Ron Wyden

Mr. WYDEN

Mr. WYDEN. Mr. President, and colleagues, this is going to be an important week in the debate about the future of the Medicare program. The White House is coming forward with several useful Medicare proposals. Democrats and Republicans on both sides of the Hill are similarly focused. This morning I have come to the floor to zero in on the issue of prescription drug coverage for older people under Medicare. I believe if the Senate builds on a bipartisan proposal already approved by a majority of Senators, it will be possible to responsibly add prescription drug coverage to the Medicare program in this session of the Congress. A few weeks ago, 54 Members of this body voted for legislation offered by Senator Olympia Snowe and myself to finance prescription drug coverage for seniors under Medicare with a tobacco tax. Senator Snowe and I have now developed a specific proposal that calls for a 55-cent-a-pack tobacco tax that would be used to cover the prescription drug needs of older people under Medicare. We think that is appropriate because, of course, the Medicare program spends upwards of $10 billion a year simply paying for tobacco-related illnesses that older people have suffered. Under the Snowe-Wyden proposal, we would be able to raise $70 billion in order to cover prescription drug benefits for older people over the next 10 years. That is hard dollars to cover this important benefit. It is not phantom funding. It is not sleight of hand. It is not a kind of wish-and-hope, pie-in-the-sky way to take care of this particular need for older people. It is a concrete, tangible concept. A majority of the Senate, Senators of both political parties, have voted for it. I am very hopeful that it will be possible now for the Senate to build on this support, with bipartisan approval, to actually get the job done and support older people. In the legislation that Senator Snowe and I have put together, we envision this $70 billion being used to assist older people with the insurance premiums that they now pay for Medicare supplemental policies. As we know, many of our seniors have Medicare supplemental policies. Many of our seniors participate in what is called Medicare Choice, a program that involves Medicare HMOs. It may well be that a number of seniors wish to purchase policies that cover only prescription drugs. But what Senator Snowe and I have developed would be voluntary. No senior would be required to do it. The Presiding Officer and I will recall the catastrophic care fiasco of several years ago when older people were concerned about being required to pay for something they did not really need or did not particularly want. That would not be the case under the legislation developed by Senator Snowe and I. It would be voluntary if an older person chose to participate in the program; and $70 billion in real funding would be eligible to assist the older people who desire to have that coverage as part of their Medicare. Senator Snowe and I believe the best way to deliver this coverage is to build on a model that Members of Congress know a fair amount about, and that is the Federal employee health plan. Senator Snowe and I recognize that program covers different people than we would be covering under Medicare, so our delivery system for this particular benefit would be a kind of senior citizen's version of the Federal employee health plan. We call it the SPICE Board. It stands for Senior Prescription Insurance Coverage Equity. We consider it a kind of senior citizens' friendly version of the Federal employee health plan. We have incorporated some of the very good ideas that have come from Families USA, the seniors' advocacy group, the National Council of Senior Citizens, and a variety of the senior citizens' organizations, to ensure that the SPICE Board that would deliver this system would offer choices and competition for older people but at the same time would not allow cherry-picking; so that a plan could not take just healthy people, it would make sure there were protections against adverse selection. We bar the use of preexisting conditions. A lot of the problems we have seen with insurance