Greater Middle East and Central Asia Development Act of 2004

Mr. President, I would like to pose a question to the Chamber today.

What would you call it if Americans were paying up to 300 percent more for the same product as consumers from other countries were paying? Back in Iowa, we would call that ``highway robbery.'' Yet, highway robbery is what is happening every day in this country, and it is happening over prescription drugs.

Yes, prescription drugs are being sold at prices that are 30 to 300 percent higher in the United States than in places like Canada or Europe.

Here are some examples.

The price in Canada of Nexium which is for heart burn and ulcers, is about 40 percent of the price in the U.S. Nexium would cost about $120 for 28 20-milligram capsules if you bought it here in the States. If you order the same Nexium from Canada, you'd pay about $51.

Here is another example: The price in Canada for Vioxx which is for arthritis pain, is also about 40 percent of the price in the U.S. If you purchased 30 12.5-milligram tablets in Canada, you would pay about $36 and here in a U.S. pharmacy, you would pay about $86.

And why is that, Mr. President? The reason is the importation of prescription drugs, those very same drugs that patients are using in Canada, and Australia, and Japan, is illegal in this country. So consumers in other countries get price breaks from the drug manufacturers and the American public doesn't.

One way to look at this is that by paying those higher prices, the American public is paying more than its fair share for the cost of research and development for future new drugs. That is not fair.

This means when a new drug comes on the market, the American consumer has paid for the research but consumers in other countries benefit from the new therapy.

I have supported amendments to permit Canadian drug purchases before. We have had numerous votes in this Chamber on legalizing importation. We had a vote most recently during the Medicare debate.

Last year, the House overwhelmingly passed a drug reimportation bill by a vote of 243 to 186. But, in the end, the conference report for the Medicare bill watered down the possibility of legal importation such that it was meaningless.

I was very disappointed about that. I think it was victory by subterfuge for the pharmaceutical industry.

So, I decided to roll up my sleeves and go to work on drafting my own bill that would address the problems surrounding importation. In fact, I was working very closely since the beginning of the year with my friend and colleague from Massachusetts, Senator Kennedy. We were working together until 3 weeks ago to create a bipartisan piece of legislation. We made a lot of progress. We still had some issues to work out but we were very close to having a final agreement.

With my leadership on the Finance Committee, and Senator Kennedy's leadership on the HELP Committee, let alone his expertise on the Food, Drug, and Cosmetics Act, I figured we had a good shot at getting something done.

Our discussions certainly created a lot of buzz around town. I had reporters and all manner of interest groups asking me and my staff about the bill and when we would introduce it. But those discussions have since evaporated. Apparently, the Democratic caucus was concerned that things were moving too quickly or that too much momentum was building behind a bipartisan effort. What I do know is that our bipartisan product was no longer the priority.

I was disappointed about that too. Senator Kennedy and I work well together. In fact, we are joining forces even now to get the Family Opportunity Act to the floor and passed out of the Senate.

You can understand why I was discouraged to learn that Senator Daschle had determined lowering the costs of prescription drugs through importation was going to be a partisan issue.

Members can understand why I was discouraged to learn that Senator Daschle determined lowering the cost of prescription drugs through importation was going to be a partisan issue. This reminded me of what happened in the year 2002 with the Medicare prescription drug debate. There, too, Senator Daschle became concerned that the Finance Committee--then chaired by my friend, Senator Baucus--would report a bipartisan prescription drug benefit for seniors.

Senator Daschle, in 2002, as the majority leader, bypassed the Finance Committee and took the prescription drug bill straight to the floor. That is not how we get legislation passed in the Senate, and everyone around here knows it. As I say so often to my colleagues, nothing gets done in the Senate if it is not bipartisan or at least somewhat bipartisan.

In the year 2002, it resulted in a very partisan debate in the Senate over

competing Medicare drug benefit proposals. There were multiple partisan proposals by the Senator from Florida, Mr. Graham. I had a proposal supported by both Republicans and Democrats. The Democratic caucus fought our bill, which was dubbed the tripartisan bill because one of the key authors, Senator Jeffords from Vermont, sits in the body as an Independent.

What happened in the final analysis in 2002? The Senate did not pass a Medicare drug benefit proposal that year. The debate fell apart in partisan bickering in the Senate. That happened because partisan politics intervened to prevent a bipartisan compromise.

It looks to me that this is what is happening now on the issue of the importation of drugs into the United States to help our seniors. When we go to the pharmacist to pick up a prescription, I don't remember the pharmacist asking if you are a Republican or a Democrat. When you pay your health insurance premium, I don't think the insurance company looks for an ``R'' or a ``D'' by your name before they accept your payment.

No, I don't see the importation of drugs as a partisan issue. Being forced to pay higher prescription prices because there is a lack of competition in the global pharmaceutical industry is not a partisan issue. That is why I decided to move ahead and introduce the bill I am introducing today.

This bill I am introducing today in a large degree is the bill on which I worked very closely with Senator Kennedy when our efforts got superseded by the Democratic caucus. I made a few changes, but this bill is basically what Senator Kennedy and I were working on together before partisan politics got in the way. I thought what we had was a good proposal. We were close to having all the details worked out. I am going ahead and introducing that bill today by myself.

