Floor Statements

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I do want to talk a little bit this morning about the pension bill, which is the current bill we are considering. I am sure all of us can remember our first jobs when we came home with our first paycheck, anxious to spend it, and if our parents happened to be around they gave some advice and suggestions for us. First, they probably suggested we figure out where we were going and, secondly, that we put something away. If it was

before college, it was probably for college. If it was after college, it was probably a suggestion that we start thinking about when we retire.

The pension funding laws that we are considering today have that same objective. We have reached a major crossroads in the private pension system that affects the retirement security of millions of American workers. The funding requirements for defined benefit plans contained in the Employer Retirement Income Security Act--ERISA is what it is usually referred to--and the Internal Revenue Code are very complex. Yet their goal is clear, and that is to make sure a plan has sufficient assets to pay the future benefits when workers retire.

I am not sure there has been much explanation on the difference between defined benefits and defined contributions. The ones we are talking about are defined benefits. There is a transition happening in this country. As fast as companies can, they are going to define contributions. That is where they say how much they will put away for future retirement, as opposed to this crisis area which is defined benefits. Defined benefits means you are guaranteed something when you retire; based on the length of time you have worked and maybe how much money you have made, it is a defined benefit. It is what you are going to receive.

So there can be a lot of complexities to calculating how to have enough money so that at the time you retire there is money in the bank to pay the annuity that you deserve at that point in time.

So we can see why there would be kind of a rush to the defined contribution, which is where the company at that point in time knows exactly what they have to pay in each year and they are willing to do that, but they are not telling you that you are going to have a specific amount when you do happen to retire. There will be money there, but it will not be a specific plan of receipt at that point in time.

All we are talking about in this particular pension bill are the defined benefit plans. That was set up under law so that when a company says you will have these benefits, you know that the Federal Government is providing some oversight to make sure those benefits will be available when the time for you to retire happens.

So companies are forced to show they have the resources on hand to make these future benefit payments when they come due. Pension law must be finely tuned to accurately reflect the plan's ability so that the appropriate funding levels can be determined.

Unfortunately, the current system is off key. We have had some different things happen than we have had to worry about in this system for a long time. The outdated 30-year Treasury rate, which is what is used to calculate a plan's current liability, has distorted the funding levels. Simply put, a lower interest rate means employers have to put more cash into their plans to satisfy the pension funding requirements, and continued use of this artificially low interest rate places the worker's retirement, the pension plan, and the employer's business at risk. If all of the money for the retirement plans was actually being held in 30-year Treasurys, then that would be an accurate calculation, but it is not. It has not been for quite awhile.

We have not changed the way that it is calculated. So continued use of this artificially low interest rate does place the retirement plan, the worker's retirement, and the business itself at risk, particularly if we expect them to make up differences that occur for a number of reasons in a very short period of time.

Pension plans are built over a long period of time, and it has always been the intent that they be built over a long period of time, so that when the person retires the money is there, and what we are trying to do in this bill is to make sure all of those things happen. A business that goes out of business no longer provides the security for the employee, and too steep of a curve for putting money in there keeps them from doing the business they are designed to do, which over even a short period of time can eliminate that business. A bankrupt business does not provide the kind of security that is needed for the retirement system. Under the current system, with the 30-year Treasury rate, businesses will have to divert billions of dollars from development and job creation to satisfy the misguided funding rules of the 30-year Treasury. Again, if that is where all the money was--it is where very little of the money is--then that would be an accurate way to do it.

The number of defined benefit pension plans in this country is steadily declining. I have given you a little bit of the reason why that is, but it is due in large part to the complex and restrictive pension laws. In 1983, there were 175,000 defined benefit pension plans. Today there are fewer than 35,000. Many more companies may choose to freeze or discontinue their plans when faced with artificially inflated funding payments. We must act now to prevent further deterioration of the pension system and to protect our economic recovery. But we must not act in haste to pass long-term sweeping changes that might undermine the retirement security of American workers.

A use of the obsolete 30-year Treasury rate has combined with recent stock market losses and economic conditions to create what we are all referring to as ``the perfect storm'' for the pension fund environment. Last year the Pension Benefit Guarantee Corporation had a record $11.2 billion deficit. The amendment offered today will provide temporary relief to recover from this perfect storm, while Congress considers comprehensive pension funding reform--comprehensive reform, but not just done in a hurry so it is just an overreaction.

The amendment provides the following temporary relief. I am very pleased this is supported in a very bipartisan way. There were agreements to limit the number of amendments, to make sure the second- degree amendments were germane to the main amendment, so that we can get this wrapped up in a hurry and get some temporary relief in place.

What the bill does, it replaces the 30-year Treasury bond rate with a conservative long-term corporate composite rate. This is done for a period of 2 years. It also defers a portion of accelerated deficit reduction contributions by airlines and steel companies for 2 years. That is the accelerated deficit reduction, accelerated because of this perfect storm. That is just for a period of 2 years. It also defers the amortization of recent investment losses by multiemployer plans for 2 years, which allows these collectively bargained plans time to return to the bargaining table.

I stress this relief is temporary. It does not forgive a pension plan's debt. It contains the important safeguards to prevent further decline in the financial health of a plan. It gives the plans time to recover their footing--and this may be just as important--and gives Congress time to carefully consider the best way to improve the troubled pension funding system.

It is often the case here that if something is worth reacting to, it is worth overreacting to. We have to be careful not to overreact to the pension system's current funding troubles. Replacing the 30-year Treasury rate along with improving economic and market conditions should improve the temporary funding deficiencies created by this perfect storm. But we have to look beneath the clouds of recent unique circumstances to see the true health of the pension funding system and identify where reform is needed. We must learn from the lessons of the perfect storm to reduce the volatility, to bring pension accounting closer to reality, to increase the transparency and disclosure of pension information to participants. They deserve to, and have to, know where their fund is at all times.

With this legislation, we give ourselves time to ensure that we make the right decisions to strengthen the pension system and improve retirement security. These decisions will be very difficult but we have to make them. Anything less is unacceptable. We cannot pass the burden of a broken pension system on to future generations.

Of course, while we are doing that we need to make sure we are also taking a look at Social Security, because Social Security is a defined benefit plan and it is underfunded. We have a chance to fix that. The earlier we work on it, the better it can be fixed with the least pain. Of course, part of that process has to be to ensure that those who are entering the job market continue to pay into Social Security.

In another 25 or 30 years there will not be anybody here who is here now. It will be the generation coming into the job market right now, the ones who are going to discover that 15 percent of their paycheck is going into a defined benefit plan, Social Security, and that the money isn't going to be there when they get out, when they are ready to take advantage of it because what goes in today gets paid out today, essentially. They could end that defined benefit system because they will say we don't owe anything to those people, just ourselves.

I am hoping that is not the attitude in this country. But it is something we have to worry about as well. But the more immediate need, the one that is having difficulties right now with the funding process, and unlike the Social Security system, is funded--it is funded and we are having a crisis with it--that is the one we want to take care of. But we need the time to do it right and this bill will give us time to do it right.

I ask people to pay careful attention to the amendments, work in a very bipartisan way to get this 2-year solution, so we can come up with the overall solution.

I yield the floor.

Mr. President, I rise to speak about a specific provision in the Omnibus Appropriations bill. The bill before the Senate includes a 2-year delay in the implementation of country of origin labeling for all products except fish. I am highly frustrated with this delay because the conference committee went beyond the scope of its conference. The House bill only had a 1-year delay for implementation of country of origin labeling for meat and meat products. The Senate bill included an amendment indicating the strong support that country of origin labeling had in the Senate. The discovery of bovine spongiform encephalopathy, BSE, within our borders this holiday season was a wake-up call to the urgency of country of origin labeling implementation and the detriments of further delays.

After the announcement of a ``presumptive positive'' BSE cow in the U.S. domestic herd, the national and international response was immediate. Domestic markets plunged and our international trading partners slammed their doors shut to our meat products. Exports account for almost 10 percent of total U.S. beef production. Our largest export markets are refusing our product and bloating the domestic market. We've already lost a majority of our export market, a void that other beef exporting countries are

eager to fill. Unless we act now to restore the confidence of those markets, the relationships we have built for many years will be lost for good. In this situation, our trading partners need to be reassured that meat they purchase is ``born, raised, and slaughtered'' in the U.S. American consumers deserve this assurance, too. Country of origin labeling does this.

We have already paid for this lack of country of origin labeling. Exhaustive traceback and research by the U.S. Department of Agriculture has shown that the cow infected with BSE was imported from Canada. The rules that govern whether a country maintains ``BSE Free'' status are found in the Terrestrial Animal Health Code of 2003 generated by the Office of International Epizootics, OIE. The code say that a country can maintain its BSE-free status despite the discovery of a diseased animal if the animal was imported and all progency--calves--of the diseased animal are disposed of. With country or origin labeling in place, the United States could have begun the fight for ``BSE-free'' status immediately. Instead, we were forced to wait weeks until it was confirmed beyond doubt that the diseased cow was born Canada.

I understand that some people say that we don't need to have country of origin labeling with the USDA is already pursing a national animal identification program. This is simply not the case. A national ID program will be useful for health safety reasons. It will help pinpoint and track the spread of disease, but this informatin will not be passed on to the consumer. Tracking disease is not the only concern. Rebuilding consumer confidence should also be a high priority, and the only consumer-focused program is country of origin labeling.

Clearly, the answer to bolstering consumer confidence is country of origin labeling. We would do a great disservice to American consumers if the Senate suppressed country of origin labeling when the need for labeling is heightened.

The regulations for country of origin labeling were intended to be completed and implemented this year. I urge my colleagues to take the necessary steps to make sure this is the case. Now more than ever, we must stabilize the confidence of our consumers and let them enjoy the privilege of knowing that they are eating from the safest food supply in the world.

Mr. President, it wasn't all that long ago that a good education consisted of providing our children with a strong background in reading, writing and arithmetic skills, mixed with an understanding of history and a good hard look at civics and how our government works. We thought, if our sons and daughters had taken courses in those subjects and mastered them, they were as prepared as they could be to face the real world, get good jobs, and one day, live happily ever after. Unfortunately, we left one vital skill out of the mix.

As an accountant, I have become increasingly concerned about the lack of knowledge we have as a society, and especially, the lack of insight we share with our children about money and how to properly handle it, budget it, and use it to plan for their retirement. The numbers are quite startling when you take a close look at how many of our children are leaving college already saddled with credit card debt and school loans that need to be repaid. It wasn't like that when many of us were in college. School didn't seem to cost nearly as much as it does now, and the scourge of a strong economy, easily available credit, hadn't reached the ranks of our schools yet.

This is a problem at the present time, but if we don't act quickly to make sure our Nation's young people receive the advice and education they need on handling money and planning their finances for the future, we will have a disaster on our hands. Young men and women, in their prime earning years, are facing a mountain of personal debt at high interest rates, with little hope of paying it off anytime soon. Clearly, that is something we must take every action to help future generations of students avoid.

That is why I am introducing the Financial Literacy in Higher Education Act with my colleague, Senator Akaka. Senator Akaka and I share many of the same ideas with respect to the importance of financial literacy and ensuring our children have a grasp of the implications of their actions when they use the credit they have been extended by banks eager to make quick loans at high interest rates. Senator Akaka and I worked together on language included in the No Child Left Behind Act to ensure elementary and secondary students would have more access to financial literacy training that we hope will make our children wiser and better users of consumer credit.

