTONE. I thank the Chair.

Mr. WELLSTONE

Mr. WELLSTONE. Mr. President, first of all, I join the Senator from Idaho in welcoming Senator Chafee to the Senate. His father was a very special Senator, and I don't think any of us will ever forget him. I hope that we will always honor his memory.

Mr. WELLSTONE

Mr. WELLSTONE. I thank the Chair. Mr. President, before I start, since my remarks will be critical and hard hitting, and, I believe, will marshal considerable evidence for my point of view about this financial modernization act--and I rise to speak in strong opposition to S. 900--I congratulate Senator Gramm for his political skill. I do not mean this in a cynical way. Cynicism is not my style; it is not the way I approach public service. He has been very skillful in his work, and as a Senator, I pay my respects to his considerable ability. I rise in strong opposition to S. 900, the Financial Services Modernization Act of 1999. S. 900 would aggravate a trend towards economic concentration that endangers not only our economy, but also our democracy. S. 900 would make it easier for banks, securities firms, and insurance companies to merge into gigantic new conglomerates that would dominate the U.S. financial industry and the U.S. economy. Mr. President, this is the wrong kind of modernization at the wrong time. Modernization of the existing confusing patchwork of laws, regulations, and regulatory authorities would be a good thing, but that's not what this legislation is about. S. 900 is really about accelerating the trend towards massive consolidation of the financial sector. This is the wrong kind of modernization because it fails to put in place adequate regulatory safeguards for these new financial giants the failure of which could jeopardize the entire economy. It's the wrong kind of modernization because taxpayers could be stuck with the bill if these conglomerates become ``too big to fail.'' This is the wrong kind of modernization because it fails to protect consumers. It allows banks, insurance companies and brokerage houses to share personal information about consumers' credit history, investments, health treatments, and buying habits. It weakens requirements for banks to invest in their own communities. It will result in higher fees for many customers and price gouging of the unwary. And it will squeeze credit for small businesses and rural America. Most importantly, this is the wrong kind of modernization because it encourages the concentration of more and more economic power in the hands of fewer and fewer people. This concentration will wall off enormous areas of economic decision-making from any kind of democratic input or accountability. I don't think there's any doubt that S. 900 will set in motion a tidal wave of big-money mergers. That's the whole point of the bill, really. The Washington Post quotes industry officials as saying that ``the point of reform is to make it as easy as possible for financial services companies to merge with one another and share customer names, addresses, and account data.'' S. 900 will prompt other banks to start courting insurance and securities firms, and it will put increasing pressure on banks of every size to find new partners. According to the Post, ``Analysts say it's likely to set off a spate of mergers over the next few years . . . and will cause consolidation of much of the industry into a handful of financial conglomerates.'' Fed Chairman Alan Greenspan has acknowledged that this kind of consolidation poses dangers for the stability of our financial system. In a speech on October 11, 1999, Mr. Greenspan said, ``We face the reality that the megabanks being formed by growth and consolidation are increasingly complex entities that create the potential for unusually large systemic risks in the national and international economy should they fail.'' Last week Jeffrey Garten, an investment banker who served as Under Secretary of Commerce in the Clinton administration, issued a similar warning on the opinion page of the New York Times. ``Megabanks like Citigroup or the new Bank of America have become too big to fail. Were they to falter, they could take the entire global financial system down with them.'' The question we have to ask, then, is whether there's any danger that these financial goliaths could actually falter. Well, if we listen to Alan Greenspan, maybe there is. In an October 14 speech, the Fed Chairman warned that financial institutions may be underestimating the risk of a ``sharp reversal of confidence'' in the stock market. Mr. Greenspan was talking about not just a ``correction'' or a ``bubble'' in the market, but a much deeper loss of confidence like the one that occurred last year after Russia defaulted on part of its debt. The result could be ``panic reactions'' that cause financial markets to ``seize up.'' Something doesn't add up here. If Alan Greenspan is right that we need to be on guard against a ``sharp reversal of confidence'' that could cause financial markets to ``seize up''; and if the Fed Chairman is right that financial consolidation creates the potential for unusually large ``systemic risks'' should these conglomerates fail; and if Jeffrey Garten is right that their failure could bring the entire global financial system tumbling down; then it doesn't seem to make a whole lot of sense to increase those systemic risks by fostering even more concentration. Yet that is precisely what S. 900 does. The problem with S. 900 is that its regulatory reach does not match the size of the new conglomerates. S. 900 does set up firewalls to protect banks from failures of their insurance and securities affiliates. But even Alan Greenspan has admitted that these firewalls would be weak. Earlier this year, economists Robert Auerbach and James Galbraith warned that ``the firewalls may be little more than placing potted plants between the desks of huge holding companies.'' And as the Chairwoman of the FDIC has testified, ``In times of stress, firewalls tend to weaken.'' Regulators will have little desire to stop violations of these firewalls if they think a holding company is ``too big to fail.'' In his New York Times article, former Under Secretary of Commerce Jeffrey Garten concluded, ``The seesaw of private and public power is seriously unbalanced.'' We seem determined to unlearn the lessons from our past mistakes. Scores of banks failed in the Great Depression as a result of unsound banking practices, and their failure only deepened the crisis. Glass- Steagall was intended to protect our financial system by insulating commercial banking from other forms of risk. It was one of several stabilizers designed to keep a similar tragedy from recurring. Now Congress is about to repeal that stabilizer