Let me explain the bill. Quite simply, it would legalize immediately the importation of prescription drugs from Canada. After 2 years, consumers would be able to order their drugs from other countries, as well. It creates a practical and safe system to do it.

Today the law prohibits the importation of prescription drugs until the Secretary of Health and Human Services certifies that importation can be done safely. Under current resources and under current authority, the Food and Drug Administration has not been able to provide such assurance on the safety of drugs coming in from other countries. We have had Health and Human Service Secretaries in both the Clinton administration and the Bush administration. This is not Republicans protecting pharmaceuticals, if you want to look at it this way. It is both Democrat Presidents and Republican Presidents making a decision that the certification and safety of drug importation was not legally permitted.

Even though the law says you can import drugs, because of the lack of certification, they cannot come into the country. More and more people have been getting prescriptions filled in Canada, regardless of what the law says. Technically, that is illegal today.

The Food and Drug Administration and our customs officials have been looking the other way. The Food and Drug Administration has said there are serious safety issues with drug importation from other countries. They say this because no public health authority is overseeing many of the prescriptions coming in from other countries. In fact, the Canadian Government has said it will not take responsibility for assuring the safety of drugs being shipped to the United States from Canada. They have basically told the U.S. consumer: You are on your own from the standpoint of safety--I suppose, as far as the Food and Drug Administration, efficacy as well as safety.

Today, importation is no longer limited to organized bus trips across the border to pharmacies in Canada. Instead, it is becoming a booming mail-order pharmacy operation with customers all over the United States. We see press accounts on a regular basis describing Americans who log on to the Internet to purchase drugs from Canada and elsewhere.

The Permanent Subcommittee on Investigations of the Senate Committee on Governmental Affairs conducted an investigation into drug importation. They found about 40,000 parcels containing prescription drugs come through JFK Airport every day. JFK Airport houses the largest international mail branch in the United States. From Miami, 30,000 packages of drugs come into the United States; 20,000 packages come into Chicago each day of the year. About 28 percent of the drugs coming in are controlled substances. These are addictive drugs that require close supervision from physicians.

From where are most of these drugs coming? I was surprised to hear it was not only Canada, but also Brazil, India, Pakistan, the Netherlands, Spain, Portugal, Mexico, and Romania.

My bill immediately halts unsafe importation from rogue operators but permits individuals to obtain prescriptions from licensed Canadian pharmacies on an interim basis while the Food and Drug Administration gets a new drug importation system up and it runs well.

The American public is tired of waiting for the Federal Government to take action to legalize importation and to assure the safety of imported drugs. Under my bill, the Food and Drug Administration is required to issue final regulations for the new drug importation system within 90 days of enactment. Under the new importation system, individuals and pharmacies could purchase qualified drugs for import into the United States from foreign exporters that register with the Food and Drug Administration. To be registered, the foreign exporters must demonstrate compliance with safety measures, must submit to the jurisdiction of U.S. courts, and take other steps to assure the safety of imported drugs.

A user fee charged to registered exporters would provide the financing needed for the Food and Drug Administration to register and oversee foreign drug exporters and assure the state of imported drugs.

The drugmakers do not want to see their lower priced products from other countries coming into the United States. That is certain because the present laws do not permit this competition to them. They would say it undermines their profits here. They will want to do everything they can to stop drug importation.

Even though this bill might pass, these companies will find some way to keep these drugs out of the country. So I have to deal with that fact in this legislation.

So under my bill, drugmakers that take steps to prevent importation of their products from these registered drug importers will lose their tax deduction for their advertising costs.

Now, that is going to upset the trade associations that deal with advertising. That is going to upset TV and newspapers and magazines that get a lot of money from advertising. I have had a long history of supporting the deductibility of advertising expenses as a legitimate business expense. I have not changed my mind in regard to that, not at all. In fact, I have a history of voting against amendments that are offered on the floor of the Senate that would make advertising not deductible.

But we are not talking about not allowing the deductibility of advertising costs. Only if a company tries to do something illegal and keep drugs from coming in from out of this country, then they will pay the penalty of not having their advertising costs deducted. But I assume, when we pass this bill, these drug companies are going to abide by this law. There will not be one cent of advertising that cannot be deducted as a legitimate expense, so I do not want the advertising fraternity to get upset with this legislation, when I have been a backer of the legitimate writeoff of advertising expenses.

Now, this not only has the stick that I just described, but we have a carrot as well, to encourage companies to abide by this law and not try to keep imported drugs from coming into this country by some sort of requirement they would put on supplies outside the country not to ship drugs into this country; and that is, they will get a 20-percent benefit--a 20-percent benefit--by having an increase in their R&D tax credit.

I am going to discuss that further, but going back to the advertising costs, I do sense, from my people in Iowa--at every town meeting some person complains about the advertising of

drugs on TV. I defend the advertising of drugs on TV because that is commercial free speech. I think our citizenry ought to be as educated about drugs as they can be, so they are not beholden to their own doctor or doctors for what might be applied. I think we ought to have an educated patient group, so this advertising is very good. But I still have to say that my Iowa constituents are pretty fed up with all those drug ads they see on TV, and how they are probably adding to the cost of prescription drugs.

