[Pages S2168-S2178]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

BALANCED BUDGET DOWNPAYMENT ACT, II

Mr. HATFIELD. Mr. President, what is the pending business?
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:.

A bill (H.R. 3019) making appropriations for fiscal year
1996 to make a further downpayment toward a balanced budget,
and for other purposes.

The Senate resumed consideration of the bill.

Pending:
Hatfield modified amendment No. 3466, in the nature of a
substitute.
Lautenberg amendment No. 3482 (to amendment No. 3466), to
provide funding for programs necessary to maintain essential
environmental protection.
Hatch amendment No. 3499 (to amendment No. 3466), to
provide funds to the District of Columbia Metropolitan Police
Department.
Boxer/Murray amendment No. 3508 (to amendment No. 3466), to
permit the District of Columbia to use local funds for
certain activities.
Gorton amendment No. 3496 (to amendment No. 3466), to
designate the ``Jonathan M. Wainwright Memorial VA Medical
Center'', located in Walla Walla, Washington.
Simon amendment No. 3510 (to amendment No. 3466), to revise
the authority relating to employment requirements for
recipients of scholarships or fellowships from the National
Security Education Trust Fund.
Simon amendment No. 3511 (to amendment No. 3466), to
provide funding to carry out title VI of the National
Literary Act of 1991, title VI of the Library Services and
Construction Act, and section 109 of the Domestic Volunteer
Service Act of 1973.
Coats amendment No. 3513 (to amendment No. 3466), to amend
the Public Health Service Act to prohibit governmental
discrimination in the training and licensing of health
professionals on the basis of the refusal to undergo or
provide training in the performance of induced abortions.
Bond (for Pressler) amendment No. 3514 (to amendment No.
3466), to provide funding for a Radar Satellite project at
NASA.
Bond amendment No. 3515 (to amendment No. 3466), to clarify
rent setting requirements of law regarding housing assisted
under section 236 of the National Housing Act to limit rents
charged moderate income families to that charged for
comparable, nonassisted housing, and clarify permissible uses
of rental income is such projects, in excess of operating
costs and debt service.
Bond amendment No. 3516 (to amendment No. 3466), to
increase in amount available under the HUD Drug Elimination
Grant Program for drug elimination activities in and around
federally-assisted low-income housing developments by $30
million, to be derived from carry-over HOPE program balances.
Bond amendment No. 3517 (to amendment No. 3466), to
establish a special fund dedicated to enable the Department
of Housing and Urban Development to meet crucial milestones
in restructuring its administrative organization and more
effectively address housing and community development needs
of States and local units of government and to clarify and
reaffirm provisions of current law with respect to the
disbursement of HOME and CDBG funds allocated to the State of
New York.
Lautenberg amendment No. 3518 (to amendment No. 3466),
relating to labor-management relations.
Santorum amendment No. 3484 (to amendment No. 3466),
expressing the Sense of the Senate regarding the budget
treatment of Federal disaster assistance.
Santorum amendment No. 3485 (to amendment No. 3466),
expressing the Sense of the Senate regarding the budget
treatment of Federal disaster assistance.
Santorum amendment No. 3486 (to amendment No. 3466), to
require that disaster relief provided under this Act be
funded through amounts previously made available to the
Federal Emergency Management Agency, to be reimbursed through
regular annual appropriations Acts.
Santorum amendment No. 3487 (to amendment No. 3466), to
reduce all Title I discretionary spending by the appropriate
percentage (.367%) to offset Federal disaster assistance.
Santorum amendment No. 3488 (to amendment No. 3466), to
reduce all Title I ``Salary and Expense'' and
``Administrative Expense'' accounts by the appropriate
percentage (3.5%) to offset Federal disaster assistance.
Gramm amendment No. 3519 (to amendment No. 3466), to make
the availability of obligations and expenditures contingent
upon the enactment of a subsequent act incorporating an
agreement between the President and Congress relative to
Federal expenditures.
Wellstone amendment No. 3520 (to amendment No. 3466), to
urge the President to release already-appropriated fiscal
year 1996 emergency funding for home heating and other energy
assistance, and to express the sense of the Senate on
advance-appropriated funding for FY 1997.
Bond (for McCain) amendment No. 3521 (to amendment No.
3466), to require that disaster funds made available to
certain agencies be allocated in accordance with the
established prioritization processes of the agencies.
Bond (for McCain) amendment No. 3522 (to amendment No.
3466), to require the Secretary of Veterans Affairs to
develop a plan for the allocation of health care resources of
the Department of Veterans Affairs.
Warner amendment No. 3523 (to amendment No. 3466), to
prohibit the District of Columbia from enforcing any rule or
ordinance

[[Page S2169]]

that would terminate taxicab service reciprocity agreements
with the States of Virginia and Maryland.
Murkowski/Stevens amendment No. 3524 (to amendment No.
3466), to reconcile seafood inspection requirements for
agricultural commodity programs with those in use for general
public consumers.
Murkowski amendment No. 3525 (to amendment No. 3466), to
provide for the approval of an exchange of lands within
Admiralty Island National Monument.
Warner (for Thurmond) amendment No. 3526 (to amendment No.
3466), to delay the exercise of authority to enter into
multiyear procurement contracts for C-17 aircraft.
Burns amendment No. 3528 (to amendment No. 3466), to allow
the refurbishment and continued operation of a small
hydroelectric facility in central Montana by adjusting the
amount of charges to be paid to the United States under the
Federal Power Act.
Burns amendment No. 3529 (to amendment No. 3466), to
provide for Impact Aid school construction funding.
Burns amendment No. 3530 (to amendment No. 3466), to
establish a Commission on restructuring the circuits of the
United States Courts of Appeals.
Coats (for Dole/Lieberman) amendment No. 3531 (to amendment
No. 3466), to provide for low-income scholarships in the
District of Columbia.
Coverdell amendment No. 3532 (to amendment No. 3466), to
provide funds for employment-related activities of the 1996
Paralympic Games.
Bond/Mikulski amendment No. 3533 (to amendment No. 3482),
to increase appropriations for EPA water infrastructure
financing, Superfund toxic waste site cleanups, operating
programs, and to increase funding for the Corporation for
National and Community Service (AmeriCorps).

Mr. COVERDELL addressed the Chair.
The PRESIDING OFFICER. The Senator from Georgia.

Amendment No. 3532 to Amendment No. 3466

Mr. COVERDELL. Mr. President, I call up my amendment numbered 3532.
The PRESIDING OFFICER. The amendment is now before the Senate.
Mr. COVERDELL. Mr. President, it is my understanding that this
amendment has been cleared on both sides.
Mr. President, I urge its adoption.
The PRESIDING OFFICER. Is there further debate on the amendment?
Without objection, the amendment is agreed to.
So the amendment (No. 3532) was agreed to.
Mr. COVERDELL. Mr. President, I thank the chairman of the
Appropriations Committee, the senior Senator from Oregon, and the
ranking member, the new Senator from Oregon, for their cooperation on
this important amendment.
Let me say that many people do not realize that immediately following
the 1996 Olympics will occur the World Paralympics for which the
amendment is addressed.
I deeply appreciate the cooperation and assistance.
Mr. HATFIELD. I thank the Senator.
Mr. COVERDELL. Mr. President, I move to reconsider the vote by which
the amendment was agreed to.
Mr. HATFIELD. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. HATFIELD. Mr. President, I have a unanimous-consent request that
has been agreed to on both sides that I would like to propound at this
time.
I ask unanimous consent that it be in order for me to send an
amendment to the desk at this time; further, that it not count as one
of the managers' amendments under the consent agreement.
The PRESIDING OFFICER. Without objection, it is so ordered.

Amendment No. 3536 to Amendment No. 3466

Mr. HATFIELD. Mr. President, I send the amendment to the desk.
The PRESIDING OFFICER. The clerk will report.
The clerk read as follows:

The Senator from Oregon [Mr. Hatfield] proposes an
amendment numbered 3536 to amendment No. 3466.

Mr. HATFIELD. Mr. President, I ask unanimous consent that reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
On page 577 of the pending amendment, strike lines 14
through the period on line 23.

Mr. HATFIELD. Mr. President, my amendment strikes a portion of this
bill related to Oregon's request for a welfare waiver. I am striking
this language because the Secretary of Health and Human Services has
now assured me that the administration will complete its commitment to
my State.
I should like to read the letter to the Senate that I have just
received from Secretary Shalala.
Mr. President, I offer this amendment on behalf of my colleague,
Senator Wyden, as well, because he has been deeply involved and
interested and concerned about this issue as well.
The letter is addressed to me as chairman of the Appropriations
Committee.