without putting any comparable safeguard in its place. In a stinging attack on S. 900, conservative columnist William Safire wrote earlier this week, Global financiers are given the green light for ever- greater concentration of power. Few remember the reason for those firewalls: to curtail the spread of the sort of panic from one financial segment to another that helped lead to the Great Depression. But today's lust for global giantism has swept aside the voices of prudence. And what about the lessons of the Savings and Loan Crisis? The Garn- St Germain Act of 1982 allowed thrifts to expand their services beyond basic home loans. Only seven years later taxpayers were tapped for a multibillion dollar bailout. I'm afraid we're running the same kind of risks with S. 900. These financial conglomerates may well be tempted to run greater risks, knowing that taxpayers will come to their rescue if things go bad. In a letter to me earlier this week, Professor Bob Auerbach of the LBJ School wrote, ``Taxpayers should be notified that [S. 900] substantially increases their risk on the $2.8 trillion in federally insured deposits for which they are liable.'' And what about the lessons of the Asian crisis? Just recently, the financial press was crowing about the inadequacies of Asian banking systems. Now we're considering a bill that would make our banking system more like theirs. The much-maligned cozy relationships between Asian banks, brokers, insurance companies and commercial firms are precisely the kind of ``crony capitalism'' that S. 900 would promote. If we want to locate the causes of the Asian crisis, I think we have to look at the reckless liberalization of capital markets that led to unbalanced development and made these economies so vulnerable to investor panic in the first place. The IMF and other multilateral financial institutions failed to understand how dangerous and destabilizing financial deregulation can be without first putting appropriate safeguards in place. World Bank Chief Economist Joseph Stiglitz wrote last year about the Asian crisis: ``The rapid growth and large influx of foreign investment created economic strain. In addition, heavy foreign investment combined with weak financial regulation to allow lenders in many Southeast Asian countries to rapidly expand credit, often to risky borrowers, making the financial system more vulnerable. Inadequate oversight, not over- regulation, caused these problems. Consequently, our emphasis should not be on deregulation, but on finding the right regulatory regime to reestablish stability and confidence.'' We claim to have learned our lessons from the crisis in Asia, but I'm not so sure we have. So why on Earth are we doing this? And why now? For whose benefit is this legislation being passed? Financial services firms argue that consolidation is necessary for their survival. They claim they need to be as large and diversified as foreign firms in order to compete in the global marketplace. But the U.S. financial industry is already dominant across the globe, and in recent years has been quite profitable. I see no crisis of competitiveness. Financial firms also argue that consolidation will produce efficiencies that can be passed on to consumers. But there is little evidence that big mergers translate into more efficiency or better service. In fact, studies by the Federal Reserve indicate just the opposite: there's no convincing evidence that mergers produce greater economic efficiencies. On the contrary, they often lead to higher banking fees and charges for small businesses, farmers, and other customers. A recent Fed study showed that bigger banks tend to charge higher fees for ATM machines and other services. Bigger banks offer fewer loans for small businesses, and other Fed studies have shown that the concentration of banking squeezes out community banking. In the long debate over passage of this legislation, there has been a lot of talk about the conflicting interests of bankers, insurance companies, and brokers. There has been a lot of talk about the jurisdictional battles between the Federal Reserve and the Office of the Comptroller of the Currency, the OCC. But there has been precious little discussion in this debate of the public interest. What about the interests of ordinary consumers? An earlier version of this legislation contained a provision to ensure that people with lower incomes have access to basic banking services. The problem is that banking services are increasingly beyond the reach of millions of Americans. According to U.S. PIRG, the average cost of a checking account is $217 per year, a major obstacle for opening up a bank account for lower-income families. These families have to rely, instead, on usurious check cashing operations and money order services. Nevertheless, this ``basic banking'' provision was stripped out of the bill. I don't see very much protection for consumers in S. 900, either. Banks that have always offered safe, federally insured deposits will have every incentive to lure their customers into riskier investments. Last year, for example, NationsBank paid $7 million to settle charges that it misled bank customers into investing in risky bonds through a securities affiliate that it set up with Morgan Stanley Dean Witter. S. 900 makes nominal attempts to address these problems, but in the end I am afraid this legislation is an invitation to fraud and abuse. One of the most objectionable aspects of S. 900 is the absence of protection for consumer privacy. The conference report will allow the various affiliates of a financial conglomerate to share sensitive confidential information about their customers. William Safire writes: As for financial privacy, [S. 900] makes your bank account everyone's business. Without your consent, the private information you write on your mortgage application, with your tax return attached, goes to your insurance company, which already has your health information, and its snoops can also see your investment behavior and what you have been buying with your credit card. Under [S. 900], giant financial conglomerates, using other surveillance to protect against fraud, will know more about your money, your habits, your assets, your disease, and your genetic makeup than your spouse does, and probably more than you do. I will tell you something. It is a little disconcerting to read columns such as this about the real potential for abuse and serious invasion of citizens' privacy. We need to have much, much more discussion about the implications of this bill for citizens' privacy in Minnesota and all across the country. I am going to repeat the last part of this quote: Under S. 900, giant financial conglomerates, using other surveillance to protect