I am fully in favor of this free speech, and I do not, in any way, want to prohibit companies from running the ads they want to run. But if drug companies are not going to allow U.S. consumers to have access to these lower prices in other countries, then, under this legislation, they would lose the tax deduction for the cost of those advertisements.

Now, on the other hand, I said there is a carrot out there. The drugmakers complain to us that these lower prices might take money from research and development. They would rightly say: Where are we going to get the money to have the next generation of ``magic'' drugs that we have? We want that to happen, because when I buy a drug today, my mother or grandmother, when they bought pills, paid for that research for the generation of drugs I take. I want my children and grandchildren to have a new generation of drugs for the future. So we do not want to hurt research and development.

So my bill, then, creates an incentive for drug companies that do not fight this importation of drugs. Companies that do not prevent importation from registered exporters will get a 20-percent increase in their R&D tax credit. I hope everybody will think that is very fair.

I have a more detailed summary of this bill that I am going to put in the Record. I ask unanimous consent that this summary and a question and answer document be printed in the Record following my statement.

I believe that free trade principles argue in favor of permitting the importation from Canada and perhaps from other developed countries as long as we can implement a system for safe importation.

Today, there is no assurance of safety--no one is watching the store--and products are coming in from all over the world.

My legislation has two objectives. First, it will put an immediate end to the unregulated and unsafe situations of drug imports that we have today by default. This is key because the situation today threatens the safety of our Nation's drug supply and puts patients who obtain these drugs at risk of harm.

Second, the legislation will provide the Food and Drug Administration with the resources and authority to ensure the safety of imported drugs, and importation will only be permitted by registered exporters who submit to the Food and Drug Administration authority.

Now, this bill will get referred to the Finance Committee because it has tax provisions in it, but the bulk of my bill falls under the jurisdiction of the HELP Committee, and my friend, Senator Gregg, as chairman of that committee, has announced he will hold a markup this year on a drug importation bill.

I do not intend to assert jurisdiction over this proposal, and I believe we should rely upon that regular committee process to work. That is how we get legislation passed in the Senate. Because that is where bipartisanship is formulated, at the committee level.

I hope my colleagues will look at this bill. I wanted to get these ideas out here for discussion. I hope some of my colleagues will want to cosponsor this bill. It is time we got this done, and this is the year to get it done, particularly following upon the vote that was in the House of Representatives last year.

We must not let partisan politics get in the way, and I think it is getting a little bit in the way right now. I hope we overcome that. I hope I am able to develop a relationship with Democrats, once again, to work on this bill in a bipartisan way. If we do not do this, I think there is going to be a penalty paid at the ballot box in November.

The American consumers are waiting. Let's get the job done.

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

Madam President, I rise today, along with my friend and colleague from Nebraska, Senator Hagel, to introduce the Greater Middle East and Central Asia Development Act of 2004. This would be a Marshall Plan for the Greater Middle East.

Let me put it in the context of the news we are receiving from Iraq today. While public opinion surveys that have been taken by independent groups have shown recently that the substantial majority of the people of Iraq, quite understandably, are grateful that Saddam Hussein is no longer in power, and while a majority of them are optimistic about their future--a better life for themselves and their children--it is clear, of course, every day there is a growing group of Saddam loyalists left over from the previous regime, and terrorists, fanatical jihadists, insurgents who will attack and kill Americans and Iraqis to stop the forward movement of progress and freedom and prosperity in Iraq.

We clearly have to respond to that with force in defense of our values, of liberty, of freedom for the Iraqis. We have, if you will allow me to use Scriptural words, to employ our swords. But it is also true in Iraq and throughout the world that we will only win the war on terrorism if we use not just our swords but plowshares as well. That is what this piece of legislation Senator Hagel and I are introducing today is all about.

I want to speak for a few moments about it. Senator Hagel will be over later in the day to offer his remarks on the bill.

Madam President, a half century ago, at the dawn of the cold war, Congress authorized the Marshall Plan for Europe--a bold initiative inspired by Secretary of State George Marshall and premised on a simple but transformational idea: that to stop communism, we had to rebuild and democratize Europe. The Marshall Plan offered monetary aid, of course, but it offered much more. It was a national commitment of American values to transform the future of Europe by offering the Europeans the blessings of liberty and prosperity, and thereby

linking, in the deepest way, Europe's future with our own. The same ideals and goals of the Marshall Plan can and must now be applied to the people of the Greater Middle East.

The predominantly Muslim countries of the Middle East and Central Asia have, unfortunately, emerged at this moment in history as the cradle of fanatical Islamic jihadist terrorism. There is a great civil war being fought in the Arab world between the peace-loving, law- abiding majority of Muslims and the minority of jihadists. This civil war unleashed the violent terrorist forces that led to September 11, 2001, the attacks on America; March 11, 2004, the attacks on Spain; and the repeated attacks in places such as Fallujah in Iraq that are occurring almost every day. The outcome of our war against Islamic terrorists will be determined by the way in which we use our swords and our plowshares to determine the outcome of the civil war in the Muslim world.