Dear Mr. Chairman: I am pleased to inform you that an
agreement has been reached between the Department of Health
and Human Services officials and the State of Oregon on the
key issues that would allow the State to implement the Oregon
Option welfare reform demonstration for AFDC, JOBS, and
related HHS programs, including issues pertaining to federal
funding. The uniqueness of Oregon's proposal in the context
of the Administration's Memorandum of Understanding with the
State warrants a special approach, to be applied only in
Oregon, to carrying out this demonstration. You have my
commitment that I officially will grant the waiver as soon as
HHS staff and State staff can finalize the details of an
agreement.
Oregon and HHS staff together have crafted an agreement
that demonstrates a solid partnership for testing new
approaches to welfare reform. This agreement focuses on
achieving important outcome-based benchmarks for helping
families move from welfare to work and reducing child
poverty.
Donna Shalala.

Mr. President, let me just give a brief background to this amendment
and the process leading up to it.
I wish to also amend her letter that I have just read on a verbal
understanding that we had this morning, and that is relating to the
timing of this waiver in the language ``as soon as HHS and State staff
can finalize the details of an agreement.'' She committed herself this
morning to me that this would not take longer than 2 weeks. And the
Governor of our State, in conversation with him this morning as well,
indicated that this would be a satisfactory time period.
This action delivers the final and most critical piece of what we
call the Oregon Option. Oregon's situation is unique. There is not
another State in the Union that has achieved this particular status.
In September 1994, 40 members of Federal agencies, most based in
Washington, DC, visited Oregon to talk about doing business
differently. In December 1994, nine Cabinet members including the Vice
President of the United States signed a memorandum of understanding
with Oregon's Governor in a coast-to-coast satellite televised
ceremony.
At this point, Mr. President, I ask unanimous consent to insert in
the Record a copy of the memorandum of understanding reached between my
State and the Federal Government.
There being no objection, the memorandum was ordered to be printed in
the Record, as follows:

Memorandum of Understanding Regarding ``The Oregon Option''

I. Purpose

The purpose of this Memorandum of Understanding is to
encourage and facilitate cooperation among Federal, State and
local entities to redesign and test an outcomes oriented
approach to intergovernmental service delivery. This special
partnership and long-range commitment will serve as
demonstration of principles and practices which may serve as
a model for improvements nationwide.

II. Background

In July 1994, Oregon proposed a multi-year demonstration
with the Federal Government to redesign intergovernmental
service delivery, structured and operated to achieve
measurable results that will improve the lives of Oregonians.
Oregon is uniquely suited for an experimental demonstration
to develop an outcomes oriented approach to intergovernmental
services. The State and many local governments have begun
using an outcomes model for establishing long-range vision,
setting public priorities, allocating resources, designing
services, and measuring results. The Oregon Legislature has
endorsed the Oregon ``Benchmarks.'' Further, many nonprofit
organizations, businesses, and civic groups in Oregon are
aligned to a benchmark process with State, county and local
jurisdictions.

III. Principles to guide cooperation

The following principles should guide the parties
cooperation in this undertaking:
A re-designed system would be:
Structured, managed, and evaluated on the basis of results
(i.e., progress in achieving benchmarks).
Oriented to customer needs and satisfaction, especially
through integration of services.
Biased toward prevention rather than remediation of
problems.
Simplified and integrated as much as possible, delegating
responsibilities for service,

[[Page S2170]]

design, delivery, and results to front-line, local-level
providers, whether they are local agencies or local offices
of state agencies.

iv. responsibilities of the parties

The parties to this memorandum will work together as
partners to (1) identify benchmarks, strategies, and measures
that provide a framework for improved intergovernmental
service delivery and (2) undertake efforts to identify and
eliminate barriers to achieving program results.

v. authorities

The principles and responsibilities covered in this
memorandum are intended to improve the coordinated delivery
of intergovernmental programs. This memorandum does not
commit any of the parties to a particular level of resources;
nor is it intended to create any right or benefit or diminish
any existing right or benefit, substantive or procedural,
enforceable at law by a party against the United States,
State of Oregon, any state or federal agency, any state or
federal official, any party of this agreement, or any person.
While significant changes to the intergovernmental service
delivery system are anticipated as result of this effort,
this is not a legally binding or enforceable agreement.
Nothing in this memorandum alters the responsibilities or
statutory authorities of the Federal agencies, or State or
local governments.

signatures of memorandum of understanding regarding ``the oregon
option''

Vice President Al Gore.
Secretary Labor HHS Donna E. Shalala.
Secretary of Housing Henry G. Cisneros.
Director, Office of National Drug Control Policy Lee P.
Brown.
Secretary of Labor Robert B. Reich.
Secretary of Education Richard W. Riley.
Attorney General Janet Reno.
Secretary of Agriculture Mike Espy.
Secretary of Commerce Ronald H. Brown.
Dir. of the White House Office of Management and Budget
Alice M. Rivlin.
Asst. to President for Domestic Policy Carol H. Pasco.

Oregon

Governor, Barbara Roberts.
Senate President, John Kitzhaber.
Mayor PDX, Vera Katz.
Commission, Salem, Randall Franke.
Mayor of Corvallis, Charles Vars.
Mayor, City of Gresham, Gussie McRobert.
Mayor of Ashland, Katherine Golden.
Mayor of Independence, Marion Rossie.
Commissioner LaGrande, John Howard.
Commissioner Lane, Steve Cornacchia.
Multnomah County, Beverly Stein.

Mr. HATFIELD. With the understanding that we had the blessings of all
levels of Government, the Oregon Legislature passed a comprehensive
welfare reform bill that became the basis for the Oregon option welfare
reform waiver request. Oregon's JOBS Plus Program gives parents the
opportunity to find substantive work with above-minimum wage pay and
includes employer involvement. Employees earn a livable wage while
learning valuable work skills.
Oregon's attempt to reform welfare is designed to allow people the
opportunity to work, thereby taking them off the welfare rolls. Through
innovative program planning, Oregon has seen a decline in its welfare
casework the last 2 years while facing increases in population. And I
wish to repeat this. Oregon has had a decline with this experimental
program in its welfare caseload the past 2 years while facing increases
in population. With this waiver, we will be able to move further into
that program of reform.
On July 3, 1995, 9 months ago, Oregon submitted its waiver request to
the Department of Health and Human Services and Department of
Agriculture. We then fell into the abyss. With Congressional welfare
reform appearing possible, including changes that would allow Oregon to
implement most of the options without waivers, action slowed down on
all sides. I became very concerned that the rhetoric and the reality
were incongruent. I inserted language in this omnibus appropriations
bill to force the administration to act on our request one way or the
other. This is not the way I like to do business, Mr. President, but I
had no other recourse. I am very pleased that today the administration
has delivered on their promises. The idea behind the Oregon option is
that outcomes and results govern the expenditure of funds, not
direction from Washington. Today, the administration, and in particular
Secretary Shalala, has sent a clear and unequivocal message of a
commitment to results.
I thank the administration for allowing us to go forward. Their
commitment is well placed. The Vice President referred to the Oregon
option in December 1994, as quoted in the Oregonian, ``This is all
about going from red-tape to results.'' The Vice President's senior
policy adviser was quoted in the August 6, 1995 Washington Post as
saying,

The Oregon option is probably the largest system of
performance-based government in the United States that is
actually up and running. We see it as a possible model for
the future of Federal-State relations.

While I cannot guarantee that the approach Oregon wants to take on
welfare reform will be successful because we do not live in a world of
guarantees, we have seen positive strides with our programs thus far.
We have a great track record of delivering on our promises. Our
Governor, John Kitzhaber, and the head of our welfare department, Steve
Minnich, deserve the gratitude of all Oregonians for the effort they
have expended to make these programs work.

I should like to say parenthetically that our Governor was the
president of the State senate, and he is a medical doctor. During his
time as president of the State senate, he was the one who brought the
parties together and crafted the Oregon Health Reform Act, and this is
the record of a very dedicated public servant and one who has quietly
and with great effectiveness brought about that change in our own
health programs in Oregon, at least as far as we could go. And now he
has undertaken the welfare program for reform. I am honored to be his
messenger to the cause that he represents here in Washington.
My home State of Oregon has a pioneering spirit. We face obstacles
armed with creative solutions and the perseverance to see them to
conclusion. Each day Oregon proves itself willing to take on hard
issues such as health and welfare reform, programs which serve as
models for the rest of the country. Mr. President, today I am reminded
of the words of Herbert Hoover. He said once, ``Words without actions
are the assassins of idealism.'' The Secretary's action certainly
maintains my idealism that innovative welfare reform is possible.
I am very pleased to again note that my new colleague, recently
elected from my State, and a man who has brought great distinction to
our State by his service in the House of Representatives and pursuing
programs of this type throughout his political career, has now joined
me as a full-fledged partner and I thank him for his continued effort
and interest in this matter.
Mr. WYDEN addressed the Chair.
The PRESIDING OFFICER. The Senator from Oregon.
Mr. WYDEN. Mr. President, I first want to extend my appreciation to
Senator Hatfield. The chairman of the committee has done yeoman work on
this and on so many issues for our State and for our country. He has
honored me with the chance to work with him on the Oregon option in
both the House and the Senate. I want him to know how much I appreciate
his help and his counsel. I think it is clear that the administration
looks to him for leadership on these issues and to a great extent it is
because of Senator Hatfield that the administration consistently comes
to us for the opportunity to test these issues. I want the Senator to
know how grateful I am to be able to work with him and in particular,
to support his amendment today.
I think Senator Hatfield has outlined quite well that the welfare
system in America today does not work for anyone. It certainly does not
work for taxpayers. In so many instances they watch as their tax
dollars are frittered away. And I know that it does not work for many
of those who are in the system. I have talked to them, and many of them
have said they would very much like to break out of the system, but
they get caught in a Catch-22. They may have a child at home and would
like to work, but if they start working they lose their child care. So,
to a great extent, the welfare system in America today does not work
for much of anybody.
What I think Senator Hatfield has outlined is that Oregon, with our
unique Oregon option, a plan that is being tried literally nowhere in
the country, is offering the Nation the chance to break out of the
encrusted shell of the old welfare system. We are saying, in effect,
that we would like to bust loose, like we did with the Oregon health
plan, and focus most specifically on results.
Senator Hatfield has made so many of the important points that I
would

