Women's Small Business Programs Improvement Act of 2003

Mr. President, today, as Ranking Democrat on the Committee on Small Business and Entrepreneurship, I join the Committee's Chair, Senator Olympia Snowe in introducing a three-year reauthorization bill for the Small Business Administration's programs. These programs help small businesses, often called the engine of the American economy, with access to capital, business advice and training and Federal procurement opportunities. But before I speak more specifically about the provisions of the bill, I would like to thank Chair Snowe for working hand-in-hand with me on this, my third, reauthorization of the Small Business Administration. Having worked closely on two previous reauthorizations, and as a member of the Small Business and Entrepreneurship Committee for over 18 years, I can tell you that the SBA reauthorization process takes diligence and a strong attention to detail. I want to commend Senator Snowe for taking the initiative to draft legislation that makes such important and necessary changes to the SBA during this reauthorization process and for showing great leadership in her first seven months as Chair of the Committee on Small Business and Entrepreneurship.

Our bill will strengthen the SBA and dramatically improve the agency's ability to deliver services to small businesses in every state. It is based on a sound Committee record. In addition to holding two hearings and three roundtables to specifically address SBA's programs and related reauthorization issues, our Committee met and spoke with numerous constituents, program directors and small business advocates. It is through this correspondence, research and input that our Committee has been able to prepare a comprehensive piece of legislation that will likely serve the Small Business Administration and the entire small-business community well past even the next reauthorization period.

Over the past three years, as Chairman and Ranking Member of this Committee, I have seen this administration reduce government funding and transfer that money to the wealthy with tax cut after tax cut, resulting in a significant loss of revenue for essential programs aimed at fostering small businesses and the economic activity they bring about. While many of us like to note that small businesses are the engine of economic growth and should be bolstered by our government, this administration has given small businesses more words than action.

The need for small business programs--for access to capital, for training and counseling, for assistance in gaining access to the Federal marketplace--runs counter cyclical to the economy. When the economy is slumping, as it now is, small businesses and entrepreneurs need the SBA even more. Our Committee has heard from the small-business community that demand for training and assistance and access to capital is up, yet this administration has proposed freezing funding for virtually all SBA programs for six years. Their proposal includes no adjustment for inflation or demand, despite SBA's own numbers that show demand is up for its programs.

It is carrying out our legislative and oversight responsibilities that Chair Snowe and I raised a number of concerns regarding the SBA's reauthorization proposal and the overall management and direction of many of the agency's programs through hearings, and roundtables and in letters and phone calls to the administration. And after hearing from the community and working with small business experts in the field, Senator Snowe and I came to the conclusion that many of the proposals put forth by the Small Business Administration would not help the agency's programs but ultimately hinder them.

This administration and small businesses across this Nation will find, however, that our prescription for small businesses in a flailing economy

is quite different. Our reauthorization legislation embraces the programs that have worked for years, redirects those that have struggled and sets the SBA and up for continued success.

Although banks have plenty of cash to lend, small businesses are still having a problem getting access to credit. For the past few years as the economy has fizzled, the Federal Reserve has reported that banks have cut back on lending to small businesses, making it harder and more expensive to get loans. And who has been there to pick up the slack? The Small Business Administration and its lending partners.

Lending is up in SBA's largest lending program for working capital. Lending is up in SBA's microloan program, which serves those with the least access to capital through the private sector. And SBA's venture capital programs account for a significant role--more than 50 percent-- in this country's investment in our fastest-growing small businesses. Last year these loans pumped about $20 billion into the economy, leveraged millions more from the private sector, fed the local tax base as the Federal government cut back, and created at least 400,000 jobs.

As the Committee reviewed SBA's programs for reauthorization, these facts figured largely into establishing the program levels. I thank our Chair, Senator Snowe, for working with me to set the levels for SBA's lending and venture capital programs at increasing levels for the next three years. I am particularly pleased with the increased funding levels for the microloan programs.

I disagree with the administration's proposals over the past few years to cut back its investment in microloans and training assistance to micro-entrepreneurs. And I disagree with the Adminstration's contention that these borrowers are being served through the 7(a) loan program. The small borrower in the microloan program is different than the small borrower being served through the 7(a) loan program. Both are important, but they are different, and one is not a substitute for the other.

And who are these borrowers being served through the microloan program? Thirty percent are African American. Eleven percent are Hispanic. Thirty-seven percent are women. And anywhere from 30 to 40 percent go to small businesses in rural areas. Banks turn these borrowers away, and yet the administration proposed cutting the microloan program by 36 percent in its most recent budget. SBA needs to fully fund these programs and put more resources into the office that manages the program. Four people is not enough to manage 1,400 loans and 180 grants.

Aside from setting the levels for each small business financial assistance program, we made important program changes and started new initiatives. In the 7(a) loan program, SBA's largest loan program, which provides working capital to small businesses with long terms of up to 25 years, we made permanent the reduction in the fees borrowers and lenders pay. We are testing a proposal that allows the most proficient 7(a) lenders in good standing to lend in every state. Lenders have complained that applying for lending autonomy in each of the 70 district office and branches is administratively burdensome, both for them and for the Agency staff, and that some district offices have taken advantage of the power to approve or disapprove lenders when they apply for this special lending status.

I want to make clear while I want to avoid unnecessary paperwork and eliminate reported abuses, I do not want the lenders to take this as authority to quit working with the district directors. It is important to have a local connection and for the SBA and the lenders to work together to maximize service to the small businesses. For this purpose I have included a provision which directs the SBA to consider the recommendations and comments of any district directors and regional administrators when reviewing a lender for national lending authority.

To increase the value of 7(a) loans sold in the secondary market, the Committee has included a provision to allow SBA to pool and sell the guaranteed portion of loans with varied rates. Currently SBA has the authority to only sell those loans with identical rates. This should create efficiencies in market and bring down borrowing costs for the small business borrower. At Senator Snowe's request, in order to reach more under-served small businesses, we have enhanced the Low-Doc program, allowing lenders to use the simplified application form for loans up to $250,000 from $100,000, making it the same as the SBA Express program. We have also expanded the incentives for lenders to provide financing to export small businesses, and proposed letting 7(a) borrowers use a simplified size standard when determining if an applicant is a small business.

To improve the 504 loan program, which makes long-term loans of up to 20 years to small, growing businesses to buy equipment and buildings, we have also raised the debenture size to keep pace with the rising cost of commercial real estate and equipment. We have brought the job requirement standard up from $35,000 to $50,000 after ten or twelve years. We have directed SBA to simplify the application and documentation process of applying for and closing 504 loans, long a goal of this Committee and made a priority based on the testimony of one of our witnesses during the reauthorization process. We have created two alternatives for 504 lenders to use when establishing a loan loss reserve to cover potential losses.

I am particularly pleased that we have included S. 822, the Child Care Lending Pilot Act in the reauthorization bill. It allows small, non-profit childcare businesses access to 504 loans. I thank Senator Snowe and my colleagues for agreeing to try this for three years, similar to what we have done with the microloan program. And I thank the trade association of 504 lenders, the National Association of Certified Development Companies, and other 504 lenders for their endorsement of an input on the pilot.

The more research I've done, the more I've come to realize how vitally important it is that we give non-profit day care providers the same opportunities as for-profits to expand their businesses. Non- profit day care centers are often the only child care suppliers available in needy areas, from the most urban to the most rural. Giving these businesses access to 504 loans for three years will allow us to gauge whether this valuable loan program is the best way to aid these valuable providers of care to our Nation's children. I have taken note of states like Oregon, where 79 percent of day care providers are non- profit, Michigan, where that number jumps to 86 percent, Iowa with 77 percent, my own State of Massachusetts with 90 percent, Ohio with 62 percent, and the list goes on and on. I've learned that in State after State families are waiting for affordable day care; from more than one thousand families on the waiting list in Nevada and Maine to more than thirty thousand on the list in Texas. These parents are waiting for quality day care they can afford, and making available affordable loans to all licensed child care providers may increase access to care and cut down those waiting lists.

