A bill to amend the Internal Revenue Code of 1986 to exclude from unrelated business taxable income the gain or loss on the sale or exchange of certain brownfield sites, and for other purposes.

Mr. President, the press and some in this body have unfairly defined this legislation as a ``porky'' tax bill. There have been articles in all the major papers following that line of attack.

One Member of the leadership on the other side said on April 20 he is worried that the sheer amount of tax breaks in the bill could end up impeding its progress. ``They've loaded this truck up and the tires are about to explode,'' he said, calling the efforts to pile sweeteners onto the bill ``haphazard.''

That Member went on and cautioned, ``any time you load it up as vigorously as they have, you create as many problems as you solve.''

Well, let's talk about the so-called ``porky'' provisions in this bill. It is a bit irritating that the complaints come from folks who say they support the bill. Every provision in the bill is the result of a joint recommendation of myself and Senator Baucus. We responded to requests from every Senator, including those who are critical of the bill.

I guess I would ask anyone, including the critics a question. That question would be, ``Are you willing to throw aside the provision you asked us to put in the bill?'' Are you willing to go back to your constituents and tell them you don't think their interest has merit?

I don't think I will hear any of the critics respond yes. I haven't had any takers yet and don't think I will by the time the bill's done.

Let's look at the bigger picture.

This bill has about $60 billion dedicated to the replacement of the FSC/ETI benefit. This bill has another $40 billion dedicated to international tax reforms to make our domestic manufacturers more competitive overseas.

There is another roughly $20 billion in domestic manufacturing incentives, including the research and development tax credit.

Some of that package deals with issues such as the unfair tax on bows and arrows which has a domestic job impact. There's another $8 billion dealing with the extenders, including a permanent tax credit directed at hiring hard-to-place workers. There's another $10 billion dealing with housing, rural areas, hard hit urban areas, Indian tribes, and other sectors of our economy. We're directing resources at economic development, plain and simple.

Finally, there's another almost $20 billion for the bipartisan Finance Committee energy incentives package which has passed the Senate twice.

All of this is offset with corporate loophole closers and measures aimed at curtailing tax shelters. The dollars involved in the much- criticized provisions are very small--perhaps less than 3 percent of the total cost of the bill. Members and the ``big city'' press need to keep their eyes on the ball: ending the euro tax and helping domestic manufacturers.

Senator Daniel Patrick Moynihan responded to the New York Times regarding the 1997 bipartisan tax relief bill. The press had made much of a few narrow provisions, such as a provision to provide tax relief for parachuter trainees. There is an excise tax on air travel. The tax is meant to apply to commercial travel. Read literally, the tax applied to parachute training flights even though those flights are not commercial transportation.

Senator Moynihan described the Finance Committee provisions that were designed to deal with these inequities this way: ``You will never see representative government more specific than in the Senate Finance Committee . . . It's a form of accommodation, and in between you think about the national interest, because there are things we all share.''

Like the 1997 tax relief bill, the bill before us includes a number of provisions that, at face value, may seem to be trivial. It is important to keep in mind, however, that each of these provisions was added in response to specific requests from fellow Senators who are looking out for the vital interests of their constituents. That is what representative government is all about.

The Federal tax system is vast. It touches virtually every aspect of life. From birth to grave. There are excise taxes to fund our airports and highways. There is a corporate and individual income tax to fund defense and general welfare. There are payroll taxes to fund Social Security and Medicare benefits. There is an unemployment payroll tax to fund unemployment benefits.

Now, when you go through this bill, you can find some provisions that involve animal manure or windmills. If you don't look beyond the superficial humor of the subject matter, you can have a lot of fun. Of course, big city papers like to make fun of these rural provisions. I always have to remind these folks that food doesn't grow in supermarkets. It grows on farms. The byproducts of those farms can give us clean energy. What's so bad about that?

Part of what we hear out in the heartland is get us some insurance that jobs are coming back. Especially, they say, in the area of manufacturing. The economy is coming back. The U.S. economy, the mightiest in the history of the planet, is adding jobs at a healthy rate. The people want an insurance policy.

Growing jobs in our diverse economy is not a cookie cutter exercise. This bill has general policies for the most part. Some are proactive, like the manufacturing deduction. Others are reactive, like responding to the Euro tax. Still others are particular. They may relate to small isolated communities or a single industry. When you take a look you'll find a common thread through nearly all of them: job creation.

That is what this bill is all about. Creating jobs, plain and simple.

Mr. President, I ask unanimous consent that all time be yielded.

I ask for the yeas and nays.

Mr. President, I ask unanimous consent that following the disposition of the Hollings amendment, the next amendments to be offered are the following in the order provided: Senator Kyl, No. 3127, 60 minutes equally divided; Senator Landrieu, 60 minutes equally divided; Senator Levin, 20 minutes equally divided; further, that there be no second-degree amendments in order to the amendments prior to the vote.

Mr. President, I ask unanimous consent that the Senators from Pennsylvania, the senior and the junior Senators, have 5 minutes apiece to discuss something very personal to their State.

Mr. President, I yield myself such time as I might consume.

Senator Hollings asks us to take $39 billion of international reforms and put it towards more domestic manufacturing relief.

I have told my colleagues so many times I shouldn't have to repeat it. But this bill is all about encouraging domestic manufacturing.

The level of spending in this bill is already over three to one in favor of domestic issues. We dedicate over $75 billion to domestic manufacturing relief.

FSC/ETI currently benefits manufacturing by $50 billion. Obviously, you can see this bill is a much stronger

commitment to manufacturing than the old FSC/ETI bill we are replacing. We have already accelerated the phase-in of the manufacturing tax rate. That is thanks to a bipartisan amendment by Senator Bunning and Senator Stabenow. We have modified the transition rules to provide stronger relief in transition for manufacturing companies which presently get the old FSC/ETI benefits this bill replaces.

I hope it is easy for my colleagues to conclude that there is very little to be gained by the amendment proposed by the Senator from South Carolina.

It is time we had our rational discussion of the international reforms in this JOBS bill because we have been spending so much time on nongermane amendments. The amendment before us is not one of those nongermane amendments but it has kept us from discussing so much which is very basic with this legislation. Maybe people think there is no reason to discuss it because this bill was built from the ground up in a bipartisan way, coming out of our committee on a very overwhelming vote of 9 to 2.

I think Members will be surprised to learn that some of our international tax rules actually harm the domestic operations of U.S. companies. When foreign income is brought home, the United States allows an offset against U.S. tax for any foreign taxes paid on that income. That is why it is called the foreign tax credit. Foreign tax credits ensure that we do not double tax foreign earnings. Accordingly, the foreign tax credit plays a vital role in preserving the international competitiveness of our companies.

In the Tax Reform Act of 1986, Congress enacted a provision that causes foreign tax credits to expire every 5 years. That was done for a reason that is not very well justified because it is often used around here--to make that 1986 tax bill revenue neutral.

Some claim this is a good rule because it forces foreign earnings to be repatriated within 5 years. But that conclusion does not comport with reality. The reason companies don't bring back foreign earnings is because of double taxation. That is what occurs with foreign tax credits expiring.

I will give you an example. A U.S. company sets up new operations in Poland to serve Eastern Europe at this time when Eastern Europe is being integrated with the European Union. That happened last week. For the next 8 years in this hypothetical--quite reasonably--it takes all of the capital generated by the Polish subsidiary to expand the company's presence in Eastern Europe. At the end of 8 years, it finally has some extra cash which it can send home.

What happens? It discovers the taxes it paid to Poland from years 1 through 3 are no longer eligible for the foreign tax credit because they are more than 5 years old. The Polish tax rate is 28 percent. This means if a company repatriates those early earnings, it will pay combined Polish and U.S. taxes of 63 percent. It is really almost confiscatory. That means, of course, the money is not coming home for reinvestment in the United States. We lose the benefit.

If those early tax credits had not expired, the United States would actually pick up some tax revenues. The subsidiary would owe the difference between the 28-percent Polish rate and the 35-percent U.S. rate. That happens to be a gain of 7 percentage points of taxation into our U.S. Treasury from that company.

To ensure that double taxation no longer occurs, our JOBS bill extends the carry-forward period for foreign tax credits from 5 years to 20 years. Twenty years is the amount of time companies have to utilize net operating losses. It is only appropriate, then, that the key mechanism for avoiding double taxation should have the same shelf life.

Our JOBS bill mostly fixes problems in the foreign tax credit area. The only time a company benefits from a foreign tax credit is when it brings that money home.

To repeat a very elementary point, foreign tax credits are a benefit to that company only when that company brings foreign earnings home for reinvestment. When the credit expires, this impedes capital mobility because of double taxation, and it blocks reinvestment of foreign earnings in the United States.

Another example of guaranteed double taxation is our rule that only allows 90 percent of a company's AMT to be offset with foreign tax credits. This rule guarantees that the company will be double taxed on 10 percent of the alternative minimum tax. The JOBS bill allows what is common sense--a 100-percent offset.

To give you a real-life example of how these two changes will help U.S. operations make investments in America and create jobs in America, the largest American manufacturer in this example of a particular automobile part is bringing dividends back from its profitable foreign operations to cover losses in its U.S. operations. Their U.S. losses, when combined with the foreign dividends to fund the U.S. operations, has created huge unused foreign tax credits with a 5-year expiration period. Because of their ongoing U.S. losses, it is unlikely these credits will be used within those 5 years.

This company also has a growing alternative minimum tax because their foreign tax credits can only be offset by 95 percent of their AMT liability.

The limit is creating an annual alternative minimum tax liability because the additional 10 percent of the AMT cannot be offset with the foreign taxes that have already been paid on that income. The company is guaranteed to incur double tax on foreign earnings brought back to support the U.S. operation. This may be unbelievable to anyone listening, but this is actually happening under U.S. tax laws.

The company's foreign competitors in the United States are not equally hindered in the same way by the 90-percent alternative minimum tax, foreign tax credit limit. If a foreign competitor loses money, they get a 20-year U.S. net operating loss compared to the 5-year foreign tax credit carryforward. Our Tax Code, then, is harming a company that has operations in all 50 States and employs 38,000 people in 16 different manufacturing facilities.

This example shows why the 20-year foreign tax credit carryforward and the repeal of the 90-percent AMT foreign tax credit limits are in this very important jobs in manufacturing bill. The current rules harm U.S. operations and we need to fix it.

I also have some comments on another provision, the interest allocation provisions, to give another example of how our international rules harm U.S. operations. As I said earlier, foreign tax credits can only offset foreign income; they cannot offset income from U.S. activities. In determining the amount of foreign income, certain U.S. expenses, such as interest expense, are partially allocated to foreign income. This is used in calculating the amount of foreign tax credit a U.S. company is allowed to claim on its return. The United States arbitrarily allocates U.S. interest expense to foreign earnings, but the foreign government does not recognize that interest expense for its tax purposes. It is as if the interest expense somehow disappears into the clear air.

The interest allocation rules artificially reduce the foreign tax credits that can be used, and when the credits cannot be used the credits expire. It may surprise many Senators to hear that our interest allocation rules create a competitive disadvantage for U.S. multinationals that try to expand their operations into the United States and maybe do not get expanded here.

A portion of the interest expense on debt incurred to invest in the United States is allocated to foreign source income. A foreign corporation making the same U.S. investment is not impacted by these interest allocation rules. It gets to fully deduct the interest costs within the United States and thereby has a lower cost of capital than a U.S. company making that same investment. Therefore, the interest allocation rules actually work against U.S. multinational companies that invest in the United States. It has put some at a competitive disadvantage with foreign companies operating in the United States. I hope this is very clear, that this is not the right thing for the U.S. Tax Code to do to foreign manufacturers. Why should we encourage international competition in the United States against our own domestic manufacturer?

We have Senators demonizing the JOBS bill international provisions. This gives me an opportunity to emphasize once again how anything gets done in the Senate--only in a bipartisan way. This is a bipartisan bill.

Democrats and Republicans agree to everything in this bill, and the international provisions we agreed to were provisions that actually help U.S. job creation and help our own economic growth.

I ask the Senate to support Senator Baucus and this Senator in this bipartisan bill. I hope Members will not buy the distortion. None of the international changes caused jobs to go offshore. Just the opposite. These were selected to bring the foreign money back for real investment in the United States, creating jobs in the United States, creating manufacturing jobs in the United States because this is a manufacturing bill. These changes level the playing field between the United States and foreign companies operating inside the United States. They were specifically selected because they tend to help U.S.-based manufacturers more than other sectors of our economy.

The entire JOBS bill is geared towards creating jobs in manufacturing--jobs in the United States, not overseas--because American manufacturing overseas does not benefit from this bill.

