E 1198 CONGRESSIONAL RECORD — Extensions of Remarks June 8, 1995

year, or 46 percent of the premiums, from the

SAIF. As the percentage of premiums paying

the FICO obligation continues to increase, the

capitalization of the SAIF slows. Without corrective legislation, the SAIF may never capitalize, putting the taxpayer at risk.

In February 1995, the Federal Housing Finance Board noted that thrifts are unlikely to

meet the FICO interest payments through their

maturity. Price Waterhouse, FICO’s outside

auditor, and GAO have reported that if the assessment base continues to shrink a FICO default will occur by the year 2000.

The portion of the SAIF deposit base available to pay the FICO obligation has declined

at an annual rate of 10 percent because insurance premiums paid by so-called Oakar and

Sasser banks cannot be used to pay the FICO

obligation. An Oakar bank is a BIF member

that has acquired a thrift and therefore pays

into the BIF and the SAIF. A Sasser institution

had a savings association charter and has

converted to either a commercial bank or

State savings bank. A Sasser bank remains a

SAIF member.

The SAIF is grossly undercapitalized. Currently, the SAIF has $2 billion in reserves

backing up approximately $693 billion of insured deposits. This is about 28 cents for

every $100 of insured deposits which is far

below the Congressionally mandated reserve

ratio of $1.25 per $100. In order to meet the

designated reserve ratio the SAIF needs approximately $8.5 billion, an additional $6.5 billion to its reserves.

According to Jonathan Fiechter, the Acting

Director of the Office of Thrift Supervision,

‘‘The SAIF is weak * * * A sudden economic

downturn, a weakness in a particular real estate market, or unexpected stress on the deposit insurance system could overwhelm the

thinly capitalized SAIF and render it insolvent.’’

An undercapitalized SAIF puts the taxpayer

at risk. On June 30 of this year the RTC will

no longer be responsible for resolving failed

thrifts. This means that losses in excess of

SAIF reserves must be covered by the taxpayer.

According to the FDIC, problem thrifts currently hold $31 billion in assets and the SAIF

only has $2 billion in reserves. This is simply

not enough because the failure of one of the

large problem thrifts or a combination of small

problem thrifts could deplete the reserves of

the SAIF and leave the taxpayer holding the

bag, again.

Additionally, even if the SAIF becomes fully

capitalized, the OTS believes that the fund will

not be sound. A key ingredient to a sound insurance fund is size. The fund must be large

enough to spread risk and absorb a series of

simultaneous losses of at least moderate size.

Since the fund is much smaller than Congress

anticipated due to the faulty assumptions, the

SAIF fails to meet the basic standards of size

and diversity.

This issue must be addressed now. The

Federal Deposit Insurance Amendments of

1995, protects the taxpayer from footing the

bill resulting from another savings and loan fiasco.

THE ARMS CONTROL AND

DISARMAMENT AGENCY

HON. JOHN JOSEPH MOAKLEY OF MASSACHUSETTS

IN THE HOUSE OF REPRESENTATIVES

Wednesday, June 7, 1995

Mr. MOAKLEY. Mr. Speaker, I want to

share with my colleagues an editorial recently

published in the Boston Globe which highlights

the impact of legislation pending before the

House and Senate which would fold the U.S.

Agency for International Development, the

United States Information Agency and the

Arms Control and Disarmament Agency into

the State Department. I think that the Globe

makes a very strong case for allowing the

Arms Control and Disarmament Agency to retain its current status as an independent agency.

THE MASOCHISM OF CHAIRMAN HELMS

All other systems are worse than democracy, Winston Churchill once observed. But

there are moments when it is salutary to remember that Churchill also recognized that

democracy can look plenty bad. This is one

of those moments.

Grandstanding, demagoguery and perversity: These are some of the qualities on display in congressional attempts to restructure and cut funding for agencies that carry

out US foreign policy.

Though budgets of these agencies should be

scrutinized for economies and pruned accordingly, the legislation initiated by the chairman of the Senate Foreign Relations Committee, Sen. Jesse Helms, is composed of

measures that would, if implemented, do

grave harm to US interests and to millions

of people around the world.

