[Pages S3311-S3317]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. HATCH:
S. 1666. A bill to authorize the Federal District Court for the
Central Division of Utah to hold court in Provo and St. George; to the
Committee on the Judiciary.

THE CENTRAL DIVISION OF UTAH FEDERAL DISTRICT COURT AUTHORIZATION ACT
OF 1996

Mr. HATCH. Mr. President, today I introduce a bill that would permit
the Federal District Court of the Central Division of Utah to hold
court in Provo and St. George. Under the relevant statutory provision,
title 28, United States Code, section 125, District Court for the
Northern Division of Utah may be held only in Ogden, and District Court
for the Central Division of Utah may be held only in Salt Lake City.
The central division of Utah, however, is quite expansive: it
encompasses 23 counties and spreads from the Salt Lake region down to
Utah's southern

[[Page S3312]]

border. Due to the division's size, those involved in district court
proceedings, whether as litigants, jurors, or lawyers, must travel to
Salt Lake City for district court. The district judges and others in
Utah have become concerned about inconveniences that have arisen due to
the statutory constraints on the places of holding court in Utah.
On January 9, 1996, the district judges for the District of Utah
voted to approve an amendment to title 28, United States Code, section
125 that would permit district court for the central division of Utah
to be held not only in Salt Lake City, but also in Provo and St.
George. The bill I introduce today embodies those changes. The Utah
State Bar supports the bill.
This bill will help Utahns by facilitating the administration of
justice in Utah, and by permitting easier access to the district courts
to citizens and litigants throughout Utah, who have often had to travel
to Salt Lake City to have their cases and concerns heard.
Provo itself is a significant city with a population of 86,835. The
neighboring city of Orem, UT, adds a population of 67,561 to Provo's
immediate region. St. George, while a smaller city, is located in the
southwest corner of Utah, and would provide a convenient location for
citizens of southern Utah.
The minor modifications embodied in the bill will place Utah in a
similar position to many other States in which district court may be
held at numerous statutorily designated locations. The vast majority of
States enjoy far more than two places in which district court can be
held. Just to cite a few examples, 13 cities in Alabama are designated
as cities in which district court may sit, 11 cities in Arkansas are so
designated, 17 cities in Georgia are named, 12 cities in Iowa are
included, and 23 cities in Oklahoma are listed.
Under current law, only Delaware, Hawaii, Maine, New Hampshire, and
Rhode Island stand with Utah in having two or fewer locations in which
district court may be held. Utah is the largest of those States. Even
with the change, a mere four cities in Utah will be designated as
places for holding district court.
I note for my colleagues that the bill does not require any
additional appropriations or any courthouse construction. It simply
permits court to be held in two additional locations.
I ask unanimous consent that the entire text of the bill be printed
in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1666

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. HOLDING OF DISTRICT COURT IN PROVO AND ST. GEORGE,
UTAH.

Section 125(2) of title 28, United States Code, is amended
by inserting ``, Provo, and St. George'' after ``Salt Lake
City''.
______

By Mr. KENNEDY:
S. 1668. A bill to improve the job and income security and retirement
security of the American worker, and for other purposes; to the
Committee on Finance.