against fraud, will know more about your money, your habits, your assets, your diseases, and your genetic makeup than your spouse does, and probably more than you do. Law Professor Joel Reidenberg of Fordham University concludes: This is an astounding loss of privacy for the American citizens. I want to shout from the floor of the Senate that this is an astounding loss of privacy for American citizens. The impact of S. 900 on the Community Reinvestment Act, CRA, is another cause for real concern. When the Senate considered S. 900 earlier this year, I argued that if we were serious about modernizing the financial sector of our country, we should be serious about modernizing CRA along with it. There have been few financial tools available to families and communities that have been as effective and have had as great an impact--positive impact--as CRA. An estimated $1 trillion has been reinvested in our towns and cities, thanks to this CRA legislation. Under the S. 900 conference report, communities, consumers, and public interest organizations will see their opportunities for public comment limited. They will not have a chance to comment on mergers when banks that have received a satisfactory CRA rating are applying to become financial holding companies. To me, this looks more like a rollback than it does modernization. Finally, under the S. 900 conference report, smaller banks that receive a satisfactory CRA rating will be reviewed every 4 years instead of every 2. Smaller banks that receive an excellent CRA rating will be reviewed every 5 years. Since an estimated 97 percent of all small banks currently receive a satisfactory or better CRA rating, S. 900 will essentially remove the majority of banks from the regular CRA review process. There are a number of reasons why banks must be reviewed by regulators, but it is only with regard to CRA that we are cutting back on the requirements for review. In reality, S. 900 reflects the same priority of interests as financial consolidation itself. It offers a little something for everybody in the financial services industry. It is a Santa's wish list for the big banks. It gives enough to securities firms and the insurance industry to keep them on board. But it basically has nothing to offer for low-income families, nothing for rural and minority communities, and very little for consumers. This should not be surprising. I don't think it is a mere coincidence that finance, insurance, and real estate spend more than any other industries on congressional campaigns and lobbying on Capitol Hill. This is a reformer's dream issue. There is no one-to-one correlation, of course; their influence is felt at a systemic level. And I have congratulated some of my colleagues on their political skill. But I do not think it is a coincidence that the finance, insurance, and real estate interests spend more than any other industries on congressional campaigns and on lobbying Capitol Hill. Last year, they shelled out more than $200 million on lobbying activities, according to the Center for Responsive Politics, and they have made more than $150 million in campaign contributions since 1996. As William Safire wrote on November 1: Generous financial lobbies have persuaded our leaders that in enormous size there is strength. Generous lobbies have been making the same case in other industries as well, with equal success. Similar consolidation is occurring in agriculture, the media, entertainment, health care, airlines, telecommunications, you name it. Teddy Roosevelt, where are you when we need you? Who is going to take on these monopolies? Who is going to call for some serious antitrust action? When are we going to be on the side of people and consumers? In fact, we are witnessing the biggest wave of mergers and economic concentration since the late 1800s. There were 4,728 reportable mergers in 1998, compared to 3,087 in 1993, 1,521 in 1991, and a mere 804 in 1980. As Joel Klein, head of the Justice Department's Antitrust Division, pointed out, the value of last year's mergers equals the combined value of all mergers from 1999 to 1996--put together. What is in store for us if we allow this trend to continue? Pretty soon we are going to have three financial service firms in this country, four airlines, two media conglomerates, and five energy giants. Huge financial conglomerates the size of Citigroup will truly be ``too big to fail.'' Government officials and Members of the Congress will be prone to confuse Citigroup's interests with the public interest, if they don't already. What happens, for example, when one of these colossal conglomerates decides it might like to turn a profit by privatizing Social Security? Who is going to stand in their way? That is a trick question, of course, because we already face that dilemma today. But I contend that the economic concentration resulting from the passage of S. 900 would only make that problem worse. The bigger these financial conglomerates get, the more influence they have over public policy choices. The bigger they get, the more money they will have to spend on political campaigns. The bigger they get, the more lobbyists they will be able to amass on Capitol Hill. And the bigger they get, the more weight they will carry in the media. I am going to repeat that. The bigger these financial conglomerates get, the more influence they are going to have over public policy choices. The bigger they get, the more money they will have to spend on political campaigns. The bigger they get, the more lobbyists they will have to amass on Capitol Hill. And the bigger they get, the more weight they will carry with the media. It is a vicious cycle. These financial conglomerates used their political clout to shape public policy that helped them grow so big in the first place. Now their overwhelming size makes it easier for them to dictate policies that will help them get even bigger. It is a vicious cycle. Jeffrey Garten's remarkable October 26th column in the New York Times called attention to this problem. ``Many megacompanies may be beyond the law,'' Garten said. Their deep pockets can buy teams of lawyers that can stymie prosecutors for years. And if they lose in court, they can afford to pay huge fines without damaging their operations. Moreover, no one should be surprised that mega-companies navigate our scandalously porous campaign financing system to influence tax policy, environmental standards, Social Security financing, and other issues of national policy. Yes, companies have always lobbied, but these huge corporations often have more pull. Because there are fewer of them, their influence can be more focused and, in some cases, the country may be highly dependent on their survival. For example, corporate