In a spirit of score-settling, Helms, a North

Carolina Republican, and other conservatives in Congress have been truffling the

House and Senate foreign aid bills with irresponsible provisions pertaining to America’s

lost sovereignty over the Panama Canal and

abortion in China. In a hamhanded manner,

they have also been seeking to meddle in the

Clinton administration’s delicate negotiations to make North Korea abandon its nuclear weapons program without having to

bomb Pyongyang’s cooling ponds. The posturing of Helms and his emulators in the

House, if judged by its likely effects,

amounts to a show of unwitting masochism.

Of three independent agencies the Helms

bill would absorb into the State Department—the US Agency for International Development, the US Information Agency and

the Arms Control and Disarmament Agency—the strongest case for preserved independence belongs to the arms control agency. Not only does this lean, inexpensive

agency have the most impressive record of

achievements and the most fateful missions

in the aftermath of the Cold War, it also

owes its success to its status as a separate,

specialized entity.

The agency has saved taxpayers billions of

dollars and enhanced US security because it

has been able to offer advice on policy directly to the secretary of state and the president. Its expert judgments on Pakistan’s nuclear weapons capability or on the proper interpretation of the Anti-Ballistic Missile

Treaty, for example, did not have to be

trimmed or inverted to comply with the parochial bureaucratic interests of the Departments of State and Defense.

Without the independence of the Arms

Control and Disarmament Agency, the other

national security bureaucracies would hardly have pursued the banning of the Soviet

Union’s dangerous and destabilizing SS–18,

an intercontinental ballistic missile with

multiple warheads. Nor would the United

States be on the road to a comprehensive nuclear test ban treaty and a verifiable Biological Weapons Convention. If the arms control agency were folded into the State Department, as Helms proposes, its decisive,

expert influence on crucial issues of national

security would inevitably be diluted. The

loss would be incalculable.

fTHE PTA

HON. BENJAMIN L. CARDIN OF MARYLAND

IN THE HOUSE OF REPRESENTATIVES

Wednesday, June 7, 1995

Mr. CARDIN. Mr. Speaker, I rise today on

behalf of Parkville Middle School in my district.

I received a large notebook of letters and artwork from Parkville students, requesting a

commemorative stamp in honor of the Parent

Teacher Association [PTA]’s 100th anniversary

in June 1996. Most of us have been PTA

members ourselves and we know that this outstanding organization has dedicated itself to

strengthening the family-school-community

partnership which is essential to quality education.

The PTA has an impressive record. It has

been involved in working toward achieving

better schools, healthier children, and stronger

families for out Nation’s future. Over the years,

it has conducted nationwide campaigns to promote awareness on such issues as drug and

alcohol abuse, protection of the environment,

teacher appreciation, safety, AIDS, and the

promotion of positive self-images.

In 1912, the PTA sponsored the first hotlunch programs in our schools. In 1941, it initiated a nationwide school-lunch program. The

PTA is responsible for the organization of field

trips, launching health information projects,

and sponsoring events which create a more

well-rounded, quality educational experience.

I would like to read to you a couple of reasons these students want to commemorate

the PTA:

Also in 1976 they began a nation wide

project to combat violence on television.

This was needed so that children will behave

in play and in class without violence. Remember, children can not vote what they

want, that’s what the PTA does.

I remember when at my old school Villa

Cresta Elementary and my big fifth grade

trip was coming up, a thrilling three days at

Camp Wo-Me-To. The Villa Cresta PTA paid

the rent fee for each cabin so all us fifth

graders only had to pay for food and activities such as rock climbing and stream study.

The camp fee was able to let low income

families pay for their child’s trip. Do you remember when you were a kid in especially

elementary school or even middle or high

school when the PTA did something for your

school like a Fun Fest or Fiesta? Well I do

remember.

I believe that the PTA should get a commemorative stamp in honor of the National

PTA. My personal experience with the PTA

is that in my old Elementary School, Fullerton, our PTA made a day for us kids. The

day was called Fun Fest Day.

I am sure that many of you have received

similar letters from your constituents. I have

written to the National Stamp Advisory Committee expressing my support for commemorating the PTA’s 100th anniversary next year.
June 8, 1995 CONGRESSIONAL RECORD — Extensions of Remarks E 1199

I encourage my colleagues to support this effort as well.