To stop al-Qaida and other terrorist groups from expanding this civil war and recruiting a new generation of killers, we must use all of our military power to capture and kill the enemy. We must drain the swamps of terrorists in Iraq and wherever they grow.

At the same time we must combat the conditions that fuel terrorism and drive recruits to al-Qaida and hate and despair. To do this we must seed the garden, not just drain the swamp, with freedom, hope, and economic opportunity. If we invest in the political and economic future of the Middle East and Central Asia in our time, as we did in Europe with the Marshall plan after the end of the Second World War and at the beginning of the cold war, we will expand democracy's reach, choke off the terrorists, strengthen our own national security, and move the world toward greater peace.

That is the underlying premise of the legislation Senator Hagel and I are introducing today. It is designed to complement our swords in the war against terrorism with the plowshares of political and economic assistance.

Our legislation is not soft. It is not welfare. It is in fact a different kind of warfare on the battlefield of ideas and ideologies, visions for the future. Although there are compelling humanitarian reasons for offering assistance to the people of the Greater Middle East, there are also compelling American national security reasons for doing so. The political and economic assistance Senator Hagel and I are proposing might be though of as additional weapons in America's arsenal in the fight against terrorists.

Let me summarize what our legislation contains. We advocate making a major financial investment in the future of the Middle East and Central Asia. How we propose making this investment is in some ways as significant as how much we propose investing. The key to the success of our Marshall plan for the Middle East, as it was of the Marshall plan for Europe, is it is not a detailed list of programs. It is a statement of values and purposes. It is the creation of a structure to carry out those values and purposes, and it is a commitment of American and international resources to realize those purposes.

Our legislation would create three new international institutions that will support economic and political development in the Greater Middle East and Central Asia, open institutions that will require participation by representatives of the countries benefiting from this support, a partnership. Institutionalizing involvement of a wide group of donors and recipients will promote better cooperation and give ownership and accountability to the impacted nations and to the private reformers in those nations--key ingredients to successful foreign assistance.

The first new institution Senator Hagel and I would create is a trust for democracy for the Middle East that would support the development of civil society in the region, not unlike efforts we made to help those who had the dream of freedom and opportunity in countries of the former Soviet Union, now living to experience that dream. Modeled on the Balkan Trust for Democracy, this institution we propose would marshal the support of civic leaders and reformers as well as private foundations to provide grants to worthy grassroots projects that support free association and promote civic responsibility, the building blocks of democracy.

Second, Senator Hagel and I would build a multilateral development foundation that would provide a second track for assistance, together with other donors, assistance that would be additional to that already being provided bilaterally by the U.S. and other international donors. This foundation will be a public place where we and other donors can come together with the countries of the region to set priorities together, to work together for the greater good of this troubled region. Many countries in the Greater Middle East are richer than they are developed, meaning their wealth has not translated to economic progress for most of the people. We would invite all governments in the region to sit on the board of this foundation, and we would ask all to contribute financially and programmatically to it.

Finally, our legislation would establish a new Middle East and Central Asia development bank, like the European Bank for Reconstruction and Development. This bank would include private sector participation and would underwrite large-scale infrastructure projects in the region. It would also have a microcredit lending facility and a project development facility.

We also believe it is important and necessary to make American assistance more effective. That is why we are calling for the establishment of an office of the coordinator for Greater Middle East and Central Asia at our Department of State. The creation of such an office would help ensure all assistance provided by any government agency of ours is in line with the overarching goals and objectives of our foreign policy. It would also give other donors and countries of the region a simple place to go when seeking information about the programs we would create.

With this collaborative structure in place, Senator Hagel and I would authorize $5 billion in assistance over the next 5 years. That is no small sum. But it is in fact small in comparison to the tens of billions of dollars in today's money that were spent on the Marshall plan in Europe 50 years ago and the hundreds of billions of dollars we are spending now and will continue to have to spend for the military side of the war against terror. That figure, we believe, is the minimum required to have a positive, measurable impact in the region and to signal the seriousness of our intentions.

Earlier this month, civil society leaders from all over the Arab world gathered in Alexandria, Egypt to discuss an Arab reform agenda. At that meeting participants agreed on a declaration that calls for significant reforms that encompass the ``political, economic, social, and cultural aspects'' of society. The fact is the reforms those Arab world reformers seek are at least as far-reaching as those that are being suggested by others from the outside, including from the United States. I know there are similar reform efforts underway in Central Asia. They deserve our support.

In introducing this legislation today, Senator Hagel and I hope to give new impetus to the discussions taking place in Washington and elsewhere about what we collectively can do to support political and economic reform in the Greater Middle East and to give the people in those great regions an alternative to a better life than the hatred and suicidal death al-Qaida offers.

The Bush administration has put forward serious proposal along the same lines as ours. It certainly has the same goals. This bill Senator Hagel and I are introducing today is intended to build on that effort. We hope it helps shape the debate of the best method to implement, which should be one of partnership and collaboration along with a serious commitment of American resources.