giants can have enormous leverage when they focus on America's foreign and trade policy. Defense contractors like Lockheed Martin, itself a result of a merger of two big firms, were able to exert extraordinarily powerful force to influence legislation that approved enlarging NATO, a move that opened up new markets for American weapons sales to Poland and the Czech Republic. Companies like Boeing, which not long ago acquired McDonnell Douglas, have expanded their already formidable influence on trade policy toward countries like China. Boeing is now the only American commercial aircraft manufacturer. Corporations like Exxon-Mobil will negotiate with oil- producing countries almost as equals, conducting the most powerful private diplomacy since the 19th century, when the British East India Company wielded near-sovereign influence in Asia. As long as the economy remains strong, the rise of corporate power with inadequate public oversight will not be high on the national agenda. But sooner or later--perhaps starting with the next serious economic downturn--the United States will have to confront one of the great challenges of our times: How does a sovereign nation govern itself effectively when politics are national and business is global? When the answers start coming, they could be as radical and as prolonged as the backlash against unbridled corporate power that took place during the first 40 years of this century. Indeed, we've been through this before. At the end of the 19th century, industrial concentration accelerated at an alarming pace. Various observers--including the columnist and author E.J. Dionne, former House Speaker Newt Gingrich, and the philosopher Michael Sandel--have noted the similarities between that era and our own. In the Gilded Age of the late 1800s and the Progressive Era of the early 1900s, the danger of concentrated economic power was widely recognized and hotly debated. And this speech on the floor of the Senate I give with a sense of history because I believe this will become a front-burner issue in America politics. Many Americans deeply believed that a free and democratic society could not prosper with such concentration of power and inequalities of wealth. As the great Supreme Court Justice Louis Brandeis said, ``We can have democracy in this country, or we can have wealth in the hands of a few. We can't have both.'' The idea that concentrations of wealth, of economic power--which is exactly what S. 900 is all about--and of political power are unhealthy for our democracy is a theme that runs throughout American history, from Thomas Jefferson to Andrew Jackson to the Progressive Era to the New Deal. Thomas Jefferson and Andrew Jackson warned not only against concentration of political power, but also against concentration of economic power. We should not, Senators, let that debate die out. That is why I come to the floor of the Senate today. That debate is a vital part of our democratic--with a small ``d''--heritage. It is a heritage that teaches us that ordinary people should have more say about the economic decisions that affect their lives. Weakening CRA isn't going to give them that. No amount of anti- government rhetoric is going to give them that. But enforcing some meaningful consumer protections certainly would. So would protecting the privacy of sensitive personal information. And so would putting a stop to mergers that crowd out community banking, squeeze credit for small businesses, and open the door to higher fees and more gouging of consumers. A lot of banks don't like the CRA. A lot of financial service firms don't want to be bothered with regulations to protect individual privacy. They denounce them as ``big government'' and ``overregulation.'' But for most people, which is the greater danger in these situations--concentration of political power in the Government, or concentration of economic power? I don't think it is a close call. When I go to the Town Talk Cafe in Willmar, MN, or any cafe in MN, and I talk and listen to people over a cup of coffee or two, I find people have what I describe as a healthy distrust of big government, a healthy distrust of overly centralized and overly bureaucratized public policy. I love it when people say, get us some capital, let us make things happen at the neighborhood and community level. I love the idea of homegrown economies. I prefer that small business people living in the community be the ones who make the capital investment decisions that determine whether or not our communities are going to do well, rather than some multinational financial services conglomerate folks halfway across the world or halfway across the country making the capital investment decisions that determine whether our communities live or die. I want the decisionmaking to be in the communities. I appreciate that focus on local development, on more self-reliant, self-sufficient people and more self-reliant, self-sufficient communities. The people in the Town Talk Cafe in Willmar, or any other cafe I have visited, also have a very healthy skepticism, distrust, and--I don't think this is too strong a term--dislike of the concentration that is taking place in the financial sector and other areas of the economy. They do not like the big insurance companies. They do not like these big telecommunication companies. They are still waiting, since the telecommunications bill passed in 1996 and all of the mergers and acquisitions since then, for cable rates to go down. They are still waiting for more diversity of viewpoints to be offered in the media. Farmers do not like the big meat packers. They don't like the big grain companies. People certainly don't like the big oil companies. With considerable justification, they certainly don't like the big banks. And with considerable justification they have reached the conclusion that too much of the legislation we pass in Congress works to the advantage of folks who have the capital, who have the wealth, who have the access, and who have the influence. And they've reached the conclusion that, as rural citizens or low- income citizens or minority communities or family farmers or just regular plain ordinary citizens and consumers, they get the short end of the stick. S. 900 is legislation that goes in the direction of giving more power to the privileged few and giving ordinary citizens less say in the economic decisions that affect their lives. S. 900 is bad for consumers, it is bad for low-income families, it is bad for rural communities, it creates potentially enormous risks for the economy, and it exposes taxpayers--please remember the S&L debacle--to tremendous liability. I believe S. 900 is bad legislation that as a nation we will soon regret. I yield the floor.