This bill builds on the activities we helped authorize in No Child Left Behind. It emphasizes financial literacy for students enrolled in institutions of higher education, or students who will soon be enrolled. With the training and real life advice they will receive in these courses we will be able to reduce the number of our children who leave high school and head out into the world on their own with little or no preparation for the demands that will be placed on their limited incomes.

Our legislation would include financial literacy and personal finance in the list of permissible activities of several programs authorized under the Higher Education Act. These programs are set up to support students, and I believe financial literacy should be an important aspect of the support process. Attending college is a necessary step that must be taken if our young adults are to succeed in the work force, and learning how to make a personal budget and meet individual financial obligations should be a priority in that process.

Our bill would also emphasize financial literacy in exit counseling for college students receiving federal student financial assistance. Today's undergraduate students are leaving school with an average of nearly $17,000 in student loan obligations. This can be a large burden to bear, but it becomes impossible to address if a young man or woman is unable to successfully manage their own finances.

The answer to this challenge is to start educating students before they experience financial difficulty. Students who are faced with the possibility of accruing larger and larger levels of debt must be taught the full meaning and significance of concepts as simple as compound interest, credit scores, and minimum payments. That way, when they leave school with their lives before them, they will be able to plan how to pay back their student loans, and keep credit card debt to a minimum. Taking the initiative while these students are in school will help them avoid some of the serious problems that can develop when someone has little or poor financial skills. These problems can literally have lifelong implications for those who overextend their resources or fail to learn to live within the limits of a budget.

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

Mr. President, it wasn't all that long ago that a good education consisted of providing our children with a strong background in reading, writing and arithmetic skills, mixed with an understanding of history and a good hard look at civics and how our government works. We thought, if our sons and daughters had taken courses in those subjects and mastered them, they were as prepared as they could be to face the real world, get good jobs, and one day, live happily ever after. Unfortunately, we left one vital skill out of the mix.

As an accountant, I have become increasingly concerned about the lack of knowledge we have as a society, and especially, the lack of insight we share with our children about money and how to properly handle it, budget it, and use it to plan for their retirement. The numbers are quite startling when you take a close look at how many of our children are leaving college already saddled with credit card debt and school loans that need to be repaid. It wasn't like that when many of us were in college. School didn't seem to cost nearly as much as it does now, and the scourge of a strong economy, easily available credit, hadn't reached the ranks of our schools yet.

This is a problem at the present time, but if we don't act quickly to make sure our Nation's young people receive the advice and education they need on handling money and planning their finances for the future, we will have a disaster on our hands. Young men and women, in their prime earning years, are facing a mountain of personal debt at high interest rates, with little hope of paying it off anytime soon. Clearly, that is something we must take every action to help future generations of students avoid.

That is why I am introducing the Financial Literacy in Higher Education Act with my colleague, Senator Akaka. Senator Akaka and I share many of the same ideas with respect to the importance of financial literacy and ensuring our children have a grasp of the implications of their actions when they use the credit they have been extended by banks eager to make quick loans at high interest rates. Senator Akaka and I worked together on language included in the No Child Left Behind Act to ensure elementary and secondary students would have more access to financial literacy training that we hope will make our children wiser and better users of consumer credit.

This bill builds on the activities we helped authorize in No Child Left Behind. It emphasizes financial literacy for students enrolled in institutions of higher education, or students who will soon be enrolled. With the training and real life advice they will receive in these courses we will be able to reduce the number of our children who leave high school and head out into the world on their own with little or no preparation for the demands that will be placed on their limited incomes.

Our legislation would include financial literacy and personal finance in the list of permissible activities of several programs authorized under the Higher Education Act. These programs are set up to support students, and I believe financial literacy should be an important aspect of the support process. Attending college is a necessary step that must be taken if our young adults are to succeed in the work force, and learning how to make a personal budget and meet individual financial obligations should be a priority in that process.

Our bill would also emphasize financial literacy in exit counseling for college students receiving federal student financial assistance. Today's undergraduate students are leaving school with an average of nearly $17,000 in student loan obligations. This can be a large burden to bear, but it becomes impossible to address if a young man or woman is unable to successfully manage their own finances.

The answer to this challenge is to start educating students before they experience financial difficulty. Students who are faced with the possibility of accruing larger and larger levels of debt must be taught the full meaning and significance of concepts as simple as compound interest, credit scores, and minimum payments. That way, when they leave school with their lives before them, they will be able to plan how to pay back their student loans, and keep credit card debt to a minimum. Taking the initiative while these students are in school will help them avoid some of the serious problems that can develop when someone has little or poor financial skills. These problems can literally have lifelong implications for those who overextend their resources or fail to learn to live within the limits of a budget.

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

Mr. President, I rise today to engage the distinguished chairman of the Finance Committee, Senator Grassley, in a colloquy regarding benefits that Medicare beneficiaries may receive through retail pharmacies and community pharmacists.

Section 1860D-4 of the conference report to accompany the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 states that sponsors of Medicare drug plans or organizations that offer MedicareAdvantage plans shall permit plan enrollees to receive benefits through a pharmacy other than a mail-order pharmacy. These benefits may include a 90-day supply of drugs or biologicals. The conference report states that such enrollees would pay any differential in charge.

I offered the amendment to add this language to the Senate version of the Medicare bill during our debate in June. My intent in offering this amendment was to prohibit plans from implementing restrictions that would steer consumers to mail-order pharmacies. The Senate voted 95 to 0 in favor of requiring Medicare drug plans and MedicareAdvantage organizations to allow local community pharmacists to fill long-term prescriptions and offer any other services that they are equipped and licensed to provide.

The language does permit a Medicare drug plan or MedicareAdvantage organization to charge a different copayment for a mail-order prescription versus a prescription filled by a community pharmacist. This happens today in many health plans.

I note that the conference report would require plans to provide clear information about copayments and deductibles. This information would have to include details on the differences in charges between mail-order and retail prescriptions.

My concern is that any differences in charges between mail order and retail be reasonable differences, based on the actual cost of delivering the service. I would be concerned if differences in charges were used as a method of steering seniors and the disabled to mail order pharmacies.

I know that Chairman Grassley and I both agree that since seniors trust their local pharmacists, they should be allowed to keep those relationships in place.

I thank the distinguished chairman for this clarification.

Mr. President, as we all know by now, the Medicare conferees have reached agreement on the most significant changes to the Medicare Program in history. I thank the Presiding Officer for the hours he has spent working on this, the agony he has gone through at understanding and reaching agreement with this diverse body of Senators. There are 100 of us. We usually amount to probably 150 opinions on anything. The Chair has had to put all of that together into a bill that not only the 100 Senators agree with--and not all 100 Senators do--as many of the Senators as possible, and as many of the House as possible, because a bill to go through to the President has to pass both the House and the Senate. When it gets this complicated, it is an extremely talented person who is able to put together the kind of legislation that reaches a compromise that will be able to pass.

This is a copy of the bill. If anybody thinks it is simple, they haven't looked at it. It takes a long time to wander through this. We have been working on it for a few days and now have the finalized copy, the copy that has passed the House. It is the most significant change in the history of Medicare. It may be the most significant change in medical delivery in the history of the world.

I congratulate the Presiding Officer, the Senator from Iowa, Mr. Grassley, for all the hard work he put in on this bill. We will soon be voting on it.

This bill will add a prescription drug benefit to Medicare, it will offer new Medicare coverage options to seniors, and it will expand tax incentives for people who save money to pay for their own health care needs. That is quite a package.

I want to strengthen Medicare. Seniors and disabled people in Wyoming depend upon Medicare to pay for their health care needs. We have relatively few major employers in Wyoming so most of our retired seniors don't have access to health care coverage through their former employers. Medicare is critical to the health and well-being of 66,000 elderly and disabled citizens in my home State. That may not sound like a lot of people, but it is over 13 percent of Wyoming's population.

Adding a prescription drug benefit to Medicare makes sense. Medicare is the only traditional insurance plan in the United States that does not cover outpatient prescription drugs. The reason Medicare does not cover prescription medications is that pharmaceuticals were not a major part of medical care in the 1960s, when Medicare was founded. It is a different story today. Today, prescription drugs are absolutely integral to providing quality health care. All of us rely on them. It makes sense for Medicare to keep up with the times by offering voluntary prescription drug coverage to seniors.

Let me emphasize the voluntary nature of this program some more. We have heard that the AARP is going to regret supporting this Medicare bill just as they regretted supporting the catastrophic coverage bill of the 1980s. I will come back to that a little bit later. The reason seniors revolted against the catastrophic coverage bill back then was that it was mandatory. They didn't have a choice. They had to pay for the coverage even if they didn't want it.

This bill does not make that mistake. This bill is different. If seniors

don't want Medicare drug coverage, they don't have to pay for it. If they have coverage through their former employer, they can keep that. Plus we provide a lot of support in this bill for employers to continue providing their retirees with drug coverage so that seniors won't be forced to buy a Medicare drug plan because they lost their retiree coverage. So this is indeed a voluntary program.

It gives seniors a chance to sign up for Medicare drug coverage or stay in the traditional Medicare and keep what they have. Choice is a great concept. America was built on the idea that people should have the freedom to choose how to live their lives, as long as their choices don't infringe on the freedom of others.

When it comes to health care, choice is also important. Today seniors don't have choices. Medicare is a one-size-fits-all program, take it or leave it. But we all know that most seniors cannot afford to leave it. So right now they are stuck with Medicare, warts and all. The fact that Congress has to pass a law to add a prescription drug benefit is part of the problem with the Medicare system. Medicare is not flexible enough to adjust and adapt to the complex nature of health care today.

As I have noted, prescription drugs play a much greater role in treating disease today than they did when Medicare was created nearly four decades ago. But unlike private health plans, Medicare has not changed with the times. Under this Medicare agreement, seniors will have the option to choose drug coverage through Medicare. They will also have options that go beyond voluntary drug coverage.

The conference agreement would allow a variety of private health plans to offer coverage of Medicare beneficiaries. I am not talking about HMOs. Despite what I have heard here on the Senate floor, this bill does not force seniors and disabled into HMOs. Medicare HMOs exist today, and no one is being forced into them. What this bill does is allow preferred provider organizations, or PPOs, to offer Medicare plans.

Most of us are familiar with PPOs. They are the type of health plans to which more Americans belong than any other type. HMOs give you a list of doctors. If your doctor is not on the list, you can't visit him. The great thing about PPOs is, you can use any doctor you choose. And if the doctor is part of the plan's network, you get a discount on the cost of his or her services. These private PPO plans will compete to serve seniors by offering new choices and benefits, choices that are currently unavailable under Medicare's one-size-fits-all structure.

To be blunt, I believe the legislation could be bolder in stimulating competition. But it represents a good step in the direction of flexibility, innovation, and here is that word again--choice.

Let's be clear on what the Medicare bill would do. It would offer security to seniors who are without drug coverage. It would provide incentives to employers to encourage them to maintain the coverage they provide to their retirees. At the same time, the bill would create new Medicare options for seniors. It also would create incentives for private health plans to innovate and compete for the businesses of today's seniors and invigorate the Medicare Program for future generations.