It is quite simple. These are the only kinds of international provisions we could ever get bipartisan agreement on because it is so obvious. It is so obvious, it came 19-2 out of our committee. We should not allow international rules to remain in place if they harm U.S. operation. Once again, we are talking about commonsense international tax reform. In fact, if anyone wants to condemn this bill, it is that maybe we do not do anything radical in this bill. We just fix problems. We fix problems with current law. We fix problems with current law that happens to be harming U.S. domestic interests.

So I ask Members to vote against the amendment of the distinguished Senator from South Carolina.

I yield the floor.

Mr. President, I say to the Senator, if you do not have any more time, then I will yield back my time and we can then vote.

Is that OK?

Mr. President, I yield back all time on this side.

Mr. President, I move to reconsider the vote.

Mr. President, I ask unanimous consent that the Senator from Texas, Mrs. Hutchison, have 2 minutes for an amendment that she wants to offer.

Madam President, I can comment very positively about the motivation behind the amendment, and the good policy of giving equity to people who are called away from jobs and away from family to go to a far-off land to defend America in a war against terrorism and doing it in a way that has never been done for guardsmen and reservists to this extent, I think going back to the Korean war. What we are doing now has not been done for a long period of time.

The Senator from Louisiana needs to be complimented on her efforts to recognize that and, particularly, to recognize that through employers who show very patriotic fervor in cooperating in this whole program.

I can say that very positively about the amendment of the Senator from Louisiana. She is asking me to predict what might happen in conference. It is very difficult to do that. I have a reputation for defending the position of the Senate and working as best I can to work through this. Obviously, I cannot make any promises to the Senator from Louisiana.

I ask unanimous consent Senators Hatch and Pryor be added as cosponsors to the Hutchison amendment.

I move to lay the motions on the table en bloc.

The motions to lay on the table en bloc were agreed to.

I promised the Senator from South Carolina we would have a little colloquy on an issue he was concerned about. Could we do that right now?

I ask the Senator from South Carolina be recognized.

As Chairman of the Senate Finance Committee, I join my colleague from South Carolina in expressing concern about the way in which the Chinese currency is valued. I certainly agree that it is a serious problem that needs to be taken seriously. A fairly valued currency is in China's own long-term interests, and is key for moving to a market driven economy. I was pleased to hear that Secretary Snow was assured that interim steps are being taken and that progress in this area will continue.

I do appreciate the importance of this issue. If we do not see substantial progress toward adoption of a market-based currency valuation system, I would support Senate hearings at the appropriate time.

Mr. President, I would like to thank the Senator from Pennsylvania for his commitment to the Section 29 extension to new coke facilities. Although I am supportive of the provision, the most appropriate time to address it is during the conference. I look forward to working with Senator Santorum and the two Senators from Ohio to include this amendment in the conference report.

privacy

I would be pleased to engage in a colloquy with the Senator from Oregon.

The Senator is correct. It is my intent to urge my colleagues to minimize this penalty in the final bill that is sent to the President for his signature.

income forecast method provision

I am happy to confirm the understanding of the distinguished Senator from Louisiana. The provision was adopted to provide needed clarifications in order to eliminate the uncertainties that have arisen regarding the proper application of the income forecast method. I believe the disputes that have arisen regarding the mechanics of the income forecast formula are extremely unproductive and an inefficient use of both taxpayer and limited tax administration resources. By adopting these clarifications, I believe the committee intended to end any disputes and prevent any further waste of both taxpayer and Government resources in resolving these disputes. Any existing disputes should be resolved expeditiously in a manner consistent with the clarifications included in the bill.

Yes.

I agree with the Senator from Tennessee that such an exception to the ``kiddie tax'' would be

good public policy. I commit to you that my staff will work with the Treasury Department, the Social Security Administration and your staff during conference negotiations to craft language that addresses Mr. Domm's concerns but also contains solid anti-abuse language. My hope is that we could place such language in the final version of S. 1637 or another appropriate tax bill.

Mr. President, I want to assure Senator Lincoln that I will continue to work with her to make sure adequate incentives for LFG are included in any final package from the upcoming House-Senate conference. Her concerns are my concerns as well. She has stated them well and I will devote my best efforts to resolving them as we move forward on discussions and deliberations with the House of Representatives.

car provision

I agree with your concerns, Senator Baucus, and I also am in favor of giving Treasury this expanded authority.

Madam President, Senators Kyl and Nickles say that a lower rate just for manufacturing is ``bad tax policy and is virtually without precedent in our history.''

Well, this is just wrong and the evidence is staring them in the face. FSC/ETI itself is a tax cut for manufacturing. FSC/ETI keeps U.S. manufacturing competitive by lowering tax rates on exports. Manufacturers could lower their rates by 3 to 8 points.

The Joint Committee on Taxation says that 89 percent of all FSC/ETI benefits go to manufacturing companies. The Kyl-Nickles Treasury proposal would take money from FSC/ETI and spread it to other industry sectors.

Kyl-Nickles will be a $50 billion tax increase on manufacturing. It will not send the FSC/ETI repeal money back to manufacturing. It is mathematically impossible for their proposal to work any other way.

We know that tax increases do not create jobs. So why would Senator Kyl and Nickles increase manufacturing taxes by $50 billion?

There are other reasons why we did not go the route of the Kyl- Nickles approach. First, their top-level rate cut would only go to the biggest corporations in America. It would not go to family-held S corporations, partnerships, or smaller corporations.

Under the Finance Committee bill, all manufacturers in America, regardless of size, get a 3-point rate cut, including S corporations and partnerships.

S corporations and partnerships benefit under current FSC/ETI law, so the Kyl-Nickles bill takes a benefit away from them and gives it to large corporations.

Kyl-Nickles claim that a manufacturing tax cut ``penalizes all other U.S. businesses.'' I think just the opposite is true. The manufacturing sector should not be a revenue offset to give investment bankers a tax cut. Kyl-Nickles claim that our definition of manufacturing is too difficult to understand. But the definition we use in the JOBS Act is the same definition used for both FSC and ETI. It covers property that is manufactured, produced, grown or extracted within the United States.

This definition is 20 years old, but suddenly no one understands what it means. We did confirm that manufacturing includes computer software, films, and processed agricultural goods. Kyl-Nickles claim that these are special interest definitions of manufacturing. However, all of these activities qualified as manufacturing under the FSC/ETI rules, which have been in place for 20 years.

We also ensured that farm co-ops get the same benefit that they do under current law.

In response to our energy crisis, we provided that refining oil pulled from American wells would qualify as manufacturing.

They claim it is too difficult to allocate income and expenses in determining the amount of manufacturing income. But for 20 years, Treasury has had administrative pricing rules on its books that tell taxpayers how to allocate expenses in figuring FSCETI benefits. Our JOBS bill grants Treasury broad latitude to revise the cost allocation rules, based on existing tax principles.

Kyl-Nickles also claims that Canada recently gave up a similar manufacturing rate cut because it did not work. This is not correct. For many years, Canada had a special lower rate for their manufacturing sector. Canada created their manufacturing rate cut in reaction to the U.S. creating FSC back in 1982. They reduced their rate on manufacturing so they could stay competitive with the U.S. Canada recently repealed that provision because they reduced all their corporate rates to the lower manufacturing rate.

Canada did not repeal their manufacturing rate cut because of its complications. Canada ended their manufacturing regime because it worked so well, that they extended it to all sectors. But when Canada reduced their overall tax rates, they did not do so at the expense of their manufacturing sector.

We put together a strong bipartisan bill, with a 19-to-2 vote out of committee, that will cut our manufacturing tax rate this very year. There is no purpose in blocking such a strong bipartisan bill. These days, is it rare that we can reach such strong agreement on anything.

Mr. President, the CBO report says the flat corporate rate cut would yield slightly more long-term growth than the JOBS bill. But the reason has nothing to do with our manufacturing tax cut.

CBO says the antitax shelter provisions and Senator Smith's and Senator Ensign's homeland reinvestment provisions are the cause.

CBO says that because we shut down shelters, corporations' taxes won't be as low and, therefore, their long-term growth is not as high.

CBO also concludes that Senators Smith's and Ensign's temporary 1- year rate cut won't help in the long-term.

The CBO concludes that a flat rate cut could be more ``efficient'' than a manufacturing rate cut. So what do they mean by ``efficient''? They said it means that a manufacturing rate cut would cause more capital to flow into the manufacturing sector.

So I have to ask, what is the problem?

I thought tax cuts were designed to increase capital investment. Isn't that what we want for manufacturing?

If we increase taxes on manufacturing, then capital should flow out of the manufacturing sector. Is that what we want?

I urge adoption of the Levin-Coleman modified amendment.

I suggest the absence of a quorum.

Mr. President, I ask unanimous consent to call up amendment No. 3133 and ask for its immediate consideration.

Mr. President, I ask unanimous consent that further reading of the amendment be dispensed with.

Mr. President, I think this is going pretty well now. We expect a vote around 6:30.

I suggest the absence of a quorum.

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

Mr. President, on behalf of Senator Nickles, I call up amendment No. 3040 and send a modification to the desk.

Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.

On this side, too.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Mr. President, I send an amendment to the desk and ask for its immediate consideration.

I ask for consideration of the amendment.

Mr. President, now that this bill has finally passed the Senate, I take the opportunity to thank several people.

First and foremost, I thank Senator Baucus. I am very certain we would not be here without his good work and his cooperation. In fact, as I have said so many times in speeches, this whole effort started when Senator Baucus was chairman of the committee in the last Congress. He held hearings and started this process going. He has not only cooperated and put in good work during this Congress, but it all started under his leadership.

I also need to thank all the other members of the Finance Committee for their time and energy in making this bill a reality. I thank my staff on the Finance Committee: Mark Prater, chief tax counsel, and the other tax counsels, Ed McClellan, Elizabeth Paris, Dean Zerbe, Christy Mistr, and John O'Neill as well as John's predecessor, Diann Howland. These individuals, along with Adam Freed, the staff assistant for the tax team, have been real workhorses for the committee, keeping the lights burning long into the night to make this bill possible.

For the record, as evidence of the work effort, this bill was introduced on the day Hurricane Isabel blew into town. Because of hard work, the markup of the bill occurred in a calm environment.

I also thank the trade staff, particularly Everett Eissenstat, chief Trade Counsel, and his team of David Johanson, Stephen Schaefer, Daniel Shepherdson, and Zach Paulsen. I also thank Carrie Clark who recently left our trade staff. Thanks also needs to be paid to our administrative staff, including Carla Martin, Amber Williams, Geoff Burrell, and Mark Blair. From my personal staff, I thank Sherry Kuntz and Leah Shimp. Also helpful were our Finance Committee press team of Jill Kozeny and Jill Gerber, known around the committee as the ``Jills.'' Lastly, on my side, I thank Kolan Davis and Ted Totman, the Committee's staff director and deputy staff director for riding herd on all this work.

In addition, this bipartisan bill would not have been possible without close work and cooperation at the staff level. I appreciate and thank the minority staff for their good work. I particularly note Russ Sullivan, Democratic Staff Director, as well as Pat Heck, Democratic Chief Tax Counsel, Matt Stokes, Matt Jones, Matt Genasci, Judy Miller, Jon Selib, Liz Leibschutz, Matt Stanton, Dawn Levy, and Anita Horn Rizek. In addition, I thank Tim Punke and his trade team, along with John Angell, Bill Dauster, and Mike Evans, former Deputy Staff Director, for their time and energy.

I extend my thanks also to George Yin and his staff at the Joint Committee on Taxation for providing their extensive knowledge and guidance to this effort. I particularly point out the good work of Ray Beeman, David Noren, and Brian Meighan. Brian recently left Joint Tax for the private sector.

I also thank Acting Assistant Secretary for Tax Policy, Gregory Jenner, and his staff for their assistance on the so-called SILOs tax shelter provision of this bill.

I thank the majority leader, Senator Bill Frist, and his leadership staff for all their assistance. The majority leader backed me and Senator Baucus all the way on this bill. We would not have the result today but for the majority leader's patience, determination, and dedication. It was tough going at times, but he and I knew we would get the right result. From Senator Frist's staff, I thank Lee Rawls, Eric Ueland, Rohit Kumar, and Libby Jarvis.

I also thank our Senate leadership team and their staffs, especially our able whip, Senator McConnell.

Finally, my thanks go to Jim Fransen, Mark Mathiesen, Mark McGunagle, and their capable staff at Legislative Counsel for taking our ideas and drafting them into statutory language.

I would like to tell them all to go home and get a good night's rest because the bill has been a very long time working its way through the Senate.

Now, I urge our friends in the other body to pass a companion bill. Hopefully, when that bill passes the House, our friends in the Senate Democratic leadership will not resist our efforts to go to conference. Every month of delay is another month where the Euro tax ratchets up another percentage point on our products going to Europe.