[[Page S2171]]

like to just touch on one or two others that I believe have great
implications for the national debate about the delivery of services in
our country, and particularly our human services. We know that many of
our colleagues are now part of the debate that suggests either you
ought to run everything from Washington, DC, that Washington, DC has
the answers, or you should just give it back to the States and see what
happens.
The Oregon option is a plan developed with the leadership of our
Governor, John Kitzhaber, who has done outstanding work in the human
services area, and with the help of the administration. The Oregon
option offers an alternative approach that falls in between the two
extremes of either running it all from Washington, DC, and saying
Washington, DC, has the answers, or simply turning it over to the
States and seeing what happens.
Oregon, in effect, with the Oregon option, is saying that if we are
allowed to be free of some of the Federal shackles and some of the
Federal red tape, we will guarantee we will focus on real
accountability with respect to services. We will make sure that the
focus is getting people off welfare into gainful employment in the
private sector, and we will focus on results, we will focus on
accountability.
I suggest to the Senate that the Oregon option does show real promise
of getting to a creative third path between those who say ``run it all
from Washington'' and those who just say ``turn it all over to the
States and we will see what happens.'' Yes, let us give the States more
freedom and more authority, but let us also require accountability.
That is what the Oregon option is going to do.
I think it is worth focusing for a moment on how this is actually
going to produce change in the system. In the future, with the Oregon
option, a welfare office is going to be evaluated not by whether all of
the boxes in every application get checked, but by how many individuals
actually move into good, nonsubsidized jobs and whether we are reducing
the number of children who live in poverty.
Right now, probably the best way to describe the system is that if
you have somebody who is on welfare and at home, the system just goes
forward. You do not have to adjust any benefits. You do not process any
paperwork. There is no job training to account for, no assets that
might accumulate. The system just goes on and on and on. Under the
Oregon plan, those individuals who are running welfare services, are
going to know the focus is on making sure there are results, making
sure that you actually see people move into the private sector. This is
what reform ought to be all about.
There are a number of specific features about the Oregon plan that I
think make great sense for welfare reform generally. Under the Oregon
option, the State is going to invest in what is known as transitional
child care and preventive child care. As a Member of the other body, I
saw repeatedly that there were individuals, particularly women who head
households, who would be able to get off welfare. Sometimes they would
get off a couple of times. They would be in the private sector, they
would be making headway, then their child care would fall apart, and
they would slide back onto public assistance.

The Oregon option, with its innovative approach toward child care is
going to help prevent that in the future. The Oregon option allows
welfare recipients to keep certain assets that can expedite the
transition from welfare to work and make sure people do not fall back
on welfare.
Finally, the focus with respect to the State's role is on real work
situations, not these make-work kind of arrangements, but real
employment opportunities where welfare recipients get trained on-site,
by business people who have actual needs in the job markets in our
State.
A lot of us see the welfare system as something that can be a ladder
to a fresh start. It is not supposed to be a feather mattress. It is
supposed to be a ladder. I am excited about the chance to change lives
for the better in our State, excited about the fact that the Oregon
option is going to allow taxpayer dollars to be used in a more
effective way.
I want to commend both the administration and Secretary Shalala. I
have had a chance to work with her on the Oregon option and the Oregon
health plan. We think this is our one-two punch in reforming services
that affect thousands of families. Secretary Shalala deserves great
credit for that.
Finally, our Governor, as Senator Hatfield has noted, is consistently
out in front in trying to look at these issues. I think, when you write
the history of health reform, and I know the President is particularly
interested in this issue, the country is going to look at what Oregon
has done in health care and the way Oregon has made tough choices and
the way Oregon has focused on prevention and focused on medical
effectiveness and focused on ways to build a new partnership with
providers. Because of Dr. Kitzhaber's work, the Oregon health plan is
going to make a difference in health reform across this country. It is
going to be something that the rest of the Nation is going to look to.
Now, with the Oregon option we have a chance, through welfare reform,
to complement the work that has been done on the health care side.
So I urge the adoption of the Hatfield amendment. As you can tell, we
are passionate, on a bipartisan basis, about this important cause. It
is going to change lives across our State. I think it is going to make
a difference across our Nation, and I am pleased and honored to be here
with Senator Hatfield to support his amendment.
I yield the floor.
The PRESIDING OFFICER. The Senator from Oregon.
Mr. HATFIELD. Mr. President, I know of no other comments to be made
at this time.
Mr. President, what is the parliamentary situation?
THE PRESIDING OFFICER. If there be no further debate, the question is
on agreeing to the amendment.
The amendment (No. 3536) was agreed to.
Mr. HATFIELD. Mr. President, I move to reconsider the vote.
Mr. WYDEN. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. HATFIELD. I thank the Chair, and I thank my colleague for his
very strong assistance on this.
Mr. GORTON addressed the Chair.
The PRESIDING OFFICER. The Senator from Washington.

Amendment No. 3496

Mr. GORTON. Mr. President, I have an amendment at the desk and I ask
for its immediate consideration.
The PRESIDING OFFICER. Is there objection? Without objection, it is
so ordered.
The amendment is now before the Senate.
Mr. GORTON. Mr. President, in Walla Walla, WA, there is a general
medical and surgical facility for the Veterans' Administration. That
facility serves a wide range of veterans over a very considerable area.
The people of Walla Walla are proud of the facility. The various
veterans organizations in the area have asked us to rename it in honor
of Gen. Jonathan M. Wainwright. As you know, Mr. President, General
Wainwright was a distinguished American military leader, having
commanded American troops in the Philippines and Corregidor after the
departure of General MacArthur. He was imprisoned for 4 years,
released, and ultimately observed the surrender of the Japanese on the
U.S.S. Missouri on V-J Day. He won the Congressional Medal of Honor.
General Wainwright was born in Fort Walla Walla, while his family was
there with the First Cavalry.
The people of Walla Walla are going to erect a statue in his honor,
and they wish to rename the facility in honor of General Wainwright.
A bill introduced by the Congressman from the district, Mr.
Nethercutt, passed the House of Representatives last year. It seems to
be buried so deeply in the Veterans' Committee that it is not going to
get out certainly in time for the Memorial Day ceremony by which time
we hope to have caused this renaming to take place.
This is not a cleared amendment but, Mr. President, I think it should
be noncontroversial. Senator Murray and I very much urge our colleagues
to agree with us, to adopt it as a rider to this bill since it has
already passed the House.

[[Page S2172]]

With those remarks, I think I need no more time of this body speaking
about this amendment, about Walla Walla, or about General Wainwright.
So I will yield the floor, but I am constrained at this point to ask
for the yeas and nays on the amendment with the hope that will bring
the whole subject to the attention of those who have objected to it to
this point and that it will soon be cleared.
So, Mr. President, I ask for the yeas and nays on the amendment.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The yeas and nays were ordered.
Mr. GORTON. Thank you, Mr. President. I yield the floor.
Mr. HATFIELD. Mr. President, I do have a group of amendments that
have been cleared on both sides. I will make a unanimous-consent
request.

Amendment Nos. 3537, 3538, 3539, 3540, 3541, 3542, 3543, 3544, 3545,
and 3546 to Amendment No. 3466

Mr. HATFIELD. Mr. President, I now send to the desk a number of
amendments that have been cleared on both sides of the aisle. I ask
unanimous consent that they be considered en bloc, agreed to en bloc,
and that the motions to reconsider be laid upon the table. I withhold.
Mr. President, my unanimous consent request has been formally
modified, but that has already been taken care of. I renew my
unanimous-consent request.
The PRESIDING OFFICER (Mr. Nickles). Without objection, the question
is on agreeing to the amendments en bloc. The amendments (Nos. 3537,
3538, 3539, 3540, 3541, 3542, 3543, 3544, 3545, and 3546) were agreed
to, as follows:

amendment no. 3537

Insert the following at the appropriate place under Title
III of the Committee amendment:
``Sec. . Any funds heretofore appropriated and made
available in Public Law 102-104 and Public Law 102-377 to
carry out the provisions for the project for navigation, St.
Louis Harbor, Missouri and Illinois; may be utilized by the
Secretary of the Army in carrying out the Upper Mississippi
and Illinois Waterway System Navigation Study, Iowa,
Illinois, Missouri, Wisconsin, Minnesota, in Fiscal Year 1996
or until expended.