Let's also be clear on what the bill won't do. It won't force seniors and the disabled to pay for a Medicare drug benefit if they don't want it. It won't encourage employers to drop drug coverage for their retirees. It won't force seniors and the disabled into HMOs.

I should also point out that the Medicare bill won't pay for every dollar of a senior's prescription drug costs. A drug benefit for needy seniors is important, but it is also important that we preserve Medicare for future generations. Already 30 percent of Medicare funding comes from the general government revenues. Projected expenditures are expected to exceed projected tax and premium revenues after 2015. I will be keeping a careful eye on Medicare spending, especially now that we have passed this drug benefit. If we are going to add anything new to Medicare beyond a basic and sensible drug benefit, we need to pay for it directly.

This drug benefit isn't free, but it is responsible. We set aside $400 billion of the Federal budget over the next 10 years to pay for this benefit. That is how much the agreement is projected to cost. Actually, it comes in slightly under that. But last year when we were doing the appropriations, we set aside the $400 billion. Some people say $400 billion is not enough. They point out that seniors are expected to spend $1.8 trillion on prescription drugs over the next 10 years.

Well, nothing in life is truly free, and prescription drugs will not be an exception. We need to remember that every new Federal program comes at a price. We need to be aware of just what that price is when we ask for a new program. It is not always the people receiving the benefit that are paying the benefit. The $400 billion is the equivalent of $1,600 from every taxpayer over that 10-year period. What would taxpayers say about the need for any program if we put it into that kind of a form for them? There would be increased concern just like there is increased concern when people have to pay their own costs of medical treatment.

That is how the competition comes into the market. I suppose we could have passed a $1.8 trillion drug benefit. Of course, we would have had to raise taxes by $1.4 trillion to do it. I cannot speak for the rest of my colleagues, but I just became a grandfather this year and I am not willing to put that kind of a tax burden on my grandson.

Even the critics of this agreement acknowledge that low-income seniors would be eligible for substantial subsidies for their prescription drugs. Even the critics admit that seniors with catastrophic drug expenditures get measurable relief under this bill. There is a generous 95 percent coverage of a seniors' drug cost over $5,000.

This bill also includes important projections for which I fought on the Senate floor this summer, which protect every senior's right to visit their community pharmacy and receive the high level of service they are accustomed to receiving from them. We have put a huge burden on our pharmacists in this country, the local ones that are right there to answer your questions face to face. There is a provision in the bill that will help to keep that local pharmacist in place and operating. It gives them an equal chance under the bill to be providing prescription drugs for seniors on Medicare. It is important that we keep those small businesses and pharmacists--local people that you can talk to--in place.

This bill doesn't cover every dollar of every prescription for every senior. But that is not a reasonable expectation. What this bill does is provide help and protection for the two groups that need it the most--those who can least afford prescription drugs, and those who otherwise would be bankrupted by a serious illness that requires expensive drug therapies. These are worthy objectives and this agreement accomplishes those goals.

I want to discuss a couple of other aspects of this agreement. First, the bipartisan Medicare agreement would establish health savings accounts, HSAs. These HSAs are tax advantaged savings accounts that all people could use to pay for medical expenses. This is a huge advancement in taking care of the uninsured. Health savings accounts would be open to everybody with a high deductible health insurance plan. The higher the deductible, the less the cost to the insurance plan. The higher the deductible, the more a person is allowed to put into a HSA. Employers would also be able to contribute to the employee's health savings account, and neither the employer's nor the employee's contribution would be taxable. Tax free, you can set up this account.

If you have an HSA, your total yearly contributions to it would be as large as your health insurance plan deductible. Just like an individual retirement account, the interest and investment earnings your health savings account would generate are not taxable. Furthermore, the money you take out of HSAs to pay for medical costs are not taxable, as long as the money is used to pay for health care expenses. Let's see, you don't pay taxes on it when you put it in, you don't pay taxes on the earnings, and you don't pay taxes when you take it out. It is a little incentive to put away money to cover deductibles, or anything to do with health care later on. I hope that every young person in this country will establish a health savings account. No matter what their income level is, no

matter how good their health is, it is an opportunity to put away money for when the health is not as good, and to take care of any deductibles that are necessary at any point in life with an insurance plan. It is an opportunity to be insured from the time you enter the job market, and to put a little away and perhaps have a lot for the years when 50 to 80 percent of the health care costs come up.

One of the best features of health savings accounts is they would be portable. That means that if you change jobs, the health savings account goes with you, you still have it. It is yours. Health savings accounts are a great innovation. Health savings accounts create a tax incentive for everybody--not just seniors--to save for health care expenses, plus it doesn't matter whether your employer offers health insurance or not; you can still save money in a health savings account and receive the tax benefit. This provides some tax fairness for those of you who don't have access to tax advantages of the employer- sponsored health insurance. Let me say that again. This provides some tax fairness to those who don't have access to the tax advantage of employer-sponsored health insurance. Employer-sponsored health insurance is tax free. It doesn't even show up on anything that you have to file. This would give the average person the same opportunity to have tax-free health coverage.

Health savings accounts are an idea whose time has come. Giving people more flexibility and responsibility in their health care spending will result in healthier and wiser consumers. I wholeheartedly support this part of the Medicare agreement. It is long overdue. It needs to be advertised. Young people of this country need to understand that that is their part of Medicare, that they can get into this now and it will save them costs later. It will be a part that will shore up the system.

I also want to speak to the provisions that would address a very sore subject on the frontier, the inequity in Medicare reimbursement between urban and rural areas. I am pleased that the conference agreement ensures reimbursement equity to doctors, hospitals, and other providers of health care in Wyoming and other rural States.

Right now, Medicare underpays rural hospitals, home health alleges, and other providers, as compared to urban counterparts. This limits the ability of these providers to maintain their services and their infrastructures and to recruit qualified personnel.

Some people do not understand the challenges that rural health care providers face in providing quality care to seniors and the disabled. For instance, I read a column in the Washington Post last Friday by a gentleman named Steven Pearlstein. I think it was supposed to be a semi-humorous column--I hope so--although it was in the business section. Well, to those of us in rural areas, it wasn't even semi- humorous, and it wasn't accurate either. I suppose I could ask that this column be printed in the Congressional Record, but I would not want to waste the space. I will, however, cite a paragraph from the column in which this gentleman called politicians from rural States ``nothing more than welfare queens in overalls.'' At this point, I'll state that I still believe Senators ought to be able to bring laptops onto the floor. But I assure my colleagues I will not be petitioning them to wear overalls on the Senate floor.

Let me read one of the paragraphs that Mr. Pearlstein wrote:

Then there is Medicare bill, which was supposed to be about

providing drug benefits to seniors, but wound up being yet

another chance to whine about the plight of country doctors

and hospitals. Although the cost to providing medical service

is actually lower out there in God's country [the God's

country is true] that hasn't stopped your guys from squeezing

$25 billion more from the Federal Treasury over the next

decade to pad Medicare payments to rural providers.

I don't know if this gentleman has ever been to God's country or not. Maybe he has flown over God's country, Mr. President. I doubt he has ever visited the Niobrara Health and Life Center, a very small hospital in Lusk, WY. Lusk has a population of 1,500. Lusk is the county seat Niobrara County, population 2,500. That is Wyoming's least populated county. Incidentally, it is a little bigger than the State of Delaware. It has one person for every 524 acres of land.

The hospital in Lusk has been closed since May of 2000. Since then, folks in Niobrara have had to travel to Douglas and Torrington for surgery or other hospital care. Douglas and Torrington are in different directions from Lusk. They are both about 55 miles from Lusk. That is a long drive any time, but in winter--and we are having winter there now. I don't know if you saw pictures of the Bronco football game where they were scraping snow off of the field; but yesterday there was a blizzard in Colorado and in Wyoming, and the temperatures were about 16 degrees, and it gets a little tough to get around, if you can at all.

Fifty-five miles is a long drive in winter when the winds are howling and the snow blows across two-lane roads. That is an important hospital for the people of Niobrara County, and they are getting ready to reopen it. They are hoping to be able to afford it. It is also important for the State of Wyoming because there is a State prison for women in Lusk. The State tried to keep the hospital open in the 1990s, but the financial pressures were simply too great.

Hospitals across rural America are struggling, particularly the smallest hospitals, such as the one in Lusk. If it were really true that the ``cost of providing medical service was actually lower out there in God's country'' then why are the rural hospitals struggling to stay open?

Our Federal Government's own Medicare Payment Advisory Commission published a report in 2001 on Medicare in rural America. That report found that the Medicare ``payment system does not recognize factors that have a greater effect on the cost of rural hospitals.'' The study also found that there are aspects of Medicare's prospective payment system for inpatient hospital care that tend to work against rural hospitals.

Every hospital has to buy a certain amount of medical equipment from hospital beds to x-ray machines. If rural hospitals get a rural discount on this equipment, it is news to me. In fact, I think there are probably some quantity discounts on which they lose out.

Rural hospitals also have to hire nurses and technicians, just as urban hospitals. It is hard enough to recruit nurses because we have a nationwide shortage. Trying to recruit nurses to come to the Wyoming frontier is even harder. So our rural hospitals have to offer a competitive wage.

Most rural hospitals also have a low patient volume compared to their urban counterparts, and this contributes to a higher cost of rural hospital care. There is a certain amount of staff and everything that has to be on hand ready for patients if they show up.

As the Medicare Payment Advisory Commission rightly points out in its study, hospitals in small and isolated communities ``cannot achieve the economies of scale and service scope of their larger counterparts and thus have higher per-case costs.'' The current Medicare rates do not directly account for the relationship between cost and volume, potentially placing smaller providers at a financial disadvantage relative to the other facilities.

I am pleased to note that the Lusk hospital is scheduled to reopen in October 2004 after completing some important upgrades and renovations. I am confident the hospital will be able to survive this time because Congress passed a law in 1997 to allow for special payments to hospitals in rural areas that are too sparsely populated to support a full-service facility.

The Medicare conference agreement would increase payments over the 1997 law to critical access hospitals, such as the one in Lusk. Despite Mr. Pearlstein's criticisms, he ignored the fact that urban hospitals have higher Medicare margins than rural hospitals.

The additional support for rural health care providers in this bill will help close the gap between higher Medicare margins of urban hospitals and the lower Medicare margins of the rural hospitals. This additional help will not come a moment too soon for the people of Niobrara County, WY, and other counties in Wyoming and other counties throughout the United States. I hope Mr. Pearlstein will visit Lusk if he ever visits Wyoming. I have been there, and I can tell you that the Medicare payments he considers ``padding'' are critical to the hospital in

Lusk and to the seniors who depend on it.

It is a long drive to Lusk from Yellowstone National Park or skiing in Jackson Hole, but I think it would be quite educational for him or anyone else who makes the journey.

There are a lot of good aspects about this Medicare agreement. Adding a prescription drug benefit to the program is good. Providing seniors and the disabled with new Medicare options is good. Offering all Americans new ways to save money for their health care expenses is good. Providing fair Medicare payments to rural doctors and hospitals is good. Having health savings accounts is outstanding.

For these reasons, I am going to vote for this bipartisan Medicare agreement, and I am going to work in the future to ensure that Medicare continues to offer a reasonable drug benefit for many of America's seniors, but one that does not place a huge financial burden on future generations.