I thank everyone for their cooperation in allowing us to get to this point this evening. This, of course, is not the final step in the process. The House has

not passed their version of the FSC legislation. I anticipate the House will send a bill to the Senate at some point. When that happens, I hope we will be able to proceed to conference so that we are able to get a final product.

I appreciate the assistance of Senator Baucus throughout this process and hope we will be able to send a bill to committee.

Order Of Procedure

Mr. President, following Senator Baucus's remarks, I ask unanimous consent that the Senate proceed to a period of morning business, with Senators permitted to speak for up to 10 minutes each.

Mr. President, I ask unanimous consent, notwithstanding the adoption of amendment No. 3143, that the modification which is at the desk be agreed to.

Mr. President, I am pleased to join my colleague Senator Inhofe, and my other Senate colleagues in introducing the Brownfield Revitalization Act of 2003. Given the nature of this legislation-- establishing tax incentives to encourage cleanup of environmentally contaminated property across the country--it is appropriate that this be a joint introduction between the Chairman of the Senate Environment and Public Works Committee and the Ranking Member of the Senate Finance Committee. This legislation is bipartisan, but it is also bicameral. A companion bill was introduced earlier this week in the House of Representatives by Congresswoman Nancy Johnson and Congressman Xavier Becerra.

Across the United States, environmentally contaminated sites endanger public health, impede economic development, and negatively impact tax rolls. The United States has an estimated 1,000,000 such properties scattered across our inner cities and rural areas alike.

In my own State of Montana, there are well over 5,000 such sites. This may seem surprising for a state like Montana that is relatively undeveloped and pristine. But we are by no means unaffected by the scourge of environmental contamination. In addition to contamination caused by leaking underground storage tanks and contamination caused by other light industries, Montana also has been impacted by significant contamination left behind by some of the very industries that built our great state.

Contaminated sediments can be found along the Clark Fork River from Butte, MT, downstream for 140 miles to Missoula and on into Idaho--a legacy of the copper mining and smelting operations at Butte and Anaconda.

Tremolite asbestos contamination is prevalent at numerous sites around Libby, MT, including the local high school and middle school tracks--a legacy from the Zonlite Mine that began operating in the 1920s and produced 80 percent of the world's supply of vermiculite. These industries created wealth and jobs for generations of Montanans. Today, however, contamination from wood processing facilities, abandoned mines, and numerous other activities have harmed human health and the environment and continue to stifle the development of new business in Montana. These sites are well known to Montanans: Sites such as Missoula Sawmill site and the White Pine Sash site in Missoula, the Missouri River Corridor site in Great Falls, and sites in Helena, Bozeman, Billings and numerous other communities all across Montana. We can and must do more to help revitalize these important areas.

Congress has undertaken a number of initiatives to address the brownfield problem in this country. I am proud to have been able to play a leadership role in passing the Brownfields Revitalization and Reinvestment Act of 2001. That bill has helped provide new Federal funds for evaluation and remediation of brownfield sites and has helped to resolve some of the liability issues that were inhibiting remediation of these contaminated properties.

But, We must do more. The U.S. Chamber of Commerce has estimated that at the current rate of cleanup, it will take 10,000 years for us to remediate all of the contaminated sites in America. The United States Environmental Protection Agency, in an analysis conducted with George Washington University, concluded that the remediation ``costs for all of the brownfields located within the United States have been estimated to exceed $650 billion,'' and that, consequently, ``it is imperative that private capital be attracted to the redevelopment of brownfields.''

Late last year, Senator Grassley and I entered a colloquy in the Congressional Record expressing our concern that certain provisions in the tax code are having the unintended consequence of discouraging investment in the remediation and redevelopment of our nation's polluted sites. In that colloquy, we pledged to get our arms around this issue and to draft legislation to correct this problem. I am pleased that we are standing here today to introduce legislation to do just that.

Let me briefly describe the basis for this bill and the means by which this legislation will dramatically accelerate the remediation of contaminated lands in America.

Today, tax-exempt investors such as university endowments, private pension funds, and charitable foundations can invest their capital in the stock market and certain real estate transactions that do not clean the environment without fear of incurring an Unrelated Business Income Tax, or UBIT, on any gains they make from their investments.

Because UBIT-sensitive entities hold over $6 trillion dollars in financial assets and routinely deploy more capital in real estate projects than any other category of investor, the unintended consequence of UBIT has been to drive our nation's biggest and most active real estate investors away from projects focused on the remediation and redevelopment of polluted properties.

This bill seeks to address this problem by allowing eligible tax- exempt entities to invest in the cleanup and redevelopment of qualified contaminated properties without incurring unrelated business income tax at the time they sell the property.

The legislation accomplishes this goal by concentrating on three basic tasks: 1. focus investment on moderately and heavily polluted properties, 2. require taxpayers to work with the State authorities and the public to ensure adequate clean up, and 3. ensure that the legislation is tightly crafted to prevent abuse.

First, this bill focuses on moderately and heavily polluted properties.

Section 198 of the tax code contains a structure under which designated state environmental agencies certify contaminated property that is eligible for special rules concerning deductions of remediation costs. This bill uses this existing structure to identify and certify contaminated sites that are eligible for inclusion within this bill. Prior to requesting certification from a state agency, the taxpayer is required to provide the agency with site characterizations, assessments and other documentation illustrating the scope and character of the pollution problem at the target site.

The legislation maintains its focus on moderately and heavily contaminated properties by requiring taxpayers to expend on remediation of each site the greater of $550,000 or 12 percent of the fair market value of the site, assessed as though the site were not contaminated. These remediation thresholds have intentionally been set higher than he typical range of costs reported to the Environmental Protection Agency to clean up brownfield sites nationwide. By establishing such high remediation thresholds, the legislation excludes incidentally or trivially contaminated property and focuses new capital investment on those sites most in need of additional assistance.

Second, this bill requires taxpayers to work with affected states and the public to ensure adequate clean up.

In addition to requiring high levels of remediation expenditures on each site, the legislation contains numerous other safeguards designed to ensure that remediation of each site is performed to state specifications and with full public involvement.

Similar to the front-end certification that is required to classify properties as truly contaminated, the legislation requires the taxpayer to obtain a tail-end certification from the state agency indicating that the site has been cleaned up and is no longer considered a brownfield. Prior to applying for this certification, the taxpayer must provide the State agency with sufficient information and documentation to allow the state agency to make this determination. In particular, the taxpayer must certify and provide documentation that: there are no longer hazardous substances, pollutants or contaminants on the property that are complicating the redevelopment or reuse of the site, environmental remediation is complete or substantially complete in conformance with all applicable federal, state and local environmental laws and regulations, the property is suitable for more economically productive or environmentally beneficial uses than at the time of acquisition, if additional activities are required to complete remediation, sufficient financial assurances and institutional controls are in place to complete the remediation in as short a time as possible, and the public was notified and given the opportunity to comment on the remedial actions taken to clean up the property and, if necessary, on any longer-term remediation activities.

The provisions in this legislation are designed to create substantive thresholds that the tax-exempt entity must meet in order to qualify for the exemption from UBIT. This legislation does not alter the complex web of existing federal, state or local environmental laws, regulations or standards.

Third, this bill ensures that the legislation is tightly crafted to prevent abuse.

It is worth noting that this legislation has been drafted to contain numerous safeguards to prevent abuse of this program. The anti-abuse examples include the following. The taxpayer cannot be the party that has caused the pollution and cannot be otherwise related to the polluter. Also, all transactions, purchase of the property, sale of the property, expenditure of remediation funds, etc., must be arms-length transactions with parties unrelated to the taxpayer. Further, the taxpayer is not allowed to count any Federal funds, e.g. grants, etc., or other types of government payments and benefits toward and required remediation thresholds. There are also restrictions on how the taxpayer may treat costs across multiple properties, requiring that an election be made specifying when and which properties are considered for such purposes; this is intended to prevent cherry-picking among different properties once the election has been made. Moreover, the legislation contains special restrictions addressing the use of the legislation's provisions by partnerships and other pass-through entities including requiring that all partnerships under the bill be fractions-rule compliant.

Because this legislation is narrowly crafted, and because tax-exempt entities are not currently investing in these sites, and thus are not paying UBIT, the Joint Committee on Taxation has concluded that this legislation will actually generate revenue for the Federal treasury during the first three years after enactment and that it will cost $10 million over five years and $192 million over ten years.

Further, because the legislation will accelerate cleanup of brownfield sites, create jobs, stimulate the economy, reduce blight and public health concerns, and because the bill has an acceptable fiscal impact, this legislative approach has been endorsed by Environmental Defense, the U.S. Chamber of Commerce, the National Taxpayers Union, and the U.S. Conference of Mayors, as well as numerous local, state and regional organizations and municipalities.

Passage of this bill will dramatically increase the speed at which our country's contaminated properties are remediated and brought back into productive taxable use. This narrowly crafted legislation will create jobs, increase tax revenues, and protect the environment--all accomplished without creating new government programs or regulations and all at a minimal cost to the Federal treasury.

I am pleased to be introducing this legislation with my colleague from Oklahoma. I look forward to working together to enact this legislation into law.

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

Mr. President, I rise today to introduce the Tax Shelter Transparency and Enforcement Act. I am pleased to be joined by my good friend, the Chairman of the Senate Finance Committee, Chairman Grassley.

He and I introduced similar legislation in the last Congress. And, just this year, the Finance Committee approved this legislation as part of the CARE Act, the energy bill, the Jobs and Growth Act, and the Jumpstart Our Business Strength Act.

But why do we need this legislation? It has been more than 2 years since the collapse of Enron.

Since then, numerous other corporate scandals have come to light, thousands of employees have lost their jobs and pension savings, and the after-shock has yet to settle down in the stock market.

But there is one thing that has not happened. This Congress has failed to send to the President one single piece of tax legislation designed to shut down the kinds of abusive tax shelters we saw Enron use and that we know many others use.

Every day that we fail to address this scandal, honest taxpayers pay the bill.

A recent study commissioned by the IRS estimated that abusive corporate tax shelters alone cost honest taxpayers from $14 billion to $18 billion each year. That means up to $180 billion over ten years.

Simply put, this abuse of our tax laws has got to stop.

Abusive tax shelters are wide-spread--and not new.

As early as 1995, the Clinton Administration undertook a comprehensive, multi-faceted effort to tackle the problem of corporate tax shelters. This included legislative proposals to halt the

sale and marketing of shelters. Regulatory action to clamp down on illicit activity. And steps to better identify and pursue abusive transactions.

The current Administration has added to the list of identified tax shelters and supported legislative proposals to ensure greater disclosure.

This is not--and should not be--a partisan issue.

The proliferation of abusive tax shelters hurts the entire tax system. Specifically, it places a greater tax burden on those Americans who are honestly and patriotically paying their fair share of taxes-- whether they are republican, democrat, or independent.

These shelters undermine the confidence of the American people in the fairness of the tax system. Abusive tax shelters place honest corporate competitors at a disadvantage.

And shutting down these abuses presents a great opportunity for Congress to restore fairness in the system.

We should do no less.

Let me take a few moments to discuss the nature of these tax shelters. Why they are wrong. And how purportedly reputable companies and professional advisors are participating in a disturbing race to the bottom.

First, what are these tax shelters?

Let me give you just one example of a tax shelter.

On October 20th, the Finance Committee held a hearing on tax shelters. This hearing was a follow-up to a hearing earlier this year to review the Committee's investigative report on the collapse of Enron.

At our hearing last month, we heard how some American corporations are purportedly buying and then leasing bridges, dams, subway systems, and other infrastructure through corporate tax shelters.

It's like the old line: If you think these tax shelter transactions are legitimate--or what Congress intended--have I got a bridge to sell you.

A former leasing industry executive, who testified before the Finance Committee, described complex transactions where U.S. companies make a single payment to a municipality to lease a bridge or other public infrastructure. These companies then lease the infrastructure back to the city. All along, the company takes a deduction on its U.S. taxes for the depreciation of the high valued asset.

The companies never pay any real lease payments to the cities. And the cities never pay any lease payments to the companies. The cities never risk losing control of the bridge, dam, or subway system.

But the companies--who include major banks and Fortune 500 companies--take millions and millions of dollars in deductions for what is essentially a paper transaction. And the American taxpayer is left holding the bill.

The witness testified: ``[M]uch of the old and new infrastructure throughout Europe has been leased to, and leased back from, American corporations.''

In essence, in these transactions, the American people, through their tax dollars, are providing these companies a subsidy, part of which the companies pocket, and part of which they transfer to these cities.

As Yale law school Professor Michael Graetz once said, a tax shelter is a ``deal done by very smart people, that, absent tax considerations, would be very stupid.''

This is nothing more than an unwarranted tax subsidy to U.S. companies courtesy of honest taxpayers. It is simply wrong. It rewards a transaction with no real economic substance.

This has got to stop. And it is up to Congress and the President to put an end to this kind of abuse.