I understand the concerns of those who are concerned about the precedent of SBA lending to non-profits. And I agree it should not be expanded to all industries. However, this is a very unique industry that in many States is delivered mostly through non-profits, and the only way to penetrate the market is to reach both for-profit and non- profit. Further, non-profits are usually the providers that care for the neediest kids. I have added provisions to ensure the underwriting standards are just as tough, if not more so, as those applied to for- profit centers. The loans must be personally guaranteed, the collateral must be owned outright by the child care provider, and it must be able to make its loan payments and cover normal operating expenses from the revenue generated from its clients. With these protections, the loans to non-profits should perform just as well as those made to for- profits, and if there is a problem, the loans should be collateralized sufficiently to cover the losses.

The bill defines a small, non-profit child care business to mean an entity organized as a 501(c)(3), but not just any organization. It must be a licensed child care provider; it must meet the size standard for a small business; and it must provide care to infants, toddlers and pre- kindergarten and older children after school. At Senator Snowe's request, the pilot is limited to

7 percent allowed for pilots under SBA's 7(a) guaranteed business loan program. I feel that the agreed upon cap should allow for sufficient lending under the pilot to adequately test whether lending to non- profit childcare providers is effective in increasing access to affordable childcare, and whether it protects the general 504 program, which is vital to the financing of small businesses in this country.

The bill also includes a comprehensive study by the GAO to track and monitor the impact of this program both on the industry and the program. Last, I want to remind my colleagues that the 504 program is funded entirely through fees and does not require appropriations.

Also included in this bill is S. 318, the Small Business Drought Relief Act. This simply reinforces in legislation something which SBA should already be doing. You see, the SBA doesn't treat all drought victims the same. The Agency only helps those small businesses whose income is tied to farming and agriculture. However, farmers and ranchers are not the only small business owners whose livelihoods are at risk when drought hits their communities. The impact can be just as devastating to the owners of rafting businesses, marinas, and bait and tackle shops. Sadly, at present these small businesses cannot get help through the SBA's disaster loan program because of something taxpayers hate about government--bureaucracy.

The SBA denies these businesses access to disaster loans because its lawyers say drought is not a sudden event and therefore it is not a disaster by definition. However, contrary to the Agency's position that drought is not a disaster, as of July 16, 2002, the day this legislation was introduced last year, the SBA had in effect drought disaster declarations in 36 states. That number had grown to 48 the beginning of this year, demonstrating that problem had gotten worse and even more small businesses were in need.

As I have said time and again, the SBA has the authority to help all small businesses hurt by drought in declared disaster areas, but the Agency won't do it. For years the Agency has been applying the law unfairly, helping some and not others, and it is out of compliance with the law. The Small Business Drought Relief Act of 2003 would force SBA to comply with existing law, restoring fairness to an unfair system, and get help to small business drought victims that need it. I thank Senator Bond for working with me on this when he was the Ranking Member of the Committee on Small Business & Entrepreneurship, and I thank Senator Snowe and her staff for all their help and support. While we might have had a lot of rain recently in the Northeast, there are areas like Lake Mead in Arizona where it is so dry that the water level is down and small businesses are losing business and making expensive changes to extend docks to reach the water.

In this bill are also provisions to shore up SBA's venture capital programs--the Small Business Investment Company Debenture and Participating Securities programs, and the New Markets Venture Capital Program. We have balanced investment incentives with soundness issues and allowed small businesses to receive more SBIC financing than currently permissible if they also have a 504 or 7(a) loan. We have improved the arrangement for distributing payments from successful SBICs so that SBA and the investors are treated more fairly and the taxpayers has more protection for realizing repayment on the investments. We have put in place conforming amendments to make the New Markets Venture Capital program work with the New Markets Tax Credit, as Congress intended. We have clarified that new markets venture capital companies have two years to raise their matching capital, as Congress intended. The Committee has been troubled by the Agency's interpretation of the NMVC statute which they viewed as permitting SBA to choose how much time it can give conditionally approved NMVCs to raise the private-sector matching money. The chosen time frames were unreasonable and not what Congress intended.

We have also included many measures to strengthen SBA's oversight of lenders, responding to findings by the General Accounting Office and the Office of Inspector General. And we have reauthorized and clarified the law for surety bond guarantees to help small businesses get government contracts.

While no one would deny the importance access to capital plays in the success of small businesses, as SBA Administration Hector Barreto and past SBA Administrators have acknowledged time and again, debt is not always the answer. In the SBA's FY 2004 budget request, there is reference to information from the Ewing Marion Kauffman Foundation and Dun & Bradstreet that indicates ``80 percent of new businesses discontinue operation within five years because of lack of `knowledge' of key business skills.'' Despite the recognized importance of such assistance, the SBA's funding request for FY 2004 and its legislative proposal to implement that request would freeze funding levels for virtually all Agency programs, without even accounting for inflation, for a six-year period. If enacted, that would severely hamstring this nation's small businesses and their ability to effectively compete and prosper in the national economy.

Cuts to or inadequate funding of the SBA's entrepreneurial development programs are often attributed to vague and unfounded claims of duplication. Such claims mistake a common mission of training and counseling for duplication, ignoring the reality that small businesses vary greatly, are often at very different stages of development, and have many different needs. Just as it would be ineffective to only have one type of loan or venture capital financing structure for the 25 million small businesses in this country, it would be futile to water down specialized management and training programs to impose a one-size- fits-all approach.

I want to commend Chair Snowe for giving women entrepreneurs such a prominent place in the reauthoziation process. Rarely do women entrepreneurs get the recognition and attention they deserve for their contributions to our economy: 18 million Americans would be without jobs today if it weren't for these entrepreneurs who had the courage and the vision to strike out of their own. During my tenure as a member, Chair, and lead Democrat of the Senate Committee on Small Business and Entrepreneurship, I have worked to increase and improve the opportunities for enterprising entrepreneurial women in a variety of ways, leading to greater earning power, financial independence and asset accumulation--and I am glad that Senator Snowe is joining me in this endeavor.

As Chair Snowe expressed when she introduced the Women's Small Business Programs Improvement Act--and when Senator Snowe and I passed the Women's Business Center's Preservation Act--protecting the extremely effective and well-established Women's Business Center network was a high priority in this reauthorization. For that reason, we make permanent the Women's Business Center Sustainability Pilot Program by creating three-year ``renewal'' grants for those centers with sustainability grants and four-year ``initial'' grants for new centers; increase the program's authorization levels; and direct the Office of Women's Business Ownership, OWBO, to make all Women's Business Center grants at $150K and to consult with the associations of Women's Business Centers when making improvements to the program. Other changes to the Women's Business Center Program include streamlining the data collection and the grant application and selection criteria, protecting the privacy of Women's Business Council, WBC, clients, and providing for a smooth transition from sustainability to the newly established WBC program. Our legislation will not only secure the future of the Women's Business Center Program, but it will connect all SBA-related women's initiatives with a unified mission, similar guidance and training. These changes were coupled with minor, yet significant, changes to the National Women's Business Council, NWBC, and the Interagency Committee on Women's Business Enterprise. Senator Snowe and I included provisions to give the NWBC cosponsorship authority, to allow more flexibility in the way the Council uses funds, and to direct the Council to serve as a clearinghouse for historical data. Each of these things will enable the Council to become a better resource for the Administration, Congress and the entire small-business

community. To bolster the representation of women business owners in the federal government, our bill re-establishes the Interagency Committee on Women's Business Enterprise, directs the Deputy Administrator of the SBA to serve as acting chairperson of the Interagency Committee until a chairperson is appointed, establishes a Policy Advisory Group to assist the Committee's chairperson in developing policies and programs under this Act and creates three subcommittees similar to those created under the National Women Business Council.

This bill also supports and protects the Small Business Development Center network, which has served 9 million small-business owners since its inception more than 20 years ago. It should also be noted that in 2001, SBDCs helped small businesses create or retain over 80,000 jobs, generate $3.9 billion in sales and obtain $2.7 billion in financing. For every dollar spent on an SBDC, $2.09 in tax revenue was returned to the Federal Government. Numbers aside, the nationwide network of SBDCs provide important counseling services to small-business owners that are unable to afford private consulting, many of whom are women and minority clients. The SBDC program has grown to serve 1.25 million small-business owners and entrepreneurs each year, and there are nearly 1,000 centers serving every State in Nation.

While this bill rejects the potentially detrimental changes proposed by the SBA to the SBDC network, it does address concerns expressed by the centers and small businesses. Included in our bill are increased authorization levels to keep up with increased demand and a provision to protect the privacy of the program's clients and a provision to help SBDCs that have been adversely affected by poor economic conditions or government downsizing.