Earlier the majority leader, Senator Frist from Tennessee, the only doctor in this body, gave an outstanding speech outlining the reasons that in a bipartisan way he and others have worked on this for 6 years to bring this to fruition. A person from the other side of the aisle who has worked on that for 6 years has been Senator Breaux from Louisiana. They served on a special task force to come up with a way to make Medicare be solvent for generations to come. This will be the first significant piece of legislation to address what they have talked about for 6 years.

Mr. President, how much time do I have remaining?

I thank the Chair.

Mr. President, in the Senator's remarks he did point out there have been a lot of health care advances. Science has played a great part in health from genetically engineered vaccines, to coronary angioplasties, to heart transplants, to the human genome project that is coming up with a lot of new medicines that will take care of us. That project, incidentally, came in 2 years ahead of time, in 2003, and has led to a massive increase in the number of projects that are being done to come up with new drugs that will help us.

This is the way Medicare has advanced. It is pretty inflexible. There has not been much advancement. We have an opportunity to correct that right now. We need to get the flexibility of Medicare to increase the same way that medical advances are increasing, and those are mostly in the area of prescription drugs. So it is time we added a prescription drug benefit.

The bill also takes care of some problems we have with Medicare. I mentioned this task force that Senator Breaux and Senator Frist were on. The task force recognized the problem that when Medicare got underway, there were 20.4 million people under Medicare. Today there are 40.8 million people under Medicare. That is a doubling. By 2030, 77.6 million people will be under Medicare. That is another doubling. That is a huge increase in the number of people who will come under Medicare.

How is it paid for? It is paid for by people who are in the workforce, not the people who are retired--the people in the workforce.

In 1973, there were 7.3 people. That tenth of a person probably didn't feel too well. But 7.3 people were paying for every person under Medicare. In the year 2000, there were 3.9 people paying the bill for those in Medicare. By the year 2030, 2.4 people per person will be paying the bill for those on Medicare. These people have to pick up the costs of all of Medicare for those people. So it is important we have some cost containment, that we put in some reforms to make sure the system is available for those 77 million people in the year 2030.

Prescription drugs are the most important treatment factor now. They were not in 1965. We have come a long way on the issue of prescription drugs. This is where we are headed. These are the number of drugs in clinical development: Cancer, 402 different kinds in clinical development. The percentage of drugs that actual make it is very small. Is there a high cost to develop a drug? Yes. Diabetes, there are 30 different kinds of medicines; rheumatoid arthritis, 24; osteoporosis, 20; obesity, overweight, 29; depression 19; congestive heart failure, 18; Alzheimer's disease, 17; schizophrenia, 16; hypertension, 11; hyperlipidemia, 10; migraine headaches, 20, and so on.

There are a lot of drugs that are being worked on. That is a new treatment. That is a tool that has to be put in the hands of doctors.

Now, we have heard some comments, as well as different versions, about surprise that AARP has backed this bill. It is not a perfect bill. We never pass a perfect bill out of the Senate.

AARP has had some comments on it. I hope my colleagues all pay attention to them. AARP believes that millions of older Americans and their families will be helped by this legislation. AARP also endorses the Medicare bill. On November 17, they stated, ``The integrity of Medicare will be protected.''

These are the most significant reforms. It provides access to medical prescription drugs. It dramatically expands voluntary, private health plan choices. I hope my colleagues will look at the comments the leader made and read them in full.

I thank the President for the time, and I yield the floor.

Mr. President, there is an old adage we have heard many times that says that the journey of a thousand miles begins with a single step. Today we are taking another one of those steps in a long journey that will hopefully lead to an increase in our energy independence, more reliable sources of energy, and more stable prices that are not so subject to fluctuations in the energy market.

The bill we have before us is something that will truly affect every American, no matter their age, where they work, where they live, or what activities they pursue in life. One of the many things that bonds us as Americans is our love of so many things that makes us consumers of energy. No matter who you are, you are a strong and vital part of that market.

If you drive a car, you won't get very far without a full tank of gas.

If you use a computer, you have to tie it to some source of electricity to get the power you need to access the Internet or the information stored on your hard drive.

If you live in a mobile home, or in a cabin in the woods and cook your food over an open fire, you are still an energy consumer who is using a resource to make your dinner.

Every lifestyle has its own energy needs and we have been incredibly blessed to have had access to an abundance of energy for many, many years.

In fact, we had such relatively easy access to energy we started to take it for granted. That led to calls for conservation and more wise use of our resources when energy costs first started to rise. That was the start of our journey to create an energy policy--one that has seen us through these past years. Unfortunately, it has taken quite a long time to agree on an update to our policy, one that takes into consideration the changes we have seen in our society and in the availability of energy both here and abroad.

Our dependence on foreign sources of energy continues to be a national concern, one that had me and many others calling for the creation of a national energy policy, which we have done since 1973 when OPEC and the Saudi Arabians first pulled the plug on our supply of crude oil.

The irony was the fact that we had an abundance of oil here in the United States at the time. In fact, we still have a huge supply of oil in the country today, but that oil has not been made available for exploration. Because we hadn't taken the steps to develop it, we allowed a foreign government to disrupt and control part of our daily lives. We became vulnerable to their manipulations and it took us months to recover. In some ways, we are continuing to recover from those days of the long gas lines, high prices and short supplies that we saw in the 1970s.

Things were bad enough back then when we didn't have an energy policy. Still, they could have been much worse. I shudder to think what might have happened if we'd had a situation like 9/11 occur at the heart of that crisis. If the terrorists had struck when we were economically crippled and energy supplies were low, what effect could they have had on our national security?

That kind of scenario is exactly the kind of thing that a national energy policy like the one we are taking up today is supposed to avoid.

It has taken us quite a while to get where we are, but we finally have something before us that will provide us with a plan, a blueprint for the future that will also address our needs in the present. It is time now for us to take it off the planning board and put it into action. After all, 30 years ought to be enough time to put the basics of a plan together, and that is how long we have had since the energy crisis of the 1970s to work out a plan like this. Now we have before us the beginning of what will be a long and continuing effort to stabilize our energy markets and protect our national security.

This bill isn't perfect, but it is a good start. It is more than a beginning, but it is not the final answer. It is a temporary remedy that will start producing results immediately while it lets us continue working on a more permanent solution. In other words, it is a chance to grab the brass ring and get another ride on the energy merry-go-round, while providing for the ride we are currently on.

I am pleased that this bill includes a number of important provisions that support and promote clean coal development. Coal is an important product of Wyoming, and one of the most important ways we can reduce our dependence on foreign energy is to find ways to diversify our energy supplies and better utilize our Nation's abundant coal supplies--especially clean burning coal like what we mine in Wyoming.

In addition to our coal supplies, in recent years our new energy development has focused on the increased use of natural gas. I support natural gas development and I hope that our gas industry continues to grow and flourish. IO am also keenly aware of the fact that there isn't enough natural gas or infrastructure available to supply all of the world's energy needs so we are going to have to continue relying on coal for some of our energy uses.

That does not mean we have to continue doing business as usual and continue to push our aging coal-fired power plants well beyond their originally designed lifetimes. We have the technology and the ability to design and build cleaner and more efficient power plants that utilize new clean coal technology, but we won't be able to do that if we cripple our economy and prohibit new development.

This won't surprise anyone, but none of us are going to be enthusiastic about everything in this bill. Again, it is not a perfect bill, but it is a good start on a policy. It does not have everything I want in it, but it does have more than enough to make it worth our support. There is a provision that would have greatly helped Wyoming get the more than $400 million that it is owed by the Federal Government through the Abandoned Mine Lands Trust Fund, but that provision was not included in this bill. We have received assurances from the Finance and Energy Committees that they would take up this matter early next year, and we are grateful for their commitments. However, I would have preferred that the provision had been included in this bill and we didn't have to take up any of the committee's time next year. Still, again, on balance, and taking the whole bill into consideration, it is a good bill and it deserves our support.

I know I am not the only one who feels that one provision or another

could have been added or left out and it would have made for a better bill. Like me, almost every State can point at something that they wish could have been included but was not. It is a reason to be disappointed, but it's not a reason to ignore the task at hand, which is to continue the process and develop a national energy policy.

There are just too many positive things that the bill would do for the country in the long and short term. To begin with, the bill would create nearly 1 million jobs and implement mandatory electricity reliability standards that we believe may prevent future massive blackouts as was experienced in August by the Northeast.

It would encourage the Federal Government to increase energy efficiency in Federal installations.

It would increase assistance for lower income families by raising the base authorization of LIHEAP to $3.4 billion. The bill also includes incentives to increase solar, wind, geothermal and other biomass technologies.

It encourages modernizing and streamlining our Nation's hydropower laws.

It provides incentives for responsible oil and gas development and royalty relief for marginal wells. In other words, it helps keep wells that are slow, but long-term energy suppliers going so we don't always have to rely on short-term, get-rich-quick wells for all of our energy needs.

It provides incentives to encourage consumers to purchase more hybrid and alternative fuel vehicles and authorizes two new programs that would improve the efficiency and quality of our Nation's fleet of school buses.

There are a number of other provisions included in this bill that will contribute to our Nation's energy security and I hope my colleagues will take the time to look at what is in this bill for what it really is: A desperately needed and all-important first step toward a policy that will increase our energy independence, ensure we have a more reliable supply of energy available, and a more stable energy market for consumers to purchase from with prices that are not so subject to as much fluctuation and change.

Mr. President, I rise to introduce the Stock Option Accounting Act. This bill has been a long time in the making. It is a strong bipartisan bill that addresses the important role stock options play in our economy.

As an Accountant, and as a member of the Senate who was a small businessman for many years, I tend to believe most of the issues we address in Congress should be examined with an eye toward preserving the strength and integrity of our small business sector, and ensuring that the regulations that govern it are fair and preserve and promote, rather than discourage, innovation and competition.

I think that's something we can all agree on, so I know I won't have to go into too much detail about the importance of our small business sector, especially our small, high tech businesses. When it comes to small businesses, especially our high technology centers, we truly are the envy of the world. Our talented and creative engineers and inventors have paved the way for innovations in advanced technologies and computer software that other countries will always try to imitate.

Here in the United States, our Small Business Administration is well aware of the importance of that sector to our Nation's economy. Nearly 23 million strong, small businesses represent more than 99.7 percent of all employers, employ more than half of all private sector employees, generate 60 to 80 percent of net new jobs annually, create more than 50 percent of nonfarm private gross domestic product (GDP) and produce 13 to 14 times more patents per employee than large patenting firms.

Last week, I chaired a hearing in the Banking Committee's Subcommittee on Securities and Investment that featured testimony from the Financial Accounting Standards Board (FASB) and the small business community. It became quite evident during the hearing that FASB is ill equipped to conduct economic impact studies of the accounting standards that it adopts even through its one of their precepts. FASB may be able to conduct a cost analysis of an accounting standard proposal determining the costs of computers and additional manpower necessary to implement a new statement. But, it does not have the expertise to look at the comprehensive impact a new standard may have on the economy.

In addition, as the hearing progressed, it was evident that FASB is not listening to small businesses, and not taking their concerns seriously about a standard that FASB Board members stated was ``set in concrete'' prior to an official comment period on any draft proposal.