So how did this tax shelter industry develop?

If there is one thing that we should have learned from the Enron scandal, it is the pervasive role of lawyers and accountants.

Why did some of the country's leading professional firms devote so much effort to spinning reported earnings out of nothing? And what does that say about the erosion of ethical standards for accountants and lawyers?

In 1908, the American Bar Association adopted its first code of ethics.

The preamble to their Model Rules states that a lawyer serves his client, but is also ``an officer of the legal system and a public citizen having special responsibility for the quality of justice.''

It also states that a lawyer should ``further the public's understanding of and confidence in the rule of law and the justice system because legal institutions in a constitutional democracy depend on popular participation and support to maintain their authority.''

In 1946, the Executive Director of the American Institute of Accountants--the predecessor to the American Institute of Certified Public Accountants--stated that:

The very existence of the accounting profession depends on

public confidence in the determination of certified public

accountants to safeguard the public interest. This confidence

can be maintained only by evidence of both technical

competence and moral obligation. One item of evidence is

promulgation and enforcement of rules of professional

conduct.

So, why did the legal and accounting profession fail to follow their own principles. And, why did they fail to police themselves?

Part of the problem stems from the 1990s practices of investment bankers and venture capitalists--taking a piece of the deal or a piece of the upside performance. This behavior spread into almost every public company.

And, following their clients, accountants and lawyers also began adopting these practices. Add to this an enormous pressure on company executives to hit revenue and earnings targets on a quarterly basis.

Amidst this obsession with short-term results, no one was left to look after the company's long-term survival.

At the same time, lawyers and accountants faced their own profit pressures as their compensation was tied to their ``book of business'' and their success in cross-selling different services to their clients.

These cultural conflicts presented a threat to professional values.

For auditing firms, traditional professional values mean attesting to investors and lenders that the company's financial statements are properly prepared and reflect all material issues.

The business culture, however, encouraged the auditor to serve company executives--not only to refrain from pushing back, but also to affirmatively help them achieve their personal goals.

Furthermore, audit services themselves became more and more of a low- profit business, as audit firms battled each other to gain the inside audit position--which could help them market high-profit services. The big money was in selling tax-engineered products.

Finally, the private interests of the accounting professional and the corporate executive converged on one kind of activity that has proved particularly toxic--the proprietary financial maneuver that boosted reported earnings. That means, manipulate the bottom line of the financial statements.

Such maneuvers satisfied the executives' need to feed the markets and keep stock prices afloat.

They also satisfied the accountant's need for generating large profits for their firm and for their own bonus formula.

Similarly, for law firms, the traditional professional values are associated with loyalty to the client and advocacy of the client's interests within the bounds of the law.

Yet, loyalty to the corporate client and attention to corporate risks came to be sorely tested in many instances.

A company executive could well be more interested in getting a deal done--and getting the legal opinion needed to support the accounting analysis--than in gaining an accurate understanding of the legal merits of the issue and the associated risks to the company.

A law firm might even have its own stake in getting the deal done-- because of a bonus or contingency fee associated with completing the deal--or because of having assisted a promoter in developing the deal.

In many accounting and tax schemes, executives simply did not want a frank assessment of legal merits and risks.

Instead, what they sought was a professional opinion that would justify hiding the true nature of a transaction from readers of financial reports and tax returns.

This was not legal advice on the merits--it was advice that was needed to justify hiding the ball.

Clearly, some accounting firms and law firms have abandoned ethics for the big dollar bonus.

As an extreme example, there were many people in the Arthur Andersen

Houston office who knew about the destruction of Enron documents. Not one appears to have realized that what they were doing was terribly wrong. Apparently, not one of these professionals even thought to check with anyone elsewhere in the firm about whether or not what they were doing was wrong.

Professional firms also have been all too willing to let themselves be compartmentalized. This way, they could say ``That wasn't my job'' when things went wrong.

Consider the case of prominent law firms that provided tax opinions for investment banks and other promoters to use in selling tax shelter products.

These opinions described the consequences of complicated tax maneuvers--based on the assumption that the future tax shelter purchaser would have a valid business purpose. And on the assumption that the transaction would not be tweaked further to reduce financial risk to almost nothing.

It may have been true that these firms were asked to provide advice based on those implausible assumptions. But that does not justify allowing the firm's professional reputation to be used to market tax shelters. The lawyers simply must have known that no purchaser could realistically be expected to supply the critical assumed facts.

The Enron case of using tax shelters to generate phantom financial earnings also seems to reflect a cycle of ``That wasn't my job'' role- playing.

The tax lawyers found a business purpose for the transaction because it generated financial earnings.

The accountants found financial earnings because the transaction promised future tax reductions. It all seems a bit circular.

And it all assumes that creating misleading earnings reports is in the real business interest of the corporation. Again, the professionals appear to have lost track of who their real client was.

Now, what do we need to do about this?

Congress and Federal regulators started to address these issues with the Sarbanes-Oxley Act of 2002.

For example, Sarbanes-Oxley calls for lawyers practicing before the SEC to report evidence of securities violations ``up the chain'' of their corporate clients--ultimately to corporate boards.

And the Act calls for auditors to report directly to the corporate board's audit committee. And, provide a number of safeguards to assure that audit committees have the independence and autonomy needed to represent corporate interests and not personal interests.

The Sarbanes-Oxley Act also addresses auditor independence in ways that respond to the business pressures that I described earlier.

Audit partners cannot be compensated based on cross-selling. Audit personnel must be rotated periodically. And a one-year cooling off period is required in the case of individuals moving between employment at an audit firm and employment at an audit client.

Public companies are prohibited from obtaining certain non-audit services from their auditor, and all other non-audit services require prior approval of the board's audit committee.

But these changes just nibble at the edges of the bigger problem. We have to reign in these lawyers, accountants, and investment bankers who are out there manipulating the tax code to come up with tax shelter schemes.

The tax shelter legislation that Chairman Grassley and I introduce today goes to the heart of the tax schemes problem.

For example, the bill ensures that transactions are done for legitimate business purposes. That means that transactions must have economic substance and are not done merely to avoid taxes.

It makes it explicit that achieving a particular kind of financial accounting treatment does not provide the needed ``business purpose'' to satisfy tax requirements.

The bill also provides for stiff penalties that are needed to back up Treasury's new shelter disclosure requirements.

As a Treasury official pointed out, ``[I]f a promoter is comfortable with selling a transaction. If a practitioner is comfortable with advising that the transaction is proper. And if a taxpayer is comfortable with entering into that transaction. Then they should all be comfortable with the IRS knowing about the transaction.''

Our bill also broadens the IRS's ability to enjoin tax shelter promoters and allows the agency to impose monetary penalties--in addition to suspension or disbarment--on disreputable tax advisors or their firms.

And more may be needed, from both government and the private sector.

For one thing, we need to also pass Senator Levin's bill, S. 1767, the Auditor Independence and Tax Shelters Act. I am pleased to be an original co-sponsor of that legislation. The Auditor Independence and Tax Shelters Act compliments the legislation that I am introducing today.

Senator Levin's legislation shuts down tax shelter promotion from the audit and financial statement side of the equation. Specifically, S. 1767 would strengthen auditor independence by prohibiting them from providing tax shelter services to their audit clients.

The legislation would also reduce potential auditor conflicts of interest by codifying four auditor independence principles to guide the audit committees of the Board of Directors of a publicly traded company, when that committee is required by the Sarbanes-Oxley Act to decide whether the company may provide certain non-audit services to the corporation.

Next, the SEC and the new Public Accounting Oversight Board should devote significant resources to considering ways to improve the clarity of the tax footnote in the company's financial statements.

They should also undertake a comprehensive review of financial reporting of income taxation. These agencies should also ensure that they have tax experts to ensure proper oversight investigations and reviews of the financial statement tax disclosures.

The IRS should improve the clarity of the already-required reconciliation between book and tax earnings on the corporate tax return--the Schedule M-1.

And we need to have better communication and coordination between the various federal departments and agencies with oversight over lawyers, accountants and investment bankers. The Department of Treasury, the IRS, the Department of Justice, the SEC, and the Public Accounting Oversight Board should talk to each other and not fall into the ``it's not my job'' mindset.

The Sarbanes-Oxley Act also empowers the Public Company Accounting Oversight Board to describe new non-audit services that public companies could not acquire from their auditors, even if they are not explicitly described in the statute as a prohibited service.

The Accounting Oversight Board should review the record of SEC rulemaking in this area, as well as ongoing business practices, and take action if it is needed to assure the public interest in auditor independence.

Finally, professional firms need to cultivate professional cultures. The Enron scandal should serve as a wake-up call to all of us, but particularly the professionals.

Law firms and accounting firms must be sure that their members and employees understand the nature of corporate representation and who the client is.

Everyone who works at the firm needs to understand that the firm is committed to integrity and quality. And to understand that the firm's leaders will listen and react if legitimate questions arise.

Professionals should resist the tendency to avert their eyes to obvious issues on the grounds that they are technically someone else's responsibility.

In the best traditions of both the accounting and legal professions, the work of the professional must be guided by commitments to professional duty, fair dealing, and honesty.

I hope that the leaders of the accounting and legal professions understand how important this is, and take the actions needed to give new vitality to these great traditions.

Every Spring, Americans sit down at the kitchen table, or at their home computer, and figure out their taxes.

With quiet patriotism, these Americans step up and pay their fair share. They are counting on us to make sure

that sophisticated corporations pay their fair share as well.

I am simply unwilling to tell the school teacher in Montana that he needs to pony up a little more because Congress is unwilling to shut down a loophole that is costing tens of billions every year.

I look forward to continuing to work with the Chairman of the Finance Committee, Senator Grassley, to see the Tax Shelter Transparency and Enforcement Act through to enactment.

I also urge all of my congressional colleagues--in the House and the Senate--to join forces to send tax shelter legislation to the President for his signature.

We need to act to close these tax shelters and restore professional ethics. And we need to act before the next big scandal comes. Congress cannot ignore the problem any longer.

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

Mr. President, today along with Senators Schumer, Lautenberg, and Reed, I am introducing the Act to Save America's Forests. This important legislation is designed to protect our national forests from needless clearcutting, safeguard our roadless areas, and preserve the last remaining stands of Ancient forests in this country.

There used to be over one billion acres of forest on the land that is now

the United States. Over 95 percent of that original forest has been logged, and less than one percent is in a form large enough to support all the native plants and animals. This land is under continuous threat, and if we don't act now to protect these Ancient forests we might lose many of them forever.

Our national forests also are under attack by clearcutting. Removing huge groups of trees at once creates a blighted landscape, destroys wildlife habitats, increases soil erosion, and degrades water quality. In the last ten years, over a quarter-million acres of our national forests were clearcut. Clearcutting destroys a vibrant, ecologically diverse natural forest, which is usually replaced, if at all, with a single species tree farm: tightly packed rows of the most profitable trees. This is forest management focused solely on economics, not ecology. And it is not the way to save America's forests.

This bill is a balanced, scientific approach to forest management. It bans all logging operations in roadless areas, Ancient forests, and forests that have extraordinary biological, scenic, or recreational values. These are our most fragile ecosystems and need to be protected. This bill also bans clearcutting in our national forests except in specific cases where complete removal of non-native invasive tree species is ecologically necessary.

However, this bill does not ban all logging in our national forests. It allows a method of logging called ``selection management,'' which cuts individual trees instead of the whole forest, leaving a healthy, diverse woodland. Selection management is less harmful to the soil, less destructive to wildlife, and less disturbing to people who enjoy the scenic beauty of our forests. Selection management can be sustainable and profitable, as demonstrated by a number of private forests around the country.

This legislation emphasizes biodiversity and sustainable management, allowing ecologically sound logging practices in some of our national forestland and fully protecting the rest. That's why over 600 scientists, including Dr. Jane Goodall and Dr. E.O. Wilson, and the Union of Concerned Scientists, support this bill. I am proud to introduce this legislation to protect and restore America's public forests, and I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I am introducing today a bill that will ensure that we properly budget for what we are now learning will be a long and costly war in Iraq. This legislation, which requires the President to submit a report every 90 days on the projected total costs of military operations and reconstruction efforts to Iraq is identifcal to an amendment I offered to the supplemental appropriations bill to October. That announcement was agreed to by unanimously consent. Unfortunately, it was removed in conference.

In recent days, the Administration has finally begun to acknowledge what Secretary of Defense Donald Rumsfeld wrote in an internal memorandum last month: that Iraq will be a ``long, hard slog.'' This past Thursday, November 20, President Bush told us that quote, ``We could have less troops in Iraq, we could have the same number of troops in Iraq, we could have more troops in Iraq, whatever is necessary to secure Iraq.'' The following day, the New York Times, citing a ``senior Army officer,'' reported that the Army was planning to keep about 100,000 troops in Iraq through early 2006.