THE AMERICAN WORKERS ECONOMIC SECURITY ACT

Mr. KENNEDY. Mr. President, throughout the decades of the cold war,
the paramount national concern was national security. Now with the end
of the cold war, concern is growing rapidly over another type of
security. This type of security has four aspects: job security,
financial security, health security, and retirement security. For
millions of individuals and families, the proper word in each of these
aspects of their lives is ``insecurity,'' not ``security.'' No
political party deserves to prevail if it fails to address these
concerns and propose a plausible strategy to end them.
The heart of the current crisis of economic insecurity is the growing
realization that growth and prosperity no longer benefit all families
fairly. The quarter century after World War II was a golden era. Hard
work paid off as the economy grew and income rose for all. But no more.
Superficial signs of prosperity abound. The stock market has soared.
Inflation is consistently low and unemployment is down. But the
prosperity is less than it seems. Americans are working harder and
earning less. Their standard of living is stagnant or sinking. They are
worried about losing their jobs, losing their health insurance,
affording their children's education, caring for their elderly parents,
and somehow still saving for their own retirement.
The rich are still getting richer but more and more families are left
out and left behind. The rising tide that once lifted all the boats is
now lifting only the yachts.
Mr. President, these two charts reflect, I think, in a dramatic way
what has effectively been happening in the U.S. economy over the period
of the recent years. From 1947 to 1979, virtually 30 years, we found
that in each of the groups, the bottom 20 percent, second bottom 20
percent, the middle 20 percent, the top 20 percent, the second top 20
percent, and even the top 5 percent of Americans for almost 30 years--
30 years--effectively grew together, the real family income group. All
Americans moved along and moved along together during periods of time
when we had both recessions and inflation. Cumulatively over this
period of time all Americans went along together.
But from 1979 to 1993, in the most recent period of time, taken
collectively, we will find out that those again at the bottom level,
the next to the bottom level, and even in the middle have been
virtually losing ground; that is, the bottom 60 percent, while the top
40 percent have been moving well, and the top 5 percent has seen great
growth, and the top 1 percent the largest growth. That reflects almost
two-thirds of the American families over this period of time from 1979
to 1993 have been, in most instances, working harder, struggling longer
hours, and have been gradually falling behind in terms of the real
family income growth during this period, while those at the top end
have seen this extraordinary growth.
Mr. President, once now profitable companies are even laying off good
workers at unseemly rates for even fatter profits, even higher stock
prices, and even more astronomical salaries and benefits for CEO's. And
to add insult to injury, the fears on Main Street are met by cheers on
Wall Street.
We saw that in recent times when we saw the dramatic increase in the
total number of jobs just a short while ago, 600,000 or 700,000 new
jobs, and the stock market going down over 100 points. And we saw it
conversely when we saw bank mergers that were taking place just several
weeks ago, a couple months ago, that saw the announcement of the loss
of some 20,000 jobs, and the stocks as a result of the mergers going
right up through the roof.
Mr. President, the Republican Contract With America is now largely
defunct because it would have made these problems worse. Its massive
cuts in Medicare, education, and other priorities would have
exacerbated the security of most families, and the lavish tax breaks
for the wealthy would have worsened the income gap. Clearly, the
Republican strategy is to comfort the comfortable and afflict the
afflicted.
The Republican strategy is designed to exploit the income gap--but do
nothing to solve it. In fact, half of all the spending cuts in the
vetoed Republican budget came from programs benefiting the neediest 20
percent of families. Less than a tenth came from the top 20 percent,
while two-thirds of the Republicans' proposed tax breaks would flow to
the top 20 percent, while the bottom 20 percent actually faced a tax
increase.
So we found even in the last proposal more was being demanded from
the working families, less from the wealthiest individuals, and yet
those families were going to be the ones who were going to benefit the
greatest amount from those proposed cuts and benefits from the Tax
Code. Practical steps, not demagoguery, are needed to deal with each of
the four economic insecurities facing individuals and families.
In other times, Congresses have enacted restraints on runaway free
enterprise to end abuses and bolster the public interest. The most
obvious precedents are the antitrust laws, civil rights laws, the child
labor laws, minimum wage, Social Security, Medicare, Medicaid, and
Federal aid to education.
Today is April 15--tax day. Ordinary Americans across the country are
filing their income taxes and wondering about their job security, their
stagnant wages, their health care, their retirement, their ability to
educate their

[[Page S3313]]

children, while our Republican colleagues are proposing tax breaks for
the wealthiest individuals and corporations in America.
Let us work together to increase economic security for all families.
We can find ways to align the interest of individuals and industries
and allow them to grow together so that corporations and shareholders
can still reap profits, but not at the expense of the wages and
standards of living of their employees.
We should provide incentives to make it more profitable for employers
to create jobs than eliminate them, share gains with employees rather
than channel them solely to the CEO's and shareholders, and provide
reasonable job training, health, and retirement benefits. We can pay
for all those incentives by closing perverse incentives in the Tax Code
that encourage firms to move jobs overseas and treat workers as
disposable.
Action on several fronts is already underway. The Kassebaum-Kennedy
bill to guarantee health insurance for workers has bipartisan support
and will be taken up this week in the Senate. It will deal with two
flagrant problems in health insurance today--the excessive use of
exclusions, the preexisting conditions, and the loss of insurance
coverage when employees lose their job or change their job.
The lesson of the health reform debate of 1994 is that a sharply
divided Congress cannot make far-reaching changes in election years.
Instead of repeating that mistake, we should enact the reforms that
have broad bipartisan support and that are achievable this year, if
both sides in the ongoing health reform debate refrain from piling on
controversial additional provisions.
Second, it is time to raise the minimum wage, which will soon reach
its lowest level in 40 years. April 1 marked the fifth anniversary of
the last increase in the minimum wage. Raising it from $4.25 an hour to
$5.15 an hour, in two steps this year and next year, as President
Clinton has proposed, will increase the wages of 13 million
Americans. It will be interesting to see whether Senator Dole and other
Republicans are prepared to join us as the debate goes on.

Third, Congress should reform the immigration laws to end antiworker
abuses. Republicans and Democrats speak with one voice in urging the
strongest possible crackdown on illegal immigration. But reforms and
legal immigration are needed, too, in order to give American workers
the protection they need and deserve.
We should make it illegal for U.S. firms to lay off American workers
and replace them with cheap imported foreign labor. Before U.S. firms
hire foreign workers they should make a good-faith effort to hire
qualified American workers. If we refuse to enact reasonable
restrictions to protect U.S. jobs, we will fuel the drive for extreme
restrictions that will slam the door unfairly against all immigrants.
Other steps are also needed to assist the American workers. Today, I
am introducing a bill to create a two-tier tax rate for companies and
encourage firms to act more responsibly toward their employees. If a
company invests in education and training for its workers, provides
adequate health care and retirement benefits, shares its profits with
its workers, increases the wages of its work force at or above the
Consumer Price Index, and makes child care available for all workers,
it will receive a 25-percent reduction in the income tax rate it pays
on profits distributed as dividends to shareholders on this portion of
its income.
The corporate tax rate will be reduced to 26 percent for corporations
now taxed at 35 percent, and corporate reductions will be available to
corporations now taxed at other rates. Under this plan, CEO's who
resist measures to treat workers fairly will feel the wrath of
shareholders, whose dividends will be lower because the corporations
fail to act responsibly.
This is a two-tier tax rate for most-favored companies. I will show
the difference between company A and a most-favored company, using this
chart. What we find out is that if they have the profits, they retain
the profits--in this case, they distribute them. They pay the $35. It
will amount to $70 in this illustration if it is a most-favored
company. If they retained $100, but distributed to shareholders the
$100 distribution, this would be a $25 tax reduction on the shares
distributed to the shareholders, which would mean there would be $26 on
this segment, meaning there would be $61 rather than the $70.
So, the drive for this kind of reduction will be the shareholders
that will be involved in this decision. This will rely on their
interest, their involvement, their pressure, rather than a governmental
institution or a State institution to be able to move this process
forward. They will see, with the distribution, that their taxes on that
distribution will be reduced.
We reward other countries with tariff benefits if they qualify as
most favored nations. We should create a category of most-favored
companies and reward them when they treat their employees as assets.
In addition, the bill I am introducing today provides that the
Federal Government, with its billions of dollars in Government
procurement and contracting, will give preference to these companies
that treat their employees well and qualify for the tax benefits--about
$85 billion, $85 to $100 billion in various contracts. Those most-
favored companies would have the preference when competing with a
nonfavorite for a particular contract. That would be true, as well as
extended loan provisions that come through the various loaning agencies
of the Federal Government. That is a smaller figure, about $20 billion,
but it is still very, very important, particularly for smaller
companies, and smaller companies would be very much encouraged to
participate.
The bill also places new restraints on corporate mergers and
acquisitions, which are causing enormous job insecurity for workers and
substantial layoffs and serious dislocations for entire communities.
This provision strengthens the antitrust laws by requiring a review of
the impact of these mergers on workers.
The Federal Trade Commission, the Justice Department, the Labor
Department, and the Securities and Exchange Commission will give
greater scrutiny to the corporate transactions likely to result in the
closing or downsizing of company, facilities, or plants that are part
of the lifeblood of local communities.

Now, Mr. President, what we are talking about are the mergers and
acquisitions, the amendments to the antitrust law. These two companies
want to merge, so they go through a review. Then there is a judgment
that is made that they will be able to go through and the merger will
take place. As part of the remedy process, the commissions will
consider not just competition considered at the present time but also
consider the impact on workers and communities. They will consider both
of those.
We are not assigning percentages to each of them but we are taking
note that we believe that if we have established the antitrust laws to
consider competition between the various companies, that we also ought
to encourage them to take a look at what the impact is going to be on
working families. Not to say that has to override, but just that it has
to be considered as they are making the remedies, to go forward with
any of the new mergers or with any of the divestitures. That is the
place this will go on through. We see the total number of mergers--
2,800 last year. They have been escalating dramatically. About 20
percent of those are reviewed carefully by the Federal Trade Commission
and DOJ. Only a small amount of them ever get into this kind of a
process, but that is an extremely important item and can make a very,
very important difference.
Mr. President, in addition, the bill eliminates the tax deductions
that encourage mergers and acquisitions and leveraged buyouts that cost
American jobs and line the pockets of the financiers of the deals.
Another major section protects retirement security by encouraging
companies to provide greater pension coverage for employees.
Last Thursday, President Clinton proposed a series of needed reforms
in the current laws applicable to workers who now participate in
pension plans. These reforms will encourage new pension plans for small
businesses, expands IRA eligibility, increases pension portability and
prevents pension raiding.

[[Page S3314]]

In addition, I am proposing several other reforms to facilitate
coverage for employees who do not have access to pension plans through
their current employment plan. The bill establishes an individual
pension plan mechanism for all individuals without access to employer-
based plans. Workers will no longer be dependent upon their employer
for retirement planning and savings. The bill will provide portability
to all these workers who could never before gain access to a pension
plan. They will be able to take these plans with them from job to job.
The employer's sole responsibility is the payroll deduction of the
employees' savings.
Less than 50 percent of the private work force is now covered by
private pension plans. More than 68 million Americans have no pension
coverage. Ironically, most of them work in smaller businesses, which
are the driving force of the future economy. Yet their retirement needs
are neglected. These are the workers who are the backbone of the
economy during their working lives. They constitute more than half of
the work force. We cannot ignore their retirement needs. Like health
care, good pension coverage should be accessible, affordable, and
portable.
This chart demonstrates the alternative pension plan which is
employer based. Here we have the IRA's. The proposal that I am
introducing today, the individual pension plan which is the more
acceptable, what this does, it says the employer will permit the
contribution by the employee into a pension system, that that pension
system is going to have to live up to fiduciary and ERISA standards,
which will give greater protections for the individual pension plans
and the advantage of portability over the IRA's. Individuals will be
able to take, though, their portable pension plans with them.
As we all know, most of the new jobs in the country are produced by
the small businesses. Pension plans will serve the retirement needs of
millions of existing and future small business workers with no pension
options.
Finally, the bill I am introducing expands educational opportunities
for workers by offering them the tax benefits for employers and
families. This is an issue that is familiar to most Members of this
body. What we find out once again, to learn what is the level of income
from those that both do not finish high school compared to those that
complete various segments of their education. This chart is the average
annual earnings by level of education. We see that those that do not
finish high school and are employed earn $12,800; those that have
professional degrees, earn $74,000. We know the stories of World War
II. Every dollar invested was returned eight times to the Federal
Treasury. The more incentives that we can provide to increase
opportunities for education, the better off our economy and our ability
to compete. We have incentives for both the training programs as well
as tuition of programs spelled out.
The bill pays for these provisions with revenues generated from the
repeal of the incentives in the current tax law that encourage
companies to close U.S. plants, uproot jobs in the United States, and
transfer them to foreign countries abroad.
We can save $40 billion or more over the next 7 years by repealing
tax breaks for profits earned in foreign countries, tax exemptions for
companies that transfer title to goods on the high seas to avoid U.S.
taxes; price rigging by multinational corporations that minimize U.S.
income and maximize income in foreign tax havens; sham corporations
that generate huge tax deductions for moving plants and jobs overseas,
and loopholes that allow billionaires to thumb their noses at Uncle Sam
and renounce their American citizenship and move to a foreign tax haven
to evade taxes on the massive wealth they have accumulated in America.
The Members are familiar with this list because many of these have
been offered by other Members of the Chamber at different times. We
have already voted on the billionaires' tax loophole, which benefits a
handful of Americans who have made substantial amounts of money--in
some instances, billionaires. By renouncing their citizenship and
moving overseas, they effectively escape all of the taxes on that money
that was earned in the United States, and they avoid paying any of
their tax obligations by just escaping and renouncing American
citizenship. This is called the ``Benedict Arnold tax loophole.'' It is
an appropriate name for it. The others are matters which raise some $40
billion, and this is not even a complete list.
We are, obviously, open to other recommendations, suggestions, or
add-ons for this. But it does indicate that we do have an opportunity
to reduce these kinds of incentives that, today, are impacting working
families. We will hear that we should not use the Tax Code to achieve
social outcomes. The fact of the matter is that these tax provisions,
which exist in the Internal Revenue Code today, are all impacting and
affecting adversely working families. We are saying, let us stop that.
We cover the revenues here and provide the incentives for the American
workers.
The ``quiet depression'' facing American workers is the central
economic, social, and political issue of 1996. When the economy is
wrong, nothing else is right. Progress and opportunity for all is a
fundamental American value. We know the problem. We know its urgency.
The only thing that is unacceptable is to do nothing.
______

By Mr. HARKIN:
S. 1670. A bill to amend the Internal Revenue Code of 1986 to allow a
deduction for postsecondary education expenses, to make permanent the
exclusion for employer-provided education, and for other purposes; to
the Committee on Finance.

THE COMMONSENSE MIDDLE-CLASS TAX RELIEF ACT

<bullet> Mr. HARKIN. Mr. President, I introduce the Commonsense Middle-
Class Tax Relief Act.
Today, middle-class Americans are working longer hours for smaller
paychecks. American families deserve a raise. And that's just what my
legislation provides--a raise in incomes, a raise in education and
skills, and a raise in living standards.
The Commonsense Middle-Class Tax Relief Act is based on a fundamental
premise: a higher education means higher income.
The bill would provide a $10,000 tax deduction for a person or their
parents for the costs of tuition and fees at a college or for a
vocational education. The full deduction would be available for
families with an adjusted gross income of $80,000 and would be reduced
as the income exceeded that level, being completely phased out when the
taxpayer's income exceeded $100,000 for joint filing taxpayers.
For individuals the full credit would be available for those with
adjusted incomes of up to $60,000 phasing out completely at $80,000.
For the current year, half of the $10,000 deduction would be available.
The full $10,000 deduction would be available starting in 1997 and
thereafter. This provision is similar to one proposed by President
Clinton.
Under existing law, post-secondary expenses can only be deducted
under very narrow circumstances: if it is for the improvement of one's
skills in a job a person holds above the skills needed to acquire that
position, but to acquire additional skills required by the government
or the employer to stay in the position.
My measure also would restore the exclusion of employer-paid payments
of post-secondary college and vocational education costs for
improvement of an employee's job related skills that were allowed prior
to January 1, 1995. It would make the exclusion permanent.
The Commonsense Middle-Class Tax Relief Act will cut taxes on hard-
working families trying to get ahead, raise incomes, and prepare
Americans for the 21st century. It will mean higher incomes, higher
education, and higher quality jobs for hard-working Americans.
Mr. President, education is key to both the raising of incomes of
average Americans and to increasing the competitiveness of America in
an increasingly global economy. I ask unanimous consent that a recent
article in the Washington Post by Lester Thurow on this topic be
included in the Record.
Mr. President, I urge my colleagues to join me in support of this
commonsense proposal. We should be able to agree on a bipartisan basis
that this type of important middle-class tax relief is needed and will
mean better opportunities and better incomes for millions of Americans.
There being no objection, the article was ordered to be printed in
the Record, as follows:

[[Page S3315]]

[From the Washington Post, Apr. 7, 1996]

Preparing Students for the Coming Century

(By Lester C. Thurow)

Consider an alphabetical list of the 12 largest companies
in America at the turn of the 20th century; the American
Cotton Oil Company, American Steel, American Sugar Refining
Company, Continental Tobacco, Federal Steel, General
Electric, National Lead, Pacific Mail, People's Gas,
Tennessee Coal and Iron, U.S. Leather and U.S. Rubber. Ten of
the 12 were natural resource companies. The economy then was
a natural resource economy, and wherever the most highly
needed resources were to be found, employment opportunities
would follow.
In contrast consider the list made 90 years later by the
Japanese Ministry of international Trade and Industry,
enumerating what it projected to be the most rapidly growing
industries of the 1990s: microelectronics, biotech, the new
material-science industries, telecommunications, civilian
aircraft manufacturing, machine tools and robots, and
computers (hardware and software). All are brainpower
industries that could be located anywhere on the face of the
earth. Where they will take root and flourish depends upon
who organizes the brainpower to capture them. And who
organizes the power most efficiently will depend on who
educates toward that objective best.
But back to the industries for the moment: Think of the
video camera and recorder (invented by Americans), the fax
(invented by Americans), and the CD player (invented by the
Dutch). When it comes to sales, employment and profits, all
have become Japanese products despite the fact that the
Japanese did not invent any of them. Product invention, if
one is also not the world's low-cost producer, gives a
country very little economic advantage. Being the low-cost
producer is partly a matter of wages, but to a much greater
extent it is a matter of having the skills necessary to put
new things together.
Wages don't depend on an individuals's skill and
productivity alone. To a great extent they reflect team
skills and team productivies. The value of any single
person's knowledge depends upon the smartness with which that
knowledge is used in the overall economic system--the
abilities of buyers and suppliers to absorb that individual's
skills.
In an era of brainpower industries, however, the picture is
even more complicated: The economy is a dynamic economy
always in transition--the companies that do best are those
able to move from product to product within technological
families so quickly that they can always keep one generation
ahead. Keeping one jump ahead in software, for instance, Bill
Gates's Microsoft had a net income running at 24 percent of
sales in 1995.
If a country wants to stay at the leading edge of
technology and continue to generate high wages and profits,
it must be a participant in the evolutionary progress of
brainpower industries so that it is in a position to take
advantage of the technical and economic revolutions that
occasionally arise. Knowledge has become the only source of
long-run sustainable competitive advantage. Recent studies
show that rates of return for industries that invest in
knowledge and skill are more than twice those of industries
that concentrate on plant and equipment. In the past, First
World citizens with Third World skills could earn premium
wages simply because they lived in the First World. They had
more equipment, better technology and more skilled co-workers
than those who lived in the Third World. But that premium is
gone Today's transportation and communications technologies
have become so sophisticated that high-wage skilled workers
in the First World can work together effectively with low-
wage unskilled workers in the Third World. America's
unskilled now get paid based on their own abilities and
not on those of their better-trained co-workers.
Industrial components that require highly skilled
manufacturers can be made in the First World and then shipped
to the Third World to be assembled with ``low skill''
components. Research and design skills can be electronically
brought in from the First World. Sales results can be quickly
communicated to the Third World factory, and retailers know
that the speed of delivery won't be significantly affected by
where production occurs. Instant communications and rapid
transportation allow markets to be served effectively from
production points on the other side of the globe.
Multinational companies are central in this process: Where
they develop and keep technological leadership will determine
where most of the high-level jobs will be located. If these
firms decide to locate their top-wage leadership skills in
the United States, it will not be because they happen to be
American firms but because America offers them the lowest
cost of developing these skills. The decisions will be purely
economic. If America is not competitive in this regard, the
market will move on. The countries that offer companies the
lowest costs of developing technological leadership will be
the countries that invest the most in research and
development, education and infrastructure (telecommunications
systems, etc.).
If the person on a loading dock runs a computerized
inventory-control system in which he logs delivered materials
right into his hand-held computer and the computer instantly
prints out a check that is given to the truck driver to be
taken back to his firm (eliminating the need for large white-
collar accounting offices that process purchases), the person
on the loading dock ceases to be someone who just moves
boxes. He or she has to have a very different skill set.
Factory operatives and laborers used to be high school
graduates or even high school dropouts. Today 16 percent of
them have some college education and 5 percent have graduated
from college. Among precision production and craft workers,
32 percent have been to or graduated from college. Among new
hires those percentages are much higher. In the last two
decades, the linkage between math abilities and wages has
tripled for men and doubled for women.
The skill sets required in the economy of the future will
be radically different from those required in the past. And
the people who acquire those skill sets may not be the
unskilled workers who currently live in the first world. With
the ability to make anything anywhere in the world and sell
it anywhere else in the world, business firms can ``cherry
pick'' the skilled or those easy (i.e., cheap) to teach
wherever they live. American firms don't have to hire an
American high school graduate if that graduate is not world-
class. His or her educational defects are not their problem.
Investing to give the necessary market skills to a well-
educated Chinese high school graduate may well end up being a
much more attractive (i.e., less costly) investment than
having to retrain an American high school dropout or a poorly
trained high school graduate.
Take Korea for example. In a global economy, what
economists know as ``the theory of factor price
equalization'' holds that an American worker will have to
work for wages commensurate with a Korean's wages unless he
works with more natural resources than a Korean (and no
American can, since there is now a world market for raw
material to which everyone has equal access); unless he has
access to more capital than a Korean (and no American can
since there is a global capital market where everyone borrows
in New York, London and Tokyo); unless he has more skilled
co-workers than a Korean (and no American can claim to
since multinational companies can send needed knowledge
and skills anywhere in the world); and unless he has
access to better technology than a Korean (and few
Americans have, since reverse engineering--tearing a
product apart to learn how it is made--has become an
international art form; highly refined in Korea). Adjusted
for skills, Korean wages will rise and American wages will
fall until they equal each other. At that point, factor
price equalization will have occurred.
The implications for the future are simple. If America
wants to generate a high standard of living for all of its
citizens, skill and knowledge development are central. New
brainpower industries have to be invented and captured.
Organizing brainpower means not just building a research and
development system that will put us on the leading edge of
technology, but organizing a top-to-bottom work force that
has the brainpower necessary to make us masters of the new
production and distribution technologies that will allow us
to be the world's low-cost producers.
To do this will require a very different American
educational system. And building such a system is the new
American challenge.
Progress has to start by ratcheting up the intensity of the
American high school. The performance of the average American
high school graduate simply lags far behind that found in the
rest of the industrial world. Those Americans who complete a
college course of study end up catching up (the rest of the
industrial world doesn't work very hard in the first couple
of years of university education), but three-quarters of the
American work force doesn't ever catch up.
The skill gap doesn't end there. Non-college-bound high
school graduates elsewhere in the industrial world go on to
some form of post-secondary skill training. Germany has its
famous apprenticeship system; in France every business firm
by law has to spend one percent of its sales revenue on
training its work force; and with lifetime employment as a
fact of life, Japanese companies invest heavily in the work
force's skills since they know that it is impossible to hire
skilled workers from the outside. In America, government-
funded programs are very limited in nature, and, with high
labor-force turnover rates, American companies quite
rationally don't want to make skill investments in people who
will leave and take their skills elsewhere. The net result is
a compounded skill gap for those Americans who do not
graduate from college. Closing this gap and giving the
country a competitive edge should be America's number one
educational priority.<bullet>
______

By Mr. HARKIN:
S. 1671. A bill to provide for cockpit voice recorders and flight
data recorders on noncombat aircraft of the Armed Forces; to the
Committee on Armed Services.

department of defense noncombat aircraft legislation

<bullet> Mr. HARKIN. Mr. President, I am introducing a bill that
requires all Department of Defense noncombat aircraft to have both
cockpit voice recorders and flight data recorders. I was shocked to
learn that the airplane that crashed in Bosnia with tragic loss of 35

[[Page S3316]]

lives including Ron Brown, the Secretary of Commerce was not equipped
with those important devices.
We need to thoroughly understand why any plane crash occurs. With
that knowledge, was can better protect other planes of a similar type.
In this case, the Department of Defense plane used was very similar to
civilian aircraft. In other cases that may not be true. But, in all
cases, we need to fully understand crashes and near crashes to better
improve our safety record.
The bill provides that the Department of Defense should establish
rules to require that noncombat aircraft contain those devices within
120 days of enactment and that the devices be in place within 1 year.
The legislation provides that the requirements for the Department be as
similar as possible to those used by the FAA.
On April 9, I wrote to Secretary Perry about this issue and asked how
many DOD noncombat planes do not have these devices and what would be
the cost of placing those devices into those aircraft. It is possible
that there may be some narrow category of non-combat aircraft where
these devices would not be appropriate because of the specialized
nature of the aircraft or extreme cost. If that is the case, I look
forward to learning about the specific situations involved. There may
be a need for some exceptions. But, I believe that the Congress should
move forward to require that these devices be on DOD aircraft as
quickly as possible. I hope that we will act to pass this legislation,
perhaps with some modification, very quickly.<bullet>

ADDITIONAL COSPONSORS

S. 358

At the request of Mr. Heflin, the name of the Senator from Nebraska
[Mr. Kerrey] was added as a cosponsor of S. 358, a bill to amend the
Internal Revenue Code of 1986 to provide for an excise tax exemption
for certain emergency medical transportation by air ambulance.

S. 605

At the request of Mr. Dole, the name of the Senator from North
Carolina [Mr. Helms] was added as a cosponsor of S. 605, a bill to
establish a uniform and more efficient Federal process for protecting
property owners' rights guaranteed by the fifth amendment.

S. 743

At the request of Mrs. Hutchison, the name of the Senator from
Vermont [Mr. Leahy] was added as a cosponsor of S. 743, a bill to amend
the Internal Revenue Code of 1986 to provide a tax credit for
investment necessary to revitalize communities within the United
States, and for other purposes.

S. 773

At the request of Mrs. Kassebaum, the names of the Senator from
Michigan [Mr. Abraham] and the Senator from South Dakota [Mr. Daschle]
were added as cosponsors of S. 773, a bill to amend the Federal Food,
Drug, and Cosmetic Act to provide for improvements in the process of
approving and using animal drugs, and for other purposes.

S. 912

At the request of Mr. Kohl, the name of the Senator from Oregon [Mr.
Wyden] was added as a cosponsor of S. 912, a bill to amend the Internal
Revenue Code of 1986 with respect to the eligibility of veterans for
mortgage revenue bond financing, and for other purposes.

S. 969

At the request of Mr. Bradley, the name of the Senator from New York
[Mr. D'Amato] was added as a cosponsor of S. 969, a bill to require
that health plans provide coverage for a minimum hospital stay for a
mother and child following the birth of the child, and for other
purposes.

S. 984

At the request of Mr. Grassley, the name of the Senator from Montana
[Mr. Burns] was added as a cosponsor of S. 984, a bill to protect the
fundamental right of a parent to direct the upbringing of a child, and
for other purposes.

S. 1027

At the request of Mr. Brown, the name of the Senator from
Pennsylvania [Mr. Santorum] was added as a cosponsor of S. 1027, a bill
to eliminate the quota and price support programs for peanuts, and for
other purposes.

S. 1028

At the request of Mrs. Kassebaum, the name of the Senator from
Maryland [Mr. Sarbanes] was added as a cosponsor of S. 1028, a bill to
provide increased access to health care benefits, to provide increased
portability of health care benefits, to provide increased security of
health care benefits, to increase the purchasing power of individuals
and small employers, and for other purposes.

S. 1043

At the request of Mr. Stevens, the name of the Senator from Louisiana
[Mr. Breaux] was added as a cosponsor of S. 1043, a bill to amend the
Earthquake Hazards Reduction Act of 1977 to provide for an expanded
Federal program of hazard mitigation, relief, and insurance against the
risk of catastrophic natural disasters, such as hurricanes,
earthquakes, and volcanic eruptions, and for other purposes.

S. 1183

At the request of Mr. Hatfield, the name of the Senator from
Connecticut [Mr. Dodd] was added as a cosponsor of S. 1183, a bill to
amend the act of March 3, 1931 (known as the Davis-Bacon Act), to
revise the standards for coverage under the act, and for other
purposes.

S. 1232

At the request of Mr. D'Amato, the name of the Senator from
Mississippi [Mr. Cochran] was added as a cosponsor of S. 1232, a bill
to amend the Internal Revenue Code of 1986 to exclude length of service
awards to volunteers performing fire fighting or prevention services,
emergency medical services, or ambulance services from the limitations
applicable to certain deferred compensation plans, and for other
purposes.

S. 1344

At the request of Mr. Heflin, the name of the Senator from
Connecticut [Mr. Lieberman] was added as a cosponsor of S. 1344, a bill
to repeal the requirement relating to specific statutory authorization
for increases in judicial salaries, to provide for automatic annual
increases for judicial salaries, and for other purposes.