In June, the United States will host the G-8 summit in Sea Island, GA. That summit will be followed by the U.S.-EU and NATO summits also in June. The future of the Greater Middle East will be placed high on the agenda of all those important meetings.

By introducing this legislation today, Senator Hagel and I hope to enable our Government to go into these summits with the bipartisan support of the Congress and also to provide some direction as to what we believe should be done and how it might best be done.

Senator Hagel and I hope our colleagues will take a look at this proposal and join us in cosponsoring it and sending thereby a message no less profound and no less necessary than the message of the Marshall plan half a century ago, that the United States is serious about improving the lives and expanding the freedoms of the millions of people who live in the Greater Middle East and Central Asia.

Today, that is our most urgent international imperative. At the dawn of the cold war, America answered the challenge of communism by seeding a garden of peace, hope, and prosperity in Europe. Today, at the dawn of our current war against terrorism, it is equally essential that we answer the inhumane, barbaric threats of terrorism and acts of terrorism with all necessary force, but also by seeding the same kind of garden of peace, hope, and prosperity in the Greater Middle East.

Madam President, I rise today, along with my friend and colleague from Nebraska, Senator Hagel, to introduce the Greater Middle East and Central Asia Development Act of 2004. This would be a Marshall Plan for the Greater Middle East.

Let me put it in the context of the news we are receiving from Iraq today. While public opinion surveys that have been taken by independent groups have shown recently that the substantial majority of the people of Iraq, quite understandably, are grateful that Saddam Hussein is no longer in power, and while a majority of them are optimistic about their future--a better life for themselves and their children--it is clear, of course, every day there is a growing group of Saddam loyalists left over from the previous regime, and terrorists, fanatical jihadists, insurgents who will attack and kill Americans and Iraqis to stop the forward movement of progress and freedom and prosperity in Iraq.

We clearly have to respond to that with force in defense of our values, of liberty, of freedom for the Iraqis. We have, if you will allow me to use Scriptural words, to employ our swords. But it is also true in Iraq and throughout the world that we will only win the war on terrorism if we use not just our swords but plowshares as well. That is what this piece of legislation Senator Hagel and I are introducing today is all about.

I want to speak for a few moments about it. Senator Hagel will be over later in the day to offer his remarks on the bill.

Madam President, a half century ago, at the dawn of the cold war, Congress authorized the Marshall Plan for Europe--a bold initiative inspired by Secretary of State George Marshall and premised on a simple but transformational idea: that to stop communism, we had to rebuild and democratize Europe. The Marshall Plan offered monetary aid, of course, but it offered much more. It was a national commitment of American values to transform the future of Europe by offering the Europeans the blessings of liberty and prosperity, and thereby

linking, in the deepest way, Europe's future with our own. The same ideals and goals of the Marshall Plan can and must now be applied to the people of the Greater Middle East.

The predominantly Muslim countries of the Middle East and Central Asia have, unfortunately, emerged at this moment in history as the cradle of fanatical Islamic jihadist terrorism. There is a great civil war being fought in the Arab world between the peace-loving, law- abiding majority of Muslims and the minority of jihadists. This civil war unleashed the violent terrorist forces that led to September 11, 2001, the attacks on America; March 11, 2004, the attacks on Spain; and the repeated attacks in places such as Fallujah in Iraq that are occurring almost every day. The outcome of our war against Islamic terrorists will be determined by the way in which we use our swords and our plowshares to determine the outcome of the civil war in the Muslim world.

To stop al-Qaida and other terrorist groups from expanding this civil war and recruiting a new generation of killers, we must use all of our military power to capture and kill the enemy. We must drain the swamps of terrorists in Iraq and wherever they grow.

At the same time we must combat the conditions that fuel terrorism and drive recruits to al-Qaida and hate and despair. To do this we must seed the garden, not just drain the swamp, with freedom, hope, and economic opportunity. If we invest in the political and economic future of the Middle East and Central Asia in our time, as we did in Europe with the Marshall plan after the end of the Second World War and at the beginning of the cold war, we will expand democracy's reach, choke off the terrorists, strengthen our own national security, and move the world toward greater peace.

That is the underlying premise of the legislation Senator Hagel and I are introducing today. It is designed to complement our swords in the war against terrorism with the plowshares of political and economic assistance.

Our legislation is not soft. It is not welfare. It is in fact a different kind of warfare on the battlefield of ideas and ideologies, visions for the future. Although there are compelling humanitarian reasons for offering assistance to the people of the Greater Middle East, there are also compelling American national security reasons for doing so. The political and economic assistance Senator Hagel and I are proposing might be though of as additional weapons in America's arsenal in the fight against terrorists.

Let me summarize what our legislation contains. We advocate making a major financial investment in the future of the Middle East and Central Asia. How we propose making this investment is in some ways as significant as how much we propose investing. The key to the success of our Marshall plan for the Middle East, as it was of the Marshall plan for Europe, is it is not a detailed list of programs. It is a statement of values and purposes. It is the creation of a structure to carry out those values and purposes, and it is a commitment of American and international resources to realize those purposes.

