EXTENSIONS OF REMARKS

∑ This ‘‘bullet’’ symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor.

Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor.

May 9, 1995 CONGRESSIONAL RECORD — Extensions of Remarks E 959

INTRODUCING THE PENSION

PROTECTION ACT OF 1995

HON. JIM SAXTON OF NEW JERSEY

IN THE HOUSE OF REPRESENTATIVES

Tuesday, May 9, 1995

Mr. SAXTON. Mr. Speaker, I am here to

speak to you this morning because $3.5 trillion

in private pension funds are at risk. Why? Because the Clinton administration has targeted

private pension funds as a new way to finance

their liberal social spending agenda.

Faced with an angry revolt of voters, fed up

with an oversized and overintrusive Federal

Government, Clinton’s advisers devised a behind the scenes, incremental strategy to

achieve Clinton’s pension grab.

The overall strategy came from a campaign

document called, A National Economic Strategy calling for an $80 billion investment in an

array of social projects that will be leveraged

with public and private pensions.

President Clinton and his Department of

Labor are trying to use private pensions to

fund social investments. These social investments include: Public housing, infrastructure,

and pork-barrel projects. The administration

has dubbed these social projects economically

targeted investments or ETI’s, but I prefer to

call them PTI’s or politically targeted investments.

Stage 2 in Clinton’s great pension grab

came in June 1994, when Labor Secretary

Robert Reich issued an interpretive bulletin

which defined ETI’s in a way that makes them

seem consistent with the Employee Retirement Income Security Act, or ERISA. This law

was specifically designed to ensure the safety

of America’s private pension funds. The

strength and force of this law has now been

undermined.

Stage 3 in Clinton’s pension-fund grab was

the establishment of a clearinghouse intended

to showcase ETI investments and give them

the Federal Government’s seal of approval.

The Clinton Labor Department, without congressional authorization I note, has already

contracted to spend $1.2 million to get the

clearinghouse up and running.

Stage 4 is now in the process of unfolding.

As members of the press know, it has been

widely reported that the President will likely

nominate Assistant Treasury Secretary Alicia

Munnell to be the next Governor of the Federal Reserve Board. Not long ago, Munnell

proposed a 15-percent Federal tax on private

pension funds to help finance the Federal

Government’s liberal spending habits. Once

planted at the Fed, not only will Munnell be

completely outside of the reach of Congress,

she will also be strategically situated to help

the administration execute its grab for private

pensions.

Let me emphasize that targeting private

pension fund investments is a radical and dangerous idea. ETI’s violate the clear mandate of

ERISA that a pension fund manager must give

complete and undivided loyalty to the pension

beneficiaries. Let me quote directly from

ERISA: a pension fund manager must ‘‘discharge his duties with respect to a plan solely

in the interest of the participants and beneficiaries and for the exclusive purpose of (i)

providing benefits to participants and their

beneficiaries; and (ii) defraying reasonable expenses of administering the plan.’’

Besides ETI’s obvious conflict with ERISA,

the best economic research indicates that

pension funds that target social investments

produce yields well below market averages.

For instance, a 1983 study by none other than

Alicia Munnell found that public pension funds

that targeted social investments had assets

that were significantly riskier, less liquid, and

earned lower yields. Also, a 1993 study by

Roberta Romano of Yale Law School concluded that the greater the political influence

on the investment decision, the lower the corresponding return. And, a 1994 University of

Pennsylvania study by Olivia Mitchell determined that public pension funds required to

make a certain portion of in-State investments

generated lower investment returns.

In light of the empirical research on ETI’s

and given their dubious legal standing, stage

five and beyond in the great pension fund

grab becomes easy to predict. The President

and his administration will seek ways for the

Federal Government to offer subsidies, guarantees, and other imaginative techniques to

shield pension trustees from blame when ETI

investing pension funds get into trouble.

Richard Ferlauto of the Center for Policy Alternatives gives us a clue to their plans: ‘‘ETI

programs must be enhanced through the development and use of appropriate risk reduction mechanisms. Examples include statefunded loan guarantee programs, state or private insurance pools, and insurance

premiums . . .’’

This means taxpayers will be put at risk as

well.

The ultimate objective would be to implement a social-responsibility requirement for

private pension funds similar to the one now

being imposed on banks—an ETI quota for

every private pension fund. One need only

refer to the ETI quota bill introduced on February 24, 1995, in California to realize the potential damage to the pension community.

What would a 5-percent quota mean if enforced at the national level? In 1993, total private pension fund assets in the United States

amounted to $3.5 trillion. A 5-percent ETI

quota would mean that the Government would

suddenly have at its command a whopping

$175 billion with which to enact the liberal social agenda. More insidiously still, a quota of

even this magnitude would mean that politicians had succeeded in conscripting private

pension funds into the compulsory economic

service of the U.S. Government.

What Secretary Reich would make permissible today, will become compulsory tomorrow.

Today, I am introducing a bill that will protect the 36 million private pension participants

from President Clinton’s pension fund grab.