coverage in the past would not be allowed under the SPICE Board because we have incorporated many of the good ideas that have come from AARP and Families USA and the National Council of Senior Citizens so as to ensure that the SPICE Board would offer these benefits to older people in a senior-friendly way. At the same time, it is important to note that this is a competitive model. This will help us to hold costs down because older people would have the kind of bargaining power, through the SPICE Board, that an HMO has today when it bargains for younger people getting prescription drug coverage under the Federal employee health plan. I think it is particularly sad to see older people, many of whom have 16, 18, 20 prescriptions they are using in a year, paying well over $1,000 out of pocket for their medicine. It is particularly outrageous that they end up paying a premium, since they don't have coverage, when they walk into a pharmacy and pay out of pocket. They have to pay more because, in effect, they are subsidizing those who have bargaining power in the private sector who get their coverage through a managed care plan. We use an approach that uses markets, offers choice, avoids price controls, but makes sure that through the SPICE Board, older people would have the kind of bargaining power and clout we see HMOs having in the private sector. I am very hopeful that this week, as the Congress moves to have a vigorous discussion about Medicare--the President's proposal is coming tomorrow; our colleagues on both sides of the Hill expressing great interest in this issue--Members will reflect on the fact that a majority of the Senate has already voted for the Snowe-Wyden proposal to finance this coverage with a tobacco tax. It is only fair, because of the costs Medicare incurs related to tobacco. We know now that a bipartisan group of Senators is willing to at least look at that approach to finance this coverage. I am also very hopeful that our colleagues will steer clear of some of these price control ideas that would create more bureaucracy. Incidentally, most of these price controls just shift the cost onto the backs of other consumers. I am very fearful that if we set up a price control regime for older people under Medicare, a lot of low-income folks, African Americans, Hispanics, and others would end up seeing the costs shifted onto them because they wouldn't have any protection from this price control regime. In addition to the real intangible way that is going to be essential to finance this program, we ought to use a concept the Congress is familiar with for delivering the benefit. Under the Senior Prescription Insurance Coverage Equity Program, the SPICE Program, we would be able to do that. We would be able to deliver the benefit in a way that allows senior citizens to exercise clout in the marketplace and be in a position to hold their costs down. There would be real consumer protections because we have incorporated the good ideas from Families USA and AARP and the National Council of Senior Citizens. I am very hopeful as this debate goes forward this week, our colleagues in the Senate will see there is a chance to avoid some of the bickering and partisanship that has accompanied other issues, look to giving older people this important preventive benefit that is so critical but financing it in a real way, not with phantom kind of money, and then delivering the benefit in a way that steers clear of price controls but gives older citizens in our country the kind of bargaining power an HMO has so the older people can get reasonable prices for their coverage. I know the Presiding Officer has a great interest in this issue. He and I have worked often on this matter. He can count on the fact that Senator Snowe and I will be visiting with him, as well as other colleagues, because it is our intent to do everything possible to keep the Senate, at least on the prescription drug issue, focused on the real needs of older people and the opportunity to address this issue in this session of Congress with real and hard financing and a delivery system that will work for the 21st century. I yield the floor.