Also, included in the entrepreneurial development section of our bill is a provision to increase to $7 million annually the authorization level for the Service Corps of Retired Executives, SCORE, which has nearly 11,000 volunteers, and a technical change to allow SCORE to keep its modest staff of fourteen employees.

I want to thank Senator Snowe for working with me to include, as introduced, the Native American Small Business Development Act, which I reintroduced earlier this year together with Senator Johnson and Senator Smith to address the SBA's growing lack of commitment to the Native American community. According to a report released by the U.S. Census Bureau, the ``three year average poverty rate for American Indians and Alaska Natives [from 1998-2000] was 25.9 percent; higher than for any other race groups.'' With an unemployment rate well above the national average and household income at just three-quarters of the national average, Native American communities need a commitment from the Federal government that we will help them, particularly during these difficult economic times. To reaffirm this commitment, the Johnson-Kerry-Smith bill provides Native Americans the resources they need to take advantage of the opportunities of entrepreneurship.

The Native American Small Business Development Act, as included in our reauthorization bill, will ensure that the SBA's programs to assist Native American communities cannot be dissolved by making the SBA's Office of Native American Affairs, ONAA, and its Assistant Administrator permanent. Our legislation would also create a statutory grant program, known as the Native American Development grant program, to assist Native Americans. It would also establish two pilot programs to try new means of assisting Native American communities and require Native American communities to be consulted regarding the future of SBA programs designed to assist them. In short, this legislation will ensure that our Native American communities receive the adequate assistance they need to help start and grow small businesses.

To address the growing business development needs of veterans, Senator Snowe and I reauthorized the Advisory Committee on Veterans Affairs, expanded veterans outreach grants from just service-disable veterans, to veterans, reservists and service-disable veterans. Further, we increase the funding for the Office of Veterans Business Development to enable that office to better deal with the demand by veterans for outreach and development services.

We continue to receive reports of the detrimental effects of the Administration's policy of reduced staffing and resources for essential programs aimed at allowing small businesses to thrive. Week after week, the Federal Times reports on the decline in contracts being allocated to small businesses, small businesses losing ground in the federal marketplace, and most recently, on the awarding of more big contracts with less oversight from Federal agencies. With agencies awarding larger, more complex and more costly contracts with less staff performing oversight, this nation's small businesses and its tax payers are the ones shouldering the burden when small business goals continue to be unmet. In addition to helping small businesses obtain access to procurement opportunities, these goals are meant to help the government benefit from the cost-savings and innovations small business contractors can often provide.

Significant improvements to the on-going problem of contract bundling, also called contract consolidation, are included in this bill. The first provision creates a two-tiered approach to preventing unnecessary contract consolidation. Civilian agencies will be required to meet specific standards if they attempt to consolidate contracts above $2 million and additional requirements for those contracts above $5 million. The Department of Defense is required to meet two types of similar requirements for contracts above $5 million and $7 million. The bill also eliminates the use of the term ``contract bundling'' and expands the definition of ``contract consolidation,'' closing a loophole that has been widely used and has detrimentally affected small businesses.

The second provision increases in the number of Procurement Center Representatives (PCRs) stationed throughout the country. These representatives advocate on behalf of small businesses in cases directly affecting contracting, such as the bundling or consolidation of contracts. In the bill, we have increased the number of PCRs to ensure that every state and every major procurement center is allocated at least one PCR. Meanwhile, we have also ensured that these PCRs are not burdened with responsibilities that were previously the duties of Breakout PCRs and Commercial Marketing Representatives. These two improvements will dramatically increase the efficacy and efficiency of all three positions and allow proper review of the approximately 40 percent of Federal contracts, nearly $90 billion, that are currently not being reviewed by PCRs. This should increase small business's access to Federal contract opportunities.

The bill would also create a reporting requirement for the BusinessLINC program, which has been showing promise in creating real teaming opportunities for small businesses in the private sector. Although the Administration recommended elimination of the program, the reports this Committee received regarding the overwhelming success of the existing nine programs made it clear that the SBA did not have sufficient information about BusinessLINC to make an informed decision on its effectiveness. The Committee's bill would ensure that the SBA offers the proper level of oversight and would foster the continued success of the program. I would like to thank Senator Snowe for working with me to find a compromise to preserve this successful program.

At each of this Committee's three Roundtables on Reauthorization and the hearing on contract bundling, the small business community reiterated the need for accountability for small business contracting at the agency level. I applaud Senator Snowe on her efforts to ensure that Federal agencies be held accountable for fully utilizing small businesses and to allow a greater amount of Congressional oversight of the implementation of agency procurement strategies. Provisions within this bill will ensure that the heads of Federal agencies identify a specific portion of their budget request that will be awarded to small businesses in their strategic plan and their annual budget

submission to Congress; will hold senior executives and senior program managers accountable in their annual performance evaluations for small business utilization in Federal contract awards.

In addition to increasing opportunities for prime contracts, this bill addresses another serious problem: small businesses have been severely hamstrung by dishonest practices by some businesses that have prime contracts with the Federal Government and receive preference over other prime contractors due to their superior subcontracting plans. Senator Snowe and I have worked closely to address the concerns of small businesses regarding delays in payment, false reporting and the use of ``bait and switch'' tactics by prime contractors.

This bill holds prime contractors responsible for the validity of subcontracting data, requiring the CEO to certify to the accuracy of the subcontracting report under penalty of law. It also expands the penalties for falsifying data included in subcontracting reports to match the $500,000 penalty for businesses that falsify their status as a small and disadvantaged business. If one intentionally falsifies data as a part of a subcontracting report to a Federal agency, he is defrauding the United States government and will be punished to the full extent of the law. I commend Senator Snowe for her diligence in creating these strict penalties and her efforts to create a bipartisan response to protect small businesses.

I want to thank Chairwoman Snowe and her able staff for all of their hard work over the past several months. I also want to express my gratitude to all members of the Committee and urge them and my other Senate colleagues to support the Small Business Administration 50th Anniversary Reauthorization Act of 2003.

Mr. President, the legislation I am introducing today with Senators Cochran, Lincoln, Collins, Daschle, Jeffords, Clinton, Cantwell, and Johnson is entitled the Children's Dental Health Improvement Act of 2003. This legislation is designed to improve the access and delivery of dental health services to our Nation's children through Medicaid, the State Children's Health Insurance Program, (SCHIP), the Indian Health Services, IHS, and our Nation's safety net of community health centers.

The oral health problems facing children are highlighted in a landmark report issued by the Surgeon General and the Department of Health and Human Services, HHS, in 2000 entitled ``Oral Health in America: A report of the Surgeon General'' in which he observed that our Nation is facing what amounts to ``a `silent epidemic' of dental and oral diseases.''

In fact, dental caries, which refers to both decayed teeth or filled cavities, is the most common childhood disease. According to the Surgeon General,``Among 5- to 17-years olds, dental caries is more than 5 times as common as a reported history of asthma and 7 times as common as hay fever.'' In short, dental care is, as the Surgeon General adds,``the most prevalent unmet health need among American children.''

I was pleased to chair a hearing in the Health, Education, Labor and Pensions Committee on June 25, 2002, entitled ``The Crisis in Children's Dental Health: A Silent Epidemic'' in which the Surgeon General, Dr. David Satcher, testified. Dr. Satcher's testimony was strong and compelling.

In his words, ``Over 108 million children and adults lack dental insurance, which is over 2.5 times the number who lack medical insurance.'' Dr. Satcher also highlight the following information specific to the oral health problems in children:

There are striking disparities in dental disease by income. Poor children suffer twice as much dental cries as their more affluent peers, and their disease is more likely to be untreated. These poor- nonpoor differences continue into adolescence. One out of four children in America is born into poverty, and children living below the poverty line--annual income of $17,000 for a family of four--have more severe and untreated decay.

Other birth defects such as hereditary ectodermal dysplasias, where all or most teeth are missing or misshapen, cause lifetime problems that can be devastating to children and adults.

Unintentional injuries, many of which include head, mouth, and neck injuries, are common in children.

Intentional injuries commonly affect the craniofacial tissues.

Tobacco-related oral lesions are prevalent in adolescents who currently use smokeless--spit tobacco.

Professional care is necessary for maintaining oral health, yet 25 percent of poor children have not seen a dentist before entering kindergarten.