Mr. BOND. Mr. President, I offer this amendment on behalf of myself,
and Senators Harkin, Simon, Grassley, and Moseley-Braun.
The purpose of the amendment is to allow surplus funds previously
earmarked to be reprogrammed to the Upper Mississippi/Illinois Waterway
Navigation Feasibility Study.
The navigation study in fiscal year 1996 is underfunded and,
consequently, will be unable to meet the 6-year study deadline unless
more funding is provided. This shortfall has been recognized by
Secretary Lancaster who has persisted in reprogramming discretionary
money to help make up the shortfall. This amendment provides the
Secretary the authority to reprogram an additional sum of money
currently earmarked for the St. Louis harbor study that the corps will
not be able to spend this year.
Even with this potential transfer, we understand they remain $1.8
million underfunded which we will have to make up in fiscal year 1997.
The amendment does not increase the overall cost of the 6-year $43
million study to update the 50-year-old locks and dams on the Illinois
Waterway and Upper Mississippi River.
Mr. President, this study is a priority item. Conference report
language in the energy and water appropriations bill for fiscal year
1996 was included directing the corps to:

Expedite work on the study and ensure that the Division
Engineer's public notice on the feasibility report is issued
no later than December of 1999 . . . because of the need for
a timely review of future navigation needs on the upper
Mississippi River and Illinois Waterway.

According to the corps in 1992, tows at Upper Mississippi locals 22-
25 were delayed a total of 87,000 hours. As river traffic grows over 4
percent per year, the corps estimates that delays at locals 22-25 would
be in excess of a day early in the 21st century.
The president of Farmland Industries told us recently that they have
18 trains running round the clock to try to meet foreign demand. Even
today, there is 12 million tons of grain on the ground in Iowa that
cannot find a ride to markets abroad--what will it be like when
freedom-to-farm takes effect and export demand continues to grow? The
longer it takes to upgrade the 50-year-old system, the harder it will
be for U.S. grain to continue to find a home in the world market at
competitive prices.
The bottom line is that this is a trade, competitiveness, and jobs
issue. Our farmers need this. This is one of our principal competitive
advantages and the action taken now will be the basis of our
competitive position 5, 10, and 20 years from now. If we have grain
piling up now, what will it be like in 10 years? Who believes that we
can remain a reliable exporter of grain if we let our system
deteriorate at the same time the Department of Agriculture is
projecting record $60 billion in agricultural exports and a record $30
billion trade surplus?
Mr. President, Senators who are concerned about competitiveness,
promoting trade opportunities, protecting jobs, and growing the economy
should be on board this effort. We know the corps is on board and we
need to get the Office of Management and Budget on board. This is not a
priority at OMB and it should be. Trying to capture the growing Asian
market is not pork--it's the economy, stupid.
It is critical that the administration follow the Secretary for Civil
Work's lead in pursuing this study. It is a project of national
significance that deserves priority attention. It is necessary that the
administration make a request for fiscal year 1997 appropriations which
accurately reflects the funding necessary to keep this study on
schedule. If this study can wait, we are telling farmers that exports
can wait. They can't.
Other nations are aggressively emulating our inland waterway system--
Brazil, China, and Germany, to name a few. The question is whether we
will forsake that advantage to the detriment of our young farmers and
nation balance of trade. This is our chief artery to the world market.
Some foreign competitors can beat us on price until our grain hits our
inland waterway system--which is the cheapest way to ship a ton of
grain in the world.
I want to thank the chairman and ranking member of the subcommittee
and full committee for accommodating us on this issue. In the coming
months and years, the urgency for action will increase to address the
lack of capacity on this critical corridor. This will be a priority
issue, not just for carriers but for shippers who are farmers. Senators
will hear from farmers and farm groups on this issue. This amendment is
to promote and permit exports and job growth and I appreciate the
support of the Senate.

amendment no. 3538

(Purpose: This Amendment adds $1,000,000 to the Adolescent Family Life
program for total funding of $7,698,000)

On page 546, line 21 of the pending amendment, increase the
rescission amount by $1,000,000.
On page 572, line 16 of the pending amendment, strike
``$129,499,000'' and insert in lieu thereof ``$130,499,000''.

Mr. SPECTER. Mr. President, as we try to steer toward a growing
economy and a balanced budget, there has been a growing consensus that
all our goals must rest on a restored ethic of personal responsibility.
There is an alarming teenage birth rate in the United States. The teen
birthrate in the United States is double the rate in other
industrialized societies such as Australia and the United Kingdom. Over
72 percent of teenage births in 1993 were to unwed mothers; 12,000
children were born to mothers under the age of 15. It is worth pausing
to reflect on the enormous significance of these statistics regarding
out-of-wedlock births. Adolescent pregnancy threatens the health of
both the young mother and child. Teenage mothers are more likely to
lack adequate prenatal care and to give birth to a low-birthweight
baby.
We can reduce unintended teenage pregnancies by encouraging
abstinence and personal responsibility. If you want to reduce the
number of abortions performed in the United States, teaching children
to say ``no'' to peer pressure is a good starting place. The Adolescent
Family Life Program, known as the title XX program, is a worthwhile
program which focuses on the issues of abstinence, adolescent
sexuality, adoption alternatives, pregnancy, and parenting. The
Adolescent Family Life Program has broad bipartisan support when it was
originally enacted in 1981

[[Page S2173]]

and when it was reauthorized in 1984. Congress appropriated $6,698,000
for this program in fiscal year 1995; my amendment would increase its
funding to $7,698,000 in fiscal year 1996.

amendment no. 3539

On Page 590, after the word ``for'' on line 19, strike all
up to the word ``payment'' on line 23.
On Page 590, after the word ``education'' on line 25,
strike all up to the period on page 591, line 3.
____

amendment no. 3540

(Purpose: To provide for a waiver of the enrollment composition rule
under Medicaid for Chartered Health Plan of the District of Columbia)

At the end of title III, on page 771 after line 17, add the
following new section:
Sec. . The Secretary of Health and Human Services shall
grant a waiver of the requirements set forth in section
1903(m)(2)(A)(ii) of the Social Security Act to D.C.
Chartered Health Plan, Inc. of the District of Columbia:
Provided, That such waiver shall be deemed to have been in
place for all contract periods from October 1, 1991 through
the current contract period or October 1, 1999, whichever
shall be later.
____

amendment no. 3541

At the appropriate place insert the following:
Sec. . Of the funds appropriated by Public Law 104-37 or
otherwise made available to the Food Safety and Inspection
Service for Fiscal Year 1996, not less than $363,000,000
shall be available for salaries and benefits of in-plant
personnel: Provided, That this limitation shall not apply if
the Secretary of Agriculture certifies to the House and
Senate Committees on Appropriations that a lesser amount will
be adequate to fully meet in-plant inspection requirements
for the fiscal year.

Mr. COCHRAN. Mr. President, the amendment I offer with my colleague
from Arkansas will ensure that funds appropriated to the Food Safety
and Inspection Service for fiscal year 1996 are used to cover in-plant
inspector salaries and benefits requirements before being obligated for
other purposes. The reason for this amendment is simple. The Food
Safety and Inspection Service has chosen to purchase computers over
paying the salaries of inspectors who ensure the safety of our Nation's
meat and poultry supply.
Mr. President, this agency requested $594 million for fiscal year
1996, a 13-percent increase over the fiscal year 1995 appropriation.
With a total allocation for discretionary spending below a freeze at
fiscal year 1995 enacted levels, this subcommittee could not grant the
requested increase. We appropriated $544 million to the agency. The
President signed the fiscal year 1996 Agriculture, Rural Development,
Food and Drug Administration and Related Agencies Appropriations Act on
October 21, 1995. Apparently, the Food Safety and Inspection Service
did not alter its spending plans for the year to live within the amount
appropriated to it. Now, here we are, about half way through the fiscal
year, with a request for a supplemental appropriation of $9.5 million
for the Food Safety and Inspection Service, which includes $3.2 million
for inspector positions, $3.5 million for training for the new hazard
analysis and critical control point [or HACCP], inspection program, and
$2.8 million for the animal production food safety initiative. This
supplemental request from the President is offset in budget authority
by a proposed rescission in funds appropriated to the Cooperative State
Research, Education, and Extension Service buildings and facilities
account, but not in outlays, as required by congressional budget rules.
In investigating why the Agency faces a shortfall, we are told that the
Agency decided to commit the $8.4 million it had requested for the
Field Automation and Information Management initiative, of which
between $4 and $5 million remain. FSIS chose computers over inspectors.
When asked if inspector positions would be protected if the Agency ran
short of funds at the end of the fiscal year, the answer was ``no.''
Rather than commit this money to an identified shortfall in inspector
funding, it has come to us for more money.
Mr. President, this amendment will ensure that above all, there are
adequate numbers of inspectors in the plants for the remainder of the
fiscal year to ensure that the meat people put on their tables is safe
and wholesome. At the same time, it will ensure that processing plants
do not shut down, thereby increasing the cost of meat in the groceries,
and reducing prices that farmers receive for their animals because they
can't get them to market.
We agree with the Department that the modernization of the current
inspection program is essential, and endorsed it in the Senate report
accompanying the fiscal year 1996 Agriculture Appropriations Act. Where
we disagree is that the current inspection system should suffer at the
expense of expediting implementation of the new system or other Agency
initiatives. It is essential that we maintain the existing system while
efforts are underway to implement the new system. In fact, I believe
that the No. 2 priority of the Food Safety and Inspection Service
should be training to implement the new HACCP rule. Once the new
inspection system is in place, then is the time to dismantle the
current system.
I hope that my colleagues will join me in supporting this amendment
to ensure that adequate funds are available to keep meat and poultry
inspectors on the job.