Mr. WELLSTONE

Mr. WELLSTONE. If my colleague will yield for a question, I don't intend to take the floor. After the Conrad amendment is disposed of, is it the intention of the chairman to have votes?

Mr. WELLSTONE. I need to go to a markup.

Mr. WELLSTONE. Mr. President, am I correct, then, the understanding is before a final vote on this amendment, Senator Grassley will be speaking and right now I will go forward with my amendment? Is that correct? Mr. President, before I send this amendment to the desk, I want to emphasize one issue that this amendment does not speak to directly but which is very much on my mind. There is an (A) and a (B) part to this issue. The (A) part is the economic convulsion in agriculture that has taken place all across our land, and certainly in our State of Minnesota. I also hasten to add there is no question in my mind that if we do not change the course of policy, we are going to lose a whole generation of producers. The (B) part of what I want to say before going forward with this amendment is that I have, for at least the last 6 weeks, if not longer, been involved in what I would almost have to describe as a ferocious fight to have the opportunity to bring an amendment to the floor that speaks to at least part of what is going on with this crisis in agriculture. No one amendment is the be-all or end-all. But one amendment would deal with all the mergers that are taking place and the ways in which these conglomerates are driving out family farmers across the land, the whole problem of concentration of power in the food industry, in agriculture. Other colleagues from agricultural States such as Minnesota have other ideas, but the point is that we want an opportunity to bring an amendment to the floor that speaks to what is going on in agriculture. I thought we would have the opportunity to do that on this trade bill. We have been clotured out. Last week, we were successful in blocking cloture. Now we have been clotured out, with the understanding this will happen on the bankruptcy bill. I want to express my skepticism on the floor of the Senate today as to whether or not that bankruptcy bill will be brought to the floor and whether or not we will have that opportunity. I want to express some indignation in advance if, in fact, we end up closing out this part of our session and going home without having had any debate, further debate about agriculture, and any effort whatsoever to alleviate the pain and misery in the countryside. I think it should be a top priority for us. Over the next several days, whatever period we are dealing with, I am going to continue to fight to get this amendment out there. My understanding is we have an agreement that there will be an amendment on agriculture that will be part of the debate we will have when the bankruptcy bill comes to the floor, along with minimum wage, along with East Timor. That is the commitment that has been made. I certainly hope we will see that commitment carried out. Amendment No. 2487 (Purpose: To condition trade benefits for Caribbean countries on compliance with internationally recognized labor rights)

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

Mr. WELLSTONE. I am sorry, the amendment has been filed. I do not need to send it to the desk.

Mr. WELLSTONE. Since I did not know it had been filed, I will speak on the amendment.

Mr. WELLSTONE. Mr. President, 2487 is the number.

Mr. WELLSTONE. I apologize. I did not know the amendment had been filed. When I talk about labor rights, my colleague from New York is very familiar with the ILO. This is his fine work. What we are talking about is the right of association, the right to organize and bargain collectively, the prohibition on the use of any form of coerced or compulsory labor, some kind of international minimum wage for the employment of children age 15, and acceptable working conditions.