Mr. WYDEN

Mr. WYDEN. Will my colleague yield?

Mr. WYDEN. Could the Senator also provide an example of when the defense would not apply?

Mr. WYDEN. The Senator's amendment refers to temporary non-compliance with ``federally enforceable requirements'' because of factors related to a Y2K failure beyond the control of the party charged with compliance. Could the Senator provide an example of such a federally enforceable requirement so that this Body can understand the practical scope of the Senator's amendment, especially what would and would not be an imminent threat to health, safety or the environment that would bar the use of the defense?

Mr. WYDEN. Mr. President, I rise today to ask my colleague, the Senator from Oklahoma, Senator Inhofe, a few questions regarding his amendment Thursday to the Y2K Bill.

Mr. WYDEN. What does the phrase ``federally enforceable requirements'' mean? Is it broader than federal requirements?

Mr. WYDEN. I appreciate that. Of course, that is what many contracts say. That is the economic loss rule. We say that the rights that apply are the rights of contracts, which most small businesses enter into when they buy the system. It is the State economic loss rule. State contract law with respect to economic loss covers those issues. I appreciate him yielding.

Mr. WYDEN. I thank the Senator from Oklahoma for clarifying his amendment and I thank him for his work on this issue.

Mr. WYDEN

Mr. WYDEN. Mr. President, I want to respond to some of the points made by the distinguished Senator from North Carolina. But before I do that, I want to talk about what a vote against this legislation means today. A vote against this legislation today means that the high-technology sector, which is driving this Nation's economic prosperity, doesn't deserve the same kind of treatment afforded the airline manufacturers; the high-technology sector doesn't deserve the same kind of treatment afforded the securities industry; the high-technology sector doesn't deserve the same kind of treatment afforded the financial services sector. I just don't think that makes sense, when it is so clear that we are going to have problems in the next century with respect to Y2K, that we would compound those problems by not giving high technology the same sort of protection that we have given to a variety of other industries. Second, it seems to me that a vote against this legislation is a vote against the Nation's risk-takers, and it is a vote against the Nation's entrepreneurs who are working their heads off today to make their systems Y2K-compliant but are legitimately concerned about frivolous lawsuits. I don't think the Senate ought to be voting today against those risk-takers and entrepreneurs. Third, it seems to me that a vote against this bill fails to recognize how dramatic the bipartisan changes have been to this legislation since it came out of the Senate Commerce Committee. The Senate Commerce Committee bill, as far as I am concerned, was a nonstarter. The House bill is a nonstarter. But this bill puts tough pressure on business and directs systems to cure problems, as well as those who might want to bring suits to mitigate damages. Now, my friend from North Carolina has said repeatedly for days that if you have a problem and you are a small businessperson, you are not going to get to recover anything except the cost of the computer. My question, colleagues, is, Why in the world would the overwhelming majority of the Nation's small businesses be calling for passage of this bill if all they got when there was a problem was the cost of a computer? I agree with the Senator from North Carolina. These are dedicated, thoughtful people. Why in the world would they be in support of a bill if all they got was the cost of the computer? The reason they are for the bill is they get all the rights that are prescribed in the contract that a majority of them signed when they purchased a computer. They get the damages that are the foreseeable consequence of a Y2K problem. They get economic losses as prescribed by State contract law. That is the reason why the overwhelming number of small businesses in this country are for this legislation. The fact of the matter is, colleagues, that the so-called culprits who are behind the Y2K problem are folks who didn't really realize decades ago what we would be faced with at the end of the century. Let me tell you what Alan Greenspan had to say recently on this issue. Alan