For over a year, this Administration has downplayed the costs of the war in Iraq. Last September, after White House economic advisor Lawrence Lindsay put the figure at between $100 billion and $200 billion, OMB Director Mitch Daniels insisted that that estimate was, quote: ``very, very high.'' Mr. Lindsay, whose candor reportedly cost him his job, was the Administration official to provide anything close to a realistic estimate. In December, Director Daniels put the figure at $50 billion to $60 billion. A few weeks later, Secretary of Defense Donald Rumsfeld told us that the war would cost under $50 billion.

As the Administration planned for war, it stopped making any public estimates at all. As Deputy Defense Secretary Wolfowitz said in February, quote: ``I think it's necessary to preserve some ambiguity of exactly where the numbers are.'' Administration officials also insisted repeatedly that Iraq would pay for its own reconstruction. To quote Deputy Secretary Wolfowitz again: ``There's a lot of money there, and to assume that we're going to pay for it is just wrong.''

The Administration failed to include any military or reconstruction costs in its Fiscal Year 2004 budget estimate, and refused to submit to Congress a budget amendment. As a result, we passed a budget resolution that included enormous, fiscally irresponsible tax cuts but no money for a war that was already upon us. Even after President Bush had issued his ultimatum to Saddam Hussein, the Administration, along with my Republican colleagues, opposed a series of efforts to put aside between $80 billion and $100 billion for the war. Only the following week, after the budget resolution was passed, did we receive the first supplemental request, for nearly $75 billion, of which nearly $60 billion was for defense and nearly two and a half billion was for the reconstruction of Iraq.

Even with the war having begun, the Administration continued to downplay the expected costs of reconstruction. On March 27, Deputy Secretary Wolfowitz stated, quote: ``We're dealing with a country that can really finance its own reconstruction, and relatively soon.'' And, on April 10, Secretary Rumsfeld said, quote: ``I don't know that there's much reconstruction to do.''

These reassurances were contradicted flatly by outside experts. In March, a panel led by former Nixon and Ford Secretary of Defense James Schlesinger estimated that the cost of postwar reconstruction would be at least $20 billion a year. The panel, which included the first President Bush's ambassador to the United Nations, Thomas Pickering, former Chairman of the Joint Chiefs of Staff John Shalikashvili, and former Reagan U.N. ambassador Jeanne Kirkpatrick, concluded that President Bush had failed, quote: ``to fully describe to Congress and the American people the magnitude of the resources that will be required to meet the post-conflict needs'' of Iraq.

But the Administration continued to insist otherwise. In April, USAID Administrator Andrew Natsios was asked whether the Administration was sticking to its estimate of total costs. He responded, quote: ``That is our plan and that is our intention. And these figures, outlandish figures I've seen, I have to say, there a little bit of hoopla involved in this. Three months later, OMB Director Josh Bolton promised, quote: ``We don't anticipate requesting anything additional for the balance of the year.''

Then we got the bill: a second supplemental request for $87 billion, of which more than $20 billion was for the reconstruction of Iraq.

This war--which I opposed--has been far more costly to the American taxpayer than was necessary. The Administration's blind assumption that we would be greeted as liberators has resulted in unnecessary costs. The failure to prevent looting, for example, or to anticipate sabotage, has made reconstruction more expensive than the Administration promised.

The Bush Administration's unilateral approach to the war has also cost U.S. taxpayers. It is worth remembering that while the first Persian Gulf War cost more than $61 billion, our allies paid for all but $4.7 billion. Had President Bush managed to enlist more of our friends and allies in this effort, the American taxpayer would not be footing this enormous bill practically alone.

We are also paying for the vast majority of reconstruction costs, and may be paying more in the future. The World Bank has estimated Iraq's reconstruction costs to be $56 billion. Iraq also has $120 billion in debts that have not yet been restructured. Outside contributions have been relatively meager. The recent donors' conference in Madrid produced pledges of $13 billion, but two thirds of that amount was in the form of loans. As for Iraqi oil, next year's revenues will be used entirely for government operations, leaving nothing for reconstruction.

It is long past time for the Administration to be more forthcoming about the future costs of operations in Iraq. Right now, the only estimates come from outside sources, such as the Congressional Budget Office, which earlier this month estimated that with 67,000 to 106,000 military personnel in Iraq, the annual cost of the occupation would be between $14 billion and $19 billion. Given recent revelations about the Army's current planning, we might now expect those upper range costs, at least through 2006. And even these figures seem low considering that we are now spending in Iraq at the rate of $4 billion a month, which would translate into $48 billion per year.

We cannot continue to play guessing games with the war in Iraq, our national defense, or our children's future. The Congressional Budget Office has estimated the Fiscal Year 2004 ``on-budget deficit'' to be $644 billion. We have serious domestic needs in everything from health care, to education, to the environment. We are not adequately protecting ourselves against terrorism, denying our first responders

the resources they need and leaving critical infrastructure such as chemical facilities unguarded. We are underfunding veterans' benefits at a time when thousands of new veterans are returning home from Iraq wounded and disabled. And we are overstretching our troops and may have to consider a significant increase in end-strength. All of these priorities are put at risk so long as we fail to budget for future costs of the war and occupation in Iraq.

The Senate clearly recognized the seriousness of this problem when it agreed unanimously last month to this legislation. There is simply no reason why we should not expect the Administration to plan for the future costs of the occupation of Iraq, to budget accordingly, and to keep Congress and the American people informed.

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

Mr. President, I am introducing today a bill to establish an independent, bipartisan commission to examine intelligence issues related to Iraq. This commission is necessary because what we have discovered on the ground in Iraq has shown our intelligence to be wrong. It is necessary because Administration officials misused intelligence--that is, they made public statements and submitted reports to Congress that the Administration knew at the time to be unsupported by the available intelligence. And it is necessary because inaccurate and misused intelligence played a role in leading us to war.

Accurate, objective, and credible intelligence is a fundamental cornerstone of our national security, particularly in an age of shadowy terrorist networks and clandestine weapons programs. Unless we improve our intelligence, we risk failing to identify serious threats to the United States and being distracted by lesser dangers at the expense of larger and more urgent security concerns.

This effort must include not only the collection and analysis of intelligence, but the use, reporting, and dissemination of intelligence assessments. If the American people are asked to go to war to preempt an attack, or--as in the case of Iraq--to prevent a possible future threat from emerging, it is critical that the public statements of our officials be supported by the available intelligence. If members of Congress are to consider authorizing the use of force, particularly against countries that have not attacked the United States, they must be provided with honest and complete intelligence. And if our allies are to be asked to join us in confronting these threats, the intelligence that we share with them and that we rely on to bolster our case must be credible in the eyes of the world.

I first proposed an independent commission to examine intelligence related to Iraq last summer, when it became clear that President Bush had made an important but unsubstantiated claim in his January 2002 State of the Union address. That claim was, quote: ``The British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa.''

Although this statement has been dismissed as the ``16 words,'' its significant cannot be overstated. The State of the Union address is the most important, the most scrutinized speech the President delivers. The statement concerned the most important topic a President can discuss-- whether to send Americans to war. And this claim was the most important element of the President's argument for war: that there was evidence that Saddam Hussein might have the necessary materials to produce a nuclear bomb. As for the reference to the British government, it is hard to imagine how the use of the word ``learned'' could imply anything other than that the United States independently believed that the claim was true.

It turns out that the Bush Administration had ample reason to know at the time that what the President was telling the nation could not be substantiated. The CIA had sought to dissuade the White House from making claims about uranium purchases. And on February 5, a week after the State of the Union address, Secretary of State Powell made a presentation to the Untied Nations in which he omitted the claim precisely because it was not supported by the available intelligence.

Despite this knowledge, the Administration never issued a clarification. As a result, the President's statement stood, as an important element of the Administration's case for war. Only last summer, after Americans learned from Ambassador Joe Wilson and others what Administration officials knew at the time, did the Administration acknowledge that the uranium allegation should never have been included in the State of the Union Address.

The case generated outrage across party lines. Republicans as well as Democrats expressed serious concern about the credibility of the Administration and the country. They stressed that cabinet members, the vice president, and the entire administration are responsible for honestly representing intelligence. They called for someone in the Administration to be held accountable. The Senate passed a resolution by voice vote. The chairman of the Senate Intelligence Committee promised to undertake a, quote ``very aggressive review.'' And the Bush Administration insisted that it would cooperate. As White House spokesman Ari Fleischer stated on June 11, quote: ``The Administration welcomes the review. It's important.''

In July, when I first sought to establish this commission, there was no dispute that the use of intelligence, as well as the collection and analysis of intelligence, should be examined. Republicans who voted against the commission did so, they said, because the commission would intrude on the jurisdiction of the Intelligence Committee. I was, and remain supportive of efforts by the committee to look into the use of intelligence related to Iraq, an inquiry that is clearly included within the committee's jurisdiction. But it was and is my belief that an independent, bipartisan commission, building on the findings of Congressional and other investigations, could undertake the most thorough, depoliticized review possible.

Now, however, it seems an independent commission is the only remaining means left to examine the use, or misuse, of intelligence. On November 13, the Chairman of the Intelligence Committee announced that there would be no examination of how intelligence was used by policymakers. I deeply regret this decision by the chairman and fervently hope the committee will ultimately exercise its role, established in the resolution laying out its jurisdiction, in overseeing the, quote: ``use or dissemination'' of intelligence. In the meantime, I would expect that an independent commission would receive strong bipartisan support.

It is now beyond question that our intelligence on Iraq was inaccurate. After months of searching, investigative teams have yet to find stockpiles of chemical or biological weapons. David Kay, who heads up the Iraqi Survey Group, has stated that Iraq's nuclear program was only at the, quote: ``very most rudimentary level.'' The Administration has yet to produce evidence of the high-level ties between Iraq and al Qaeda that it warned of prior to the war. And now, tragically, we must add to the list of intelligence failures the inability to anticipate the current resistance to U.S. occupation. Clearly, the facts and circumstances surrounding these failings warrant a detailed and systematic review.

But what of the use of intelligence? As important as the State of the Union address was, that speech was only part of a larger case made by the Administration for war. Administration officials made many claims--particularly those related to chemical and biological weapons-- that were expressed in terms that were more specific and more certain than the intelligence may have supported. Most troubling, however, were the highly dubious assessments and suggestions related to nuclear programs and terrorism with which the Administration built its most powerful and emotionally potent argument. That argument had three elements: 1. That Iraq had a nuclear weapons program, and possibly even a nuclear weapon; 2. that Saddam Hussein was allied with al Qaeda, and that he may have been involved with the terrorist attacks of September 11; and 3. that the threat was imminent.

The Administration began to make its argument in the summer of 2002. As vice President Cheney stated in an August 26 speech, quote: ``Simply stated, there is no doubt that Saddam Hussein now has weapons of mass destruction.'' In an indication of how Administration officials would make their case over the next seven months, the vice president insisted that the intelligence indicated no doubt, no internal disagreement, and no uncertainty.

Then, on September 12, President bush, in his speech to the United Nations, went further, stating, quote: ``right now, Iraq is expanding and improving facilities that were used for the production of biological weapons.'' the President also made two statements regarding Iraq's alleged nuclear program. The first was that Iraq had made, quote: ``several attempts to buy high-strength aluminum tubes used to enrich uranium for a nuclear weapon.'' He failed to mention that neither the Department of Energy nor the Department of State's Bureau of Intelligence and Research believed that the tubes were intended for that purpose. The President's second statement added the missing ingredient: the uranium itself. As the President stated, quote: ``Should Iraq acquire fissile material, it would be able to build a nuclear weapon within year.'' This was the context for the President's claim made in the State of the Union address that Iraq had sought to purchase uranium from Africa.

The Administration continued making its case throughout the fall of 2002, adding claims concerning ties between Saddam Hussein and al Qaeda. One of many examples was Secretary Rumsfeld's September 26 statement that the

Administration had, quote: ``very reliable reporting of senior level contacts going back a decade.''

As Congress deliberated whether to authorize the use of force against Iraq, the Administration officials made increasingly alarming statements about Iraq's ties to al Qaeda and about its nuclear weapons program. On October 7, three days before the vote in the House of Representatives and four days before the vote in the Senate, President Bush gave a speech in which he said, unequivocally, that, quote: ``We know that Iraq and al Qaeda have had high-level contacts that go back a decade,'' and, quote: ``The evidence indicates the Iraq is reconstituting its nuclear weapons program.'' He repeated the allegations about uranium tubes and the warning about purchases of uranium. Then the President put it all together--the implication that Iraq was connected to the September 11 attacks, the implication that Iraq could have a nuclear bomb at any time, and the warning that Saddam Hussein could decide on any day to explode a nuclear bomb in the United States. Here is what the President said: ``Why do we need to confront it [Saddam] now? And there's a reason. We've experienced the horror of September the 11th. We have seen that those who hate America are willing to crash airplanes into buildings full of innocent people. Our enemies would be no less willing, in fact, they would be eager, to use biological or chemical, or a nuclear weapon. Knowing these realities, America must not ignore the threat gathering against us. Facing clear evidence of peril, we cannot wait for the final proof--the smoking gun--that could come in the form of a mushroom cloud.''