Medical insurance is a strong predictor of access to dental care. Uninsured children are 2.5 times less likely than insured children to receive dental care. Children from families without dental insurance are three times more likely to have dental needs than children with either public or private insurance. For each child without medical insurance, there are at least 2.6 children without dental insurance.

Medicaid has not been able to fill the gap in providing dental care to poor children. Fewer than one in five Medicaid-covered children received a single dental visit in a recent year-long study period. While recent CMS data indicate progress in this area with 1 million more Medicaid-eligible children now receiving annual dental care than was the case in 1996, there is still a long way to go to ensuring greater access. Although new programs such as the State Children's Health Insurance Program, SCHIP, may increase the number of insured children, many will still be left without effective dental coverage.

The social impact of oral diseases in children is substantial. More than 51 million school hours are lost each year to dental-related illness. Poor children suffer nearly 12 times more restricted-activity days than children from higher income families. Pain and suffering due to untreated diseases can lead to problems in eating, speaking, and attending to learning.

Over 50 percent of 5- to 9-year-old children have at least one cavity or filling, and that proportion increases to 78 percent among 17-year- olds. Nevertheless, these figures represent improvements in the oral health of children compared to a generation ago.

The Senate also heard the testimony of Dr. Burton Edelstein, founding director of the Children's Dental Health Project; Dr. Gregory Chadwick, president of the American Dental Association; Dr. Lynn Douglass Moundon, director of oral health in the Arkansas Department of Health; Ed Martinez, chief executive officer at San Ysidro Health Center in California; and, Dr. Timothy Shriver, president and chief executive officer of Special Olympics, Inc.

Dr. Edelstein underscored the need for more attention to this issue. As he said, ``The too-widespread belief that childhood dental disease has been vanquished states in contrast to the thousands upon thousands of toothaches and acute abscesses experienced daily by America's children--many as young as 2 years of age.''

In endorsing this legislation, Dr. Chadwick added, ``. . . we cannot forget the fact that millions of people in this country--particularly children--aren't getting even basic preventive and restorative dental care. These children are out there suffering.''

The Children's Dental Health Improvement Act of 2003 seeks to end that suffering. One important provision in the bill would grant States flexibility

to provide dental coverage to low-income children through the State Children's Health Insurance Program, or SCHIP, just as States currently are able to do through Medicaid.

Unfortunately, SCHIP law prohibits coverage of children for services unless they are completely uninsured. As authors Ruth Almeida, Ian Hill, and Genevieve Kenney of an Urban Institute report entitled ``Does SCHIP Spell Better Dental Care for Children? An Early Look at New Initiatives write'', ``. . . many low-income children are covered by employer-based or other private health insurance for their medical care, but do not have a comprehensive dental benefit. Because these children are privately insured, they are not eligible for SCHIP and cannot avail themselves of dental coverage under SCHIP. Expanding SCHIP to furnish dental services on a wraparound basis to private covered low-income children without dental coverage could help achieve broader improvements in children's oral health.''

For low-income children with medical coverage but no dental insurance through the private sector, their only option would be to completely dump their private coverage for their children in order to access SCHIP coverage.

Instead, the Children's Dental Health Improvement Act of 2003 creates an option for States to provide low-income families with the ability to receive wraparound dental coverage through SCHIP without having to completely drop their private insurance. This reduces the crowd-out of private insurance, which was a priority of the Congress during passage of SCHIP, and it provides low-income children with dental services that other children in the same economic circumstance are already receiving through SCHIP.

In implementing such a change, I want to make it clear that I am in strong support of providing additional funding to SCHIP to ensure that these services are provided without reducing current levels of SCHIP funding. With those additional funds, I strongly believe that SCHIP, just as Medicaid, should provide services to low-income children who are both uninsured and underinsured. Children need a comprehensive set of child health services, including dental services, to ensure their appropriate health and development.

However, coverage for these services is often not enough. Even when children do have dental coverage, the access to care is often sorely lacking. Medicaid is the largest insurer of dental coverage to children. Yet despite the design of the Medicaid Program to ensure access to comprehensive services for children, including dental care, the inspector general of the Department of Health and Human Services reported in 1996 that only 18 percent of children eligible for Medicaid received even a single preventive dental service. The same report shows that no State provides preventive services to more than 50 percent of eligible children. The factors are complex but the primary one is due to limited dental participation in Medicaid.

According to GAO, in its September 2000 report entitled ``Oral Health: Factors Contributing to Low Use of Dental Services by Low- Income Populations.'' ``Of 39 states that provided information about dentists' participation in Medicaid, 23 reported that fewer than half of the states' dentists saw at least one Medicaid patient during 1999.'' Even worse, a 1998 survey by the National Conference of State Legislatures indicates that fewer than 20 percent of dentists participate in the Medicaid Program nationwide.

The GAO concludes poor participation rates by dentists is due in large part to poor reimbursement rates in Medicaid. As the GAO points out, ``Our analysis showed that Medicaid payment rates are often well below dentists' normal fees. Only 13 states had Medicaid rates that exceeded two-thirds of the average regional fees dentists charged. . . .''

Clearly, Medicaid is chronically underfunded with respect to dental care. The Surgeon General's report notes, ``On average, state Medicaid agencies contribute only 2.3 percent of their child health expenditures to dental care, whereas nationally, the percentage of all child health expenditures dedicated to dental care is more than 10 times that rate, almost 30 percent.''

The good news is that many States, including New Mexico, have taken recent actions to improve the participation of dentists in the Medicaid Program by raising low payment rates and reducing administrative requirements. These efforts were highlighted by the GAO in its September 2000 report. To further encourage such efforts, the ``Children's Dental Health Improvement Act of 2003'' provides $50 million annually as financial incentives and planning grants to States to undertake additional improvements in their Medicaid Programs delivery of dental health services to children.

In addition to Medicaid and SCHIP, the Federal Government administers other health care programs providing dental services or providers for low-income children and their families, including services administered by community health centers and the Indian Health Service, or IHS. Unfortunately, both of these programs are underfunded and, as the GAO found, ``report difficulty in meeting the dental needs of their target populations.''

For example, the GAO found that ``HHS and health center officials report that the demand for dental services significantly exceeds the [urban and rural health] centers' capacity to deliver it. In 1998 . . ., a little more than half of the nearly 700 health center grantees funded under this program had active dental programs.'' This is also true for public health departments across the country.

To assist the health centers and public health departments with this need, the Children's Dental Health Improvement Act of 2003 provides $40 million to community health centers and public health departments to expand dental health services through the hiring of additional dental health professionals to serve low-income populations.

This is particularly a problem that needs to be addressed in areas with severe dental health professional shortages, such as New Mexico. For example, New Mexico ranked next to last in the Nation with just 32.1 dentists per 100,000 population in 1998, according to HHS. This compares to the national average of 48.4 per 100,000. Moreover, the number of dentists in New Mexico declined by 7 percent between 1991 and 1998 while the State's population grew 12 percent. The result was a 17 percent decline in dentists per capita during the period.

With regard to American Indian and Alaska Native populations, the need is so great and the funding so little that a comprehensive solution is requiring throughout the IHS system. With respect to the unmet need, the GAO notes that ``American Indian and Alaska Native children aged 2 to 4 years old have five times the rate of decay that all children have.''

Unfortunately, the GAO adds, ``. . . about one-fourth of IHS' dentist positions at 269 IHS and tribal facilities were vacant in April 2000. Vacancies have been chronic at IHS facilities--in the past 5 years, at least 67 facilities have had one or more dentist positions vacant for at least a year. According to IHS officials, the primary reason for these vacancies is that IHS is unable to provide a competitive salary for new dentists . . .''

The GAO continues, ``The IHS' dental personnel shortages translate into a large unmet need for dental services among American Indians and Alaska Natives. IHS reports that only 24 percent of the eligible population had a dental visit in 1998. The personnel shortages have also reduced the scope of services that facilities are able to provide. According to IHS officials, available services have concentrated more on acute and emergency care, while routine and restorative care have dropped as a percentage of workload. Emergency services increased from one-fifth of the workload in 1990 to more than one-third of the workload in 1999.''

To help alleviate this workforce shortage, the Children's Dental Health Improvement Act of 2003 provides IHS with the authority to offer multiyear retention bonuses to dental providers offering services through the IHS and tribal programs.

The bill also provides for some technical amendments to ensure that tribal organizations and community health centers are allowed to apply for school-based dental sealant funding from the Centers for Disease Control and Prevention, or CDC.