My bill, the Pension Protection Act of 1995,

will not alter the fiduciary duties laid out in

ERISA. Instead, my bill will simply reiterate

that the act means what it says, no more, or

less.

ERISA couldn’t be clearer. Trustees may

not invest in ETI’s because by definition ETI’s

seek to benefit someone other than solely the

participants and beneficiaries of the pension

plan; and ETI’s pursue an objective other than

exclusively the interest of the plan’s participants and beneficiaries.

My bill removes any uncertainly by making

it unambiguously clear that solely means solely not primarily or even overwhelmingly; and

my bill makes it unambiguously clear that exclusively means exclusively not almost only or

even just about completely. Exactly what parts

of solely and exclusively doesn’t the Clinton

Labor Department understand?

My bill also will prohibit the Federal Government from guaranteeing, subsidizing, or encouraging social investments. And, it will put

an end to the clearinghouse.

The security of our pension funds is no

small issue. Every American who plans on retiring someday should be very concerned

about what the Clinton administration is up to.

I believe that if we act quickly, we can ensure

that everyone working today can rest easier if

my bill to protect their pensions is passed.

FUNDING FOR THE INTERNATIONAL MILITARY EDUCATION

fAND TRAINING [IMET] PROGRAM

HON. LEE H. HAMILTON OF INDIANA

IN THE HOUSE OF REPRESENTATIVES

Tuesday, May 9, 1995

Mr. HAMILTON. Mr. Speaker, the Committee on International Relations will be considering the American Overseas Interests Act of

1995, authorizing foreign assistance programs

for fiscal years 1996 and 1997, this week.

The International Military Education and

Training [IMET] Program will be among those

authorized in this legislation. The administration considers IMET a cost-effective and critically important program in advancing the U.S.

interest in enhancing allies’ defense professionalism and promoting professional militaries

under civilian control. Accordingly, Under Secretary of Defense Slocombe has written to me,

urging full funding of the administration’s $39.8

million request for IMET for each fiscal year.

The letter follows:

THE UNDER SECRETARY OF DEFENSE,

Washington, DC, May 5, 1995.

Hon. LEE HAMILTON,

Ranking Democratic Member, Committee on

International Relations, House of Representatives, Washington, DC.

DEAR MR. HAMILTON: I ask your support for

full funding of the Administration’s FY96

budget request for the critically important

International Military Education and Training (IMET) program.
E 960 CONGRESSIONAL RECORD — Extensions of Remarks May 9, 1995

I am sensitive to the austere budget environment, but believe that less than full funding will make it virtually impossible to conduct a viable worldwide IMET program responsive to the changing international situation. Our modest, but essential, $39.8M request will request will reach more than 3,500

personnel from over 100 countries. It will enhance friends and allies’ defense professionalism, strengthen their own training capabilities, and give us access and influence.

The IMET program directly supports the

United States’ National Security and National Military Strategies. Our regional

Commanders in Chief forcefully and repeatedly emphasize the program’s centrality to

the success of their regional security strategies.

While the FY96 request may appear to be a

significant expansion of the program, in reality it would simply return IMET closer to

traditional funding levels. From FY88

through FY93, annual IMET appropriations

ranged from $47.4M to $42.5M. Then, in FY94,

funding was precipitously cut in half, to

$21.25M, with only a modest recovery to

$25.5M in FY95.

Implementing the IMET program within

dramatically lower funding levels of the past

two years has been very difficult. Since

FY91, our overriding national interest in the

promotion and expansion of democracy

around the world has required us to initiate

IMET programs with 28 new and emerging

democracies, primarily in Central Europe

and the Newly Independent States. FY94–95

funding levels compelled us to curtail these

new programs’ growth, eliminate some traditional programs, and slash many more, particularly in Latin America, Asia, and Africa.

Moreover, inflation and a smaller pool of

U.S. students have significantly increased

training costs for foreign students, reducing

each IMET dollar’s purchasing power. For

example, the Army War College now costs

$14,498 per student, vice $11,429 in FY93.

While we seek to return close to, though

still below, the FY93 funding level, it is important to understand we are not simply returning to the earlier program. Important,

positive changes have been made to the program’s content and focus over the past two

years. IMET has been tightly focused on professional military education and Expanded

IMET (E–IMET). High cost education, such

as pilot training, has been eliminated. The

technical training that is still supported is

focused on ‘‘training the trainer’’ so that

countries can assume more responsibility for

their own equipment-oriented instruction.

Proposed FY96 funding for new democracies

is 160 percent higher than in FY93, while

funding for traditional programs is 25 percent less.

If we are to build upon our investments in

the new and emerging democracies, maintain

support for countries important to Middle

East peace, and restore some of the funding

for other traditional programs important to

our regional strategies, the FY96 IMET request needs to be fully funded. For the Defense Department, IMET is critically important. I would be pleased to discuss these issues with you, and greatly appreciate your

support for this important program.

Sincerely yours,

Walter B. Slocombe.