Mr. WELLSTONE. Mr. President, this amendment would provide for mutually beneficial trade between the United States and Caribbean countries by actually rewarding countries that comply with internationally recognized core labor rights with increased access to U.S. markets for certain textile goods. That is what this should be about. We ought to reward countries that are willing to comply with internationally recognized core labor rights with increased access to the U.S. market. This amendment provides for enforceable standards--let me emphasize this. I say to my colleagues, and I know they believe me, I am an internationalist. I very much want to see expanded trade. I very much want to see expanded relations with other countries. The question is the terms of trade, and I am especially focused on the need to have enforceable labor standards. Under this amendment, before any of the benefits of the CBI trade bill can go into effect, the Secretary of Labor will have to determine a CBI country is providing for enforcement of the core ILO labor rights. That is what this amendment does. The Secretary will make this determination after consulting with labor people from the region and after consideration of public comments. But the Secretary of Labor will make the determination to make sure the country with which we have trade relations is providing for the enforcement of the ILO core labor rights. I want to make sure these standards are enforceable. U.S. citizens will also have a private right of action in district courts to enforce these provisions. The alternatives in the CBI Parity bill are unenforceable. That is my dissent from this legislation. The CBI Parity bill merely includes labor rights as an eligibility criterion which can only be enforced by the administration. But the administration already enforces the GSP program and has never, not one time, suspended a CBI country, despite their terrible labor rights records. Later on, I will provide, from my point of view, too much by way of documentation. That is to say, the number of petitions that have been filed with the USTR under the GSP program. Every single time the petition has been withdrawn. There has been no real response. If the administration will not use its GSP leverage to improve labor rights in these countries, why would we expect them to use an eligibility criterion? The ILO is not an option because it does not have the enforcement power. I want to make sure there are some enforceable labor standards that will apply to this CBI trade agreement. Some examples of GSP workers' rights cases accepted for review against major CBI countries are as follows: Costa Rica, 1993, right of association, right to organize and bargain collectively, acceptable working conditions, petition withdrawn. That is the outcome. Dominican Republic, 1989-1991, right of association, right to organize and bargain collectively--these are core labor rights--forced labor, child labor, review terminated in 1991 due to introduction of ``labor code reform.'' El Salvador, 1990-1994, right of association, right to organize and bargain collectively, review terminated. Guatemala, 1992-1997, right of association, right to organize and bargain collectively, again, review terminated. The list goes on. What we want to do is parallel to what Senator Feingold has done in his HOPE for Africa bill. That is, we want to apply some enforceable labor standards. We want to reward countries that comply with internationally recognized core labor rights. In this amendment, we call for the Secretary of Labor to determine whether or not a CBI country is providing for the enforcement of ILO core labor rights. Why wouldn't we want to do that in a piece of trade legislation? When will we? Supporters of CBI parity complain that NAFTA-like benefits will help Caribbean workers. I have heard that argument made over and over. I want to read from a report that came out in October of 1999: ``Six years of NAFTA: A review from inside the maquiladoras.'' This 1999 report on the Mexican maquiladoras shows wages and conditions have actually deteriorated since passage of NAFTA. This was a joint effort between the Comite Fronterizo de Obreras and the American Friends Service Committee. I will quote from relevant sections of the report, ``Six years of NAFTA: A review from inside the maquiladoras'': In Mexican manufacturing, real wages have fallen by more than 20 percent since 1994. It is not only that real wages have remained stagnant overall, failing to keep pace with inflation, but wage levels have also come under attack wherever they are over the threshold considered competitive by the maquiladoras. One sees over and over, in going through this report, wage levels dropping, basic violations of the people to organize, and failure to enforce child labor standards. When I hear about NAFTA-like benefits, I have to question whether or not this is the future. I will speak about the CBI countries and what I call the race to the bottom. The CBI countries with the fastest export growth to the United States have also experienced the steepest decline in wages in the region. Over the last 10 years, textile and apparel imports from Honduras exploded by a whopping 2,523 percent. Yet from the 10 years spanning 1985 to 1996, wages of Honduran workers declined by 59 percent. I will repeat this since we are talking about the benefits for the workers in these countries. I am not making an argument that we should have enforceable labor standards because I only care about workers in our country. I do care about workers in our country, and I do worry that the message we're sending to workers in our country, if we do not have enforceable labor standards in this agreement, is: If you dare to organize and bargain collectively to get a better wage and a better standard of living for yourselves and your families, then these companies will just go to the Caribbean countries. That is part of the message. Let me tell you why I think it is the message. This is a list of approximate apparel wages around the world. In the United States, the average is $8.42. Do my colleagues know what it is in Colombia? Seventy to 80 cents; Dominican Republic, 69 cents; El Salvador, 59 cents; Guatemala, somewhere between 37 to 50 cents; Haiti, 30 cents; Honduras, 43 cents; Nicaragua, 23 cents. I am worried that not only is the message to workers in our country: Look, we will just go to these countries where we can pay 23 or 40 cents an hour; you cannot compete with them so you dare not call for better wages and working conditions. I am also worried the message we're sending to these countries is: Yes, there is going to be economic expansion and there is going to be more trade, but the only way you can get the foreign investment is if you agree to work for less than 50 cents an hour. Again, I will give some figures. CBI countries with the fastest export growth to the United States have also experienced the sharpest decline in wages in the region. Maybe my colleagues can explain to me why this is the case. Over the last 10 years, in Honduras: Apparel imports from Honduras exploded 2,523 percent. Yet for the same 10 years, the wages in Honduras declined by 59 percent. In El Salvador: Apparel exports to the United States have increased 2,512 percent, while wages have decreased 27 percent. In contrast, Jamaica's export growth has been less impressive, culminating in an actual 17 percent decline over the past year. One explanation is that Jamaica's high rate of unionization has ensured that workers' wages have increased. So here is the message. May I simply say to my colleagues why enforceable IOL standards are important: The basic right to be able to organize and not wind up in prison; the basic right to be able to bargain collectively and not wind up in prison. It is because if we do not have enforceable labor standards--and we do not in this trade legislation right now, and this amendment puts enforceable labor standards into this legislation--then we are saying to workers in our States: You had better not ask for more by way of wages. You had better not be too assertive for yourselves or your families because we'll just go to these CBI countries and we'll pay 50 cents an hour or less. What it says to the workers in these countries--and I just gave you some aggregate data--is: By the way, we're not going to guarantee your right to organize. We're not going to guarantee any fair labor standards. We're not going to guarantee any IOL standards that will be enforceable. Therefore, the only way you get the investment is if you're willing to work under sweatshop conditions. As a matter of fact, in the CBI countries, their growth in exports to our country has been unbelievable--dramatic growth--but the wages have declined. The only country where that has not happened is Jamaica, which is a country where there has been unionization. So the message is: You don't get the trade, you don't get the investment, if you dare to unionize. I say to colleagues, there are many articles, many testimonies, and there is a GAO report which shows that workers' rights have not been respected and are not respected in Central America, Haiti, and the Dominican Republic. I do not think my colleagues are going to argue with me on this. It seems the evidence is irrefutable on that point. Without this amendment, the CBI Parity bill is going to help defeat unionizing drives in our textile plants and American workers will compete with Caribbean apparel workers who are willing to work for 30 cents an hour--23 cents an hour actually in Nicaragua, 80 cents an hour in Colombia. The United States apparel workers make, on the average, $8.42, which is not a lot of money. There is a bitter irony: Many of these workers in U.S. textile plants are actually immigrants from these very same countries. A large number of them are poor, they barely make a living wage, they are women, they are minorities. Without this amendment, the CBI parity bill will merely encourage United States corporations to set up sweatshops in the Caribbean. My amendment is an anti-sweatshop amendment. To summarize, there ought to be enforceable labor standards. There are not any in this trade bill. Without enforceable labor standards, we are not on the side of human rights, we are not on the side of people in the CBI countries wanting to organize and to be able to do well for their families, and we are not on the side of wage earners in our country who are going to lose their jobs to workers in Honduras who work for 40 cents an hour. We ought to at least have enforceable IOL standards. That is exactly what this amendment speaks to. I reserve the remainder of my time. Mr. MOYNIHAN addressed the Chair.