amendment no. 3542

On page 769, line 24, delete the word ``Of'' and insert
``Notwithstanding any other provisions of law, of'.
On page 770, line 4, after the word ``available'', insert
the words ``for operating expenses''.
____

amendment no. 3543

(Purpose: To amend the Federal Food, Drug, and Cosmetic Act to
authorize the export of new drugs)

(The text of the amendment is printed in today's Record under
``Amendments Submitted.'')
Mr. HATCH. Mr. President, yesterday morning I had the honor of
addressing the National Medical Device Coalition, an association of
far-thinking medical device manufacturing executives who have come to
Washington to press for meaningful Food and Drug Administration reform.
In their visits with Senators and Representatives this week, NMDC
members will be offering the most compelling case I know for FDA
reform, and, specifically, reform of medical device regulation.
Indeed, they urge that reform of the medical device regulatory
process should be a top priority of this Congress, and I couldn't agree
more.
As the NMDC points out, there are severe problems facing the medical
device industry in our country--problems which impede the ability of
manufacturers to maintain our world class competitive edge and continue
to produce products which have so many public health benefits.
I think that Wayne K. Barlow, president of the NMDC summed it up the
best in his March 11 address to the American Institute for Medical and
Biological Engineering. Mr. Barlow, who happens to also be president of
Wescor, Inc., a small medical device manufacturer in Logan, UT, said:

The U.S. Medical Device industry is severely challenged.
Its survival beyond the 20th century has been case in doubt.
The innovative fervor that once characterized our industry is
evaporating. We are seeing an alarming exodus of companies,
technologies, and jobs to other countries. Do not doubt that
we are in a life-or-death struggle nor that its outcome will
determine whether our industry has a future in this country.

Mr. Barlow went on to say:

Powerful forces are reshaping health care delivery and the
associated markets for health care products in America. The
three major components are (1) dynamic restructuring of
global markets, (2) Federal regulatory policies, and (3) the
U.S. product liability climate. These forces in combination
have debilitated the industry. In consequence, America is
being pulled down toward second-rate status in medical
technology.

I think that the NMDC has done us a valuable service in their
concerted emphasis this week to educate the Congress on issues
associated with medical devices.
As they point out, this diverse industry is comprised largely of
small businesses, which manufacture a wide range of products all of
which contribute positively to our U.S. trade balance.
A regulatory climate which threatens the health of these small
businesses, threatens the health of our economy as well.
But it also threatens public health, because declining incentives for
innovation force production overseas. And when that innovative edge
moves offshore, Americans will be deprived of the latest medical
products, products which could improve or even save lives.
One of the top priorities of the NMDC, eliminating FDA's involvement

[[Page S2174]]

in granting permission to export medical products, is also a top
priority of mine, and is the subject of the amendment Senators Gregg,
Kassebaum, Kennedy, and I are offering here today.
Let me turn to a specific discussion of the amendment, which is a
substitute for the FDA Export Reform and Enhancement Act (S. 593)
approved unanimously by the Labor Committee last July.
I want to commend all of my colleagues who have worked on the FDA
export issue in this Congress.
In the House, Congressman Fred Upton has exhibited a great deal of
leadership on this issue. The chairman of the Commerce Committee,
Representative Thomas Bliley, and the ranking member, Representative
John Dingell, must be credited for working closely together to fashion
the House language on export contained in the continuing resolution
under discussion today.
In this Chamber, I must recognize all of the original cosponsors of
the Senate bill, S. 593: Senators Gregg, Kassebaum, Abraham, Frist, and
Coats.
My good friend, Senator Kennedy, was instrumental in fashioning the
compromise language that was unanimously adopted by the Labor Committee
in July and in the amendment we now consider.
In the interest of moving forward our important goal of increasing
the export of medical products, I ask all of my colleagues to support
this amendment.
I think that the amendment we offer today is a vast improvement over
current law. It undoubtedly will allow a more free export of American
medical products abroad.
However, I must also recognize that our original bill, and the bill
approved by the House of Representatives, provides even greater
opportunities for such exports, without the intrusive hand of the FDA
in first approving those exports. I am hopeful we can work during the
conference to get a compromise which will move toward that free-
trade concept while still ensuring protection of the public health.

I was chairman of the Labor Committee in 1986 and worked very hard to
get the provision in current law which relaxed our restrictive trade
policies regarding pharmaceutical products not approved by the FDA.
At that time, the law did not go as far as I would have liked, but we
did make some important strides such as permitting the export of drugs
not approved by the FDA to 21 specified countries.
Section 801(e)(1) of the Federal Food, Drug, and Cosmetic Act already
contains extremely important principles, and sufficient safeguards, in
the area of exports:

A food, drug, device, or cosmetic intended for export shall
not be deemed to be adulterated or misbranded under this Act
if it--
(A) accords to the specifications of the foreign purchaser,
(B) is not in conflict with the laws of the country to
which it is intended for export,
(C) is labeled on the outside of the shipping package that
is intended for export, and
(D) is not sold or offered for sale in domestic commerce.

A very good argument can be made that this provision alone should
constitute our national policy.
It is important to understand that this is essentially the policy of
every country in the world, except for the United States.
While I think that it should be the primary responsibility of the
government of each nation to protect its own citizens, I am also a
realist and know that many believe that additional requirements must be
imposed on our domestic manufacturers to ensure public health abroad.
I do not question that well-intentioned motivation. At the same time,
I would point out that no other country in the world imposes such
requirements.
As I have suggested previously, we should all take note of the
perspective of Dr. John Petricciani, an official of the Massachusetts
biotechnology firm, Genetics Institute, Inc.
Prior to joining the private sector, Dr. Petricciani spent over 20
years in the Public Health Service, including serving as Director of
the FDA Center for Biologics, head of the World Health Organization's
biologicals unit and Deputy Director of the Public Health Service
National AIDS Program Office. As Dr. Petricciani has stated:

The real issue here is one of benefit and risk. Do the
benefits to foreign countries in the current law outweigh the
risks imposed on the U.S. in terms of draining jobs and
capital investment in research, development, and
manufacturing? As has been pointed out by others, one of the
results of that drain is the earlier availability of products
in Europe and elsewhere than in the U.S. If we were
discussing electronics or automobiles, I would not be as
concerned because the American people are not being placed at
a meaningful disadvantage by such delays.
However, the issue here is medical products that can make a
very big difference in the health of the American people. The
current law is resulting in new products being introduced
first in foreign countries where U.S. firms are forced to
manufacture them. I believe that we are paying far too high a
price in terms of delayed availability of new products in the
U.S. for the theoretical benefit being provided to developing
countries.
I would also like to point out that if a U.S. company
really wanted to export a product that would be acceptable in
the U.S., all they would have to do is manufacture it outside
the U.S. and export it to a developing country.