The legislation also has a new provision that addresses a technical and unintended problem with the implementation of provisions changing the way Medicare graduate medical education, or GME, is funded. As background in the Balanced Budget Act of 1997, or BBA, Congress recognized the unfairness of subjecting dentistry to GME policies based on the oversupply of physician specialists by exempting dental residency positions from caps placed on the number of residents supported by Medicare GME.

However, the two provisions in that law--both enacted primarily to alleviate the impact on hospitals that decrease physician slots--have had the opposite impact on hospitals that increase their dental residency positions. While successful in achieving the purpose of reducing the number of physicians being trained, these provisions have hurt dentistry and access to oral health care in the United States and are contrary to the congressional goal in 1997 to increase the number of postgraduate dental residency slots. As a result, the legislation would exempt dental residency training positions from the 3-year rolling average provision used to calculate the number of residents for Medicare GME payments.

The bipartisan legislation I am introducing today would improve the access and delivery of dental health services to our Nation's children through Medicaid, SCHIP, IHS, and our Nation's safety net of community health centers. These problems are well documented and call out for congressional action as soon as possible.

I would like to thank the American Dental Association, the American Dental Education Association, the American Academy of Pediatric Dentistry, the National Association of Community Health Centers, Inc., the National Association of Children's Hospitals, the American Dental Hygienists' Association, and the Children's Dental Health Project for their outstanding support and/or their technical advice on this legislation. This bill is a result of their outstanding work.

In particular, I want to thank Dr. Burt Edelstein, Libby Mullin, and Ann De Biasi of the Children's Dental Health Project for their vast knowledge and technical assistance on this issue. I want to thank Judy Sherman of the American Dental Association, Myla Moss and Jack Bresch of the American Dental Education Association, Dr. Herber Simmons and Scott Litch of the American Academy of Pediatric Dentistry, Karen Sealander of the American Dental Hygienists' Association, Dr. Jim Richeson and Judy Kloss Bynum of the Academy of General Dentistry, Dr. Stephen Corbin of Special Olympics, Inc., and Dan Hawkins, Chris Koppen, and Roger Schwartz of the National Association of Community Health Centers, Inc., for their valuable insight, technical advice, and continued support for this legislation. I look forward to working with them all to ensure that we achieve increased access to oral health care for our children.

In addition to those organizations, I would like to thank the following groups for their support of the bill, whether in the past session of Congress or this year. They include: the Academy of General Dentistry, American Academy of Child and Adolescent Psychiatry, American Academy of Oral and Maxillofacial Pathology, American Academy of Periodontology, American Association of Dental Examiners, American Association of Dental Research, American Association of Endodontists, American Association of Public Health Dentistry, American Association of Oral and Maxillofacial Surgeons, American Association of Orthodontists, American Association of Women Dentists, American College of Dentists, American College of Preventive Medicine, American Dental Trade Association, American Public Health Association, American Society of Dentistry for Children, American Student Dental Association, Association of Clinicians for the Underserved, Association of Maternal and Child Health Programs, Association of State and Territorial Dental Directors, Dental Dealers of America, Dental Manufacturers of America, Inc., Family Voices, Hispanic Dental Association, International College of Dentists--USA, March of Dimes, National Association of City and County Health Officers, National Association of Local Boards of Health, National Dental Association, National Health Law Program, New Mexico Department of Health, Partnership for Prevention, Society of American Indian Dentists, Special Care Dentistry, and United Cerebral Palsy Associations.

Mr. President, I ask unanimous consent for the text of the bill to be printed in the Record.

Mr. President, today, I am introducing a bill with Senators Daschle, Boxer, and Lincoln that will be jointly introduced by Representatives Ciro Rodriguez, Hilda Solis, and others in the House of Representatives entitled the ``Hispanic Health Improvement Act of 2003.'' This bill addresses the tremendous health disparities that confront the Hispanic community in our Nation.

Even if you know the statistics, they remain shocking. Over one- third, a 35 percent of Hispanic adults lack health insurance. Despite that passage of the Children's Health Insurance Program, 27 percent of Latino children remain uninsured, which is sharp comparison to 9 percent of white, 18 percent of black and 17 percent of Asian/Pacific Islander children.

In testimony before the Senate Health, Education, Labor and Pensions Committee on September 23, 2002, on Hispanic health issues, Dr. Glenn Flores, chair of the Latin Consortium of the American Academy of Pediatrics Center for Child Health Research, added: ``Among uninsured poor children in the U.S., Latinos outnumber all other racial/ethnic groups, including whites: there are 1 million poor, uninsured Latino children, compared with 766,000 white, and 533,000 African-American poor, uninsured children. Although 1999 marked the first time in many years that the proportion of uninsured Latino children actually decreased (from 30 percent to 27 percent), recent national data suggest that outreach efforts to enroll Latino children have largely been unsuccessful. A Kaiser Commission report found that only 26 percent of parents of eligible uninsured children said that they had ever talked to someone or received information about Medicaid enrollment, and 46 percent of Spanish-speaking parents were unsuccessful at enrolling their uninsured children in Medicaid because materials were unavailable in Spanish.''

In order to address the lack of health care coverage, the legislation would expand CHIP to cover pregnant women and parents of children enrolled in CHIP. The legislation provides $50 million in grants to community-based groups to improve outreach and enrollment of children in Medicaid and CHIP with the grants targeted to Hispanic communities.

In addition, the bill eliminates a number of enrollment barriers within Medicaid.

And finally, it provides States the option to enroll legal immigrant pregnant women and children in Medicaid or CHIP. This comes from legislation introduced by Senator Graham earlier in this Congress.

In addition to poor coverage rates, according to the Centers for Disease Control and Prevention, or CDC, the Hispanic population has morbidity and mortality rates that more often than not exceed that of any other ethnic groups. For example, age-adjusted mortality rates for diabetes are over 50 percent higher among Hispanic persons than non- Hispanic whites. HIV infection rates are over 3 times those of non- Hispanic whites. Tuberculosis rates among Latino children are 13 times that of whites.

The legislation addresses these problems in a number of ways. In the area

of access and affordability, our bill requires an annual report to Congress on how federal programs are responding to improve the health status of Hispanic individuals with respect to diabetes, cancer, asthma, HIV infection, AIDS, substance abuse, and mental health. The bill provides $100 million for targeted diabetes prevention, education, school-based programs, and screening activities in the Hispanic community.

In addition, the legislation specifically addresses the problems facing communities along the U.S.-Mexico border, a 2,000-mile stretch of land that contains 11 million people, 5 of the 7 poorest metropolitan statistical areas in the country, and disease rates in some areas that are extraordinary. If the region were a state, the border would rank 1st in the number of uninsured, last in terms of per capita income, and 1st in a number of diseases.

As Dr. Francisco Cigarroa, president of the University of Texas Health Sciences Center at San Antonio, noted in testimony at the hearing last year on Hispanic health, ``Germs respect no INS regulations. We truly must work with our neighbors to the South if we are to avoid a major influx of new conditions and diseases. It can be seen so clearly on a map. Just as there are `rivers of commerce' there are `rivers of infectious disease' and though they may start at the Border, they are eventually seen all the way to the northern Border that we share with Canada.''

In response, the bill provides $200 million to border communities to improve health services and infrastructure along the U.S.-Mexico border.

The numbers I have cited thus far indicate what we do know. Almost as much of a concern is what we do not know with respect to the status of Hispanic health in this Nation. According to one study, only 22 percent of all articles published in major medical journals included non- English-speaking patients.

The bill provides funding to do additional research and work on reducing health disparities in this Nation. The various provisions include efforts to improve the recruitment and retention of Hispanic health professionals and programs that support training health professionals who can provide culturally competent and linguistically appropriate care. With respect to training more minority health professionals, Dr. Cigarroa said at last year's hearing, ``We should do this because it is the smart thing to do. If we fail to take steps to address the gap between the health of the majority population and the health of the Nation's rapidly growing minority populations, we are on a court leading to a collision. We are far too great a nation to allow this to happen.''

Representative Ciro Rodriguez, chairman of the Congressional Hispanic Caucus, and I, have worked together on this legislation to respond to the challenge before us with regard to coverage, access, and health disparities in the last Congress and have reintroduced the bill with the hope to move it forward this year.