Mr. WELLSTONE. Mr. President, before yielding to the Senator from Montana--I will be pleased to accommodate him--my understanding is that before we come to a final vote, there will be an opportunity for further discussion of this amendment. There are some additional comments I want to make, especially in response to the very helpful comments of the Senator.

Mr. WELLSTONE. I thank the Senator. Mr. BAUCUS addressed the Chair.

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

Mr. WELLSTONE. Mr. President, I had a chance to speak earlier about the amendment I had introduced, and then we cut off the discussion to enable Senator Baucus to have a chance to speak on the floor. I look forward to comments by my colleague from Delaware, but I think what I will first try to do is summarize this amendment and then hear what my colleague, Senator Roth, has to say. This amendment would provide for mutually beneficial trade relations--that is what we talked about earlier--between the U.S. and Caribbean countries by rewarding those countries that comply with internationally recognized core labor rights with increased access to the U.S. market for certain textile goods. Secondly, it would provide for enforceable labor standards. Before any of the CBI trade bill's benefits could go into effect, the Secretary of Labor would have to determine that a CBI country is providing for enforcement of ILO core labor rights. The Secretary would make this determination after consulting with labor officials in these other countries and after public comments. But the Secretary of Labor makes the final decision. U.S. citizens would have a private right of action in district court to enforce these provisions. This amendment would basically apply the labor standards of Senator Feingold's HOPE for Africa bill to CBI countries. Supporters of CBI parity claim that NAFTA-like benefits will help the Caribbean workers. I want to point out again--because I am an internationalist and I am interested in mutually beneficial trade--that an October 1999 report on Mexican maquiladoras by the Comite Fronterizo de Obreros shows that wages and conditions have actually deteriorated since NAFTA. If NAFTA hasn't helped Mexican workers, why would NAFTA parity help CBI workers? I already presented data this morning, and I won't do it again. In October of 1999, the CFO Border Committee of Women Workers issued a report detailing what happened to workers in the Mexican maquiladoras since the passage of NAFTA. They found that the maquiladoras paid the lowest wages in Mexican industry; that real wages in Mexican manufacturing have declined by more than 20 percent since 1994; that wage levels have come under attack whenever they are over the threshold considered competitive by the maquiladoras; that border workers have endured a sharp decline in their standard of living since NAFTA; that the practice of using child labor in the maquilas is widespread; and that in the name of NAFTA, Mexican companies, aided by their government, are ``waging a tireless and surreptitious campaign of dirty tricks to stamp out unions in the maquiladoras.'' That is the report. The same is true of the CBI countries. Those countries, which have the fastest growth in exports to the United States, have experienced the steepest decline in wages in the region. Honduran apparel exports to the United States increased 2,523 percent over the last 10 years but wages declined by 59 percent. In El Salvador, it was 2,512 percent and wages declined 27 percent. Jamaica had the least export growth, one reason being the rate of unionization in Jamaica. You have average wages of 78 cents in Colombia, 69 cents in the Dominican Republic, 30 cents in Guatemala, and 23 cents in Nicaragua. Basically, what we are saying again to workers in our own country is, if you organize and try to bargain collectively to make a better wage, these apparel companies will just go to these Caribbean countries. We will just basically undercut your right to organize. I am in favor of the right of people to organize in our country. What we say to the workers in these countries is that if you want to make more than 35 cents an hour, or 43 cents an hour, and you join a union, or try to bargain collectively, we will deny you your right to do so. We don't have any enforceable labor standard to make sure these abuses don't continue to take place. Sometimes I think the wage earners in our country are portrayed in some of this debate as if they are greedy or are portrayed as if they look backward and they don't understand this new international economy. I think in many ways this debate is about that. What would you think if you were working for $8.50 an hour and you saw adopted on the floor of the Senate a trade agreement without any enforceable labor standard, which meant you were going to be competing against people who make 30 cents an hour or against people making 30 cents an hour in Guatemala? They are never going to get to $8.50. But don't we want to take these ILO standards and basic human rights standards and make sure they are enforceable? That way you can have the uplifting of the living standards of people in these countries. Without this amendment, this CBI parity bill is going to merely encourage U.S. corporations to set up sweatshops in the Caribbean. This is an antisweatshop amendment. This amendment does not require that CBI countries match U.S. wages in work and working conditions, although 67 percent of the American people think the minimum wage of our trading partners should be raised to U.S. levels. That is not going to happen. But that is not what the amendment does. It only requires these countries to respect the core ILO labor standards before we give them additional benefits. It is a human rights amendment. This amendment basically says we should not be encouraging these CBI countries to compete against our workers by setting up sweatshops, and it