At the hearing, small business witnesses testified about how they are worried that the expensing of stock options would make this form of employee compensation prohibitive. They said it would make it very difficult if not impossible to attract and retain talented employees. It would also have a detrimental effect on the entrepreneurial nature and spirit of our country. In all of my years listening on this issue, not one small business owner has spoken in favor of expensing stock options.

After the hearing, I was more convinced than ever that legislation like this bill was needed to address the issue of the expensing of stock options.

A key element of FASB's current structure is its independence and I want to make it clear that I support that principle. FASB's independence, like freedom, must be earned--and it's independence does not provide a shield that absolves FASB of accountability and due process.

When it comes to the issue of stock options, a case can be made that FASB took up the project with a pre-ordained result in mind. It's no surprise, therefore, that the process that was established to pursue the matter seems to reflect a project that was begun with the end in mind. There is enough evidence there to at least make one wonder.

First, FASB doesn't seem to have given much consideration to the more than 200 public comment letters they received. The public comments made by FASB Board Members seem to also reflect a skewed process, as does the lack of response to the many high tech companies that have visited with FASB in the past several months. In addition, FASB has refused to conduct real road tests to actual valuation methods.

According to the FASB website ``Facts about FASB 2003-2004,'' the Board follows certain precepts in the conduct of its activities. They are: 1. To be objective in its decision making and to ensure, insofar as possible, the neutrality of information resulting from its standards. To be neutral, information must report economic activity as faithfully as possible without coloring the image it communicates for the purpose of influencing behavior in any particular direction. 2. To weight carefully the views of its constituents in developing concepts and standards. However, the ultimate determinant of concepts and standards must be the Board's judgment, based on research, public input and careful deliberation about the usefulness of the resulting information. 3. To promulgate standards only when the expected benefits exceed the perceived costs. While reliable, quantitative cost-benefit calculations are seldom possible, the Board strives to determine that a proposed standard will meet a significant need and that the costs it imposes, compared with possible alternatives, are justified in relation to the overall benefits. 4. To bring about needed changes in ways that minimize disruption to the continuity of reporting practice. Reasonable effective dates and transition provisions are established when new standards are introduced. The Board considers it desirable that change be evolutionary to the extent that it can be accommodated by the need for relevance, reliability, comparability and consistency. 5. To review the effects of past decisions and interpret, amend or replace standards in timely fashion when such action is indicated.

Precept number 3 greatly interests me. I am very concerned that FASB has repeatedly refused to consider the economic consequences of its decisions. The mandatory expending of all employee stock options has serious economic, labor, trade and competitiveness implications. These issues fall squarely within the jurisdiction and oversight of Congress. It's not hard to imagine what would be said of Congress if we failed to take note of the economic implications of the actions we take on the floor.

Simply put, at the end of the day, if FASB is going to earn its independence, it will have to adhere to a process that is objective, fair, open and balanced. So far, FASB seems to be more concerned about getting the job done--than in getting it right.

That is why I am offering legislation that will expense the stock options given to the top five executives of a company, exempt small businesses and start up companies, and set conditions for the expensing of broad-based options for the remaining employees. I treat the three groups differently in this matter because a very real and strong accounting distinction exists between the two types of workers.

First of all, in a very real sense the top five executives of an organization

are different from the general employee group in the manner in which they are treated by the SEC and the manner in which their compensation is defined and distributed from an accounting perspective.

The top five executives, for instance, are treated differently when it comes to their compensation and a wide range of other matters. Proxy rules, for instance, require significant additional disclosures from the top five executives than they do of any other group.

Second, from an accounting perspective, there is a clear distinction between executives and the broad employee group. In their recent book, In the Company of Owners, Professor Joseph Blasi and Douglas Kruse concluded, based on extensive research, that options granted to all but the top executives in a company are not labor income, but a form of capital income.

To quote from their book, ``They represent risk sharing profits that workers receive on top of their normal market wages and benefits. As such, it makes little sense to deduct the value of those options from profits.''

In addition, Blasi and Kruse found that, ``options turn employees into economic partners in the enterprise. As such, they stand to share in the stock appreciation that they help to bring about. . . . Options provide an additional dimension to their employment relationship, allowing workers to participate in both the risks and the rewards of property ownership. . . . There's substantial economic evidence that options bring workers capital rather than labor income. . . . The earnings workers get from options comes on top of their regular market wage.''

In contrast, options for top executives function more as labor income, particularly in companies without broad based option plans. These top executives bargain for their entire ``compensation'' package and, in many cases, stock options represent a large part of the total package. Their negotiations about compensation are distinctly different than other employees.

That brings me to our bill and its purpose--or, to continue with my line of reasoning--If these two groups should be compensated differently for their efforts when it comes to stock options, how should it be done?

Our legislation would mandate a valuation method of the options given to the top five executives that does not require companies to predict their future stock price volatility. One of the members of the Option Valuation Group, Fred Cook, appointed by the FASB strongly recommended this method--one where stock price volatility is set at zero so that companies don't have to use a crystal ball and try to predict their future stock price.

Another key principle in our legislation is the requirement that FASB develop a method of ``truing up''--or correcting errors--that are made when stock option estimates are made at grant date. There are several other areas where estimates are made in financial statements, and then corrected over time as the precise facts are learned. Today, no such corrections are made in the stock options area--a fundamental flaw in the system.

To address these issues, the bill has three major components. First, the bill would target executive compensation. A company would be required to expense immediately options of the top five highly compensated individuals at a company. The Securities and Exchange Commission already requires this information in annual statements and proxy statements. In addition, it would provide investors with a clearer understanding of the stock options of top company officials. This also would work in conjunction with the self-regulatory organization's rules, approved last week by the Securities and Exchange Commission, to require shareholder approval of stock option plans.

Second, small business would be exempt from expensing stock options. The exemption for small businesses would follow the current SEC rules for defining small businesses. The bill would allow small companies a 3-year grace period after an initial public offering prior to a company being required to expense stock options. This would allow a sufficient period of time to work out any initial volatility after the initial public offering.

Finally, the bill would not permit the Securities and Exchange Commission to recognize a stock option expensing standard unless two things happen. First, companies must be able to recognize the true expense of stock options on their financial statements. Currently, FASB wants companies to expense stock options upon the grant date of an option. Unfortunately, the current valuation models for stock options, Black-Scholes, binomial, Crystal Ball, and others, are horrible indicators of the true cost to a company stock options.

The bill would require that a company be able to ``true-up'' its financial statements when a stock option is exercised, lapses or is forfeited. If the cost goes up then the company must record the increase when an option is exercised. Likewise, if an option lapses or is forfeited then a company should be able to wipe those previously taken expenses off its balanced sheet. This is only fair.

The second item prior to an accounting standard to be recognized is the completion of an economic analysis study by the Secretary of Commerce and the Secretary of Labor. This study would look at how the use of stock options may stimulate economic growth in our nation's economy. In addition, the study would relate how stock options expensing could effect the competiveness of U.S. companies in international markets.

I strongly believe that this bill is essential to our economic strength. It is clear that FASB is not listening to small business and therefore is not listening to the future of our country. FASB is therefore ill equipped to make the economic analysis decisions to determine the true effect of stock option expensing on our economy.

In addition, the bill also targets the invasion's need for greater information on executive compensation. I ask my colleagues to take a serious look at this bill and to support its passage.

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

Mr. President, I rise to introduce the Stock Option Accounting Act. This bill has been a long time in the making. It is a strong bipartisan bill that addresses the important role stock options play in our economy.

As an Accountant, and as a member of the Senate who was a small businessman for many years, I tend to believe most of the issues we address in Congress should be examined with an eye toward preserving the strength and integrity of our small business sector, and ensuring that the regulations that govern it are fair and preserve and promote, rather than discourage, innovation and competition.

I think that's something we can all agree on, so I know I won't have to go into too much detail about the importance of our small business sector, especially our small, high tech businesses. When it comes to small businesses, especially our high technology centers, we truly are the envy of the world. Our talented and creative engineers and inventors have paved the way for innovations in advanced technologies and computer software that other countries will always try to imitate.

Here in the United States, our Small Business Administration is well aware of the importance of that sector to our Nation's economy. Nearly 23 million strong, small businesses represent more than 99.7 percent of all employers, employ more than half of all private sector employees, generate 60 to 80 percent of net new jobs annually, create more than 50 percent of nonfarm private gross domestic product (GDP) and produce 13 to 14 times more patents per employee than large patenting firms.

Last week, I chaired a hearing in the Banking Committee's Subcommittee on Securities and Investment that featured testimony from the Financial Accounting Standards Board (FASB) and the small business community. It became quite evident during the hearing that FASB is ill equipped to conduct economic impact studies of the accounting standards that it adopts even through its one of their precepts. FASB may be able to conduct a cost analysis of an accounting standard proposal determining the costs of computers and additional manpower necessary to implement a new statement. But, it does not have the expertise to look at the comprehensive impact a new standard may have on the economy.

In addition, as the hearing progressed, it was evident that FASB is not listening to small businesses, and not taking their concerns seriously about a standard that FASB Board members stated was ``set in concrete'' prior to an official comment period on any draft proposal.

At the hearing, small business witnesses testified about how they are worried that the expensing of stock options would make this form of employee compensation prohibitive. They said it would make it very difficult if not impossible to attract and retain talented employees. It would also have a detrimental effect on the entrepreneurial nature and spirit of our country. In all of my years listening on this issue, not one small business owner has spoken in favor of expensing stock options.

After the hearing, I was more convinced than ever that legislation like this bill was needed to address the issue of the expensing of stock options.

A key element of FASB's current structure is its independence and I want to make it clear that I support that principle. FASB's independence, like freedom, must be earned--and it's independence does not provide a shield that absolves FASB of accountability and due process.

When it comes to the issue of stock options, a case can be made that FASB took up the project with a pre-ordained result in mind. It's no surprise, therefore, that the process that was established to pursue the matter seems to reflect a project that was begun with the end in mind. There is enough evidence there to at least make one wonder.

First, FASB doesn't seem to have given much consideration to the more than 200 public comment letters they received. The public comments made by FASB Board Members seem to also reflect a skewed process, as does the lack of response to the many high tech companies that have visited with FASB in the past several months. In addition, FASB has refused to conduct real road tests to actual valuation methods.

According to the FASB website ``Facts about FASB 2003-2004,'' the Board follows certain precepts in the conduct of its activities. They are: 1. To be objective in its decision making and to ensure, insofar as possible, the neutrality of information resulting from its standards. To be neutral, information must report economic activity as faithfully as possible without coloring the image it communicates for the purpose of influencing behavior in any particular direction. 2. To weight carefully the views of its constituents in developing concepts and standards. However, the ultimate determinant of concepts and standards must be the Board's judgment, based on research, public input and careful deliberation about the usefulness of the resulting information. 3. To promulgate standards only when the expected benefits exceed the perceived costs. While reliable, quantitative cost-benefit calculations are seldom possible, the Board strives to determine that a proposed standard will meet a significant need and that the costs it imposes, compared with possible alternatives, are justified in relation to the overall benefits. 4. To bring about needed changes in ways that minimize disruption to the continuity of reporting practice. Reasonable effective dates and transition provisions are established when new standards are introduced. The Board considers it desirable that change be evolutionary to the extent that it can be accommodated by the need for relevance, reliability, comparability and consistency. 5. To review the effects of past decisions and interpret, amend or replace standards in timely fashion when such action is indicated.