Our legislation would create three new international institutions that will support economic and political development in the Greater Middle East and Central Asia, open institutions that will require participation by representatives of the countries benefiting from this support, a partnership. Institutionalizing involvement of a wide group of donors and recipients will promote better cooperation and give ownership and accountability to the impacted nations and to the private reformers in those nations--key ingredients to successful foreign assistance.

The first new institution Senator Hagel and I would create is a trust for democracy for the Middle East that would support the development of civil society in the region, not unlike efforts we made to help those who had the dream of freedom and opportunity in countries of the former Soviet Union, now living to experience that dream. Modeled on the Balkan Trust for Democracy, this institution we propose would marshal the support of civic leaders and reformers as well as private foundations to provide grants to worthy grassroots projects that support free association and promote civic responsibility, the building blocks of democracy.

Second, Senator Hagel and I would build a multilateral development foundation that would provide a second track for assistance, together with other donors, assistance that would be additional to that already being provided bilaterally by the U.S. and other international donors. This foundation will be a public place where we and other donors can come together with the countries of the region to set priorities together, to work together for the greater good of this troubled region. Many countries in the Greater Middle East are richer than they are developed, meaning their wealth has not translated to economic progress for most of the people. We would invite all governments in the region to sit on the board of this foundation, and we would ask all to contribute financially and programmatically to it.

Finally, our legislation would establish a new Middle East and Central Asia development bank, like the European Bank for Reconstruction and Development. This bank would include private sector participation and would underwrite large-scale infrastructure projects in the region. It would also have a microcredit lending facility and a project development facility.

We also believe it is important and necessary to make American assistance more effective. That is why we are calling for the establishment of an office of the coordinator for Greater Middle East and Central Asia at our Department of State. The creation of such an office would help ensure all assistance provided by any government agency of ours is in line with the overarching goals and objectives of our foreign policy. It would also give other donors and countries of the region a simple place to go when seeking information about the programs we would create.

With this collaborative structure in place, Senator Hagel and I would authorize $5 billion in assistance over the next 5 years. That is no small sum. But it is in fact small in comparison to the tens of billions of dollars in today's money that were spent on the Marshall plan in Europe 50 years ago and the hundreds of billions of dollars we are spending now and will continue to have to spend for the military side of the war against terror. That figure, we believe, is the minimum required to have a positive, measurable impact in the region and to signal the seriousness of our intentions.

Earlier this month, civil society leaders from all over the Arab world gathered in Alexandria, Egypt to discuss an Arab reform agenda. At that meeting participants agreed on a declaration that calls for significant reforms that encompass the ``political, economic, social, and cultural aspects'' of society. The fact is the reforms those Arab world reformers seek are at least as far-reaching as those that are being suggested by others from the outside, including from the United States. I know there are similar reform efforts underway in Central Asia. They deserve our support.

In introducing this legislation today, Senator Hagel and I hope to give new impetus to the discussions taking place in Washington and elsewhere about what we collectively can do to support political and economic reform in the Greater Middle East and to give the people in those great regions an alternative to a better life than the hatred and suicidal death al-Qaida offers.

The Bush administration has put forward serious proposal along the same lines as ours. It certainly has the same goals. This bill Senator Hagel and I are introducing today is intended to build on that effort. We hope it helps shape the debate of the best method to implement, which should be one of partnership and collaboration along with a serious commitment of American resources.

In June, the United States will host the G-8 summit in Sea Island, GA. That summit will be followed by the U.S.-EU and NATO summits also in June. The future of the Greater Middle East will be placed high on the agenda of all those important meetings.

By introducing this legislation today, Senator Hagel and I hope to enable our Government to go into these summits with the bipartisan support of the Congress and also to provide some direction as to what we believe should be done and how it might best be done.

Senator Hagel and I hope our colleagues will take a look at this proposal and join us in cosponsoring it and sending thereby a message no less profound and no less necessary than the message of the Marshall plan half a century ago, that the United States is serious about improving the lives and expanding the freedoms of the millions of people who live in the Greater Middle East and Central Asia.

Today, that is our most urgent international imperative. At the dawn of the cold war, America answered the challenge of communism by seeding a garden of peace, hope, and prosperity in Europe. Today, at the dawn of our current war against terrorism, it is equally essential that we answer the inhumane, barbaric threats of terrorism and acts of terrorism with all necessary force, but also by seeding the same kind of garden of peace, hope, and prosperity in the Greater Middle East.

Mr. President, today, joined by Senator Sununu, I am introducing legislation to fundamentally reform our Nation's intercity rail passenger program. The proposal adopts the core concepts for reform advanced by the administration in its Amtrak legislation--cost- sharing with the States, a network of trains that makes economic sense, and fair and open competition for Amtrak. However, in recognition of the magnitude and complexity of the task of restructuring Amtrak, the legislation takes a more moderate, realistic approach to reform. While I would prefer to see more accomplished in the next 6 years, enactment of the restructuring and reforms we are proposing today would represent meaningful progress toward creating an intercity passenger rail program that makes economic sense and meets the needs of the traveling public.