says that we have to make sure there is some means of enforcing such antisweatshop standards. I want to support trade agreements. People in our country want to support trade agreements. But do you want to know something. The reason the trade policy is losing its legitimacy with the American people--I think probably poll after poll shows that the American people are suspicious of these trade agreements--is because they know they put our workers in a terrible position because they know there aren't enforceable labor standards, because they know there aren't enforceable human rights standards, and they tout these trade agreements as being great for the apparel industry, great for these corporations, and terrible for wage earners. That is what this vote on this amendment is all about. Are you on the side of working people in our country so that they know they can organize in textile plants and the apparel industry, and they won't basically be shut out and the companies won't be able to say, goodbye; we are going to these other countries because we don't have to abide by any labor standards? Are you on the side of these workers or are you on the side of these corporations? American workers compete with Caribbean apparel workers earning from 23 cents an hour in Nicaragua to 80 cents an hour in Colombia. Our workers make about $8.42, on average. Who is going to benefit from extending NAFTA benefits to the CBI countries without enforceable labor standards? All I am asking with this amendment, I say to my colleague from Delaware, is enforceable labor standards. It is not going to be the textile workers. It is not going to be the workers in the CBI countries. It is going to be the American textile companies that want to shift production to sweatshops offshore so they can save labor costs. Can I repeat that one more time? Who is going to benefit from this trade legislation without this amendment? Who is going to benefit from extending NAFTA benefits to the CBI countries without enforceable labor standards? Not American textile workers; not working people in our country; not the workers in the CBI countries. It is the American textile companies that are going to benefit that want to shift production to sweatshops offshore so they can save labor costs. I say to Republicans and Democrats alike: Whose side are you on? If you are on the side of working people, if you are on the side of the right of people to be able to organize, if you are on the side of working people in these CBI countries and poor people in these CBI countries, and you are on the side of human rights of people in these countries, at the very minimum, we ought to vote for this amendment which will put some teeth into some enforceable labor standards. The alternatives to this amendment are unenforceable. Let me be clear about that. I don't want a Senator to come to the floor and say we have already dealt with labor standards. The CBI parity merely includes labor rights as an eligibility criteria which can only be enforced by the administration. The administration already enforces the GSP program and has never suspended one CBI country despite their terrible labor rights record. If the administration won't use its GSP leverage to significantly improve labor rights, why would it use eligibility criteria? Nobody can seriously argue that this administration would deny eligibility to a CBI country based on labor rights violations. They have never done it. The GAO issued a report last year that listed the various GSP worker rights in CBI countries accepted for review. In each case--I gave examples earlier, so I will not do it again--the petitions were withdrawn usually after some nominal changes in the CBI country labor law. But in one CBI country after another, labor laws are flouted, often openly. There have been 95 worker rights petitions against CBI countries under GSP. None, not one, has led to investigation and suspension. The ILO is not an acceptable substitute because it has no enforcement power. This amendment speaks to the compelling need to have enforceable labor standards. The ILO has no enforcement power. The managers' amendment directs the President to ``seek the establishment in the ILO of a mechanism to ensure the effective implementation of each of the core labor conventions that ILO members have ratified.'' I commend Senators Graham and Moynihan for their effort in this direction. But, again, I have to say this on the floor of the Senate. The ILO has no enforcement power, so I am not sure how the ILO can ensure effective implementation. I think enforceable standards for core ILO labor rights need to be built into the trade agreement itself. Let me repeat that. You have to take these basic ILO labor rights, and you have to make sure that enforceable standards are there built into the trade agreement. Otherwise, what you have is a CBI parity bill which is going to actually provide an incentive for CBI countries to move in the opposite direction. I welcome the provision in the managers' amendment on increased transparency. Let me repeat that. I think it is a good idea. It will be useful. But I don't believe it is an enforceable standard that will encourage CBI countries to improve conditions for working people. That is what this is all about. I don't want anybody to misunderstand this amendment. This amendment is based upon a belief in the importance of international trade relations. It is based upon the importance of making sure we address the standard of living in CBI countries and the standard of living of working people in our country. But you can't do that unless you have enforceable labor standards. That is what this amendment calls for. I reserve the remainder of my time. I will wait to hear what my colleagues have to say. Amendment No. 2402 (Purpose: To clarify the acts, policies, and practices that are considered unreasonable for purposes of section 301 of the Trade Act of 1974)