This was the most powerful, dire, and convincing warning a President could give. And it was based on one inference that the President has acknowledged he never had any evidence of, that Saddam was tied to September 11, and another which had already been refuted by many within the Administration, that Iraq was reconstituting its nuclear program.

Later statements included Secretary of Defense Rumsfeld's claims to specific knowledge of the whereabouts and movements of biological and chemical weapons. On March 11, he stated, quote: ``We know he continues to hide biological and chemical weapons, moving them to different locations as often as every 12 to 24 hours, and placing them in residential neighborhoods.'' On March 30, he said, quote: ``We know where they are. They're in the area around Tikrit and Baghdad and east, west, south and north somewhat.''

The Administration also continued to insist that the threat was imminent--a claim that served to counter arguments that the United Nations should be given more time. On February 6, the day after Secretary of State Powell made his presentation to the UN, Secretary of Defense Rumsfeld made an appeal for immediate action. ``Why now?'' he asked. ``The answer is that every week that goes by, his weapons of mass destruction programs become more mature.'' That same day, Deputy Secretary Wolfowitz stated, quote: ``Connections with terrorists, which go back decades, and which started some 10 years ago with al Qaeda, are growing every day.''

Finally, on March 16, the day before President Bush's ultimatum to Saddam Hussein, Vice President Cheney went beyond claims that Iraq had the intent to produce nuclear weapons, and even beyond the claims that Iraq was seeking centrifuge equipment or uranium. Rather, the vice president stated flatly, quote: ``We believe he has, in fact, reconstituted nuclear weapons.'' This assertion, which the vice president has recently acknowledged was a misstatement, was not corrected. Instead, it was allowed to stand as nearly the final word on why we were going to war.

Questions surrounding the Administration's use of intelligence extend beyond public statements, to include reports to and testimony before Congress. One example of unsubstantiated reporting was the January 20 report to Congress, mandated by the use of force resolution, that cited Iraq's failure to declare its, quote: ``attempts to acquire uranium and the means to enrich it''--the same unsubstantiated claim made in the President's State of the Union address.

This commission would be authorized to examine other intelligence issues related to Iraq, as well. The Administration made claims related to weapons delivery systems, including President Bush's assertion on October 7 that, quote: ``Iraq has a growing fleet of manned and unmanned aerial vehicles that could be used to disperse chemical or biological weapons across broad areas,'' and that Iraq could use them for, quote: ``missions targeting the United States.'' There has never been evidence that Iraq had UAVs with ranges of thousands of miles.

Administration officials made claims related to the occupation, including Vice President Cheney's March 16 assertion that, quote: ``I really do believe that we will be greeted as liberators,'' and Deputy Defense Secretary Wolfowitz's November 17 analogy to, quote: ``post- liberation France.''

The Administration also downplayed the costs of the occupation. Despite White House economic advisor Lawrence Lindsey's estimate that the occupation would cost between $100 and $200 billion--an estimate for which he was apparently fired--Secretary of Defense Rumsfeld on January 19 put the figure at, quote: ``something under $50 billion,'' On February 27, Deputy Defense Secretary Wolfowitiz stated that, quote: ``there's a lot of money there, and to assume that we're going to pay for it is just wrong.'' And, on March 27, Deputy Secretary Wolfowitz stated, quote: ``We're dealing with a country that can really finance its own reconstruction, and relatively soon.''

The independent commission I propose would be authorized to examine the relationship between policy makers and the intelligence community. Were members of the intelligence community pressured to produce analyses that conformed to the Administration's policies? Did Administration officials seek to bypass the normal analysis process by cherry-picking bits of intelligence that suited their agenda, through the Office of Special Plans in the Department of Defense or through other special or ad hoc arrangements? Did the Administration base its analyses on foreign intelligence sources of dubious credibility? These questions must be answered, and corrective measures undertaken, if our intelligence community is to be as effective and objective as we need it to be.

Perhaps the most egregious undermining, indeed betrayal, of the intelligence community was the identification by senior Administration officials of a covert CIA operative. The operative is the spouse of a person who has been called a national hero by President George H.W. Bush but who questioned the current Administration's statements regarding Iraq. The leak of this operative's identity sent an implicit warning to others in the intelligence community who might disagree with the Administration's positions. It potentially endanged the life of the operative and those with whom the operative worked. And it rendered the operative's skills, experience and sources permanently useless, thus wasting precisely the kind of intelligence asset that the United States so desperately needs right now.

The purpose of this commission is to identify ways in which we can learn from past mistakes and thus improve our collection, analysis, reporting, use and dissemination of intelligence. The commission's members, who will come from both parties, will be prominent Americans with experience in intelligence, the armed forces and other relevant areas. Their work will build on relevant Congressional and other investigations.

The commission, through an objective, independent, highly professional examination process, will help depoliticize an extremely complicated and sensitive topic. By reviewing intelligence related to Iraq beginning in 1998, it will draw conclusions about the use of intelligence by a Democratic as well as Republican Administration. And by reporting its recommendations directly to the President and to Congress, it will serve as a valuable resource outside the context of open political debate. In this respect, I disagree with the Chairman of the Intelligence Committee who has stated that the full Congress and the public could ``decide for themselves whether the intelligence was accurately represented by government officials.''

This issue is far too serious to simply ignore. Over one hundred thousand brave Americans are currently serving

in Iraq, facing challenges that require accurate and objective intelligence. We have an obligation to pursue every opportunity to improve that intelligence. Meanwhile, the United States faces other threats--from despotic regimes with nuclear, chemical, or biological weapons, from terrorism, and from the horrible possibility that terrorists could acquire these weapons. Our ability to confront these threats requires that our intelligence be accurate and objective. And, as we seek to enlist our friends and allies in our efforts to address these common threats, we must ensure that our intelligence is credible.

Unless we identify and correct the mistakes of the past, we will not be safer.

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

I yield 5 minutes to the senior Senator from New Mexico.

Mr. President, I yield 5 minutes to the Senator from Wyoming.

How much time remains on our side?

I yield 3 minutes 22 seconds to the Senator from Delaware, and 3 minutes 22 seconds to the Senator from Alaska following the Senator from Delaware.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Mr. President, as has been ordered, after the Hollings amendment, there are three more. I am not sure any votes are needed on the three amendments the chairman just mentioned, by Senators Kyl, Landrieu, and Levin. We have times, but we are trying to work with the Senators. For example, it is my understanding that the Kyl amendment will be offered and withdrawn. We may be able to work out the others as well. Nevertheless, that is the order.

Mr. President, I have a unanimous consent request that has been cleared on both sides. I ask unanimous consent the pending Kyl amendment be recalled.

Mr. President, I suggest the absence of a quorum.

Mr. President, I ask unanimous consent the amendment by the Senator from Texas be temporarily set aside so the Senator from Louisiana may offer her amendment.

Madam President, I compliment the Senator from Louisiana. This is a very important amendment. The reservists clearly, particularly under the current circumstances, deserve at least the provision suggested by the Senator from Louisiana. The Senator can be assured this Senator will fight vigorously for her amendment in conference. It is a very important amendment.

Madam President, I believe there is no more debate on this amendment.

All time is yielded back.

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

Mr. KERRY. Mr. President, the continuing activation of military reservists to serve in Iraq and the war on

terror has imposed a tremendous burden on many of our country's businesses, especially our small businesses. Too many small businesses, when their employees are asked to leave their jobs and serve the Nation, are unable to continue operating successfully and face severe financial difficulties, even bankruptcy. That is why I am pleased to join Senator Landrieu to provide all American businesses with a tax credit to help them continue to pay their employees who are called to active duty and to help small businesses temporarily replace reservists who are called up.

This amendment expands upon the Small Business Military Reservist Tax Credit Act that I introduced last year which provides help to small businesses in paying the difference in salary for their reservist employees called up to active duty. My legislation, S. 1595, also provided a tax credit to help small businesses cover the cost of temporarily replacing that employee while he or she is serving our Nation.

I worked with Senator Landrieu to develop this amendment which honors all patriotic employers who continue to pay the salaries of their employees who are members of the National Guard and Reserve and are called up to active duty in the war on terror in Afghanistan, Iraq and elsewhere. I believe this amendment will encourage all employers, especially small businesses, to pay their reservist employees when they face a reduction in salary due to their activation. Employers who continue to pay their reservists will be eligible to receive a tax credit up to $15,000 of the wages they pay to members of the Guard and Reserve for as long as the reservist is on active duty status. The JOBS Act, which we seek to amend, only provides a tax credit for reservists on active duty status for 1 year and does not provide any assistance for small businesses to help temporarily replace their reservists. I believe this approach is insufficient and that our amendment is needed to help reservists for each day of their service to our Nation and to provide important assistance to small businesses.

I am very pleased that Senator Landrieu has included provision of my bill to help small businesses cover the cost of temporarily replacing the reservist employee while he or she is serving our Nation. Today, many small employers are currently having a difficult time hiring temporary workers to replace their employees who have been called up to active duty in the national Guard or Reserve. The United Sates Chamber of Commerce estimates that 70 percent of military reservists called to active duty work in small- or medium-size companies. The Landrieu-Kerry amendment will provide a tax credit of 50 percent up to $6,000 to help small employers defray the costs of hiring a worker to replace a guardsman or reservist who has been called up to active duty. Small manufacturers will be eligible for a tax credit of 50 percent up to $10,000 to assist in hiring a temporary worker.

To fight our wars and meet our military responsibilities, the United States supplements its regular, standing military with reservists, citizen soldiers who serve nobly. Not since World War II have so many National Guard members been called to serve abroad. President Bush authorized the activation of up to 1 million military reservists for up to 2 years of active duty. Today, there are about 170,000 reserves on active duty in the war against terrorism--nearly half of the more than 350,000 called to duty since the attacks of September 11, 2001. Many are serving admirably around the world, performing critical wartime functions in Iraq, Afghanistan, and elsewhere. Our Nation does not go into battle without members of the National Guard and Reserve, and we are all grateful for their service.

Just this week, the Bush administration authorized the activation of an additional 47,000 reservists. The extension will cause significant economic difficulties for the reservists, their families and their employers that are left behind. Beyond the hardship of leaving their families, their homes and their regular employment, more than 41 percent of military reservists and National Guard members face a pay cut when they are called for active duty in our Armed Forces. Many if these reservists have families who depend upon that paycheck to survive and can least afford a substantial reduction in pay.

The large number of reservists being called up to active duty has hurt many small businesses across the Nation and may impact the number who are willing to re-enlist in the National Guard and Reserve in the future. In January, the Commission of the Army Reserve, Lt. General James R. Helmly, warned of a recruiting-retention crisis in the future for the National Guard and Reserve. A recent U.S. military questionnaire of returning Army National Guard soldiers projected a resignation rate of double what it was back in November 2001. From October to December 2003, almost one-quarter of the Guard members who have had the opportunity to re-enlist have opted not to do so. Recently, the U.S. Army developed a plan to pay reservists up to $10,000 to re-enlist to stop a developing problem.

That is why the Federal Government must take action to help businesses weather the loss of an employee to active duty and protect employees and their families from suffering a pay cut to serve our Nation. It is imperative that we help families of reservists maintain their standard of living while their loved one serves our Nation. We must also ensure that the cost of that service does not force businesses into financial ruin. We must ensure that our great tradition of citizen soldiers does not fade or cease because of the effect that service has on work and family. The Landrieu-Kerry amendment will help achieve their important goals and I urge my colleagues to vote in favor of this amendment.

I call for regular order with regard to the Hutchison amendment.

I believe there is no further debate.

Madam President, I move to reconsider the vote on the previous two amendments en bloc.

Mr. President, my colleague from New York and my colleague from Minnesota have filed a noteworthy amendment to the Jumpstart Our Business Strength Act, S. 1637. The amendment raises the very important issue of how in this global economy we can protect the privacy of personally identifiable information that is transmitted abroad. Senator Clinton and her staff have worked diligently with me and my staff to find a way for the Senate to address these issues. The amendment raises significant issues that I believe will benefit from being made part of any appropriate hearing this session in the Finance Committee. They have graciously recognized the importance of moving forward on the JOBS bill. That is why I have agreed to invite Senators Clinton and Dayton to testify on this issue during the Senate Finance Committee's hearing on offshoring. My hope is that we will schedule that hearing soon.

I appreciate the comments of the Senator and share his commitment to the new markets tax credit.