Precept number 3 greatly interests me. I am very concerned that FASB has repeatedly refused to consider the economic consequences of its decisions. The mandatory expending of all employee stock options has serious economic, labor, trade and competitiveness implications. These issues fall squarely within the jurisdiction and oversight of Congress. It's not hard to imagine what would be said of Congress if we failed to take note of the economic implications of the actions we take on the floor.

Simply put, at the end of the day, if FASB is going to earn its independence, it will have to adhere to a process that is objective, fair, open and balanced. So far, FASB seems to be more concerned about getting the job done--than in getting it right.

That is why I am offering legislation that will expense the stock options given to the top five executives of a company, exempt small businesses and start up companies, and set conditions for the expensing of broad-based options for the remaining employees. I treat the three groups differently in this matter because a very real and strong accounting distinction exists between the two types of workers.

First of all, in a very real sense the top five executives of an organization

are different from the general employee group in the manner in which they are treated by the SEC and the manner in which their compensation is defined and distributed from an accounting perspective.

The top five executives, for instance, are treated differently when it comes to their compensation and a wide range of other matters. Proxy rules, for instance, require significant additional disclosures from the top five executives than they do of any other group.

Second, from an accounting perspective, there is a clear distinction between executives and the broad employee group. In their recent book, In the Company of Owners, Professor Joseph Blasi and Douglas Kruse concluded, based on extensive research, that options granted to all but the top executives in a company are not labor income, but a form of capital income.

To quote from their book, ``They represent risk sharing profits that workers receive on top of their normal market wages and benefits. As such, it makes little sense to deduct the value of those options from profits.''

In addition, Blasi and Kruse found that, ``options turn employees into economic partners in the enterprise. As such, they stand to share in the stock appreciation that they help to bring about. . . . Options provide an additional dimension to their employment relationship, allowing workers to participate in both the risks and the rewards of property ownership. . . . There's substantial economic evidence that options bring workers capital rather than labor income. . . . The earnings workers get from options comes on top of their regular market wage.''

In contrast, options for top executives function more as labor income, particularly in companies without broad based option plans. These top executives bargain for their entire ``compensation'' package and, in many cases, stock options represent a large part of the total package. Their negotiations about compensation are distinctly different than other employees.

That brings me to our bill and its purpose--or, to continue with my line of reasoning--If these two groups should be compensated differently for their efforts when it comes to stock options, how should it be done?

Our legislation would mandate a valuation method of the options given to the top five executives that does not require companies to predict their future stock price volatility. One of the members of the Option Valuation Group, Fred Cook, appointed by the FASB strongly recommended this method--one where stock price volatility is set at zero so that companies don't have to use a crystal ball and try to predict their future stock price.

Another key principle in our legislation is the requirement that FASB develop a method of ``truing up''--or correcting errors--that are made when stock option estimates are made at grant date. There are several other areas where estimates are made in financial statements, and then corrected over time as the precise facts are learned. Today, no such corrections are made in the stock options area--a fundamental flaw in the system.

To address these issues, the bill has three major components. First, the bill would target executive compensation. A company would be required to expense immediately options of the top five highly compensated individuals at a company. The Securities and Exchange Commission already requires this information in annual statements and proxy statements. In addition, it would provide investors with a clearer understanding of the stock options of top company officials. This also would work in conjunction with the self-regulatory organization's rules, approved last week by the Securities and Exchange Commission, to require shareholder approval of stock option plans.

Second, small business would be exempt from expensing stock options. The exemption for small businesses would follow the current SEC rules for defining small businesses. The bill would allow small companies a 3-year grace period after an initial public offering prior to a company being required to expense stock options. This would allow a sufficient period of time to work out any initial volatility after the initial public offering.

Finally, the bill would not permit the Securities and Exchange Commission to recognize a stock option expensing standard unless two things happen. First, companies must be able to recognize the true expense of stock options on their financial statements. Currently, FASB wants companies to expense stock options upon the grant date of an option. Unfortunately, the current valuation models for stock options, Black-Scholes, binomial, Crystal Ball, and others, are horrible indicators of the true cost to a company stock options.

The bill would require that a company be able to ``true-up'' its financial statements when a stock option is exercised, lapses or is forfeited. If the cost goes up then the company must record the increase when an option is exercised. Likewise, if an option lapses or is forfeited then a company should be able to wipe those previously taken expenses off its balanced sheet. This is only fair.

The second item prior to an accounting standard to be recognized is the completion of an economic analysis study by the Secretary of Commerce and the Secretary of Labor. This study would look at how the use of stock options may stimulate economic growth in our nation's economy. In addition, the study would relate how stock options expensing could effect the competiveness of U.S. companies in international markets.

I strongly believe that this bill is essential to our economic strength. It is clear that FASB is not listening to small business and therefore is not listening to the future of our country. FASB is therefore ill equipped to make the economic analysis decisions to determine the true effect of stock option expensing on our economy.

In addition, the bill also targets the invasion's need for greater information on executive compensation. I ask my colleagues to take a serious look at this bill and to support its passage.

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

Mr. President, I rise today to introduce legislation that would increase the likelihood that citizens who live on the American frontier and in other sparsely populated areas will have access to affordable healthcare in their communities.

Since my election to the Senate in 1996, one of my goals has been to educate folks in Washington about what life is like in the West.

Obviously there are rural areas along the East and West Coasts and in the Midwest. But people who live in these places are always surprised when they travel for the first time to places like my home State of Wyoming. They are amazed at just how rural Wyoming is.

Well, Wyoming is more than rural. Most Wyomingites live in the remaining stretches of the American frontier. Now, that's not to say that there aren't plenty of sparsely populated areas elsewhere, even in coastal States. There are many places outside the West that share the characteristics of the frontier. But almost all of Wyoming is sparsely populated. In fact, more people live in the 68 square miles of the District of Columbia than live in the 98,000 square miles of Wyoming.

People who live on the frontier and other sparsely populated areas face some unique challenges, and one of those challenges is access to affordable healthcare. People who live in frontier areas are more likely to lack health insurance than other rural and urban citizens. Also, frontier areas generally do not have population centers that can support the full range of healthcare services available in most urban and some rural areas.

One of the proven ways of improving healthcare in medically underserved areas is through the establishment of federally qualified community health centers, or CHCs. Community health centers are not- for-profit providers of health care to the working poor, the uninsured, and other vulnerable populations. These safety-net providers served ten million people across America in 2001.

Community health centers deliver preventive and primary care to patients regardless of their ability to pay. Almost half of the patients treated at community health centers have no insurance coverage at all. Community health centers set their charges according to income, and they do not collect any fees from their poorest clients.

President Bush has proposed major increases in funding for the establishment and expansion of community health centers, and Congress has begun to provide that funding. Senators across the political spectrum agree that community health centers play an important role in providing health services to the uninsured and underinsured in many medically underserved areas. We all agree that we ought to encourage the development of more sites where those in need but without means can get proper care.

Unfortunately, many frontier areas do not have community health centers. Wyoming, for example, only has one CHC, located in Casper. That center just opened a satellite clinic in Riverton, a town of 9,300 people almost 125 miles away, so now we have two sites.

The Federal Government keeps statistics on the degree of ``health center penetration into the unserved.'' In other words, we keep track of what percentage of those who need access to affordable healthcare can get adequate service through community health centers.

In Wyoming, only 7.9 percent of the unserved had reasonable access to community health center services, based on 2001 data. Lest you think this is just a Wyoming problem, Mr. President, let me share some percentages from other states: Alabama: 15.9 percent; Georgia: 8.9 percent; Indiana: 10.1 percent; Kansas: 10.4 percent; Louisiana: 4.3 percent; Maryland: 15.8 percent; Nebraska: 5.3 percent; Nevada: 7.8 percent; North Carolina: 11.1 percent; Oklahoma: 7.8 percent; Texas: 9.0 percent; and Virginia: 12.2 percent.

Why are these access figures so low? It's not because communities aren't interested in helping their less fortunate neighbors. It's because many communities on the frontier and in other sparsely populated areas can't even apply for community health center funding.

Why can't they apply? Well, believe it or not, the Federal Government doesn't consider many isolated communities to be located in ``medically underserved areas.'' And a community has to be designated as being a ``medically underserved area'' before one can even apply for CHC funding.

The barrier for frontier communities lies in the index that the Federal Government uses to determine ``medical underservice.'' That index looks at four factors: the percentage of people over 65 years of age, and the ratio of primary-care physicians per 1,000 people.

Using these four factors, the agency has calculated that only four Wyoming's 23 counties qualify to be ``medically underserved areas.'' I find this interesting, since Wyoming ranks 46th out of the 50 State in terms of physician-to-population ratio.

I have an idea about the source of this contradiction. When I went to accounting school, one of the things I learned about was a concept called ``statistical validity.'' What I learned was that the statistical validity of a sample is a function of sample size: in other words, the larger the sample, the more accurate the results associated with the sample.

Well, as you can imagine, sparsely populated states like Wyoming offer

less statistically valid samples than other states. Many of our counties score very well on factors like infant mortality. Take Western County, for instance. Weston County has a very low infant mortality rate--in fact, their rate in 2002 was zero. But there were only 59 births in Weston County. Now I'm happy to see that statistic, but it really hurts Weston County's score on the agency index.

Even looking at 5 years of data in sparsely populated counties doesn't provide a statistically valid sample. From 1994 to 1998, Weston County's infant mortality rate was 8.5 per 1000 births, slightly above the national average. From 1995 to 1999, Weston County's rate jumped to 14.7 percent--nearly twice the national average.

Why did the infant mortality rate jump so dramatically in Weston County? The only difference was that in 1999, two of the 60 babies born in the county died soon after birth.

When two deaths have such a dramatic impact on the infant mortality rate, it's because the sample size simply isn't large enough to provide a valid result. Slight variations in small samples can result in huge differences when translated into statistical data. And in my opinion, we shouldn't be making decisions based on statistics that aren't valid indicators of the healthcare status of a community.

I am concerned that the Federal definition of ``medically underserved areas'' does not recognize the unique nature and needs of people who live in the sparsely populated areas of our country. This makes me concerned that frontier communities are going to miss out on a great opportunity to participate in our national expansion of community health centers.

That's why I'm joining today with my distinguished colleagues Senators Bingaman, Thomas, and Craig to introduce the Frontier Healthcare Access Act. We believe that people who live on the frontier and in other sparsely populated areas ought to have a fair shot at competing for federal support as we grow the community health center program.

Our bill would automatically deem ``frontier areas'' to be eligible for Federal funding for the development and expansion of community health centers.

The bill would require no new funding--it would simply designate frontier communities as special populations eligible for federal CHC support. Nor would the bill create a new preference for frontier areas--it would simply allow frontier communities into the competition for funding. The bill would end the application of a statistical formula that doesn't provide a valid assessment of need in sparsely populated areas--but it would still require frontier communities to compete with other communities to receive federal CHC support.

The Frontier Healthcare Access Act also would direct the Federal Government to create a new definition of ``frontier area.'' The bill would require that the new definition go beyond the traditional population-density approach to include important factors like distance in miles and travel time in minutes to the nearest significant healthcare service area or market. This is important, because defining frontier solely by population overlooks some important considerations.