Greenspan said, ``I am one of the culprits who created the problem. I used to write those programs back in the 1960s and 1970s, and was so proud of the fact that I was able to squeeze a few elements of space by not having to put 19 before the year.'' That is what Alan Greenspan said. He said he was one of the culprits behind the problem. In the infancy of the information age when every byte of memory cost about $1 million, he saved his company a lot of money. Today a million bytes of memory can be bought for less than a penny. This problem was a result of an engineering tradeoff, not some kind of conspiracy of computer geeks. I doubt that any computer programmer ever dreamed that programs written in the 1960s and 1970s would still be running today. But the point of this legislation is to keep the heat on all of our Nation's companies to do everything they can to make the chips and the computers and all of our systems Y2K compliant. Let's get the problem fixed. But let's also have a safety net in order to ensure justice for those who have problems. I want to say to my friend from North Carolina, the distinguished Senator, that he talked about how companies that are big and bad are going to get off the hook; they are going to get a free ride, and, again, you are not going to get anything except the cost of the computer. Let me tell you what the hooks are for those that are big and bad. If you are ripping people off, you are going to get stuck with joint and several liability. You are going to get stuck with punitive damages. That is what happens under this legislation when you are big and bad. But what we say in the many cases where we don't have that kind of conduct--the Senator from North Carolina and I certainly agree on this point--is you will be liable for the proportion of the problem that you caused. We say that the small businesses deserve a break on punitive damages. But let's make no mistake about it, colleagues. If you are big and bad, the hooks in this bill are clear. Nobody is getting off the hook. You get stuck with joint and several liability. You can be held for punitive damages. That is in the text of this legislation. There is a reason, colleagues, why the little guy is for this bill. There is a reason why the overwhelming number of small businesses in this Nation are for the bill. It is that those risk takers, those entrepreneurs, those innovators are saying, as we take the steps to make our systems Y2K compliant, let's also have a safety net so if there are frivolous lawsuits that we aren't going to lose everything as a result. This bill has seen 11 major changes to favor the consumer, the plaintiff, and small businessperson since the legislation left the Senate Commerce Committee. I particularly want to credit the chairman of the committee, Senator McCain, and the Democratic leader on the technology issue, Senator Dodd, who have worked so hard to help fashion this proposal. I hope today when we vote that we will not send a message that high technology doesn't deserve the same kind of treatment that airlines get, that the securities industry gets, that the financial services sector gets. Let's pass this bill. Let's send it to the conference with a resounding vote. I yield the floor.

Mr. WYDEN

Mr. WYDEN. Mr. President, Senator Dodd is the Democratic technology leader. I join him now in saying that a vote against this bill is a vote against the entrepreneurs and risk-takers of this Nation who are working their heads off to make their systems Y2K compliant but are legitimately fearful of frivolous lawsuits. Some have said that small businesses cannot recover their economic losses under this bill. If that were the case, why would the Nation's small businesses overwhelmingly support the legislation? The fact is, small businesses can recover economic losses just as they do under the status quo. Specifically, a small business plaintiff can recover whatever economic losses are allowed under State contract law. Many of these State laws say that if profits are lost as a consequence of a Y2K failure, the small business plaintiff can recover their economic losses. Failure to pass this bill would be similar to lobbing a monkey wrench into the high-tech engine that is driving the Nation's economic prosperity. I join with Senator Dodd, our technology leader, in urging Democrats to support the legislation.

Mr. WYDEN

Mr. WYDEN. I believe I have the time. I am going to wrap up in 2 minutes, maximum.