The Senator is correct. The intent of the economic substance provision in the JOBS bill is clearly to uphold and protect congressionally mandated tax benefits while curtailing unintended abuses of the tax code. I assure the Senator that the new markets tax credit would not be adversely affected by this provision.

As the Senator knows, our intent in codifying the economic substance doctrine is to curtail the use of abusive tax shelters that have no economic substance or business purpose other than reducing the Federal tax liability of the taxpayer. This is clearly not the case of the new markets tax credit.

We attempted to clarify the intent of this provision in the Finance Committee report, 108-192, in a footnote that states:

If tax benefits are clearly contemplated and expected by

the language and purpose of the relevant authority it is not

intended that the tax benefit be disallowed if the only

reason for the disallowance is that the transaction fails to

meet the economic substance doctrine as defined in this

provision.

The report also specifically identifies the low income housing tax credit and the historic rehabilitation credit as examples of tax benefits that would not be taken into account in measuring potential tax benefits. These credits were noted as examples of the types of tax benefits that would not be considered in applying the economic substance doctrine.

The new markets tax credit was authorized with the clear intent of using a tax subsidy to attract private investors to business and economic development opportunities in poor communities--investment opportunities that otherwise might not be able to secure such investment capital. It is our intent that the NMTC be treated like the LIHTC and the HRTC and protected as a congressionally mandated tax benefit.

canadian softwood lumber dispute

I want to join my colleague from Oregon in support of this amendment, which cannot be considered for inclusion in the legislation at hand. I concur that action must be taken to ensure the integrity of the Chapter 19 Panel Process. There is a clear breakdown of due process with respect to Chapter 19. The decision by the NAFTA Panel to reject the UTC's injury analysis in the softwood lumber dispute between the U.S. and Canada proves to me that the credibility of the NAFTA Panel process is in serious jeopardy. By imposing an impossible standard for proving ``material injury'', this NAFTA Panel seems to be saying that it will reject any antidumping or counterveiling duty in any circumstance. If the ANFTA dispute panel process wants to maintain its credibility, the panelists themselves must respect the limits of their responsibility. No country will allow the dispute panel process to undermine the integrity of perfectly valid trade remedies. Action must be taken to address this situation, and I can give my colleague my assurance that I will work to find an opportunity for the Senate to consider his amendment in the near future.

I agree with the distinguished chairman of the Finance Committee, Senator Grassley. The disputes resulting from any uncertainty regarding the proper application of the income forecast method are extremely unproductive and wasteful. To avoid further waste, resolution of any disputes must be resolved in a manner consistent with the clarifications contained in the bill.

Mr. President, I raise an issue with regard to the car donation provision included in the JOBS bill. Under the provision donors are limited to deducting the actual sale price of the vehicle that is donated to charity, unless the charity uses the car, in which case donors a get fair market value deduction. This is a good rule. It will cut out abuse of this charitable giving device, and make it easier for donors to comply with the tax law. However, I am also concerned about the potential for charities that intentionally sell/transfer donated vehicles at a low or no cost to low-income recipients as part of a charitable program to be unintentionally hampered from doing so. I believe the law is written in such a way that if the car is given by the charity to a low income family, or used for parts to repair a different car, there is no sale that triggers the sales proceeds limit, and the donor gets a fair market value deduction. I agree with some folks' suggestions that the sales to needy families case does not fit within the ``use by the charity'' rules as presently drafted. But trying to modify the proposal to move away from the sale bright line rule can be tricky, and I fear we would be opening up the proposal to abuse. I pledge to charities that do sell cars to low-income or needy individuals at reduced prices as part of a charitable program, that we will expand regulatory authority during conference or a preconference period with the House to permit Treasury to issue rules excepting certain sales from the sales proceeds limit and certain reporting rules if the sale furthers a charitable purpose.

Mr. President, we have looked at this amendment on this side, and we are agreeable that this amendment should be adopted.

I move to reconsider the vote.

Mr. President, I ask for the yeas and nays on the bill.

Mr. President, I am very proud of the Senate. The Senate worked its will through a very involved and complex tax bill. I might add--I don't have the final figures here, but in the case of first impression, this probably is one of the largest tax bills the Senate has taken up and passed, outside of reconciliation--we don't know yet-- in maybe a decade, or maybe close to two decades.

I say that because of the importance of protecting Senators' rights. I know this sounds like a little inside baseball, but when I say ``outside reconciliation,'' all of us in the Senate know this means the bill was taken up under the usual Senate process, which means Senators have the right to offer amendments, have the right to speak as long as they can stand on their own two feet, and have the rights Senators usually have in taking up bills. Whereas, if this were to be taken up under the process we call ``reconciliation,'' then amendments would have to be passed very easily; that is, there is no right for extended debate. Germaneness rules do not apply; that is, unless cloture is invoked.

So the main point I want to make is that the Senate has done a good job. The Senate has taken up a very complicated, very large tax bill, and done it the way the Senate should ordinarily do business; that is, outside of reconciliation. We are responsible. We can do it. We did it.

I very much thank my good friend and colleague, the chairman of the Finance Committee, who led us in a way to help make that happen. He basically did it by being so gracious, by being so fair. He has a reputation, we all know, of being one of the most honest and fair persons you would ever have the privilege to meet, not only in the Senate but in life. His credibility is unquestioned. That is a substantial reason why we were able to pass such a messy bill outside reconciliation. I thank my friend for his leadership, for his friendship, and for all he has done.

I also especially thank Senator Reid of Nevada. We all know Senator Reid is probably one of the masters of the floor. He knows procedure, and his main goal is to get things done. He, too, is a man whose word is his bond. He is invaluable here. If not for the efforts of not only the chairman but Senator Reid, I am not so sure we would be here today. He has done a super job.

It is also very appropriate to thank a lot of my staff, and Senator Grassley's staff, and many others, which I will do. But before I do that, I would like to do something a little bit differently and thank some people who helped me with this bill; that is, the people I talked with back home who provided ideas on how to structure the FSC/ETI replacement bill in a way that made the most sense for our manufacturers, not only throughout the country but in my home State of Montana.

This was a great chance for me to learn even more about manufacturing in my State, by going to manufacturers in my State and saying: What do we need? What can we do to help make this happen?

Let me give you a few examples.

The timber industry, for example, has faced very tough economic times during the last several years. In the years 2000 and before, many of these businesses paid very high taxes on solid profits.

So a provision in this bill will permit businesses in industries with cyclical profits to smooth out their tax rates. This is accomplished by permitting a loss to be carried back for up to 5 years. That will help a lot.

I thank Jim Hurst at Owens & Hurst, a small timber company located in Eureka, MT, for helping us better understand the economics of the timber business. The JOBS bill will help this company and many other companies that have very cyclical incomes.

I might add, too, that the people at Mountain Harvest Pizza Crust Company, from Billings--that does not sound like a huge American manufacturing company but they are extremely important to Montana, to Billings, and to me--helped educate me about the challenges of rising costs facing small businesses, and about how the cost of health care was getting to be too much to handle.

I might say, too, not all exporters are large corporations. We learned this from Sun Mountain Sports in Missoula. They are an S corporation. They export golf bags and other sports equipment. They are just the kind of company we want to stay strong so they can keep those manufacturing jobs here in the U.S. and so they can continue to export overseas.

Because of discussions with many small businesses such as Mountain Harvest Pizza Crust and Sun Mountain Sports, I made sure that every manufacturer would get this deduction. So we in the Finance Committee produced a bill that gives a deduction not only to C corporations but to S corporations, to partnerships, and to sole proprietorships so they all could have help and not be left behind by this legislation. The tax relief they are getting in this bill will help defray those and other rising costs.

Again, by consulting with the people at home, we were able to realize what the FSC/ETI replacement bill should be. It should not be just for big C corporations--those are large, publicly held corporations--but, rather, for any organization that manufactures, including proprietorships, small businesses, et cetera.

I also thank the people at CHS--that is Central Harvest--who showed us the role that cooperatives play in rural America and helped us better understand the importance of making this tax deduction pass through to the members of cooperatives. Agricultural cooperatives are a crucial part of the economy of my State and a lot of the West, and, I might add, a lot of other rural parts of America.

CHS helped to make sure their important contributions were not overlooked in this bill. I wanted, as I said, the bill to include all American manufacturers, and I have made sure the bill includes the agricultural cooperatives that are so important to so many States.

Also, I thank Elvie Miller at Mountain Meadow Log Homes, who talked to us about how integral good research and design is to their business. Frankly, with the addition of the amendment by the Senator from Texas, we were able to add that provision.

I also want to thank Leland Griffin and the good folks at Montana Refining Company in Great Falls. They pointed out that under the export credit this bill will repeal, oil refining operations are not eligible for tax benefits. But Montana Refining pointed out that if we are converting the laws to a manufacturing deduction, then it should cover oil and gas refining operations. Those operations are manufacturing. They take raw material, crude oil, and convert it to a usable product-- gasoline and other petroleum products. I offered an amendment in committee to include refining operations in the definition of manufacturing.

All of these companies, and many more, were invaluable in passing such a strong bill in the Senate. I thank them. I thank them very much for adding their part to this bill. Were it not for their very valuable contributions, this legislation would not be as good.

I also thank a lot of people from my office. I don't have the whole list. There are so many of them. If we turned the camera over, we could see them lined up against the wall over there. Starting with Brian Pomper on the far right, he does a very good job, handles a lot of trade work. We have Pat Heck over there; Russ Sullivan; Matt Genasci; Liz Liebschutz, Matt Stokes, Jon Selib. We have Scott Landes there in the corner, Simon Chabel, many others. Wendy Carrey is there; Mac Campbell. They are our folks. They do the work. My guess is

that if I talk much longer, they are going to fall asleep, they are so tired. We all very much appreciate, deeply appreciate what they do.

I have often said that the most noble human endeavor is service-- service to church, to community, to mankind, service to whatever makes the most sense to us as human beings. A lot of us who run for public office get some of the psychic rewards of service. We see our names in newspapers and on TV. Usually that is good, not always but usually.

However, the folks who work in the Senate, on Joint Tax and elsewhere, work harder. And they don't get public recognition for what they do. They are the real servants. They are the ones who really provide the most noble kind of service. I know I speak for everyone listening, for everyone else who stops and thinks about these things if only for a nanosecond, when I say how true that last statement is. They are the most wonderful folks. I take my hat off to all of them.

I yield the floor.

Mr. President, I call up my amendment No. 3134 and ask the clerk to report.

Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.

I thank the distinguished Chair.

Mr. President, the underlying bill gives a 5-percent domestic manufacturing deduction to the manufacturing industry. Of course, that is woefully insufficient. My amendment would provide a full 9-percent domestic manufacturing deduction.

The underlying bill slowly phases in the domestic manufacturing provision over a 5-year period, but instantly it gets the full effect of the overseas industry, the outsourcing. They immediately get some tax breaks over the period of the bill covering some 39, almost 40 billion bucks.

Can you imagine that? Here is a bill entitled--this is the committee report--the Jump-Start Our Business Strength, JOBS, Act. It jump-starts the jobs in Shanghai and Guadalajara and not in Philadelphia, PA, I can tell you that right now.

What my amendment does is provide the right incentives. It eliminates the tax breaks for corporations that have moved American jobs offshore and gives those tax breaks to the employers of jobs in America today.

I wish to thank, first, the distinguished ranking member, Senator Baucus, of our Finance Committee and his outstanding staff. They have been very helpful in trying to make this amendment not only relevant but budget neutral. I am not sure about its budget neutrality, but I am told now we do have a relevant amendment. If we have to get into the arcane discussion with respect to budget neutrality, I will be glad to join it.

I want to get to the point. We are still in a post-World War II culture, what they call up here an environment or pedigree. What happened was, after World War II, we had our finest hour with the Marshall plan. We sent money overseas. We sent expertise overseas. We sent equipment overseas. In the cold war, capitalism defeated communism. It worked. All during that almost 50-year period since World War II, we all enjoyed it because we fudged when it came to trade. We treated fair trade more or less as foreign aid, but we knew what we were doing. We had to sacrifice a certain amount of our industry, our jobs, our economic strength to prevail in this cold war.

Now what has occurred is the competition has regeared, they have rebuilt, they have industrialized, and they have become outlandishly competitive. And here amidst a trade war, we hear those in the national Congress running around and saying: Woo, we might start a trade war; free trade, free trade, I am for free trade, when they know free trade is like dry water. There is no such thing. If you trade, you are trading something, you are

swapping an article with various countries, free trade, but we know that is not going to come to pass.

The example we set of a capitalistic free market and our endeavor in the last 50 years, the Japanese did not follow suit. They have the financing, they have the subsidies, they have the nontariff barriers, and we have yet to get into downtown Tokyo with American sales. Come on, quit kidding each other. It worked that way for Japan. Korea followed. And now China is following the same Japanese pattern of restricted and competitive trade, not free trade.