HONORING DR. ED WAYBURN

HON. NANCY PELOSI OF CALIFORNIA

IN THE HOUSE OF REPRESENTATIVES

Tuesday, May 9, 1995

Ms. PELOSI. Mr. Speaker, I rise today to

recognize the achievements of Dr. Edgar

Wayburn and to congratulate him on receiving

the 1995 Albert Schweitzer Prize for Humanitarianism. In his illustrious career, Ed has

achieved distinction as a physician, environmentalist, and humanitarian. He is a worthy

recipient of this award and I join his friends

and colleagues in congratulating him.

Many people have described Ed as the

present day incarnation of John Muir. This is

not only an accurate description, but one

which complements the legacy of Mr. Muir

himself. During his 50 years of service with

the Sierra Club, Ed was responsible for over

103 million acres of public lands in the United

States being designated as protected areas.

These lands included portions of the Redwood

National Park, the Golden Gate/Point Reyes

region, and vast tracts in Alaska. Their protected status is a tribute to Ed’s tireless energy and his lifetime commitment to the preservation of our Nation’s wild lands.

On behalf of the millions of Americans who

seek respite in these natural sanctuaries, I salute you Ed and wish you and Peggy the best

in the years to come.

TRIBUTE TO MEDICAL GROUP

fMISSIONS

HON. BILL BAKER OF CALIFORNIA

IN THE HOUSE OF REPRESENTATIVES

Tuesday, May 9, 1995

Mr. BAKER of California. Mr. Speaker, recently a physician from my district, Dr. Neil

Wilson of Orinda, traveled to Ecuador for 2

weeks to help Indians in three Andean villages. He went with a group called Medical

Group Missions, a nondenominational association designed to provide assistance to needy

people worldwide.

The trip was put together by nurse Diana

Bennett, with whom Dr. Wilson had served on

the staff of Mt. Diablo Hospital.

As related by Dorothy Bowen in an article in

‘‘The Contra Costa Sun,’’ Dr. Wilson in 1993

journeyed to Zimbabwe, treating AIDS patients, living in cement block houses and working with serious ill patients.

This year he traveled to South America. In

describing his trip to Ecuador, Dr. Wilson said:

We represent Jesus and His teaching and

also our country * * *. The greatest gift was

from them to us. They are beautiful people

who have the courage to carry on day after

day. It’s hard to complain about my life

after I get home.

It’s an honor for me to recognize Dr. Wilson,

Diana Bennett and the team that traveled to

Ecuador. The work of these outstanding Californians reminds each of us the value of selfless service. I am pleased to recognize them

today in the CONGRESSIONAL RECORD.

KILDEE HONORS VFW POST NO.

4087

HON. DALE E. KILDEE OF MICHIGAN

IN THE HOUSE OF REPRESENTATIVES

Tuesday, May 9, 1995

Mr. KILDEE. Mr. Speaker, it is an honor for

me to rise before you today to pay tribute to

the Veterans of Foreign Wars Post No. 4087.

VFW Post No. 4087 celebrated its 50th anniversary on April 29, 1995 at their beautiful facility that is located in my district in Davison,

MI.

VFW Post No. 4087 boasts one of the largest memberships in the State of Michigan,

with over 1300 members. The officers and

members of VFW Post No. 4087 are known

throughout the community for their charitable

work on behalf of children. VFW Post No.

4087 is a major supporter of the VFW National

Home, which has provided care to the children

and grandchildren of America’s veterans since

1925. VFW Post No. 4087 has also been an

active supporter of Little League Baseball in

our community, helping to provide equipment

and uniforms so that young people will have

the opportunity to play baseball. VFW Post

No. 4087 has also been an energetic supporter of the Boy Scouts of America, playing

host to a local Boy Scout troop.

VFW Post No. 4087 has played a key role

in providing much needed medical equipment

to residents of the community. The generosity

of the members of Post No. 4087 have assured wheelchairs and hospital beds for those

who might have otherwise gone without these

essential items. Members of VFW Post No.

4087 frequently contribute their time, and travel many miles, to the nearest Veterans Hospital. The visits have helped to cheer and

comfort these veterans who are sick and infirm. Many times through the years the Color

Guards and the Firing Squad of Post No. 4087

have participated in events honoring our country. Their reputation precedes them. This has

resulted in many invitations to attend parades

and various functions in other communities,

adding a touch of class and dignity to whatever event they might attend.

Mr. Speaker, VFW Post No. 4087 has provided a dignified home to the bronze plaques

that honor those in our area who served in

World War II. The plagues were formerly

housed in the Industrial Mutual Association

Auditorium but needed new home when that

auditorium was discontinued. I am particularly

pleased to read on these plaques the name of

my brother, Kenneth Kildee, who served our

country in both World War II and the Korean

War.

Mr. Speaker, it is with great pride that I

stand before you today, asking you and my

fellow Members of Congress to honor the Veterans of Foreign Wars Post No. 4087. For 50

years they have stood firmly to their commitment to this Nation. Their dedication to protecting and promoting the enhancement of the

human dignity of all Americans serves as inspiration to the entire community.