For example, in some large counties, the presence of a city in one corner skews population density and overshadows the existence of many large frontier areas. Furthermore, a key component to frontier life is distance. Even areas with population density as high as 20 people per square mile should be considered frontier if the community is located far from the closest significant service center or market.

The National Rural Health Association and the Western Governors Association have already endorsed a definition using the factors proposed by the Frontier Healthcare Access Act. If the federal government adopts a similar definition, it would ensure eligibility for community health center development and expansion for about ten million citizens who live in more than 800 counties located in 38 states--not just the frontier West.

Mr. President, people in hundreds of cities and towns across the country have access to affordable healthcare services through community health centers. People who live in sparsely populated areas ought to have a fair opportunity to create the same sort of access.

The Frontier Healthcare Access Act would create this opportunity for people who live in isolated communities across our great country. I hope that my colleagues will join me in making this opportunity possible for our citizens who live in every part of our remaining American frontier--whether the buffalo still roam there or not.

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

Mr. President, I rise today to introduce legislation that would increase the likelihood that citizens who live on the American frontier and in other sparsely populated areas will have access to affordable healthcare in their communities.

Since my election to the Senate in 1996, one of my goals has been to educate folks in Washington about what life is like in the West.

Obviously there are rural areas along the East and West Coasts and in the Midwest. But people who live in these places are always surprised when they travel for the first time to places like my home State of Wyoming. They are amazed at just how rural Wyoming is.

Well, Wyoming is more than rural. Most Wyomingites live in the remaining stretches of the American frontier. Now, that's not to say that there aren't plenty of sparsely populated areas elsewhere, even in coastal States. There are many places outside the West that share the characteristics of the frontier. But almost all of Wyoming is sparsely populated. In fact, more people live in the 68 square miles of the District of Columbia than live in the 98,000 square miles of Wyoming.

People who live on the frontier and other sparsely populated areas face some unique challenges, and one of those challenges is access to affordable healthcare. People who live in frontier areas are more likely to lack health insurance than other rural and urban citizens. Also, frontier areas generally do not have population centers that can support the full range of healthcare services available in most urban and some rural areas.

One of the proven ways of improving healthcare in medically underserved areas is through the establishment of federally qualified community health centers, or CHCs. Community health centers are not- for-profit providers of health care to the working poor, the uninsured, and other vulnerable populations. These safety-net providers served ten million people across America in 2001.

Community health centers deliver preventive and primary care to patients regardless of their ability to pay. Almost half of the patients treated at community health centers have no insurance coverage at all. Community health centers set their charges according to income, and they do not collect any fees from their poorest clients.

President Bush has proposed major increases in funding for the establishment and expansion of community health centers, and Congress has begun to provide that funding. Senators across the political spectrum agree that community health centers play an important role in providing health services to the uninsured and underinsured in many medically underserved areas. We all agree that we ought to encourage the development of more sites where those in need but without means can get proper care.

Unfortunately, many frontier areas do not have community health centers. Wyoming, for example, only has one CHC, located in Casper. That center just opened a satellite clinic in Riverton, a town of 9,300 people almost 125 miles away, so now we have two sites.

The Federal Government keeps statistics on the degree of ``health center penetration into the unserved.'' In other words, we keep track of what percentage of those who need access to affordable healthcare can get adequate service through community health centers.

In Wyoming, only 7.9 percent of the unserved had reasonable access to community health center services, based on 2001 data. Lest you think this is just a Wyoming problem, Mr. President, let me share some percentages from other states: Alabama: 15.9 percent; Georgia: 8.9 percent; Indiana: 10.1 percent; Kansas: 10.4 percent; Louisiana: 4.3 percent; Maryland: 15.8 percent; Nebraska: 5.3 percent; Nevada: 7.8 percent; North Carolina: 11.1 percent; Oklahoma: 7.8 percent; Texas: 9.0 percent; and Virginia: 12.2 percent.

Why are these access figures so low? It's not because communities aren't interested in helping their less fortunate neighbors. It's because many communities on the frontier and in other sparsely populated areas can't even apply for community health center funding.

Why can't they apply? Well, believe it or not, the Federal Government doesn't consider many isolated communities to be located in ``medically underserved areas.'' And a community has to be designated as being a ``medically underserved area'' before one can even apply for CHC funding.

The barrier for frontier communities lies in the index that the Federal Government uses to determine ``medical underservice.'' That index looks at four factors: the percentage of people over 65 years of age, and the ratio of primary-care physicians per 1,000 people.

Using these four factors, the agency has calculated that only four Wyoming's 23 counties qualify to be ``medically underserved areas.'' I find this interesting, since Wyoming ranks 46th out of the 50 State in terms of physician-to-population ratio.

I have an idea about the source of this contradiction. When I went to accounting school, one of the things I learned about was a concept called ``statistical validity.'' What I learned was that the statistical validity of a sample is a function of sample size: in other words, the larger the sample, the more accurate the results associated with the sample.

Well, as you can imagine, sparsely populated states like Wyoming offer

less statistically valid samples than other states. Many of our counties score very well on factors like infant mortality. Take Western County, for instance. Weston County has a very low infant mortality rate--in fact, their rate in 2002 was zero. But there were only 59 births in Weston County. Now I'm happy to see that statistic, but it really hurts Weston County's score on the agency index.

Even looking at 5 years of data in sparsely populated counties doesn't provide a statistically valid sample. From 1994 to 1998, Weston County's infant mortality rate was 8.5 per 1000 births, slightly above the national average. From 1995 to 1999, Weston County's rate jumped to 14.7 percent--nearly twice the national average.

Why did the infant mortality rate jump so dramatically in Weston County? The only difference was that in 1999, two of the 60 babies born in the county died soon after birth.

When two deaths have such a dramatic impact on the infant mortality rate, it's because the sample size simply isn't large enough to provide a valid result. Slight variations in small samples can result in huge differences when translated into statistical data. And in my opinion, we shouldn't be making decisions based on statistics that aren't valid indicators of the healthcare status of a community.

I am concerned that the Federal definition of ``medically underserved areas'' does not recognize the unique nature and needs of people who live in the sparsely populated areas of our country. This makes me concerned that frontier communities are going to miss out on a great opportunity to participate in our national expansion of community health centers.

That's why I'm joining today with my distinguished colleagues Senators Bingaman, Thomas, and Craig to introduce the Frontier Healthcare Access Act. We believe that people who live on the frontier and in other sparsely populated areas ought to have a fair shot at competing for federal support as we grow the community health center program.

Our bill would automatically deem ``frontier areas'' to be eligible for Federal funding for the development and expansion of community health centers.

The bill would require no new funding--it would simply designate frontier communities as special populations eligible for federal CHC support. Nor would the bill create a new preference for frontier areas--it would simply allow frontier communities into the competition for funding. The bill would end the application of a statistical formula that doesn't provide a valid assessment of need in sparsely populated areas--but it would still require frontier communities to compete with other communities to receive federal CHC support.

The Frontier Healthcare Access Act also would direct the Federal Government to create a new definition of ``frontier area.'' The bill would require that the new definition go beyond the traditional population-density approach to include important factors like distance in miles and travel time in minutes to the nearest significant healthcare service area or market. This is important, because defining frontier solely by population overlooks some important considerations.

For example, in some large counties, the presence of a city in one corner skews population density and overshadows the existence of many large frontier areas. Furthermore, a key component to frontier life is distance. Even areas with population density as high as 20 people per square mile should be considered frontier if the community is located far from the closest significant service center or market.

The National Rural Health Association and the Western Governors Association have already endorsed a definition using the factors proposed by the Frontier Healthcare Access Act. If the federal government adopts a similar definition, it would ensure eligibility for community health center development and expansion for about ten million citizens who live in more than 800 counties located in 38 states--not just the frontier West.

Mr. President, people in hundreds of cities and towns across the country have access to affordable healthcare services through community health centers. People who live in sparsely populated areas ought to have a fair opportunity to create the same sort of access.

The Frontier Healthcare Access Act would create this opportunity for people who live in isolated communities across our great country. I hope that my colleagues will join me in making this opportunity possible for our citizens who live in every part of our remaining American frontier--whether the buffalo still roam there or not.

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

I would like to add to my colleague's discussion. I got involved in this process to bring attention to the concerns of veterans in rural and frontier areas. Based on these concerns, I hope in any further analysis on the future needs of veterans health care the

VA will consider all access issues related to travel, such as road conditions, the number of lanes on roads, and seasonal changes and other factors relating to the weather. I know many of my colleagues share these concerns and I appreciate their taking this opportunity to address them.

Mr. President, I am pleased to be a cosponsor of this amendment and I hope to clarify some of the reasons I believe every Senator should support our efforts.

I think everyone in this Chamber agrees on the importance of our national veterans community. Just yesterday ceremonies throughout the Nation and speeches here on the Senate floor paid tribute to those who have been willing to sacrifice so much. When young men and women volunteer their lives for the fight for freedom and democracy we, as a nation, promise to take care of them.

The amendment Senator Clinton introduced today addresses the Capital Asset Realignment for Enhanced Services or CARES process from the Department of Veteran's Affairs.

I believe the intent of the CARES process is good. If we can clear up some of the unused space in the VA health care system and remove redundancy in services, we can save money and put it towards effective health care for our veterans. I do not believe, however, that rushing into changes for the sake of making changes is a good policy. How can we expect good changes to come from a broken system?

There is no doubt in my mind that the CARES Commissioners have the best interests of veterans at heart. I believe that given enough time and proper information, they will be able to make changes in veterans health care that will fully benefit current and future veterans for years to come. I must admit, however, that they currently have neither the time nor the proper information to make good changes.

Now, let's be clear about what this amendment does and does not do. It does not prevent the CARES process from moving forward. It does not prevent improvements from being made or new hospitals from being built. It does not kill the CARES initiative.

It does require the VA to commit to a separate process for long-term care, domiciliary care, and mental health care needs. It does require the VA to confirm that they have examined local travel factors such as road and weather conditions. It does require the CARES Commission to hold hearings within 30 miles of each facility targeted for a closure or a reduction of services and it requires veteran participation in these hearings.

Let me touch on a couple of these requirements. One is that there be a CARES Commission hearing within 30 miles of every facility facing a realignment of services under the national plan.

We recently had a CARES hearing in Cheyenne, WY near the Cheyenne VA Medical Center. I think the hearing went extraordinarily well. The veterans who attended where given an opportunity to understand more about the future of their health care. Likewise, the CARES Commissioners were able to hear the veteran's concerns through the veterans service organizations. Just holding a hearing in Denver about reducing services in Cheyenne--a town more than 100 miles away--would have sent a strong statement to Wyoming veterans that the VA cared neither for their health nor their opinions.

I believe each facility and community should have the opportunity to have this same interaction. Each community should be able to understand what the changes will mean for them and what differences in services the veterans will face. I now the burden falls to the CARES Commissioners to attend and consider the testimony at these additional hearings, but I believe

they will then be better informed about the decisions they will need to make.

I also want to point out the travel issue in the amendment. I think we all realize the difficult nature of taking weather into consideration nationally. After all, northern Wyoming's winter and southern Florida's winter are hardly the same. What this part of the amendment intends to do is ensure that the local factors were considered when drafting the national plan. Distance cannot be the only factor considered--we all know that even in Washington, DC, 30 miles travel distance doesn't mean 30 minutes travel time.