Mr. WYDEN. We are going to have to look at some of these. The question is, Is a fix available? If we are not careful, that could be a lawyer's full employment program. My colleague is absolutely right. In Oregon and California, we have access to some of the best minds and most dedicated and thoughtful people on the planet in this area. We should spend some time making sure we can get at this concept the Senator from California wishes to address in a workable way so we don't have more litigation, rather than less. I know the Senator from California shares that goal. I yield the floor.

Mr. WYDEN. My colleague is constructive, as always. Here is the kind of concern I think the high-technology sector would have to focus on the manufacturer. That deals with this issue of interoperability where, in effect, if you have one system or product that is Y2K compliant but, as a result of it being installed in a system that isn't already Y2K ready, you may have in fact failures, or bugs, or defects, the Y2K- ready product may get infected and not properly function. Then the question is, Who is responsible? Can you, in effect, have somebody take responsibility for fixing a problem that isn't under their control? If the Senator from California would like to put in a quorum call and get into the issue of interoperability and how to deal with these various issues, and sort of have all of the people talking at once, I think that is very constructive. I am anxious to do it. I think this is a discrete and important concept. Again, without going back to all the things that were said in the last 20 or 25 minutes, if you are a consumer, or a business, and you are getting stiffed, you can go out and sue immediately. You can go out and sue and get an injunction immediately. You don't have to wait 30 or 60 days, or whatever. You can go immediately. I would like to spend the time during the quorum call to try to focus on what I think is a very sincere effort of the Senator from California to try to do something to help people who need a remedy, and need it quickly. We are going to have to get into some of these interoperability questions and some of the questions of what happens when you have a problem that essentially gets into your system after it leaves your hands. I am anxious to try to do it. We can put it in the context of the kind of discrete, specific idea that the Senator from California was talking about rather than what I heard during the last 20 or 25 minutes about how big and bad actors are going to get a free ride, when in fact on page 13 of the bill it says that you are liable for the problem that you cause. That is what is on page 13 of the bill. Proportionate liability--you are liable for the portion of the problem you caused. If you engage in intentional misconduct, if you rip people off, you are going to be stuck for the whole thing--joint and several, punitive damages, the works. I would prefer to do what the Senator from California is now suggesting, which is to put in a quorum call, bring the good people from Chairman McCain's office and from the office of the Senator from California and myself, along with Senator Dodd's, into a discussion to see if we can figure out a way to make this workable. I am happy to yield the floor.

Mr. WYDEN. Mr. President, I came over to the floor because I am in sympathy with what the Senator from California is trying to do. But this bill has taken such a pasting in the last 15 or 20 minutes that I am going to take a couple of minutes to correct the Record before we actually get into the merits of what my colleague is trying to do. For example, I have heard repeatedly that if you pass this bipartisan legislation put together by the Senator from Arizona and the Democratic leader on technology issues, Senator Dodd, and myself, well, these companies won't have to do anything; they won't have to do anything at all. Well, if they don't do anything at all, they are going to get sued. That is what is going to happen to them. Then we heard that if they were big and bad, they were going to get a free ride. I heard that several times here on the floor of the Senate in the last 15 or 20 minutes. If you are big and bad, you are going to get a free ride if we pass this bill. I will tell you what happens if you are big and if you engage in egregious activity, if you rip people off; what happens is you get stuck for punitive damages because there is absolutely no cap on those, and joint and several liability applies to those people as well. That is what happens to the people who are big and bad under our legislation. I think it is just as important that the Record be corrected. I also heard that businesses were going to be the victims and the like. Well, if that is the case, it is sort of hard to understand why hundreds and hundreds of business organizations are supporting this bill. I would be very interested in somebody showing me a list of some business groups that aren't supporting the bill because I would sure want to be responsive to those folks. Let me, if I might, talk specifically about the Boxer amendment. By the way, apart from the last 15 or 20 minutes of discussion, my friend from California has been very helpful on a lot of technology issues that this Senator has been involved in. I remember the Internet Tax Freedom Act that we worked on in the last session of the Congress, where the Senator from California was very helpful. I very much appreciated that. The question that I have--and maybe I can engage in a discussion with the Senator from California on this and try to see if I can get fixed in my mind how to make what the Senator from California is talking about workable, because I think the Senator from California wants to do what is right. I am now just going to focus on her amendment and sort of put aside some of these other comments that I have heard in the last 15, 20 minutes, which I so vehemently take exception to, and see if I can figure out with the Senator from California how we can make this workable. I want to tell her exactly what my concerns are. I come from a consumer movement, and she comes from that movement, and I know what she is trying to do is the right thing. Let us say that you have a system where one chip out of thousands is out of whack. My colleague says it ought to be repaired or replaced, and the question that we have heard as we have tried to talk to people is: Does this mean replacing just a chip? Does it mean replacing the operating system? Who is responsible for the fix? Is it Circuit City, where you bought it? Is it Compaq Computer? Is it the chip maker? What we have found in our discussions with people is that it wasn't just chips, but it was the software situation as well. Is it going to be Lotus or Novell or the retired computer programmer who put the code together a few years ago? As far as I can tell, the responsible companies--and I think the Senator from California has been absolutely right in making the point that there are an awful lot of responsible people out there. We are trying to do the right thing. The responsible people seem to want to do the kinds of things that the Senator from California is talking about. I know I saw an EDS advertisement essentially in support of our bill that talked about how they have a system to try to do this. If we can figure out a way, with the Senator from California, to do the kinds of things she is talking about so as to not again produce more litigation at a time when we are trying to constrict litigation, I want to do it. I have already had my staff put a lot of time into this. We are willing to spend a lot more time, because I think the motivations of the Senator from California are absolutely right. The question is how to deal with the kinds of bits, bytes, and chips, and all of the various technological aspects that go into this. I would be happy to yield to my colleague and hear her thoughts on it.