THE SACRED HEART CATHOLIC

CHURCH CELEBRATES 100 YEARS

fIN BLUEFIELD

HON. NICK J. RAHALL II OF WEST VIRGINIA

IN THE HOUSE OF REPRESENTATIVES

Wednesday, June 7, 1995

Mr. RAHALL. Mr. Speaker, 1995 is a memorable year for the residents of Bluefield, WV.

For it was 100 years ago that the Sacred

Heart Catholic Church was dedicated on Mercer Street. The theme of this years celebration

is ‘‘Remember, Rejoice, and Renew.’’

Late in the 19th century, the coal industry,

the railroad, and commercial trade brought numerous Catholics to southeastern West Virginia. The first Catholic service in Bluefield

took place on Princeton Avenue, when the

Reverened John McBride came on horseback

from Wytheville, VA, to perform the ceremony.

Mr. Speaker, the first Catholic service in Bluefield even predated the incorporation of the

city of Bluefield, WV.

Five years later, in 1984, the Most Reverend P.D. Donahue, Bishop of the Diocese of

Wheeling, WV, appointed the Reverend Emile

Olivier the pastor of the growing Catholic community in Bluefield. Through Reverend

Olivier’s tutelage and the hard work of the parish, the Sacred Heart Church was dedicated

on Mercer Street in Bluefield on October 27,

1895. The church continued to grow and was

responsible for the creation of other Catholic

communities in Powhatan, Gary, Welch,

Williamson, Princeton, and Our Lady of

Lourdes in Bluefield.

Mr. Speaker, the Sacred Heart Church in

1995, as in 1895, is a family of Christians

whose mission it is to bring about the Kingdom of God on Earth by their worship,

evangelization, and strengthening of relationships and service to church and community. It

is with great honor that I help to honor the

centennial year of Bluefield’s Sacred Heart

Church. Remember, Rejoice, and Renew.

UNEMPLOYMENT COMPENSATION

fHON. PETER J. VISCLOSKY OF INDIANA

IN THE HOUSE OF REPRESENTATIVES

Wednesday, June 7, 1995

Mr. VISCLOSKY. Mr. Speaker, as the 104th

Congress considers changes to the unemployment compensation [UC] system, I would like

to bring to your attention a recent speech by

Leon Lynch, Vice President of the United

Steelworkers of America. Mr. Lynch’s views,

which focus on the unemployment insurance

reforms recommended by the Advisory Council on Unemployment Compensation, were delivered to the National Foundation for Unemployment Compensation and Workers Compensation last month in Atlanta. These remarks provide an important viewpoint that

should become part of the debate over UC reform.

REMARKS OF LEON LYNCH TO THE NATIONAL

FOUNDATION FOR UNEMPLOYMENT COMPENSATION AND WORKERS COMPENSATION

The focus of my presentation today is unemployment insurance reforms recommended by the Advisory Council on Unemployment Compensation. To date, the

Council has issued two reports containing a

number of recommendations to improve our

unemployment insurance program. The

Council’s major recommendations are focused on bringing the unemployment insurance system more into line with the realities

of the 1990s economy and labor market. I believe they deserve the support of business

and labor, and I want to explain why.

Since I joined the Advisory Council only

late last summer, I did not directly participate in the adoption of the recommendations

of the first report, which dealt mostly with

the reform of the extended Benefits (EB) program. The second Council report, released in

February 1995, focused broadly on the regular UI program. I was on board last year and

I voted in favor of the recommendations of

that report. The third and final report, due

in February 1996, will focus on the administrative aspects of UI.

In all honesty, I am continuing to learn

about our unemployment compensation system from the testimony presented by witnesses at Advisory Council meetings, the

briefing papers prepared by Advisory Council

staff, discussions among the Advisory Council, and meetings such as this. I have enjoyed

my participation in the work of the Advisory

Council and I hope to work for the adoption

of the Council’s recommendations at both

the federal and state levels.

Having admitted that I am not an unemployment insurance expert, however, should

not be taken as less than my full endorsement of the recommendations of the Advisory Council to date. You don’t need a Ph.D

to understand that our UI system is neither

serving the needs of unemployed workers nor

employers as well as it should.