Let me say again, this amendment does not stop the CARES process. It merely requires the VA to consider a couple of factors that we believe should have been considered from the very beginning.

I know letters from some veterans service organizations may have raised concerns for my colleagues about our amendment. these organizations were able to meet with the Secretary of Veterans Affairs and had many of their worries addressed. the Secretary told them that no services would be reduced until replacement services are fully available. He also stressed that no net changes would be made in long- term care, domiciliary care, or mental health care.

I think this meeting was a great idea. It is, however, a shame that it took news of this amendment to get the VA, moving. I am very glad that the veterans organizations had the opportunity to meet with the Secretary. Through this amendment we are trying to make sure the VA addresses the concerns of Congress. We are just trying to make sure that the promises made are promises kept.

Again, I want to reiterate my support for the CARES Commissioners themselves. They are doing their best to make good decisions in a broken system. I appreciate their patience and most of all their willingness to serve America's veterans. I urge my colleagues to support the amendment.

As we observed Veterans Day yesterday, and remembered the sacrifices each and every veteran has made to grant us our current freedoms, Congress should be doing all it can to help modernize and improve the VA

healthcare system at the earliest possible time. This amendment would derail this effort.

Congress should be finding new and innovative ways to get healthcare services delivered in a more timely and convenient way to our former servicemen and women. This amendment would postpone this effort.

Finally, Congress needs to ensure that the foundation and future of the VA healthcare system is stable and secure, giving our veterans the peace of mind that they will receive high quality and accessible healthcare whenever it is required. This amendment would hinder this effort.

The VA will soon finalize its 20-year Capital Asset Realignment for Enhanced Services initiative, better known as the CARES plan, for updating medical facilities. Starting in the last administration and continuing in the present one, VA evaluated its future need for healthcare facilities, matched projected needs against current facilities, and developed a plan to match resources to needs.

The amendment being proposed would impose unnecessary conditions before VA could go forward with this vital plan.

Through CARES, VA is examining where its facilities are located, where veterans are projected to be living in the next 20 years, and what their health needs will be. Nationwide, VA provides medical care to almost 5 million veterans.

VA's legacy facilities are old, with the average age over 50 years, many dating back all the way to World War I or even earlier. These initial facilities were designed to provide medicine as it was practiced a half century ago, and in most cases, are poorly located to serve veterans where they live today or are expected to live in the future.

CARES will enable VA to leverage scarce resources by directing funding from the maintenance of obsolete facilities and applying that funding to the direct provision of healthcare services and staffing. It calls for construction of new facilities where the veteran population is growing, such as the southeastern and western United States. Additionally, it provides for the realignment of facilities that are redundant, out of date, or poorly located.

The Draft National CARES Plan contains over $4.6 billion in capital investments, including 11 million square feet of renovation, 9 million square feet of new construction, 2 new hospitals, 48 new high priority community based outpatient clinics, 2 new blind rehabilitation centers, and 4 new spinal cord injury units.

The Draft National CARES Plan, completed in August in this year, is a comprehensive integrated national proposal. The CARES process has been thorough and inclusive, combining a set of national assessment standards with planning at the local and regional levels.

This plan is now under review by the independent CARES commission, established by Secretary Principi to objectively examine the plan, to obtain comments and conduct public hearings to ensure stakeholder views are considered. The CARES commission conducted 38 hearings, heard from over 700 witnesses; including employees, local government officials and veterans; and took over 180,000 comments.

The bottom line is that the Draft National CARES Plan has been exposed to lengthy and close public analysis, and those observations will be included within the final plan. Next month, the CARES commission will submit their independent and comprehensive plan recommendations to the Secretary, which he will accept or reject as a whole.

Placing further conditions on an already well-detailed plan, which this amendment would do, would hold up, and even disrupt, VA's long delayed modernization process.

For example, the House and Senate Appropriations Committees have declined to provide more than minimal funding for VA medical constructions until VA provides a nationwide plan for managing its medical facilities. CARES is that plan.

Further, this amendment would inherently prevent VA from implementing many critical components of the CARES plan. Anything less than full implementation of the CARES plan recommendations will lead to inequitable access to care. It cannot go forward with only parts of the plan. CARES is a comprehensive national plan, and it must be accepted in its totality to be effective.

Knowing this to be true, four of the major national veterans' service organizations: the Disabled American Veterans, the Veterans of Foreign Wars, the Paralyzed Veterans of America, and AMVETS, have come out in either strong opposition or have raised serious concerns about the Clinton-Enzi amendment.

I believe it is critically important that we consider the red flags raised by these organizations that represent almost 4 million veterans nationwide.

Let us consider the actions taken by the committee of jurisdiction over the CARES initiative, the Senate Veterans' Affairs Committee. As a member of this committee, I have been intimately involved in the step- by-step process of analyzing this initiative, and I believe the VA committee has dedicated more than ample time and resources to the study of this plan.

The committee held an extensive hearing on the CARES initiative just this past September, receiving updates from top VA officials and the Secretary himself, on the progress of the plan.

Ultimately more important, the VA committee in September voted unanimously to give the Secretary the authority to implement the Draft National CARES plan once it is completed. In doing so, the committee outlined very specific priorities for the implementation of this plan.

First, and what is paramount for the CARES process to be viable, any medical facility that is closed must be replaced with a facility that adequately serves the healthcare needs of the region. Second, any locality that is in need of a full-service hospital must receive one. And third, any region that is in need of an outpatient clinic to provide basic care services must receive one.

These priorities, as agreed to by every member of the VA committee, emphasize, in my belief, that we support the CARES initiative and want it to move forward as quickly as possible. This amendment, without question, would not allow this to happen

In my opposition to this amendment, I do understand the concerns of the sponsors. However, I believe that they have been more than adequately addressed.

The sponsors believe that the CARES process has neglected to address the areas of long-term care, domiciliary care and mental health, mainly in rural areas. I strongly disagree with these assertions.

By design, the VA seeks to provide long-term care services in the least restrictive setting that is compatible with a veteran's medical condition and personal circumstances. This allows VA to reserve nursing home care for veterans who can no longer be safely cared for in home- and community-based settings.

VA expects to meet most of the future growth for long-term care services through non-institutional settings that keep veterans close to spouse, home and friends.

Since there are critical renovation and replacement nursing home needs that have been recognized, the plan includes several needed nursing home renovations and replacements that are believed to be within the projected outcomes of the new model.

In planning for CARES, the networks were to develop options taking care to preserve current bed levels for nursing home and inpatient long-term mental health programs.

More recent data is now available and suggest that both disability among the elderly and nursing home utilization rates have diminished. The discrepancy between projected needs from the current planning model and actual current demand prompted VA, earlier this year to commence in an intensive review and refinement of the long-term care planning model.

However, because the new data could not be incorporated into a new planning model for the current cycle of the CARES process, VA chose to treat the long-term care issues neutrally; that is, there will be no major changes or negative impact on care or capacity in long-term care. Once the data from the new model is available and analyzed, it will be used for future strategic planning activities.

On the issue of rural coverage, VA is, in fact, very sensitive to the healthcare

needs of rural and frontier veterans. It was a principal factor for several of the CARES commission hearings to be located in rural locales. Additionally, the Draft National CARES plan calls for the designation of critical access hospitals, recognizing the vital role that many of VA's small facilities fulfill in providing access to acute hospital care in rural or less densely populated areas. Moreover, it recommends 48 new sites for community-based outpatient clinics, many of those in rural areas.

The amendment before us is really nothing more than a solution in search of a problem. The VA has gone to great lengths to incorporate every stakeholder, especially our veterans, in the CARES process throughout.

I believe they have done an excellent job in creating a realistic and practical vision for the future of VA healthcare services, and we in the United States Senate should help them make that vision a reality.

What this all boils down to is how do we best serve the immediate and growing needs of our Nation's veterans. No one here is saying that the draft plan is perfect. However, we need to possess the wisdom and foresight to say we have all the necessary components in place to make a positive change and we should move forward.

Many injured or ill Vietnam veterans were disillusioned and critical when treated at VA medical facilities designed and built to treat their World War II fathers or even World War I grandfathers. Veterans of Iraq and Afghanistan are now returning to many of those same facilities.

It is time to take the first step toward bringing the level of care for all our veterans into the 21st century. They have waited long enough, and we need to act now to improve the lives of each and every veteran in America.

In summary, we all have made commitments to our veterans that we should take care of them. These are the men and women who have donned the uniform of the United States and have made incredible sacrifices so that we can live in freedom. We live in the greatest country, I believe, in the history of the world, with the most freedoms of any people in the history of the world. This country of ours has only remained free because people have been willing to lay their lives down to ensure those freedoms for us, our children, and our grandchildren.

The amendment that has been proposed today would violate the commitment to our U.S. veterans. I say that because the veterans are moving away from the old rust belt. We should be taking the health care, which is their primary issue, to our veterans. Services, need to follow where the veterans are moving. We should not be trying to prop up institutions, instead, we should be moving the healthcare services where those veterans are relocating.

Secretary Principi is doing a wonderful job of trying to put the priorities of the veterans over process, over other constituencies, and maybe over a congressional district. He is trying to reform the system, recognizing that veterans are moving and that the money should follow so that the services are provided to those veterans.

I live in the fastest growing State and the fastest growing metropolitan area in the United States. It must have the kind of quality of lifestyle that veterans like because they are moving there in droves. Per capita, our State now has the most veterans in the United States. Yet, for instance, the Las Vegas metropolitan area that has 1.6 million people does not have a VA hospital. There are a couple hundred thousand veterans living in the area and we have no VA hospital. We have VA clinics but no VA hospital. So when our veterans need surgery or have complicated procedures, they have to travel away from their families down to southern California to get those services.

We can understand it in smaller population areas, maybe, but in a major metropolitan area, where veterans are choosing to live, that is not keeping the commitment we have made to our veterans.

So I rise in strong opposition to this amendment and will fight against its passage. If there is a vote on it, we will fight against the votes to pass it, or if it is tried to be snuck in the omnibus bill, if this bill does not actually get passed today, we will fight against putting it in the omnibus bill. The reason why is because it is so important that we look the men and women in the face who are serving in our military today and say we are going to keep the commitment we are making to them today.

They already made the sacrifices, and now we need to keep our commitment to them. In the future, we will keep our commitment to them and they can count on that.

Secretary Principi and the administration, I believe, are trying to do the right thing. They are trying to say that as the veterans are moving, we recognize that. For a long time the VA has needed updating and changing, and they finally have the courage to start doing that. As a legislative body, let us not stop that process.

My colleague Senator Reid and I have worked very hard on improving the services for veterans in our State, both in northern and southern Nevada, as all Senators try to do for their State. The bottom line is we should not hurt the services in the fastest growing areas of our country where the waits are so long, where people have to travel out of State to get the proper medical services. Let us look at our veterans and say no matter where they move in the United States, they are going to get the kind of services they have earned. And make no mistake about it, they have earned those services.

Anybody who has taken a look at what I believe is this ill-conceived amendment will say this would, in effect, do harm to many veterans in this country and they deserve better than that.

I thank the manager of the bill and the ranking member for the time, and I yield the floor.