Now is the time to revise and reform the current export
restrictions--both for public health and international trade
considerations.
The question is not whether we should change current law, but how we
should change the current law.
As I said earlier, I prefer the House language. But I am also a
realist and recognize that to include a provision under unanimous
consent today there will be some matters that will not be resolved to
my satisfaction.
I would like to review briefly the history of the development of this
legislation in the 104th Congress.
First, the companion bills, S.593/H.R. 1300 were introduced last
March.
The theory behind this legislation was simple and direct.
Essentially, S. 593 and H.R. 1300 would harmonize the U.S. policy
with the policy adopted by every major trading nation in the world.
This would allow U.S. producers to sell their products freely to
World Trade Organization-member countries so long as such products were
not violative of the laws of the importing country. This is a good law
and good policy and is the rule by which the rest of the world lives
by.
Because of concerns that such unfettered free trade might possibly
subject citizens in Third-World countries to dangerous U.S. exports, a
compromise was reached in the Labor Committee last July. The compromise
would allow shipment of drugs to any country in the world if they were
already approved by one of a list of some 20-odd countries deemed to
have sophisticated drug approval and regulatory systems.
The purpose of this so-called bank shot was to decrease the
possibility that some small Third World country might somehow unwisely
allow, or be somehow coerced to allow, dangerous products into its
borders.
In parallel with this bank shot, the Labor Committee compromise
contemplated the creation of a so-called tier II list of countries with
regulatory systems found adequate to protect the health and safety of
their citizens. Drugs and devices could be shipped directly to those
countries even in the absence of an approval of a Tier I country with a
sophisticated drug approval system.
Subsequent to the markup, the GAO was requested to provide technical
assistance to help the Senate formulate tier II country criteria as
well as technical assistance in helping the Senate to select an initial
list of tier II countries.
Understandably, and perhaps, unavoidably, the creation of these
criteria and the initial list has presented contentious issues. Neither
the GAO nor FDA are anxious to get involved in the middle of such an
inherently complex issue.
I believe there is agreement among sponsors of our amendment today
that we will examine this issue in more detail in conference. I feel
very strongly that we must allow opportunities for export beyond the
tier I realm. That is the future of exports for our country.
Where the GAO and FDA fear to tread, the Congress must, and should,
march in.
In the end, I think it is the responsibility of each government to
design laws to protect its own citizens so I have philosophical
concerns about a system that would preclude a U.S. company to ship a
product to another country--even a third world country--when that
country has decided to allow the use of that product.
I know that some, including our colleague, Senator Simon, have, for
good

[[Page S2175]]

and legitimate reasons, raised concerns about the ability of small
developing nations like Botswana to make these crucial regulatory
decisions. I just question whether our Food and Drug Administration is
as well-positioned as the public health authorities of another country,
Botswana included, as to what products are suitable for its citizens.
I am even more skeptical of the wisdom of not providing a tier II
mechanism to provide, in the absence of a tier I country approval,
direct shipment to countries like Russia, China, India, Brazil, and
Argentina.
Why should this Congress presume to forbid American manufacturers the
opportunity to sell products in these countries after these governments
have independently found that such products are legal to make and use?
Can we not rely upon the Chinese and Russian governments to act in the
best interests of its own citizens?
I don't think that FDA approval, or the approval of a select list of
tier I countries, should be a necessary condition for other countries
to decide to approve, or for that matter disapprove, the use of a
certain medical product. Accordingly, I believe that, American
manufacturers should be given the same opportunity to compete with
manufacturers of products approved for use in tier II, but not tier I,
countries. Deciding which medical products to allow into the stream of
commerce is an important power for each sovereign nation to exercise.
In closing, I want to commend our colleagues in the House for
developing a proposal which represents an improvement over the original
version of S. 593/H.R. 1300. Frankly, I believe that the imminent
hazard provisions of the House-passed bill grants sufficient authority
to the Secretary of Health and Human Services to halt shipments of
dangerous projects. As a practical matter, I don't think that the
imminent hazard provisions of this new Senate amendment act much
differently.
We have an opportunity in the 104th Congress to enact FDA export
legislation. This legislation can advance the public health of the
United States and internationally. This legislation can benefit
employees and potential employees of American medical products
manufacturers.
It is estimated by experts that each $1 billion in exports results in
the creation of 20,000 new jobs for Americans. We in Congress have a
unique opportunity and special responsibility to expand our trading
markets for biomedical products.
This legislation is consistent with advancing the public health and
with our international trade policy. I commend Senators Gregg,
Kassebaum, and Kennedy in moving this amendment and I look forward to
working with my colleagues to see if we can resolve this issue in the
conference committee.
Mr. KENNEDY. Mr. President, this amendment represents a great deal of
effective work by Senator Gregg, Senator Kassebaum, and Senator Hatch,
and I commend them for their efforts. The provisions are similar to
those in the bill unanimously approved by the Senate Labor Committee
last year.
This amendment will reform the export policy of the FDA and enhance
the competitive position of U.S. manufacturers of drugs and medical
devices in the international market. At the same time, it will protect
consumers in the Third World from unapproved, unsafe and ineffective
products that might be exported from the United States but that their
governments lack the expertise to evaluate.
This amendment represents an appropriate balance between the needs of
U.S.-based industries and the need to provide adequate safeguards for
the distribution of U.S. medical products in other countries.
Multinational pharmaceutical manufactures also recognize that this
amendment will ease the major regulatory problems that have been a
barrier to locating production facilities in the United States.
For many years, the United States was one of the few countries in the
world with a well-developed procedure for approving drugs and medical
devices. The FDA is still the gold standard throughout the world, but a
number of other industrialized countries have now adopted sophisticated
systems for safeguarding their citizens.
In recent decades, foreign markets have become increasingly important
to U.S. manufacturers, and foreign competition has become increasingly
strong. The United States still leads the world in biotechnology, in
medical device development, and in drug development--but we cannot be
complacent about maintaining our leadership.
The increasing internationalization of the production and
distribution of medical products has been accompanied by a welcome
improvement in international efforts to coordinate standards of ethical
conduct and to monitor the use of these products in countries around
the world. Nonetheless, serious abuses have occurred, and continue to
occur.
This legislation recognizes these trends and responds to changing
conditions in several ways. First, it recognizes countries whose
approval methods have reached international standards of excellence.
Exports of products that have not been approved in the United States to
countries with such programs have been permitted since 1986. This bill
streamlines that process.
In addition, the bill allows manufacturers to export products to any
other country in the world, provided that the recipient country wants
the product, and provided that the product has been approved by any of
the countries specified in the legislation as having excellent drug
approval processes. For established, responsible pharmaceutical
companies, this requirement is not a burden. They routinely seek
approval of a new drug in one of the countries named in the bill,
before any broader exports are contemplated. But this requirement will
assure that irresponsible companies do not try to use the label ``Made
in the U.S.A'' to peddle unsafe drugs or medical devices to other
nations.
Many of the worst abuses by drug companies have come in deceptive
promotions in which approved drugs are promoted for inappropriate uses
and without necessary safety warnings. To protect consumers in other
countries, the legislation also requires that U.S. drugs marketed in
these countries must be labeled in accordance with the requirements of
the country that approved the safety of the products. Promotional
activities must be consistent with indications and contra-indications
on the label.
The bill also authorizes the Secretary of HHS to immediately suspend
the export of any American-made drug that poses an imminent hazard to
public health in an importing country.
American manufacturers must be free to compete effectively in world
markets. But America also has a responsibility to assure that the label
``Made in America'' will not be used to promote unsafe or ineffective
products. This bill strikes an appropriate balance between these two
important goals.
Unfortunately, the companion provision in the House bill includes
none of these safeguards to protect foreign consumers. Instead, it
allows U.S. manufacturers to export any product, no matter how unsafe
or ineffective, anywhere in the world. This kind of carte blanch is
clearly unacceptable. It does not serve the commercial interests of
responsible manufacturers. It makes a mockery of the quality standard
that his always been associated with products labeled ``Made in the
U.S.A.'' And it will endanger innocent foreign consumers, including
Americans traveling or living abroad, who rely on that label.
I urge the Senate to adopt this amendment, and to insist on those
safeguards in whatever bill is finally sent to the President.
Mr. GREGG. Mr. President, I would like to thank Senators Hatch,
Kassebaum, and Kennedy for their great assistance in the development of
this amendment which will reform the laws governing the export of
pharmaceutical products and medical devices. It is imperative that this
Congress take action immediately to change the inappropriately
restrictive laws that grossly limit the export of medical products that
can be legally marketed in other countries but are not yet approved by
the U.S. Federal Food and Drug Administration [FDA]. On August 2, 1995
the Senate Labor and Human Resources Committee unanimously reported S.
593, the FDA Export Reform and Enhancement Act of 1995. This bill made
improvements in the area of free trade while retaining some important
public health protections.
Prior to 1986, medical products, including drugs, biologicals, animal

[[Page S2176]]

drugs, and medical devices generally could not be exported unless they
were approved by the FDA. With the passage of the export legislation
authored by Senator Hatch in 1986, this inappropriate and paternalistic
policy was somewhat corrected. The 1986 amendments allowed drug
manufacturers to ship their products to a codified list of 21 specific
countries. It is my understanding that there was no prohibition
included in the law that would prevent the expansion of that list, yet
in the 10 years this law has been in effect, no attempt has ever been
made to modernize this limited list.
On July 13, 1995, I held a hearing before the Aging Subcommittee of
the Labor and Human Resources Committee on the issue of whether
additional changes in the export laws are needed. There we determined
that it is critical that we eliminate unnecessary restrictions which
serve to encourage American pharmaceutical and medical devices
companies to maintain research, production and investment to conduct
clinical research in foreign countries; build factories overseas; and
send high paying high-tech jobs to foreign competitive markets. Our
current FDA export regimen is causing us to relinquish our intellectual
leadership in the health care field. Improvement to the export policy
in this country will also free up limited resources at the FDA, better
enabling the agency to focus on the mission of timely, efficient
approval of new products that meet the needs of American patients in
conjunction with comprehensive FDA reform.
In this hearing, we listened to both drug and medical device
manufacturers testify as to how the U.S. laws--unparalleled anywhere in
the world--are negatively impacting their business, investments, and
the patient population they serve in the United States. For example,
Steve Ferguson, chief operating officer of the Cook Group, Inc.,
testified that our consideration of the FDA as the ``gold standard'' is
``generally a joke that you hear throughout the world, the standard is
that, FDA approved just means that it is outdated. You are already on
to the second or third generations over there, unless you are in the
business, it is hard to understand that.''
We also heard from Mr. Michael Collins, chief operating officer of
Medtronic, who stated--

Every week that the current policy continues to be
implemented, more American jobs are lost through the
relocation of manufacturing overseas and the loss of market
share to foreign competitors.