Mr. WYDEN

Mr. WYDEN. Thank you, Mr. President. I would like to pick up on a couple of points made by Chairman McCain, and particularly on this matter of tackling the issue in a bipartisan way. Certainly, when a consumer business gets flattened early in the next century as a result of a Y2K failure, they are not going to ask, is it a Democratic failure or a Republican failure? They are going to say: I have a problem. What is being done to fix it? The central point we have been trying to make--Chairman McCain, and Senator Dodd, who is the Democratic leader of the Y2K effort, and I--is that we have spent many weeks trying to tackle this in a bipartisan way. The fact of the matter is that when the bill came out of the Senate Commerce Committee, we were not at that time able to come before the Senate and say we did in fact have a bipartisan bill. As a result of the negotiations that have taken place for many weeks now--led by Senator Dodd, our leader, Senator Feinstein of California who has great expertise in this matter, and a variety of Democrats--we have now a bill that has 11 major changes that assist consumers and plaintiffs in getting a fair shake with respect to any litigation which may develop early in the next century. These were all areas where a number of Members on the Democratic side of the aisle thought that the original Senate Commerce Committee bill came up short. We went to Chairman McCain, and we said we would like to get a good bill; we would like to get a bill the President of the United States could sign; we would like to get a bipartisan bill. We said we had a few bottom lines. One of them was that we were not going to change jurisprudence for all time; this was going to be a time-limited bill. Chairman McCain agreed to our request that this last for 36 months. This is a sunsetted piece of legislation. We insisted this bill not apply to anybody who suffers a personal injury as a result of a Y2K failure. If you are in an elevator or you suffer some other kind of grievous bodily injury as a result of a Y2K failure, all existing tort remedies apply. We took out all the vague defenses that some people in the business community earlier thought were important. We said we are not going to give somebody protection if they just say they made a reasonable effort to go to bat for a plaintiff or the consumer. Those 11 major changes were made to try to be responsive to what the White House and a variety of consumer groups feel strongly about. Frankly, the area I am most interested in, in public policy, is consumer rights. I started with the Gray Panthers. I was director of the Gray Panthers for 7 years before I was elected to the House of Representatives, making sure that consumers got a fair shake and that the little guy was in a position, if they got stuck in the marketplace, to have remedies. That is at the heart of my public service career. I believe this is a balanced bill. This forces defendants to go out and cure problems for which they have been responsible. It also tells plaintiffs we would like them to mitigate damages; we would like them to figure out ways to hold down the cost; we should direct as much as we possibly can to alternative dispute systems. Picking up on the theme of Chairman McCain, that is a bipartisan proposition. I think we have been responsive to key concerns that have been made by those with reservations about this bill. There are some areas where we cannot go. I will emphasize as we move to today's debate a couple of those big concerns. We cannot allow under our legislation the creation of new Y2K torts that are not warranted on the basis of the facts. We believe, in areas like the economic loss issue which was debated so intensely yesterday, that the appropriate remedies involve State contract law. When consumers are faced with economic losses, we want to see them get a fair shake in this area, and we believe State contract law should govern. What we are not able to do is allow those who believe State contract law is inadequate with respect to economic losses, we cannot support them repackaging those claims as new Y2K torts. We favor the status quo. With respect to economic losses, we want to see consumers protected in the right of contract. However, this Member of the Senate thinks it would be a big mistake to create on the floor of the Senate today and in the days ahead new Y2K torts, new tort claims, that don't exist today under current law. I am very hopeful that we are able to finish this legislation today. It is bipartisan legislation now as a result of the 11 changes that have been made. I am very hopeful the White House will not veto this legislation. I have said repeatedly that to veto a responsible bill is just like lobbing a monkey wrench into the technology engine that is driving the Nation's prosperity. That is what is going to be the real effect of vetoing a responsible bill in this area. We continue to remain open to ideas and suggestions from colleagues. We want this bill signed. We have made, as I say, 11 major changes since this bill left the Senate Commerce Committee on a bipartisan basis under the leadership of Senator Dodd, who is the Democratic leader on the Y2K issue. There are areas where we cannot go, such as the creation of new Y2K torts in this area. I look forward to today's debate and am anxious to continue to work with colleagues in a bipartisan way. I am very optimistic that the bill the Senate hopefully will pass today will get the support of the White House. I yield the floor. Amendment No. 612, As Modified