Today we are in real trouble. We are losing jobs like gangbusters overseas. We have lost 68,000 jobs in the little State of South Carolina in the last 3 years, over 3 million jobs nationally. I can tell you, 58,000 of those jobs are our textile jobs, and they are not going to be replaced. You can put all this statistical information from the Federal Reserve and Greenspan about how we are creating jobs, but they are not coming to South Carolina.

As Abraham Lincoln said some years ago: The dogmas of the quiet path are inadequate to the stormy present. As our case is new, we must think anew, we must act anew, we must disenthrall ourselves, and then working together we can save our Nation. That is the reason for this amendment.

One does not put up an amendment to this finance bill with hope. The chairman of the Finance Committee knows there are not going to be any amendments. But we might be able to disenthrall our colleagues because the country has to develop a competitive trade policy in order to subsist and survive.

I can point out survival in the very beginning of this Nation started with Alexander Hamilton. Of course, I will not read the book--Ron Chernow's ``Alexander Hamilton.'' They will not give me that much time, but I recommend to everyone this particular edition. You will find the mother country, England, prevented manufacture in the Colonies, later the United States of America. In fact, they arrested and jailed anyone with any manufacturing talent who would move from England to the Colonies.

We had a veritable struggle in the earliest days, and we had just barely 1 hour of freedom when the mother country said: Under this David Ricardo doctrine of comparative advantage, we will trade with you what you produce best and you trade back with us what we produce best.

As a result, Alexander Hamilton wrote his famous treatise, ``Report on Manufacturers.'' I will not read that and put it in the Record, but I will say in a phrase exactly what Hamilton told the Brits: Bug off. He told the Brits, we are not going to remain your colony, shipping you our timber, iron ore, rice, cotton, indigo, and natural resources, and importing the manufactured articles and remaining a banana republic; we are going to build up our own manufacturing.

It caused me to listen to our friend Akio Morita, the former head of Sony. Some 20 years ago in Chicago, while lecturing third world countries, he said you have to develop a strong manufacturing sector in order to become a nation state. Then he pointed to me and said: Senator, that world power that loses its manufacturing capacity will cease to be a world power.

It is economic strength that counts in this terrorism war. It is diplomacy. It is negotiation. It is not military strength. We have to disenthrall ourselves and realize when we are going around talking about we might start a trade war, it was Hamilton himself and the United States of America some 228 years ago that started the trade war.

The very first bill--well, Pat Moynihan used to correct me on that. He said the first was a resolution for the United States Seal. So let's say the second bill that passed this Congress in its history on July 4, 1789, was a tariff bill, protectionism, a 50-percent tariff on 60 different articles. We started a trade war.

When Abraham Lincoln was President, they were going to build a transcontinental railroad. They said, we are going to get the steel from England. President Lincoln said, we are going to build our own steel plants, and he put import restrictions on that British steel and we built the steel plants.

When Franklin Roosevelt was President in the darkest days of the Depression, we did not practice any comparative advantage. He put on the most successful initiative ever with import quotas and subsidies for America's agriculture. That farm crowd that is now heading up our Finance Committee gets $180 billion worth of all kinds of subsidies. Then they run around here and tell this poor little textile Senator, protectionism, protectionism, you are going to start a trade war.

We do not get a subsidy. We do not have those things the farmers have. I favor what the farmers have, I say in the same breath. I vote for it because I think it is a very successful program.

President Eisenhower, in the mid-1950s, put on oil import quotas. Yes, John F. Kennedy--I sat there with Andy Hatcher and we would grind out the mimeograph machine--and we got the seven-point Kennedy textile program of restrictions on textile imports in 1961.

Who else other than Ronald Reagan, the best of the best, he put import quotas on steel, machine tools, semiconductors, motorcycles. Last night, I was near Myrtle Beach and they told me there were 100,000 motorcyclists--I think I ran into 99,000 of them out on the highway-- but do my colleagues remember what old Ronnie Reagan did? He started a trade war of motorcycles. He put a 50-percent import tariff on motorcycles. Harley Davidson now has recovered its health and we have them all running up and down the beach at Myrtle Beach, SC. So do not come now and tell me about starting a trade war.

We have had that trade war and we know simply and clearly what happens. I want to read starting on page 20 of ``Theodore Rex'' by Edmund Morris, because this is so interesting. I will read what protectionism did at the turn of the century, this is under Teddy Roosevelt, when we did not have an income tax. For the first 100 and some years, we financed this great United States of America with protectionism. I am trying to get that through so this crowd will wake up and quit pulling off this charade of the multinationals, because that is who we are facing. We are facing the U.S. Chamber of Commerce, the Business Roundtable, the National Association of Manufacturers, the Conference Board, the United Federation of Independent Businesses. The newspapers make a majority of their money on retail advertising and grind out this free trade, free trade, do not let us start a trade war.

Well, here is what the trade war gave us:

This first year of the new century found her worth twenty-

five billion dollars more than her nearest rival, Great

Britain, with a gross national product more than twice that

of Germany and Russia. The United States was already so rich

in goods and services that she was more self-sustaining than

any industrial power in history. . . .

More than half of the world's cotton, corn, copper, and oil

flowed from the American cornucopia, and at least one-third

of all steel, iron, silver, and gold.

Here we are having trouble manufacturing steel. We were exporting one-third of the world's steel.

Even if the United States were not so blessed with raw

materials, the excellence of her manufactured products

guaranteed her dominance of world markets. Current

advertisements in British magazines gave the impression that

the typical Englishman woke to the ring of an Ingersoll

alarm, shaved with a Gillette razor, combed his hair with

Vaseline tonic, buttoned his Arrow shirt, hurried downstairs

for Quaker Oats, California Figs and Maxwell House coffee,

commuted in a Westinghouse tram (body by Fisher), rose to his

office in an Otis elevator, and worked all day with his

Waterman pen under the efficient glare of Edison light bulbs.

``It only remains,'' one Fleet Street wag suggested, ``for

[us] to take American coal to Newcastle.'' Behind the joke

lay real concern: the United States was already supplying

beer to Germany, pottery to Bohemia, and oranges to Valencia.

As a result of this billowing surge in productivity, Wall

Street was awash with foreign capital. Carnegie calculated

that America could afford to buy the entire United Kingdom,

and settle Britain's national debt in the bargain. For the

first time in history, transatlantic money currents were

thrusting more powerfully westward than east. Even the Bank

of England had begun to borrow money on Wall Street. New York

City seemed destined to replace London as the world's

financial center.

Well, in the year 2004, we are broke. We have come from the greatest creditor nation to the greatest debtor nation. The Japanese are financing over $460 billion of my deficit. The Chinese are financing my debt--not me financing any other country like we started

with protectionism. The Chinese have over $200 billion of my deficit. We will end up this year in September, in a few short months, with a deficit that will approximate $700 billion.

We are spending around $2 billion a day more than we are taking in. Can you imagine that? In the early 1980s when I talked about budget matters, I spoke about how it took us 200 years of our history to get to $1 trillion in debt. The cost of the Revolution, the Civil War, Spanish-American War, World War I, World War II, Korea War, Vietnam War--it took us 200 years and the cost of all the wars to reach a $1 trillion debt.

In the last 3\1/2\ years--because we don't want to pay for our war and want to give tax breaks instead--we have already piled up $2 trillion in debt; $2 trillion in the last 3\1/2\ years.

This crowd has to sober up. We have to get hold of ourselves. We have to disenthrall ourselves and we have to start competing. Remember, it is our standard of living. That is the most frustrating thing around here. Here we add on these requirements: the minimum wage, Social Security, Medicare, Medicaid, plant closing notice, parental leave, safe working place, safe machinery, the old age act, the discrimination act, and this act and that act--all of that goes into the cost of production. It is not just the minimum wage; it is our high standard of living. Every Republican and every Democrat favors clean air and clean water. So we are not going back on our standard of living. So fundamentally we have to protect, and that is the fundamental role of Government.

I will never forget when we swore in President Ronald Reagan for his second term. It was inclement weather and we did it in the Rotunda. He raised his hand to preserve, protect, and defend. We came back and we were debating trade, and we said: Oh, we don't want to protect, we don't want to protect. The fundamental oath that we take as public servants is to protect. We have the Army to protect us from enemies without, the FBI to protect us from enemies within. We have Social Security to protect us from old age, Medicare to protect us from ill- health; clean air, clean water--antitrust laws to protect the freedom of the market. We can go right on down the list. Are we going to pass a wonderful high standard of living and then run around like ninnies hollering: Wait a minute, wait a minute, free trade, free trade. We don't want to start protectionism--they get that garbage from the Business Roundtable and the U.S. Chamber of Commerce.

I talk as one having received all of their awards. In 1992, I was man of the year of the National Chamber of Commerce. By 1998 they were sending out leaflets against me. So I speak advisedly. That crowd is not any longer interested in Main Street America. They are interested in Main Street Beijing. That is where you make the money, and the country can go to hell as far as they are concerned. So it is our duty to protect the economy and open up the markets and everything else like that.

Don't tell us more about retrain, retrain, retrain. I continually hear that. Oh, we have to retrain. I went through another little town yesterday, Andrews, SC. It brings to mind Oneida. I brought that plant in. They make little T-shirts. They closed to go to Mexico. At the time of closure they had 487 employees. The average age was 47 years.

We have done it, Senator, your way. We have retrained them and we have 487 highly skilled computer operators. Are you going to hire the 47-year-old highly skilled computer operator or the 21-year-old highly skilled computer operator? You are not going to take on the retirement, the pension cost of the 47-year-old. You are not going to take on the health cost of the 47-year-old. You are going to get the 21-year-old. So don't tell me about retraining.

We have the most productive economy--that is what Alan Greenspan says. He is sobering up himself. He came down here with this administration saying we were paying down too much debt. ``We are paying down too much debt.'' He sanctioned all these tax cuts. Now he says debt and deficits matter, and he is worried about interest rates now and everything else of that kind, and paying bills.

It is time we speak out as much as we can, early on, so we will know exactly where we stand. Where we stand is that we have to reorganize-- begin to organize, I should say--our trade effort, not just the Department of Commerce, but a Department of Trade and Commerce. I have been serving for almost 38 years on what was originally the Committee of Foreign and Interstate Commerce because article I section 8 says that Congress--not the President, not the Supreme Court--but the Congress of the United States shall regulate foreign commerce.

But, instead, it is over in the hands of a deep six group known as the Finance Committee. What they do is they work out their little deals. You might get a stadium, you might get a courthouse, you might get any kind of visions of sugarplums dancing in their head.

Forget about trade. They put on fast track. After they make their deal, the vote is fixed. Then it comes to the floor of the most deliberative body that cannot, under fast track, deliberate. And we enjoy it. We have tied our hands with fast track because we don't want to take the responsibility. That is what the polls will tell you: Don't say you are for or against, just say you are concerned.

So we say we are concerned and we keep getting reelected and the country goes to hell in an economic hand pot. I can tell you right now we are in real trouble, and we have to disenthrall.

What happens is that we need to organize a Department of Trade and Commerce, take that special Trade Representative, put it under that Secretary, do away with the International Trade Commission, which is a fix. You can find the damage done by the International Trade Administration over in Commerce. Then you go over to the Commission and they find out--oh, there is never any injury because you have growth. The GNP now is 3 or 4 percent, so there is no injury. So we keep sending the jobs out of the country like gangbusters, and we ought to do away with that particular fix of the Finance Committee. Then come in and get an Attorney General--an assistant, let's say, to enforce the trade laws.

Many a trade lawyer in this city has gone all the way to the Supreme Court and found out that, well, politically it is set aside. It was that way in the Zenith case, when they were gathered around the Cabinet table and President Reagan walked in and he said: I have to take care of Nakasone. We are going to have to reverse that decision, after 3 years and millions of dollars of legal costs.

So we ought to put in, like we have for antitrust, like we have for equal employment--we have to put in an Assistant Attorney General to enforce those laws, get the Customs agents, and finally when we get right down to it, do like the others do, play their game. If you are going to sell it here, you have to make it here. Isn't that wonderful? That is exactly what China really controls.

They said, if you want to sell it here you have to make it here. I haven't gotten them that far along, I am just trying to flex their minds so we will get away from this trade war and protectionism nonsense, so we can put in a competitive trade policy and save our industrial backbone.

Mr. President, how much time do I have remaining? My distinguished colleague from Florida, Mr. Bob Graham, wants to be heard.

Let me yield at this time to the proponents and the distinguished leadership of our Finance Committee. I retain the remainder of our time.

Mr. President, I yield 8 minutes to the distinguished Senator from Florida.

Mr. President, how much time is remaining on this side?

Mr. President, I yield whatever time I have to the distinguished Senator from North Dakota.

Mr. President, I ask for the yeas and nays on the amendment.

Good.

Yes.