It is past time for Congress to come to terms with Amtrak's problems and why it is largely a failure. Year after year, for more than 3 decades, Congress has funded an essentially nationalized passenger railroad, that in most areas of the country neither meets a market demand nor provides needed public transportation. After 34 years and $27 billion in taxpayer subsidies, Amtrak still serves less than 1 percent of intercity travelers.

My colleagues and I may not agree on exactly how Amtrak should be restructured, but we should agree that what exists today is far from ideal. Amtrak loses over $1 billion annually. Its debt stands at almost $5 billion, a legacy the taxpayers will bear for years to come. It has mortgaged nearly every asset it owns, including a portion of New's York's Penn Station, to avoid bankruptcy. It operates routes, many of them in the middle of the night, that lose hundreds of dollars per passenger. And despite a Federal investment of $3.2 billion for high- speed service on the Northeast Corridor, the Acela service has been plagued by equipment and operating problems. In a report prepared at my request, the General Accounting Office recently found that Amtrak mismanaged the project, blatantly ignoring the Federal master plan and failing to complete 51 of the project's 72 work elements.

It is past time to end the status quo. If the collective wisdom of Congress is to continue to fund intercity passenger rail service, then we should do so in a manner that makes economic sense. The legislation we are introducing today would restructure the passenger rail program in a realistic way and provide responsible funding for existing service and new corridor development.

First, the legislation would make cost-sharing on shorter-distance corridor routes more equitable. Today, California, Washington, Oregon, and a number of other States play an active role in funding and managing passenger service on corridor routes in their States, while other States pay nothing. This legislation would require equitable cost-sharing for all corridor trains. By the end of the 6-year reauthorization period, States would be required to fund 70 percent of the operating losses on corridor services, the level of contribution already being made by California, the Pacific Northwest, Oklahoma, Missouri, and several other States. Furthermore, the Federal share of operating subsidies would be payable as grants to the States. Where States have taken an active role in managing Amtrak service, there has been more accountability, better customer service, and a higher level of efficiency.

Second, the legislation would restructure Amtrak's long distance routes. I am not proposing, as many of my colleagues would expect, to ``whack'' every long distance train. In fact, closure and consolidation would be a last resort under my proposal. The ultimate goal would be to reduce the annual operating subsidy required for these routes by at least 50 percent whether by restructuring the route, reducing operating expenses, contracting out service to a private operator, or securing State financial support. Amtrak operates 16 long distance trains, including the Sunset Limited, a train that runs through Arizona on its 3-day odyssey from Los Angeles to Orlando and loses over $400 per passenger. Reducing the burden of these trains on the taxpayer is one of my top priorities.

This proposal would also establish fair and open competition for Amtrak. If, after 34 years of being told by Amtrak that profitability is just a few years away or, more recently, that it is on a ``glide- path'' to self-sufficiency, we are now to conclude that Amtrak will always run operating and capital deficits. Our duty to the taxpayers is to ensure that service is operated as efficiently as possible to minimize subsidies. To achieve this goal, there must be fair and open competition for Amtrak from private sector companies and commuter authorities.

Some of my colleagues contend that the private sector would not be interested in operating passenger service, noting that Amtrak was created because the freight railroads did not wish to continue providing what had become unprofitable service with the development of air travel and the Interstate Highway System. But times have changed. Norfolk Southern recently told transportation officials in Georgia that it wants to be considered to run the State's planned commuter service between Atlanta and Macon. Herzon, a private company headquarted in Missouri, operates commuter services in Texas and California, and has been trying to bid against Amtrak to operate the ``Mules'' service between St. Louis and Kansas City. Further, 14 private corporations expressed interest in operating service following a Commerce Committee hearing in which the question of private sector interest was posed.

Fourth, this legislation would establish a process for corridor development modeled after the transit ``new starts'' program. Many States have expressed interest in developing new conventional or high- speed intercity passenger service in highly-traveled corridors. My proposal would evaluate new intercity services on a competitive basis and require that projects meet planning and design requirements similar to those that apply to the well-respected new starts program administered by the Federal Transit Administration. As the States assume more responsibility for operating subsidies, the amount of funding available for corridor development would increase. By year 6 of the reauthorization period, $800 million would be authorized for corridor development.

This legislation also addresses ownership, management, and maintenance of Northeast Corridor. As recommended by the administration, the bill proposes that the Federal Government assume ownership of the Northeast Corridor and implement a plan to restore the Corridor to a state of good repair. The Northeast Corridor States would be encouraged to adopt an interstate compact within 5 years and assume responsibility for the Corridor's management. Other States would be expected to manage their corridor services, and the Northeast Corridor should be no exception. Moreover, over 1,000 of the 1,200 or so trains operated daily on the Corridor are commuter trains, not intercity services. Until the interstate compact is in place, Amtrak would continue to operate and maintain the Corridor.

Finally, the legislation institutes reforms at Amtrak. Amtrak would be required to perform its services under

contract with the Federal Government or States, and would be required to develop a more accurate and transparent cost accounting system. As recommended by the DOT Inspector General, an effort would be made to restructure Amtrak's debt to reduce the cost to the taxpayers.