Mr. WYDEN

Mr. WYDEN. Let me yield, if I can, to Senator Hollings.

Mr. WYDEN. Will the chairman yield?

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

Mr. WYDEN. I appreciate the chairman yielding. I will be brief. I think what the chairman of the Commerce Committee is suggesting is a practical way to get at it. This Member of the Senate believes, with all due respect to my friend from Massachusetts, that the Kerry amendment would be a lightning rod for additional frivolous lawsuits with respect to Y2K. I think, for example, some of the language is so vague--this question of identifying the potential for Y2K failure.

Mr. WYDEN. Mr. President, I will yield the floor in just a moment. First, I thank the Democratic leader for the Y2K effort, and Senator Dodd for all of his counsel and help. He, of course, is the principal author on securities litigation legislation which, to a great extent, this bill is modeled after. Just before I yield the floor, I, too, want to say to Senator Hollings, the Democratic leader of the Commerce Committee, that I agree with so much of what he has done--whether it is a matter of Social Security surplus or campaign finance. I regret that on this one we have a difference of opinion. I think that we have brought a balanced bill to the floor of the Senate. But I look forward to the many other issues on which Senator Hollings and I are going to be in agreement. I yield the floor.

Mr. WYDEN. Thank you, Mr. President. I would like to take just a few minutes, as we wait for the minority leader to address some of the concerns that have been raised by the Senator from Massachusetts, to describe why I and the Democratic leader of the Y2K efforts, Senator Dodd, believe that the Kerry amendment, though certainly sincere, is really a glidepath, an invitation, to frivolous lawsuits with respect to this Y2K matter. I come today to say we know we are going to have problems early in the next century. That has been documented on a bipartisan basis by the Y2K committee. What we are concerned about is not compounding the problem with frivolous lawsuits. Regrettably, the Kerry proposal is going to do just that. What the Senator from Connecticut and I have tried to do is to talk first about the vagueness of the language in the Kerry proposal. This notion that you would simply have to identify ``potential'' with respect to the Y2K issue and Y2K problems is just going to be a lawyers' full employment program. What is going to happen is, you are going to have frivolous cases brought; you will very quickly have companies, particularly small business defendants, move to dismiss those cases because they are patently frivolous. Because the Kerry standard is so vague, a judge is going to have really no alternative other than to send that to a jury. So I think that provision, identifying ``potential,'' is a real lightning rod for frivolous lawsuits. That would be our first concern. The second, it seems to me, is that the Senator from Massachusetts has, to a great extent, mixed together, commingled, the principles of punitive damages and proportionality. I would like to try to step back for a minute and see if I can clarify that. The Senator from Massachusetts has spoken repeatedly, he has come to the floor repeatedly, and said that under the bipartisan legislation, if defendants are engaged in reckless, irresponsible, wanton conduct, there is going to be no remedy for the plaintiff in those situations. The fact of the matter is, under proportionality--clearly laid out in our legislation--you are liable to the extent that you contributed to the problem. That is true if you are a small business, if you are one of the Fortune 500 businesses--it is true no matter who you are. Under our language, with respect to proportionality, you are liable for what you contribute. It is just that simple. With respect to punitive damages, besides keeping in place the State evidentiary standards on punitive damages, what we in fact say is the only people we are really going to try to protect are those who are such a key part of the technology engine for our country, and that is the Nation's small businesses. Finally, colleagues, I think there is some confusion with respect to this issue of economic losses as well. The Senator from Massachusetts has said that in some way the bipartisan proposal we bring has narrowed the availability of coverage for economic losses. We very specifically, in our legislation, make clear that existing State contract and tort law is kept in place. What the dispute is all about is that the Senator from Massachusetts, and perhaps others, is in effect trying to tortify existing contract law. They would like to try to create some torts for 36 months in the Y2K area where those torts do not exist today in existing law. My reputation, my background is as a consumer advocate. That is what I was doing with the Gray Panthers for 7 years before I was elected to the Congress, what I have tried to do for 18 years in both the House and the Senate. I feel very strongly about protecting consumers, and there are areas where it is appropriate to create new torts. Certainly, I have created a few causes of action during my years of service in the Congress. If I can just finish, then I will be glad to yield to the Senator from Massachusetts. I think it would be a mistake, given the extraordinary potential for economic calamity in the next century, to change the law with respect to economic loss. We are neither broadening it nor narrowing it. We are keeping it in place. I know that those State laws with respect to economic loss do not do a lot of the things that the Senator from Massachusetts thinks are important, but that is, in fact, what we do in our legislation. I want to be clear, our legislation does nothing, absolutely nothing, to limit remedies that are available to plaintiffs when, in fact, they are victims of a personal injury or wrongful death. So if an individual, early in January of the next century, is in an elevator, for example, and the computer in the elevator breaks, and the individual tragically falls to his or her death or suffers a grievous bodily injury, all existing tort law remedies apply in that kind of instance. The bill that is before the Senate now is a very different one than the one that was voted on on a partisan basis by the Senate Commerce Committee. In fact, in the Senate Commerce Committee, I joined the Senator from Massachusetts in saying that it was wholly inadequate in terms of protecting the rights of consumers. I happen to think the bill the House of Representatives passed is wholly inadequate. The legislation that we have now is a balanced bill. The defendants have strong obligations to cure defects. The plaintiffs have an obligation to mitigate damages. I think our failure to pass this bill, which has now included 10 major changes to favor consumers and plaintiffs since the time it left the Commerce Committee, our failure to pass this bill, I think, is a failure to meet our responsibilities as it relates to this technology engine that is driving so much of our Nation's prosperity. I think when we look at the potential for calamity early in the next century, I don't think there is any dispute that we are going to have a significant number of problems. The question is, does the Senate want to compound those problems by triggering a round of unnecessary and frivolous litigation? I hope we won't do that. I urge my colleagues to oppose the Kerry amendment. I yield the floor. Mr. KERRY addressed the Chair.

Mr. WYDEN. Mr. President, if the Senator will yield, I am happy to engage him. I am saying that our proposal protects State contract law with respect to economic losses. It seems to me that the gentleman's proposal, in wanting to change existing State contract law, is clearly moving us in a different area which legal experts have come to describe, pretty arcanely, as the notion of tortifying contract law doctrine, yes.