Mr. Mark Knudson, a managing partner of Medical Innovation Partners,
a venture capital firm, testified that: ``5 or 10 years ago the pace of
innovation and the intensity of regulation were not as mismatched as
they are today * * *. We can no longer consider a medical investment
opportunity which does not have a European strategy * * * the capital
required to reach market is so much greater in the United States
today.''
I am concerned that if we don't change these laws soon that we will
have sent so many of these high-technology businesses overseas, the
trend will be irreversible. The domestic drug and device industries are
two of the too few sectors of the economy in which the United States is
the acknowledged world leader and the U.S. producers have a favorable
balance of trade, but the negative turn in these statistics is
frightening. The Labor Committee reported out a bill 16 to 0 that began
to address this problem. That substitute version of S. 593, worked out
between Senators Kassebaum, Hatch, Kennedy, and myself, was clearly a
positive expansion of current law.
The bill we are including as a manager's amendment today represents a
further iteration of that legislation in an attempt to address issues
that remained in the committee-passed bill. This bill allows export of
human drugs, animal drugs, biologics or medical devices not approved by
the FDA. U.S. products, under this bill, could be exported to any
country in the world if a product was approved by at least one country
from a list of countries we were able to agree have appropriately
sophisticated regulatory systems. These countries consist of the 21
that have this status under current law: Australia, Austria, Belgium,
Canada, Denmark, Federal Republic of Germany, Finland, France, Iceland,
Ireland, Italy, Japan, Luxembourg, The Netherlands, New Zealand,
Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom,
with the additions of Israel, South Africa, the body of the European
Union, and member countries in the European Economic Area--countries in
the European Union and the European Free Trade Association.
As under current law, the exported products must be permitted in the
importing country and must comply with all of the relevant laws imposed
by that country. Moreover, the following safeguards must be satisfied
and a FDA-unapproved product may be exported only if the product is
made in conformity of good manufacturing practices; the product is not
adulterated; the product is labeled and advertised in accordance with
the requirements of the approving country; the product is in accordance
with the specifications of the foreign purchaser; and, the product is
labeled for export and not sold or reimported into the United States.
Along with free export to the above countries with sophisticated
regulatory systems, we have included a provision which ensures this
list will not be static, a major problem now. The Secretary,
manufacturers, countries, and individuals will have the opportunity to
expand the list of countries with sign-off authority on products
produced in the United States that have market potential outside of
this country. It is our strong intent that this provision will be used
to keep the list dynamic.
In addition, we have expanded the provisions in current law for
tropical diseases to include other diseases that are not prevalent in
the United States. We have done this as a compromise. I personally
believe all countries should have complete autonomy over their trade
and what products they allow to be marketed to their citizens. However,
some of my colleagues disagree, feeling we should play watch-dog over
the rest of the world's markets. So, as a middle ground, we have agreed
that American companies should have the freedom to explore the
development of therapies and cures which address diseases that may be
common among the populations of other countries, even though the
disease is not often seen in the U.S. There is no good reason why
paternalistic United States regulatory policies should relegate
citizens of other countries to poor health, particularly when our
regulatory regime is so behind-the-times that the need to pass this
bill is universally acknowledged. Any countries not designated by
either provision can receive exports of products not approved by FDA if
the product is approved by at least one country with regulatory
sophistication.

During the course of our hearing, a concern was raised by Senator
Simon that altering the export laws under the original terms of S. 593
might result in the dumping of unsafe products into Third World
countries. Dr. John Petricciani, vice president for regulatory affairs
with Genetics Institute, a Boston biotechnology firm, and former
Director of the FDA's Center for Biologics, and head of the World
Health Organization's Biologicals Unit, with 20 years in the
Commissioned Corps of the U.S. Public Health Service as Deputy Director
of the National AIDS Program Office, responded to Senator Simon in a
letter that is included in the hearing record. I would like to include
a portion of his letter for the Record here as well:

The real issue here is one of benefit and risk. Do the
benefits to foreign countries in the current law outweigh the
risks imposed on the U.S. in terms of draining jobs and
capital investment in research and development and
manufacturing? As has been pointed out by others, one of the
results of that drain is the earlier availability of products
in Europe and elsewhere than in the U.S. If we were
discussing electronics or automobiles, I would not be as
concerned because the American people are not being placed at
a meaningful disadvantage by such delays.
However, the issue here is medical products that can make a
very big difference in the health of the American people. The
current law is resulting in new products being introduced
first in foreign countries, where U.S. firms are forced to
manufacture them. I believe that we are paying far too high a
price in terms of delayed availability of new products in the
U.S. for the theoretical benefit being provided to developing
countries.
I would also like to point out that if a U.S. company
really wanted to export a product that would be unacceptable
in the U.S., all they would have to do is manufacture it
outside the U.S. and export it to a developing country.

American jobs are being sent abroad because of current laws which
restrict

[[Page S2177]]

the export of drug and medical technology not approved in the United
States. These laws not only waste scarce Food and Drug Administration
resources--they ignore the sovereignty of our trading partners around
the world. Today's world marketplace demands that these barriers to
U.S. global competitiveness be reformed.
A 1995 survey of U.S. medical device inventors and manufacturers by
the Wilkerson Group showed that more than 90 percent of the firms
surveyed planned to market new products overseas first. Ninety-eight
percent of medical device companies in the U.S. are small businesses--
employing fewer than 500 employees. These companies need to generate
sales quickly in order to make appropriate returns to their startup
investors, finance their manufacturing operations, and be able to
afford the approval process in the United States which costs them a
great deal in both time and money.
Although the 1986 Drug Export Act represented a good step forward, it
has led to the development of a patchwork quilt of bureaucracy that has
forced U.S. manufacturers to establish and maintain facilities outside
the United States. At the same time, the law imposes time-consuming
requirements on FDA, whose resources should be reprioritized to the
review of new, life-saving medicines and technologies for American
patients. Offshore movement often begins with the relocation of
clinical trials, closely followed by R&D, which is most efficient when
done in conjunction with the medical professionals involved in the
trials.
Within the device industry, 50 percent of established companies and
87 percent of startup ventures are moving their clinical trials to
foreign countries. This means American patients not only are not
receiving access to the most cutting-edge innovative medical products,
but also are several generations behind in what products have been
approved and are in common use. Clinical trials are also critical to
the success of products developed by pharmaceutical companies, who
generally expend millions of dollars on this phase of drug development.
In a time of unprecedented harmony in worldwide trade, as reflected
by recent passage of GATT, our laws relating to the export of foods,
drugs, medical devices, and cosmetics should reflect that comity as
well. The rate of growth in the favorable balance of trade that the
medical device industry in this country has historically seen is
slowing dramatically. The average annual rate of growth in this
industry was 26 percent in 1988-1992; it dropped to 11 percent in 1992-
1994.
In addition, the increased competition from foreign competitors--as
well as American firms who have moved part or all of their operations
overseas, and are now foreign competitors as well--is being evidenced
in patent activity. The United States has consistently held close to
three-quarters of the medical device patents granted in the United
States, but foreign growth in this industry means that foreign-owned
companies now hold thousands of U.S. patents, not just hundreds.
The paternalistic approach evidenced in our current law is no longer
compatible with today's world marketplace. In my view the original
version of S. 593, which was introduced by Senator Hatch and co-
sponsored by Senators Kassebaum, Abraham, Frist and Coats as well as
myself, was a good approach. This would have allowed free export to any
World Trade Organization [WTO] member nation, and export to non-WTO
members with 30 days notice to the Secretary of HHS, who had the
authority to stop exports destined to be imminent hazards to the public
health of citizens overseas. Similar efforts were led by Representative
Fred Upton in the House; he introduced the companion bill H.R. 1300
with 24 cosponsors last summer.
However, in the spirit of bipartisanship, Senators Hatch, Kassebaum,
and I, undertook an effort to try to work with Senator Kennedy to
create a revised bill. The version of this bill being considered here
today embodies the resultant compromise. While I believe this
legislation is still more restrictive than it should be, there is a
real value to moving a good bill rather than gaining nothing. This
export bill is good trade policy and is consistent with advancing the
public health.