As a trade union leader, I have long understood the terrible human impact of the defects in our UI system. These defects are

much clearer to close observers. If you

haven’t done so, I encourage you to review

the Advisory Council reports. They contain

many more facts supporting the Council’s

recommendations than I can cover today. I

hope you will take the time to review the reports since even those who regularly deal

with UI will find a fair and impartial review

of all aspects of the UI program.

I often hear employer representatives

claim that our UI system isn’t broken. I

challenge you to read the reports with an

open mind and come away with anything but

a conclusion that, in key respects, our UI

system can be improved and made to work

better for all interested parties.

I want to begin my discussion by pointing

out some of the factual findings from the

February 1995 Advisory Council report. Many

of you may be generally aware of UI developments, but I think these particular findings

deserve mention.

First, there’s been a serious erosion in the

number of unemployed workers getting UI

benefits. The ratio of insured unemployed

workers (those that file a claim and have

monetary eligibility) and the totally unemployed (those who are unemployed and actively seeking work) is widely used as an indicator of how many unemployed workers

get UI benefits. In 1993, 32 of the 52 jurisdictions had an IU/TU ratio under 33 percent.

Twelve states had a ratio of less than 25 percent. South Dakota had a ratio of 15.3 percent. In other words, the ratio of unemployed workers getting UI benefits was a

third or less in a majority of the states, and

less than 2 in 10 in South Dakota.

Complaints about the declining proportion

of unemployed workers getting UI have not

been met with sympathy by employers. However, even so-called ‘‘job losers’’ are no

longer getting UI benefits at past levels. Job

losers fall in the unemployed workers category which is closest to the involuntarily

unemployed workers who are supposed to get

UI—even according to most employers.

The 1995 report finds a steep decline in receipt of UI benefits in the ‘‘job losers’’ category. In fact, the ratio of UI claimants to

job losers has fallen nearly forty percent

since 1970.

The other reason cited for the reduced

number of unemployed workers getting UI

benefits is that eligible workers apparently

aren’t applying. While the research on nonapplicants is not as clear as we might wish,

on a practical level there are many things we

can do to encourage potentially eligible UI

claimants to apply for benefits. These include providing better UI claims information

to workers at the time of layoff, permitting

electronic and telephone claims, prohibiting

employer retaliation, and continuing to improve the customer service aspects of agency

claims handling. I believe that the Advisory

Council will consider some of these administrative matters in the coming year.

Analysts disagree about why the ratio of

insured unemployed workers to totally unemployed workers has fallen, but all recent

studies show that legislative restrictions on

UI eligibility and disqualifications have contributed. The only argument among the experts is the weight assigned to federal and

state UI law changes as compared to other

factors.

In fact, in most states, there are dollar estimates made on the amount of money to be

‘‘saved’’ when legislative restrictions on UI

are passed. Since many of you have pushed

for this so-called ‘‘cost saving’’ legislation to

reduce the number of UI benefits recipients

in your states, we should have few claims of

innocence in this audience. We in organized

labor are past the point of needing more

studies concerning the reasons for the decline in receipt of UI benefits. We expect

positive action to reverse the decline.

Often, when government is slow to act or

fails to act, we have to looked for solutions

elsewhere. That’s what we’ve done in the

Steelworkers—in this and other areas, such

as employment security, pensions and health

care.

For the unemployed, we have negotiated

supplemental unemployment benefits—commonly known as SUB. The fair-minded employers we have contracts with recognize

that unemployment compensation by itself—

where it exists—is nowhere near sufficient to

keep a family going.

With SUB, however, circumstances improve substantially. When one of our members is laid off, SUB will provide benefits

ranging from 70 percent to 90 percent of the

worker’s wages. And it provides these benefits for two years.

When the worker is receiving UC, that

amount is deducted from the SUB payment.

When UC expires, SUB makes up the difference. The result is that no matter what

the level of UC is, the worker receives the

same percentage of wages.

The rationale is simple: Workers should

not suffer for events over which they have no

control. SUB payments help them to survive

until they are recalled to their former jobs,

or until they find new employment.

Even though we are proud of what we have

done in this area, we feel this is an area that

is properly the government’s responsibility.

Is any that with full knowledge of the atmosphere in Washington—an atmosphere

with which I disagree completely. But that’s

a different story for a different time.

The problem we are dealing with today has

its own import, and I’m pleased that the Advisory Council report this year makes specific recommendations to reverse the decline