Mr. WYDEN. Mr. President, on this point, Senator Edwards is such a magnificent lawyer and I am always reluctant to get into this, but the bottom line in this matter of economic losses is, whatever the plaintiff is entitled to get under State contract law with respect to economic losses is what our bill does. That is just the bottom line. Whatever the plaintiff is entitled to under State contract law is what they are going to get for economic loss--no more, no less. The bill keeps the status quo. I want to take a minute to go to one example. I want to take a minute to talk about the options available to the typical small business in these kinds of cases. Let's say we have a company that buys $10,000 worth of computers from another company, and they all crash January 3 of 2000. They lose $1 million worth of business as a result. Obviously, they are unhappy. They write the computer company and they say that crash was the fault of the computer company, the Y2K failure, and they want it fixed, and they want their money, they want their $1 million. I want to take a second and describe what happens in those situations. The computer company has to get back to the small business within 30 days. It has to make it clear. You have to move. They can say it was a Y2K failure. The computer company says, ``It is our fault. We will fix it the way the business wants--the restaurant. We will give you $1 million.'' That is that. They can say they will fix the Y2K problem, but they should not be responsible for the whole $1 million. They might say, ``We will fix it, but we have to negotiate this out. We are liable for some. You are liable for some.'' If the small business isn't satisfied with what the computer company does, they can basically go out and sue immediately in that kind of situation. The third kind of example would be, the computer company just stiffs the small businessperson, is completely unresponsive to what the small business needs. In that case, the plaintiff, the small businessperson, can go out and file a suit immediately against the computer company. Finally, we have raised the example of what happens if that computer company is bankrupt and insolvent. At that point, the small businessperson can name in their lawsuit anybody they think is a responsible party. They can name Intel; they can name Microsoft; they can name anybody they want. It is at that point the jury is going to decide what portion of the blame each potential defendant ought to bear. That strikes us as sensible. That is the principle of proportionality. We are saying that you ought to pick up the burden of the problem you actually produced, but if you did something intentional, if you ripped somebody off, if you engaged in egregious conduct, then joint and several applies. If we are talking about a low net worth of a defendant, it is the same sort of situation. So the plaintiff isn't left hanging. As we get towards the final vote, I ask my colleagues to remember that is what a typical small business is entitled to--those four kinds of situations, so that at the end of the day they are going to have their economic losses dealt with just as they would under State contract law--no more, no less. Really, we have what amounts to only a handful of real protections for this 36-month period. Yes, we do say that if a small business is operating in good faith, we would put some limits on punitive damages. I guess there can be a philosophical difference of opinion on that. Reasonable people can differ. But we think that if a small business acts in good faith, there ought to be some limit in terms of these punitive damages. There are only a handful of protections. Again, the 30-day period is a limitation on somebody's right to sue. That is why we say if you really think you are stiffed, you can go out and sue immediately. We think it makes sense for a 30-day period to try to cure these problems. On the proportionality issue, we are making a change to deal with a situation where we think that unless somebody engages in an egregious offense-type of conduct with a low net worth defendant, it is appropriate in this situation to say you are liable for what you actually produced. In addition to this being a bill that lasts for a short period of time, it does not apply to personal injury problems at all. If somebody is in an elevator and the computer system falls out and the elevator drops 10 floors and somebody is badly injured, all existing tort remedies apply. I am very hopeful we will have a significant number of our colleagues, particularly on the Democratic side of the aisle, supporting this. There have been 10 major changes made in this legislation since it left the Senate Commerce Committee. Our senior Democrat, the distinguished Senator from South Carolina, was absolutely right--the bill that came out of the Senate Commerce Committee was completely unacceptable in terms of the rights of consumers and the rights of plaintiffs. I joined him in opposing it. Since that time, we took out the items that were unfair. A lot of them happened to be in the House bill--which is completely unacceptable to me, as well. This bill is a balanced bill. It tells defendants they have to go out and cure problems; it tells plaintiffs they have to go out and mitigate damages. I hope our colleagues recognize that failure to pass a responsible bill in this area is just like hurling a monkey wrench into the technology engine that is keeping our economy humming. I hope we won't do that. The Senator from North Carolina asked me, before I went through that enlightening example of small business, to yield. I am happy to do so.

Mr. WYDEN. I thank the Chair. Mr. President, I am going to be brief this morning. I know my colleague from Colorado has been waiting. The Democratic leader of the Y2K effort, Senator Dodd, has also been waiting. I will be brief to begin. It is just a couple of hundred days to the new millennium. It seems to this Member of the Senate that how this body handles this legislation will say a great deal about our Nation's ability to keep our strong technology-oriented economy prospering in the next century. I believe that failure to pass this responsible legislation would be like sticking a monkey wrench in the high-tech engine that is driving our economic prosperity. There is no question that there are going to be problems early next year stemming from the Y2K matter. What is going to happen, however, is that the frivolous lawsuits will compound those problems. The sponsors of this legislation--the chairman of the committee, the Democratic leader of the Y2K effort, Senator Dodd, and myself and others who have been intensively involved--believe that with this bill our Nation will be in a better position to be on line rather than waiting in line for a courtroom date when the problems occur. We have heard my chairman, Senator Hollings, and others talk about the matter of changing jurisprudence in our country. Senator Hollings specifically, who I respect so much, talked about how 200 years of case law and jurisprudence is being changed. This is a very narrow bill. Senator Dodd and I insisted that there be a sunset date on this legislation. We believe, and all the evidence points to the fact, that we are going to see the problems stemming from Y2K trailing off 1 to 3 years into the new century. We have put a tight 36-month sunset date on this legislation. This is not changing Anglo-American jurisprudence for all time. This is a narrow bill that will apply for 36 months so that we do not have to have, for example, a special session of the Senate early next year to deal with this problem.

Mr. WYDEN. I have been waiting about an hour. I will be happy to yield to my friend, who I know has also been doing a lot of work.