amendment no. 3544

(Purpose: To provide for welfare reform in the State of Texas)

On page 577 line 14 of the committee substitute, insert:
``Sec. 213 If the Secretary fails to approve the
application for waivers related to the Achieving Change for
Texans, a comprehensive reform of the Texas Aid To Families
With Dependent Children program designed to encourage work
instead of welfare, a request under section 1115(a) of the
social Security Act submitted by the Texas department of
Human Services on September 30, 1995, by the date of
enactment of this Act, notwithstanding the Secretary's
authority to approve the applications under such section, the
application shall be deemed approved.''
____

amendment no. 3545

(Purpose: To remove regulatory impediments to community development)

Section 223B of the amendment is amended to read as
follows:
``Sec. 223B. Section 415 of the Department of Housing and
Urban Development--Independent Agencies Appropriations Act,
1988 (Public Law 100-202; 101 Stat. 1329-213) is repealed
effective the date of enactment of Public Law 104-19. The
Secretary is authorized to demolish the structures identified
in such section. The Secretary is also authorized to
compensate those local governments which, due to this
provision, expended local revenues demolishing the
developments identified in such provision.''.
____

amendment no. 3546

To the amendment numbered 3466: On page 406, line 8, strike
``$567,152,000'' and insert in lieu thereof ``$567,753,000''.

Mr. HATFIELD. Mr. President, I further ask unanimous consent that any
statements relating to the amendments be placed in the Record at the
appropriate place.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HATFIELD. Mr. President, I ask for action on the adoption of the
amendments en bloc.
The PRESIDING OFFICER. They have already been agreed to.
Mr. HATFIELD. I thank the Chair.
Mr. DORGAN addressed the Chair.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. DORGAN. Mr. President, I ask unanimous consent to speak for 15
minutes as in morning business. In making the request, I have spoken
with the chairman of the Appropriations Committee. If someone comes to
the floor with business on this piece of legislation, if they will
simply signal me, I will relinquish the floor, because I think that
should take precedence. If no one is on the floor to do business on the
appropriations bill, I seek unanimous consent to speak for 15 minutes
as in morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DORGAN. Mr. President, I wanted to come to the floor and speak
about two pieces of legislation, one which I introduced last week and
one which I will introduce next week, simply to alert my colleagues
about what I intend to do with them.
Before I do, let me suggest that I think it is time for us to ask the
President and the majority leaders and minority leaders of the House
and the Senate to restart the budget negotiations and work to try to
reach another budget agreement.
As I was coming over here this morning, I was thinking about a young
man from Jamestown, ND. I was thinking of this issue of the budget, and
of trying and failing. We went through all of this last year. In fact,
I was one of the two Senate Democratic negotiators, along with Senator
Exon. We spent day after day in S-207, at the White House, in the Oval
Office, in the Cabinet room. Those of us involved in the negotiations
know we did not reach a conclusion. We did not settle on a plan to
balance the budget in 7 years, but we should, we can, and we ought to.
I was thinking about the young man from Jamestown, ND, in this
context as I came over this morning. He is a young man who attended a
wonderful little grade school in Jamestown, and he dreamed of being an
astronaut. He grew up to be a strapping, happy young man named Rick
Hieb.
He joined the program to become an astronaut, went to NASA, became an
astronaut, and flew up in the space shuttle. I recall seeing Rick in
Jamestown not only before he went up in the space shuttle, but also on
television, as I sat on my living room couch, watching him and two of
his fellow astronauts, who had flown in this mission with him.
The mission was that they were to grab, I believe it was, an Intel
satellite,

[[Page S2178]]

a 10,000-pound satellite that had malfunctioned. They were to grab this
satellite in outer space and hold it with an arm they had constructed.
They were going to repair this satellite--it had never been done
before--traveling 16,000 miles an hour in weightlessness while trying
to grab a 10,000-pound satellite.
Rick and his two colleagues went out. Something stuck on the
apparatus, and they failed to grab the satellite. Do you know what the
headlines were that night? The headlines were that ``NASA Failed.''
``The Astronauts Failed.'' ``The Mission Failed.''
The next day, still orbiting in space, they tried again. They spent a
couple of hours walking in space, trying to manipulate and maneuver to
grab that satellite, and they failed again. And the second day the
newspapers said, ``NASA Mission Fails.'' ``Astronauts Fail.''
Then they spent some time trying to figure out how they could fix
this problem, and they spent a day doing that. The next day, they went
back out for a third time, and that is when many of us watched them on
live television, I think, for about 4 hours, as they orbited around the
Earth working this mechanism to grab the Intel satellite and fix the
satellite. And they did it.
What they did was something that they had never before rehearsed,
they had never planned and they had never done before. But they went
out a third time and risked failure because they wanted to succeed.
Rick came to my office some time later. I asked how tough it was to
try to do something in space that they had never even practiced. He
said, ``The shame would have been not to try.'' There is no shame in
trying and failing. The shame is in failing to try, and they went out
and failed twice and the world heard that they had failed. The third
time they went out and did something no one expected they could do, and
they succeeded.
It is not just astronauts in space with the courage and bravery of
Rick Hieb and his colleagues who ought to understand the message that
the shame is if you fail to try.
Last year, we did not get a budget agreement. The fact is, we ought
not quit, we ought to try again. Now is the time for us to try to reach
a budget agreement.
We have a circumstance in which the majority leader is running for
President. The President is running for reelection. We have a very
unique political circumstance in this country. It will probably make it
a little difficult to deal with the budget issue. But that does not
mean we should not continue to try. It is time to restart the budget
negotiations, and it is time for us to succeed in developing a plan for
a balanced budget in the interest of this country.
Mr. President, let me ask unanimous consent to proceed for as much
time as I consume in morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DORGAN. Mr. President, I was speaking about the negotiations to
try to reach some kind of a balanced budget plan. I know there has been
a lot of windmilling of the arms and gnashing of the teeth and wringing
of the hands. There has been a lot of huffing and puffing on both sides
of the aisle about the budget deficit and about who is at fault for not
reaching a plan of some type to deal with the budget deficit. But the
plain fact is, both sides, it seems to me, have something to
contribute.
I have said on the floor that the Republicans, I think, need to be
commended. The Republicans have said to us, this is something we must
do. They have continued to apply pressure that we reach some kind of a
solution. That, I think, serves this country's interests. The Democrats
also serve this country's interests by saying, yes, let us do that, but
let us do it the right way. Just doing it, if you do it the wrong way,
can be terribly destructive to this country.
The choices on spending, which is what we are really talking about
when we balance the budget, are critically important. Some came to the
floor of the Senate and said, ``We have a deal for you. Let us cut Star
Schools by 40 percent and let us increase spending on star wars by 100
percent.''
I do not know what air they breathe, but that does not seem like very
clear thinking to me. So the method by which we balance the budget is
critically important. How many people do you want to kick out of the
Head Start Program? That is a program that really works and helps
children. How many kids do you want to tell, ``You no longer have an
entitlement to have a hot lunch at school. You come from a poor family,
but we decide you have no longer an entitlement to have a hot lunch at
school in the middle of the day.'' How many people want to tell poor
children that in this country? Some do, because that has been the
proposal.
My point is, we should balance the budget, but we should do it with
the right priorities. But, most of all, I think it is time for the
President and the Members of the Congress to understand now is the time
to try again. If we simply take the lower of the figures on spending
cuts offered during this negotiations, the lower of the figures from
either party, it adds up to over $700 billion in spending cuts and adds
up to the kind of spending cuts that will reach a balanced budget in
the year 2002.
So, it is not a case of not having the will to get there. It is a
case of not agreeing to the menu of the spending cuts. It is time to
try again. It is time for the President and Members of Congress to sit
down, restart the negotiations, and solve this problem.
As I said, before I relinquish the floor, we have a very unique
circumstance facing us. We have a majority leader here in the Senate
running for President. We have a President down at the other end of
Pennsylvania Avenue who wants to keep his job. A lot of what is going
to go on this year, I assume, will have a substantial amount of
political overtones.
But there ought not be, it seems to me, a political judgment in this
country that says balancing the budget is not important. It is
important. It is the right thing to do, and it ought to be done the
right way. I think the President and leaders of Congress have an
obligation to restart these negotiations, restart them now, and
continue budget negotiations until we finalize a plan and agree to a
plan to reach a balanced budget. The American people deserve that and
this country deserves that.

____________________