Before closing, it should be noted that while the legislation puts forth a number of initiatives to address what are disproportionately Hispanic problems, each section of the bill, including those to reduce the number of uninsured and to improve access to care, would improve the overall health of our entire Nation regardless of race or ethnicity.

I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I rise today to introduce the ``Small Business Administration 50th Anniversary Reauthorization Act of 2003,'' a bill to reauthorize the U.S. Small Business Administration, SBA, and its programs for the next three years. While reauthorization legislation is a significant event, this year it is particularly auspicious since we are celebrating the 50th anniversary of the agency--a full half century of helping to create, assist, and guide small businesses.

As the Chair of the Committee on Small Business and Entrepreneurship, I began developing this legislation just after assuming the leadership of the Committee in January. The bill I introduce today is the product of considerable effort and vetting, and I am very pleased to be joined by the Committee's Ranking Member, Senator Kerry, in this process. Through his contributions and those of other Members of my Committee, this is truly bipartisan bill.

Over the past several months, we have held a series of hearings and roundtables to examine virtually every aspect of the SBA and the wide array of programs and services it provides to the country's small enterprises. As we started that process, we looked back on the SBA's history to learn from its past in order to set a path for its future.

More than 50 years ago, congressional efforts began to focus on the specific needs of small businesses--to create a ``level playing field''--and to develop Federal small business assistance programs. One of the objectives was to

ensure that small businesses could develop management and marketing skills to compete with big business for their share of government contracts.

In May of 1953, the Small Business Act was introduced, and it became law on July 30 of that year with President Eisenhower's signature. Since 1953, Congress and the various administrations have responded to the needs of small businesses by creating a fair but competitive environment for those who choose entrepreneurship. The SBA has evolved from a direct lender and provider of management assistance to a nationwide delivery system of resources offering a complete menu of small business tools, professional counseling assistance, business education and training programs, Federal procurement opportunities, and loan guaranty programs.

Today, the agency faces enormous challenges. Each year, there are 3 to 4 million new businesses start-ups--one in 25 adult Americans is taking steps to start a business. One quarter of existing small business owners intend to form another business. And, small businesses account for approximately two-thirds of the net new jobs in our country. So while the SBA has had a tremendous impact on the success of small businesses over the past 50 years, it is critical that we ensure the agency is well positioned to produce even better results in the next 50 years.

My goal in developing this bill has been to ascertain what works among SBA programs, why it works, and apply that approach to other programs so there is more consistent success within the SBA portfolio of products and services. In the end, I hope this bill will lead to a renewed SBA, rededicated to improving the environment or leveling the playing field for small business ownership in America.

While the particulars of this bill are extensive, I want to highlight three of its most critical, key areas--

In terms of financing programs for small businesses, during this reauthorization process, I have focused extensively on improving the credit and venture capital resources that the SBA provides for small enterprises. These programs--including the 7(a), 504, and Microloan programs as well as the SBIC, New Markets Venture Capital, and Surety Bond programs provide vital capital for America's small businesses. In addition, looking just at the lending programs, they alone are responsible for helping small businesses create and retain more than 1.3 million jobs in just the past 3 years!

That is why I held two Committee roundtables on these financing programs so I could hear firsthand from small business, lenders, and the SBA about ways these programs can increase access to capital for small businesses. To start, we are proposing to continue the growth of the financing programs through reasonable increases in their authorization levels. The bill also increases the amount that small businesses can borrow subject to the SBA's guarantee, so that the SBA's loan sizes will keep pace with what it actually costs to start and operate a small business in today's economy. And we make improvements to the SBA's loan programs that will benefit fast-growing contributors and vital elements of our economy including women-owned and veteran- owned businesses and small business exporters.

Moreover, the bill addresses access to capital by helping SBA's lending partners. A new initiative that holds great promise will allow for the pooling of small business loans not guaranteed by the SBA. This pilot program was recommended by participants at our roundtable on April 30, 2003, and has been under consideration by the SBA. By pooling these non-guaranteed loans together and offering them as securities on the secondary market with a partial SBA guarantee on the pool, banks will be able to free-up capital for additional small business lending. As a result, they will be able to provide even greater resources for small businesses struggling to secure the necessary capital to start up, operate, and grow.

Similarly, the new National Preferred Lenders Pilot Program will allow qualified SBA lenders to be licensed on a nationwide basis. Currently, Preferred Lenders must qualify in every region where they do business, which is both cumbersome and costly. This initiative will streamline that process for the premier lenders who qualify for a nationwide license and enable them to provide capital more efficiently and effectively to small businesses across the nation.

In addition, the bill includes a proposal by Senator Kerry to permit non-profit child-care centers to qualify for 504 loans. I believe the growing need for child care in this country warrants testing this idea as a pilot program, even as I continue to have reservations about this initiative's effect on the availability of loans under the 504 program for other for-profit borrowers and the expansion of this loan program to non-profit entities. Accordingly, we have limited the loan volume under the pilot to 7 percent of the overall 504 loans to ensure that this initiative does not bar qualifying for-profit businesses from obtaining necessary financing.

Finally in the area of financing programs, we have also focused on improving the SBA's procedures for overseeing lenders participating in the credit programs. By improving this oversight, we can protect against improper lending practices, produce a more consistent system for lenders, and provide taxpayers with better protection of their tax dollars.

In the area of entrepreneurial development, we set out to ensure that the SBA's programs continue to provide the products and services essential to small businesses, which in turn create a return on our investment in these programs through successful business ownership and job creation. Recognizing the tremendous accomplishments by women entrepreneurs, I introduced the Women's Small Business Improvement Act of 2003 (S. 1154) earlier this year to improve the SBA's Office of Women's Business Ownership, the Women's Business Centers Program, the National Women's Business Council, and the Interagency Committee on Women's Business Enterprise. I have incorporated those provisions into the bill before us in order to provide a universal approach to all of SBA's sponsored programs and services for women.

A cornerstone of this effort involves making the Women's Business Center Program a permanent program that will offer opportunities for new centers and renewal grants for existing centers on a competitive basis. By replacing the pilot Sustainability Program, which expires at the end of the current fiscal year, with a fair and balanced grant program, the bill will correct the funding constraints that have plagued the program in 2003. The bill will also provide for the creation of new centers and the continuation of current operating centers through renewal grants. This structure will reward successful centers with continuation funding and weed out failing centers to make room for new ones with greater potential for serving the needs of women-owned businesses.

The National Women's Business Council will also be given greater control of its mission, and I am proposing the full funding of $1 million for each Fiscal Year for this program. The Interagency Committee on Women's Business Enterprise will be reenergized by providing interim leadership and a shared focus with the National Women's Business Council, the Women's Business Centers, and the Office of Women's Business Ownership. These programs hold great potential for women-owned businesses, but they must be coordinated so that their limited resources are dedicated to a focused goal.

In addition, the SBA's entrepreneurial development partners--the Small Business Development Centers and the Service Corps of Retired Executives--continue to provide quality training and free counseling through almost 2,000 locations and are limited only by funding and their geographic locations. Therefore, in addition to minor technical changes in these programs, I propose that we increase the authorization level for these programs to support the increased demand for their services.

And we have included the Native American Small Business Development Program in the bill. This initiative will provide entrepreneurial assistance to Tribal Governments and Colleges, Small Business Development Centers in Native American communities, and small businesses located on or near Tribal Lands. Complementing the SBA's Office of Native American Affairs, this initiative will strengthen the

SBA's efforts to help Native Americans start, operate and grow small businesses.

Finally, one of the most serious problems facing small business is their inability to participate fully in Federal contracts, on either a prime or subcontract basis. In the last 10 years, contract bundling has forced more than 50 percent of small businesses out of the Federal marketplace. Steps clearly must be taken to ensure that small businesses have the opportunity to compete for the business of the nation's largest consumer--the Federal government.

President Bush recognizes the inequity that contract bundling represents. He also understands the damage it does to both small businesses and the Federal procurement process by denying the government the benefits of more robust competition, small business efficiencies, and small business innovations. He has spoken out against this practice, and I applaud his commitment to addressing this problem.

To achieve that objective, the SBA reauthorization bill addresses the practice of Federal contract bundling by limiting its use and giving small businesses access to Federal contracts and a fair opportunity to compete for them. By requiring studies to be done for all consolidations worth more than $5 million for the Department of Defense and $2 million for all other agencies, the bill also holds agencies to a higher level of accountability than exists under current law.