S. 1400

At the request of Mrs. Kassebaum, the name of the Senator from New
Hampshire [Mr. Gregg] was added as a cosponsor of S. 1400, a bill to
require the Secretary of Labor to issue guidance as to the application
of the Employee Retirement Income Security Act of 1974 to insurance
company general accounts.

S. 1483

At the request of Mr. Kyl, the name of the Senator from Minnesota
[Mr. Grams] was added as a cosponsor of S. 1483, a bill to control
crime, and for other purposes.

S. 1505

At the request of Mr. Lott, the name of the Senator from Tennessee
[Mr. Frist] was added as a cosponsor of S. 1505, a bill to reduce risk
to public safety and the environment associated with pipeline
transportation of natural gas and hazardous liquids, and for other
purposes.

S. 1551

At the request of Mr. Dorgan, the names of the Senator from Illinois
[Mr. Simon] and the Senator from Minnesota [Mr. Wellstone] were added
as a cosponsors of S. 1551, a bill to restore the broadcast ownership
rules under the Communications Act of 1934 to the status quo ante the
enactment of the Telecommunications Act of 1996.

S. 1574

At the request of Mr. Bond, the name of the Senator from Virginia
[Mr. Warner] was added as a cosponsor of S. 1574, a bill to provide
Federal contracting opportunities for small business concerns located
in historically underutilized business zones, and for other purposes.

S. 1578

At the request of Mr. Frist, the names of the Senator from Montana
[Mr. Burns] and the Senator from Alaska [Mr. Stevens] were added as
cosponsors of S. 1578, a bill to amend the Individuals With
Disabilities Education Act of authorize appropriations for fiscal years
1997 through 2002, and for other purposes.

S. 1595

At the request of Mr. Bradley, the name of the Senator from
California [Mrs. Boxer] was added as a cosponsor of S. 1595, a bill to
repeal the emergency salvage timber sale program, and for other
purposes.

[[Page S3317]]

S. 1623

At the request of Mr. Warner, the names of the Senator from Hawaii
[Mr. Akaka] the Senator from Illinois [Ms. Moseley-Braun], the Senator
from California [Mrs. Feinstein], and the Senator from Vermont [Mr.
Jeffords] were added as cosponsors of S. 1623, a bill to establish a
National Tourism Board and a National Tourism Organization, and for
other purposes.

S. 1639

At the request of Mr. Dole, the name of the Senator from Virginia
[Mr. Robb] was added as a cosponsor of S. 1639, a bill to require the
Secretary of Defense and the Secretary of Health and Human Services to
carry out a demonstration project to provide the Department of Defense
with reimbursement from the medicare program for health care services
provided to medicare-eligible beneficiaries under TRICARE.

S. 1646

At the request of Mr. Domenici, the names of the Senator from Arizona
[Mr. Kyl] the Senator from Georgia [Mr. Coverdell], and the Senator
from Arkansas [Mr. Pryor] were added as cosponsors of S. 1646, a bill
to authorize and facilitate a program to enhance safety, training,
research and development, and safety education in the propane gas
industry for the benefit of propane consumers and the public, and for
other purposes.

S. 1650

At the request of Mr. Harkin, the names of the Senator from
California [Mrs. Boxer] and the Senator from Rhode Island [Mr. Pell]
were added as cosponsors of S. 1650, a bill to amend the Fair Labor
Standards Act of 1938 to prohibit discrimination in the payment of
wages on account of sex, race, or national origin, and for other
purposes.

S. Joint Resolution 49

At the request of Mr. Kyl, the name of the Senator from Virginia [Mr.
Warner] was added as a cosponsor of Senate Joint Resolution 49, a joint
resolution proposing an amendment to the Constitution of the United
States to require two-thirds majorities for bills increasing taxes.

Senate Resolution 152

At the request of Mr. Abraham, the name of the Senator from Tennessee
[Mr. Frist] was added as a cosponsor of Senate Resolution 152, a
resolution to amend the Standing Rules of the Senate to require a
clause in each bill and resolution to specify the constitutional
authority of the Congress for enactment, and for other purposes.

Senate Resolution 226

At the request of Mr. Domenici, the names of the Senator from Maine
[Mr. Cohen], the Senator from Hawaii [Mr. Akaka], the Senator from
Rhode Island [Mr. Pell], the Senator from New Mexico [Mr. Bingaman],
and the Senator from Georgia [Mr. Coverdell] were added as cosponsors
of Senate Resolution 226, a resolution to proclaim the week of October
13 through October 19, 1996, as ``National Character Counts Week.''

Senate Resolution 238

At the request of Mr. Helms, the names of the Senator from Colorado
[Mr. Brown] and the Senator from Iowa [Mr. Grassley] were added as
cosponsors of Senate Resolution 238, a resolution expressing the sense
of the Senate that any budget or tax legislation should include
expanded access to individual retirement accounts.

____________________