We encourage our colleagues to support this legislation. Reforming Amtrak and the way our intercity passenger rail program is now organized must be accomplished before Congress considers expanding intercity service. Simply throwing billions more at Amtrak as some of my colleagues propose--whether through appropriations, bonds, or some other funding scheme--will not solve the fundamental problems. We can and must do better.

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

Mr. President, I am pleased to join Senator Graham in introducing the ``Restore Elector Confidence in Our Representative Democracy Act of 2004'' (``RECORD'' Act) because there is no civic action more important in a democracy than voting. Yet right now, many Americans have concerns about the integrity of the electoral system. We must restore trust in our voting, and we must do it now.

Electronic voting systems, specifically touch-screen voting machines, are being increasingly used across the nation. Indeed, according to Election Data Services, it is estimated that this November, at least 50 million voters this year will vote on touch-screen voting machines.

These machines have benefits but there are major concerns with the security of these machines and the current ability of voters to verify their votes through a paper record. This legislation effectively addresses both of these vitally important issues.

In New York, electronic voting is on the horizon. Some machines will be used next year in the New York City mayoral race. As New Yorkers start to use this new technology, I want them to be absolutely certain their right to elect the leaders of their choice won't be at risk for want of a simple fix like this.

When you use an ATM, you get a paper receipt. Right now, when you cast an electronic vote, you get nothing. You have no way of knowing that the selections you've made on the touch screen will be recorded and counted.

This legislation will ensure that voters will be able to verify a paper ballot that accurately reflects their intentions and that will be locked away and will be the official ballot in a recount. This legislation will also address the security issues surrounding electronic voting systems.

Why is this so critical? Because we know from computer experts that these systems are vulnerable to hacking--and that with just a push of a button, hackers could turn Kerry votes to Bush votes. Think about that.

Indeed, a number of recent studies, including the July 2001 study by Caltech/MIT, the July 2003 study by Johns Hopkins and Rice universities, the September 2003 study by Science Applications International, and the two November 2003 studies conducted by Compuware corporation and InfoSENTRY, pointed to significant and disturbing security risks in electronic voting systems and related administrative procedures and processes.

According to the Johns Hopkins study, these voting machines are incapable of detecting their own mistakes. Specifically, as one of the authors noted, there is no way to validate the outcome of an election using the current crop of machines. Errors can't be detected and, in my opinion, that is a threat to all of us.

There were also problems with these machines in the recent presidential primaries. Counties in California, Georgia, and Maryland reported problems with encoders, the devices that allow touch-screen voting machines to display the candidate and ballot measures specific to one county.

We already know of stories from Florida in which there was a special election for one office, and the computer election system recorded 120 people as there but not voting.

These security concerns have only been inflamed by statements from people like Walden O'Dell--the CEO of Diebold, a major electronic voting machine manufacturer--who said he would do anything to ensure that President Bush would be re-elected.

So we have a system that is vulnerable to attack, that provides no real accountability to ensure accuracy and, to add to our concerns, an e-voting manufacturer demonstrating his tremendous partisanship. This should give us all pause.

This legislation will require the use of voter verifiable paper ballots so that each and every voter will be able to confirm that his or her vote was accurately cast and recorded. The verified paper ballot will be deemed the official record for purposes of a recount and at least 2 percent of all ballots in all jurisdictions in each State and 2 percent of the ballots of military and overseas voters will be counted at random.

One hundred and fifty million will also be appropriated to the Election Assistance Commission in order to help States implement the paper ballot system.

To ensure greater security of electronic voting systems, the Act authorizes the use of only open source software. Manufacturers will also have to satisfy a number of security standards concerning the development, maintenance, and transfer of software used in electronic voting systems.

This legislation also provides $10 million to the Election Assistance Commission to help it administer the implementation of verification systems and improved security measures nationally, and $2 million to the National Institute of Standards and Technology for consultation services to State and local governments regarding voter verification and the security of their electronic voting machines.

The Commission must receive this additional administrative funding because unfortunately, even though the Help America Vote Act of 2002 authorized $10 million annually to help the Commission do its work, Congress in the fiscal year 2004 omnibus appropriations legislation appropriated less than $2 million to the Commission, making it that much more difficult for the Commission to do its work.

Lastly, the Act requires the Election Assistance Commission to report to Congress within 3 months of enactment on operational and management systems that should be used in Federal elections and within 6 months of enactment on a proposed security review and certification process for all voting systems.

Our Nation is the greatest nation on earth and it is the leading democracy in the world. In fact, the Bush Administration takes pride in promoting democracy around the world--and they should. But we also have to do everything in our power to ensure democracy here. Central to our democracy is the ability of Americans to have confidence in the voting system used to register and record their votes. This is a fundamental standard that must be met. We are currently, however, falling short of that standard.

And let me say one more thing. The election this November is going to be one of the most important of my lifetime. And every pundit in America says it will be close, because we are still so divided. If we have huge problems again, if we have another debacle like Palm Beach voting for Buchanan, people will fundamentally lose confidence in our democracy and in their vote. We cannot let that happen.

This legislation is good insurance against that risk. For all of those who believe that in a democracy, there is no more important task than assuring the sanctity of votes, this should be an easy step to take to assure it. I ask all of my colleagues to support this legislation.