Those who support the practice of bundling allege that denying small businesses access to prime contracts can be offset by ensuring that such firms receive more subcontracts from the large firms that are awarded prime contracts. However, small businesses continue to experience difficulties at the subcontract level as well. This bill contains strong language that strengthens oversight and enforcement of small business subcontracting plans to ensure small business subcontractors are not neglected.

Furthermore, we have included provisions to encourage contracting opportunities for women-owned businesses--one of the fastest growing segments of the small business sector of our economy. Despite their success, women-owned small businesses have testified before the Small Business Committee about how difficult it is to do business with the Federal Government. Three years ago Congress created a Procurement Program for Women-Owned Small Business Concerns. That legislation required the promulgation of regulations to help implement new small business procurement set-asides for women-owned businesses.

The legislation, however, conditioned the regulations by first requiring a study to be conducted to justify the disparate treatment of women in various procurement instances. At the Small Business Committee's roundtable on April 9, 2003, women-owned small businesses expressed their frustration that it has taken so long to conduct the study and implement the program. This bill directs the GAO to complete that study by December 31, 2003 to ensure that the women's procurement program is finally implemented.

Finally, the bill contains improvements to the HUBZone program, which are intended, in part, to address the serious consequences that military base closings pose for our local communities. Closing a military base adversely affects the towns and communities surrounding the installation due to loss of tax revenue, defense income, base transition costs and clean-up costs.

Successful recovery from a base closing has been tied to public and private reinvestment in these communities. While Congress has taken action in the past to ease the transition for individuals and spur reinvestment, this bill supports faster redevelopment by expanding the HUBZone Program to include communities affected by base closures. It provides an incentive, through Federal government contracts, for small businesses to operate in these communities and to provide employment to these military and civilian personnel.

This year's SBA reauthorization bill paves the way to a stronger SBA able to meet the needs and concerns of the country's entrepreneurs. The future of our country is inextricably tied to the future of small business--and by enhancing the conditions that support small business, we will ensure a more prosperous future for all. I urge all my colleagues to support this important legislation on behalf of the nation's small businesses and entrepreneurs.

(At the request of Mr. Daschle, the following statement was ordered to be printed in the Record.)

Mr. President, I have sought recognition to explain the provisions of the ``Veterans Prescription Drugs Assistance Act of 2003,'' a bill that I have introduced today to assist Medicare-eligible veterans struggling with the costs of prescription medications.

I fully understand that Congress, and the President, are working very hard on legislation to take on the larger issue of providing a prescription drug benefit for all American seniors. I applaud that effort, and I will continue to work with my colleagues to see that Congress enacts legislation to help all seniors who struggle with the ever-increasing costs of necessary medications. But in the meantime, as Chairman of the Committee on Veterans Affairs, I offer legislation to allow Medicare-eligible veterans to obtain prescription drugs from the Department of Veterans Affairs, VA, at the significantly discounted costs that VA, as a high-volume purchaser of prescriptions medications, is able to secure in the marketplace.

Earlier this year, VA Secretary Anthony J. Principi was forced to limit access to VA care by suspending new enrollments of non-service- disabled middle and higher income veterans who were not enrolled for care as of January 17, 2003. The Secretary was forced to so act because the number of patients provided care by VA has more than doubled in just five years. And as a result, VA's medical care system has been overwhelmed and, as a consequence, VA has been unable to provide timely access to healthcare for all veterans who have sought it and appointment waiting times have grown to alarming levels. But in almost every news story that followed the Secretary's difficult decision, it was noted that many of the new enrollees who had overwhelmed VA's capacity to provide care were Medicare-eligible veterans who were able to get Medicare-financed care elsewhere--but who were seeking access to the relatively generous prescription drug program provided to veterans under VA care.

Currently, VA provides enrolled patients with prescription medications for $7.00 for each 30-day supply. But to get such prescriptions, the veteran must obtain the full range of medical care from VA. This fact, coupled with the Secretary's decision to close enrollment, means that veterans who are now--or who will be--eligible for Medicare who had not enrolled for VA care prior to January 17, 2003, will be unable to access VA's generous prescription drug benefits. This legislation would provide some relief for those veterans. In addition, I anticipate that it may induce some VA-enrolled Medicare-eligible veterans--those who were happy with their Medicare- financed care but who enrolled for VA care to gain access to VA- supplied drugs--to return to non-VA care with knowledge that they will be able to get their non-VA prescriptions filled through VA. Enactment of this provision, then, would reduce--not exacerbate--VA patient backlog numbers.

The premise of this legislation is straightforward: VA fills and distributes more than 100 million prescriptions each year for its 4.5 million veteran-patients. As a result, it has significant purchasing power--power which, coupled with VA's formulary program, allows it to negotiate very favorable prices for prescription drugs. According to the National Association of Chain Drug Stores, the average ``cash cost'' of a prescription in 2001 was $40.22. The average VA per- prescription cost in 2001 was $22.87--almost 50 percent less. The average per-prescription price paid by VA this year is up to just under $25--a slower growth rate than the 6.7 percent annual growth experienced in the population at large since 2001.

My purpose is to afford Medicare-eligible veterans access to such discounts. I do not propose that VA be directed to supply drugs to all Medicare-eligible veterans at VA expense, or even with a partial VA subsidy. VA has stated that such a mandate would divert VA funding-- which, clearly, is already stretched to the limit--away from VA priority patients: the service-connected, the poor, and those with special needs. I accept VA's statement of concern; I accept and I insist--that scarce funding be directed, first, to meet the needs of priority patients. This legislation, therefore, requires that VA recover the costs of drugs it supplies under this program from veterans who bring their prescriptions from outside doctors to VA.

I do not propose to tell VA in this bill how to recover these costs. VA is better positioned than I to make such judgments. Thus, my legislation provides flexibility to VA to design and test payment mechanisms to best accomplish cost recovery while still easing veterans' access to the drugs they need. It might be that enrollment fees, a copayment structure, or a simple ``cost-plus''--for administrative expenses pricing format--or some combination of those mechanisms--works best. And it might be that different approaches work best in different regions of the country. I intend for the VA to experiment with different pricing structures to determine what works best. But I also intend that veterans get a break on prescription drug pricing.

Those who would benefit from this program are World War II and Korean War veterans who answered their country's call over 50 years ago. As they age, many desperately need relief from high drug prices. My purpose is not to disparage the drug companies; their discoveries have truly been marvels. But that is precious little comfort to a Medicare participant who, whatever the drug's overall utility might be, cannot afford both the drug and food or shelter or heat. Many such persons reside in the Commonwealth of Pennsylvania where, just last month, a genuine titan in the industrial history of the United States, Bethlehem Steel, ceased to exist. Many retired steelworkers who are also veterans--and who never needed VA because of company-paid

benefits--have lost their health insurance coverage and, with it, prescription drug benefits. These people need a break. This bill could provide it.

The premise of this legislation is simple: veteran access to VA market-driven discounts. Yet, the assistance it could provide might be profound. I do hope that Congress will find a way to provide prescription drug benefits to all seniors. But for now, I urge my colleagues to support this bill so that the problem might be solved--or at least reduced--for seniors who served. They deserve it, and we should do it.

I ask unanimous consent that the text of this bill be printed in the Record.

Mr. President, I have sought recognition to explain briefly the provisions of the ``Department of Veterans Affairs Long- Term Care and Personnel Authorities Enhancement Act of 2003,'' a bill that I have introduced today.

Title I of the bill would extend through calendar year 2008 authorities that now specify that the Department of Veterans Affairs, VA, will provide to veterans enrolled for VA medical care outpatient- based long-term care services, such as Adult Day Health Care, Home Health Aide assistance, Non-Institutional Respite Care, and Home-based Primary Care. These services provide alternatives to institutional care and, in many cases, they obviate the need for institutional care by allowing veterans to remain in their own homes with care-giving assistance provided by VA.

In addition, this bill would lower, from 70 percent to 50 percent, the threshold level of service-connected disability that would qualify a veteran for highest-priority for institutional care should he or she need it. VA currently provides highest-priority access to hospital and outpatient clinic-based care to veterans who have suffered a service- connected disability rated by VA as 50 percent disabling or higher. Highest-priority access to inpatient-based long-term care services, however, is only granted by law to veterans who are 70 percent or more disabled, unless such care is needed specifically to treat a less- disabling service-connected disability. When this provision of law was enacted in 1999, Congress set the threshold for priority access to nursing home care at 70 percent, rather than at 50 percent, due primarily to concerns that a lower threshold--which was actively considered--might cause VA to be faced with an unforeseen level of demand that could not be met. Since then, however, VA has reported that ``there was only a small increase in the numbers of veterans 70 percent service-connected or greater who were estimated to need nursing home care but who actually received that care from VA.'' In light of that, I see no compelling reason to continue distinguishing between nursing home care and all other types of care that are made available to 50 percent or higher service-connected veterans on a highest-priority basis. This bill would provide, in effect, that hospital care, outpatient clinic-based care, and nursing home care will equally be made available to all such enrolled veterans.

Title I of the bill would also make technical changes to VA authority to contract for nursing home and adult day health care services by allowing VA to enter into agreements with providers under standards similar to those allowed by Medicare. According to VA, these changes will allow a greater number of smaller community-based providers to contract with VA by reducing the regulatory burdens placed upon them as a condition to contracting eligibility.

Title II of the bill authorizes major construction for long-term care facilities in Beckley, WV and Lebanon, PA. Each of these states has a substantial elderly population and each is need of expansion to their VA long-term care programs.

Title III of the bill would change current law to allow VA to more easily hire and retain certain clinical staff members. Under current law, VA hires many clinical professionals, such as physicians and nurses, under streamlined authorities set forth in title 38 of U.S. Code. But other key clinical professionals, such as clinical social workers, psychologists, and pharmacists, may only be hired through the standard ``civil service'' authorities specified in Title 5, U.S. Code. Further, members of such professions may only be paid and promoted in accordance with the standard civil service General Schedule, GS, pay scale. The process of hiring staff under these procedures is arduous and lengthy, consuming three months or more and placing VA at great competitive disadvantage in securing the services of best qualified candidates. This bill would convert many of these positions into ``hybrid Title 38'' status and permit VA greatly increased hiring and promotion flexibility, and compensation at special, locally-based, pay scales. Such clinicians, however, would retain their standard civil service grievance, vacation, and discipline protections.

Title III of the bill also contains provisions to correct a long- standing inequity relating to retirement benefits for certain part-time VA nurses; to expand a successful pilot program allowing for contract- physician disability compensation medical examinations; and to afford certain wage-grade canteen workers an opportunity to compete favorably for VA employment.

I urge my colleagues to support this legislation.

Mr. President, I ask unanimous consent that the text of this bill be printed in the Record.

Mr. President, today I am introducing a bill to bring the United States into compliance with its obligations under the World Trade Organization.

The basic thrust of the bill is simple--it repeals section 801 of the Revenue Act of 1916 which the WTO Appellate Body found to be inconsistent with our responsibilities under Article VI of the GATT 1994 and the WTO Antidumping Agreement. Repealing section 801 will therefore bring the United States into conformity with its WTO obligations.

Section 801, which has been referred to as the Antidumping Act of 1916, allows private parties to sue importers of dumped imports in U.S. district courts, and also establishes criminal liability for importing dumped goods. While the provision is seldom used, there are several recent court cases pending in the United States where litigants have sued under the Antidumping Act of 1916.

I am introducing this legislation because I believe it is important that the United States comply with its WTO obligations. While we may not agree with each and every decision that comes out of the WTO, we should not pick and choose which decisions we will comply with. The bottom line is that the United States benefits greatly from a rules- based world trading system. We have had considerable success in bringing down foreign import barriers, and this has resulted in increased trade, economic growth, and more jobs right here in the United States. When we comply with adverse decisions we only strengthen our position in other cases where we challenge the impermissible import restraints of our trading partners, such as the de facto biotechnology moratorium adopted by the European Union, which continues to hurt farmers in Iowa and is now under challenge before the WTO. I want other countries to comply when we win, so I think it is important to comply when we lose.

I would also like to point out an important aspect of the bill I am introducing. The bill brings us into compliance with our WTO obligations, but it does not apply retroactively. I think retroactive application of repeal would be wrong in this case for a number of reasons.

First, the U.S. Supreme Court has held that under the constitutional due process standard, retroactive application of economic legislation is acceptable only where it is justified by a rational legislative purpose. To my knowledge, no one has yet articulated any reason, let alone a rational legislative purpose, for depriving litigants in U.S. courts of the opportunity for final adjudication of their disputes in this case. In fact, the Appellate Body Ruling itself does not call for a retroactive repeal of section 801 in order for the United States to conform to its WTO obligations. It seems to me that no rational legislative purpose is served by retroactive repeal of section 801 when the Appellate Body Report does not ask for retroactive repeal and the Administration has not explained why retroactive repeal is necessary.

The Supreme Court has also held that the justification for prospective application of legislation may not suffice for retroactive application of the same legislation. The justification for repeal of section 801 is to conform to our WTO obligations; again, if WTO compliance does not call for retroactive repeal, then the justification for repealing section 801 should not extend to a retroactive repeal of this provision.

Second, the administration and Congress have consistently taken the position that retroactive repeal is not necessary to ensure compliance with our WTO obligations in all cases, particularly in cases dealing with U.S. trade remedy laws. The Joint Report of the Committee of Finance, Committee on Agriculture, Nutrition, and Forestry, Committee on Government Affairs of the U.S. Senate which accompanied the legislation implementing the Uruguay Round Agreements Act explicitly noted that compliance with WTO panels in trade remedy cases applied prospectively only. The Joint Report continued that prospective application ``is consistent with the general principle in the GATT, and in the future WTO, that panel decisions do not have retroactive effect.''

This principle is fully consistent with the text of the WTO agreement itself. Article 19.1 of the Dispute Settlement Understanding states only that ``{w here a panel or the Appellate Body concludes that a measure is inconsistent with a covered agreement, it shall recommend that the Member concerned bring the measure into conformity with that Agreement. In addition to its recommendations, the panel or Appellate Body may suggest ways in which the Member concerned could implement the recommendations.'' Thus, the text of the WTO calls only for ``bringing the measure into conformity'' and not retroactive application of an Appellate Body decision.

To my knowledge, this is the position which has consistently been taken by the U.S. Government and the WTO Appellate Body. In fact, with the exception of one aberrant decision by a panel in the case of Australian Automotive Leather, WTO panels and the Appellate Body have continued to adhere to the general principle that retroactive compliance measures are inappropriate.

The panel ruling in Australian Automotive Leather is instructive. The WTO Dispute Settlement Body adopted a panel report that recommended the Australian recipient of a subsidy pay back the entire amount of the $30 million Australian dollar subsidy it had received. This recommendation went far beyond what the United States asked for. The United States sought only the return of the prospective value of the subsidy that the Australian automotive leather company had received. The United States argued that repayment of the entire subsidy was inappropriate and ultimately settled the dispute with Australia in a deal that required the automotive leather company to pay back $7.2 million Australian dollars to the Government of Australia, which reflected the prospective value of the subsidy. Thus, both U.S. law and U.S. trade policy conform to the general principle that compliance measures should be prospective in nature.

Finally, I believe that as a general matter, attempts at retroactive compliance with WTO rulings can make for bad trade policy. The intent of the rules-based trading system established under the WTO is to bring Members into compliance so that going forward international trade can be conducted on a level playing field. There is just no telling where efforts at retroactive compliance may lead. While in this instance the retroactive repeal of section 801 may seem clear-cut to some, it could set a dangerous precedent for future cases. Imagine if the WTO Appellate Body required or the U.S. Government advocated for retroactive application of a measure repealing the Extraterritorial Income Act/Foreign Sales Corporation tax regime. The result would be ludicrous.

Rather than foster the establishment of a level playing field, efforts at retroactive compliance may well distort markets to an extent even greater than the underlying measure that was found to be WTO inconsistent. We need to carefully consider whether retroactive repeal of a statutory provision is appropriate. I believe that considerations of judicial precedent, legislative intent, established practice under the GATT and the WTO, as well as good trade policy, all mitigate against the retroactive repeal of section 801.

I call upon my colleagues to support this bill repealing section 801. Passing the bill will bring us into compliance with our WTO obligations, demonstrate our continued commitment to the rules-based trading system, and strengthen our position in future cases where we prove successful in challenging impermissible import restraints erected by our trading partners.

I ask unanimous consent that the 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: