Arrow Excise Tax Simplification Act of 2003

Mr. President, I rise today to introduce my package of alternative energy and energy efficiency bills. These bills all work in concert toward a single goal--promoting the use of cleaner, renewable energy for this nation.

For several decades, the U.S. has relied on foreign sources of energy supply. Worldwide demand for energy has continued to increase, while our domestic resource base has decreased, leaving the country vulnerable in the event of foreign supply disruptions. This year, the U.S. will import 60 percent of its crude oil needs this year. The events of September 11th have focused attention on the need to develop a new energy policy that focuses on creating new domestic sources. Our Nation needs to explore and develop all possible domestic options as resources for our energy supply. To reduce our dependence on foreign imports, it is imperative that policy makers create incentives to promote technologies that can produce quality alternative products. Our national security demands that the government undertake programs which assure the implementation of real alternative fuel technologies.

It is in the best security interests of our Nation to reduce our reliance on foreign energy suppliers. We can no longer afford to be subject to the whims and manipulations of foreign cartels like OPEC. Added to these threats posed by OPEC and the instability of the Middle East are the even more sinister possibilities that we face in other parts of the world. Developments in many regions of the world where much of today's energy supplies are obtained--West Africa, the Caspian Sea, Indonesia, Venezuela, and so forth--clearly serve notice that our Nation cannot continue to depend on these areas for our future energy needs. These events make it more pressing than ever that we proceed forward with the development of our own domestic alternative energy resources.

In the last Congress, both the House and the Senate passed comprehensive energy bills that would have brought us closer to these goals. In the Senate bill, we were able to strike a delicate balance between using our resources for energy and preserving our environment for future generations. I was pleased with the Senate version of the Energy Policy Act of 2002, and was disappointed that conferees were unable to iron out differences with the House of Representatives before adjournment. We must make energy independence a national priority because it is now essential to our homeland security.

Looking ahead, I will continue my work to build a cohesive national energy policy that ultimately reduces our dependence on foreign oil. To accomplish this goal, we must provide access to more resources, transmit these resources to the consumer, and encourage industrial and individual consumers to use more renewable energy sources. These important steps will lead to greater reliability and lower energy costs for consumers.

We should all work again in the 108th Congress to adopt a comprehensive energy plan that sets America on the road to energy independence and assures consumers of a reliable and affordable energy supply.

The legislation I am introducing today will encourage production of biodiesel and its use in this country; to promote the manufacture of energy efficient home appliances; to encourage the use of fuels produced from animal and agricultural wastes; to encourage the use of our waste sources such as landfill gas and municipal solid waste to produce energy; and to spur the investment in delivering fuels to rural America. These incentives for production and use of clean and renewable fuels can help bridge the investment cost gap between production of petroleum and renewable energy.

Each of these bills were either included or debated in the Senate during last year's Senate consideration and passage of the energy bill. I look forward to their inclusion in the debate and inclusion in any energy bill to be passed by the Senate during the 108th Congress.

The first bill I am introducing today is the Biodiesel Promotion Act of 2003. I am pleased to be joined in introducing this bill by Senators Grassley, Hagel, Dayton, Harkin, Durbin, Coleman, and Johnson. This legislation will provide tax incentives for the production of biodiesel from agricultural oils, recycled oils, and animal fats and will ensure that biodiesel becomes a central component of this nation's automobile fuel market.

This legislation is identical to language authored by myself and Senator Grassley included in the last Congress's Energy Bill. It is intended to be a starting point for our debate and discussion as we draft an energy bill for consideration in this Congress.

This legislation will provide a partial exemption from the diesel excise tax for diesel blended with biodiesel. Specifically, the bill provides a one-cent reduction for every percent of biodiesel from virgin agricultural oils blended

with diesel up to 20 percent. The legislation will also provide a half- cent reduction for every percent of biodiesel from recycled agricultural oils or animal fats.

Also importantly, in the year that we are to reauthorize the Transportation Enhancement Act of 1996, the bill provides for reimbursing the Highway Trust Fund from the USDA Commodity Credit Corporation, CCC. This procedure will protect the Trust Fund from lost revenues due to the biodiesel incentive while providing a much-needed boost to our nation's biodiesel industry. The cost to the CCC would be offset at least initially by the savings under the marketing loan program.

Biodiesel, which can be made from just about any agricultural oil including oils from soybeans, cottonseed, or rice, is completely renewable, contains no petroleum, and can be easily blended with petroleum diesel. A biodiesel-diesel blend typically contains up to 20 percent renewable content. It can be added directly into the gas tank of a compression-ignition, diesel engine vehicle with no major modifications. Biodiesel is completely biodegradable and non-toxic, contains no sulfur, and it is the first and only alternative fuel to meet EPA's Tier I and II health effects testing standards. Biodiesel also stands ready to help us reach the EPA's new rule to reduce the sulfur content of highway diesel fuel by over 95 percent.

Even after years of research and market development, biodiesel is not yet cost-competitive with petroleum diesel. In order to be so, market support and tax incentives are needed. I believe the provisions provided in this bill will help in leveling the field for biodiesel blends and help jumpstart this new industry.

The time is right for this investment. It is right for our rural economy, for our environment, and for our national energy security and I encourage my colleagues to join us in supporting the Biodiesel Promotion Act of 2003.

The second component of my package is the EPACT Alternative Fuel Flexibility Act of 2003. I am pleased to be joined today by Senators Bond and Talent in introducing this legislation.

The purpose of this legislation is to place biodiesel fuel on equal footing with every other alternative motor fuel used in this nation.

The Energy Policy Act of 1992, EPACT, set a national objective to shift the focus of national energy demand away from imported oil toward renewable and domestically produced energy sources. When EPACT was passed in 1992, it recognized ethanol, natural gas, propane, electricity, and methanol as alternative fuels. The original list of alternative fuels did not include biodiesel because the technology had not been fully developed.

EPACT set a goal to replace 10 percent of petroleum-based fuels by 2000 and 30 percent by the year 2010. However, a GAO report issued in July of 2001 noted that ``limited progress has been made in increasing the numbers of alternative fuel vehicles, AFV, in the national vehicle fleet and the use of alternative fuels'' as compared to conventional vehicles and fuels.

We did not meet the original EPACT goals of replacing 10 percent of petroleum-based fuels by 2000. Today we are not on track to meet the goal of 30 percent by the year 2010. In fact, we haven't even come close, and that's partly a result of not allowing all alternative fuels to be used to meet the EPACT alternative fuel mandates.

This legislation will significantly increase the use of alternative fuels by allowing EPACT covered fleets to meet up to 100 percent of the EPACT purchase requirements through the use of biodiesel. Currently, covered fleets can only meet up to 50 percent of purchase requirements with biodiesel.

By offering an additional option for the use of alternative fuels, we will widen the possibilities for these fuels to be made more widely available. Fleets will continue to have the option to choose the complying vehicles and fuels that best meet their needs. This legislation is not expected to affect fleets that are currently using ethanol or natural gas. But this legislation does provide a further option for alternative fuel vehicles. Furthermore, it does not directly displace natural gas or ethanol sales, since biodiesel is used in medium- and heavy-duty trucks rather than light-duty vehicles.

By allowing fleets to meet 100 percent of their AFV requirement by using biodiesel, we'll take a positive step toward moving this country away from dependence on petroleum-based motor fuels and toward alternative motor fuels. I urge all of my colleagues to support this legislation.

The third bill I introduce today as part of my energy independence package is the Animal and Agricultural Waste Renewable Energy Production Act of 2003. I am pleased to be joined today by Senators Hagel, Bond, and Kerry in introducing this legislation.

This legislation would provide a credit under Section 29 of the tax code for the production of fuels from animal and agricultural wastes.

Thanks to new technological developments, we can now produce significant quantities of alternative fuels from agricultural and animal wastes in an environmentally friendly manner. Production incentives are needed to assure implementation and commercialization of this new generation of technology.

Section 29 was originally enacted to provide an incentive to produce alternative and hard-to-reach fuels that could compete with fossil fuels and hopefully reduce the nation's dependence on foreign oil. As originally enacted, a number of ``non-conventional fuels'' were eligible for the credit, including the following: oil from shale; oil from tar sands; natural gas from geo-pressured brine, coal seams, Devonian shale, or tight sands; liquid, gaseous or solid synthetic fuel from coal, including coke and coke by-products; gas from biomass, including wood; steam from solid agricultural by-products; and processed solid wood fuels.

Other biomass by-products, such as agricultural and animal oils and solids, also should qualify the same as liquid or gaseous synthetic fuels derived from coal.

New technological advances have been developed which will convert these biomass wastes efficiently to alternative fuels. The most readily available of these wastes are agricultural and animal wastes, municipal wastes, plastics, used tires, and forest product wastes. This production incentive opportunity would provide significant new annual quantities of alternative fuel to replace foreign imported oil and should be considered a government investment in the nation's future.

If these incentives are implemented, large marketable quantities of quality alternative fuel products can be produced as a replacement for foreign imported oil. These processes can achieve the desired results in an environmentally positive way that essentially converts all wastes to products and provides an answer for waste disposal problems. To achieve these results, financial incentives need be provided from the government. Section 29 should be extended to include alternative fuels produced from all biomass wastes and I encourage all of my colleagues to join us in supporting this legislation.

The fourth bill I am introducing today is the Capturing Landfill Gas for Energy Act of 2003. This legislation will provide a credit under either Section 29 or Section 45 of the tax code for the production of energy from landfill gas, LFG. It is designed to encourage additional collection and productive use of methane gas generated by garbage decomposing in America's landfills. LFG is a renewable fuel that can be used directly as an energy source for heating, as a clean burning vehicle fuel, as a hydrogen source for fuel cells. Furthermore, it can power generators to produce electricity.

Congress recognized the importance of LFG for energy diversity and national security by providing such a credit in 1980 and extending it for nearly two decades. With today's critical energy needs and emphasis on distributed generation, this incentive makes more sense than ever. Most of the 360 LFG projects that currently are operating were made economically feasible by the ``non-conventional-source fuel'' production tax credit under Section 29 of the tax code.

But since June 30, 1998, that credit to encourage construction of new LFG projects has been unavailable, and few have been constructed since that date. The U.S. Environmental Protection Agency estimates that 600- 700 more LFG projects could be constructed nationwide if there were sufficient economic incentives in place to foster

their development. With such incentives, it is likely that about 55 new projects would be brought on line each year. Just one medium-sized project could provide three megawatts of electrical power capacity-- enough to meet the electricity needs of 3,000 homes each year.

In addition to the value of LFG as an important contribution to our overall energy strategy, there are compelling environmental reasons to encourage these projects. Uncontrolled landfill gas can create fire hazards and odors and can impair air quality. The methane in landfill gas is 21 times more potent than carbon dioxide as a greenhouse gas. Even the large landfills that are required under the Clean Air Act to collect their gas and control non-methane organic compounds often find it more economic to simply flare or otherwise waste the gas rather than use the methane. Some smaller landfills are not required to collect the gas, and may continue to emit it for decades under the Clean Air Act. Thus, LFG projects not only reduce local and regional air pollution while yielding a renewable source of energy, they can also reduce the country's yearly emissions of greenhouse gases by a very substantial amount at a relatively small cost.

Unfortunately, the potential energy and environmental benefits of future LFG projects are substantial, but they will be lost without adequate LFG tax provisions to support project development. On average, the total capital cost of constructing an LFG-fueled electricity generating project is about $1 million per megawatt, and the annual operating and maintenance costs average another $150,000 per megawatt. The average capital cost of a new direct use fuel production and delivery project is about $2.5 million, with annual operation and maintenance costs of about $350,000.

My bill proposes sufficient, yet sensible, tax incentives to encourage these large investments, and I urge my colleagues to join me and support LFG tax credits.

Today I am also pleased to be joined by Senator Akaka in introducing the fifth component of my energy package--the Waste to Energy Utilization Act of 2003. This legislation will provide a credit under Section 45 of the tax code for new waste-to-energy facilities or new generating units at existing facilities. Such a tax credit encourages clean renewable electricity and promotes energy diversity, while helping cities meet the challenge of trash disposal.

Nearly 2000 communities nationwide rely on waste-to-energy facilities to safely dispose of trash and generate clean, renewable energy that meets the power need of more than two and a half million homes. The U.S. Conference of Mayors has repeatedly urged Congress to include provisions that promote waste-to-energy in tax legislation and they are joined by the National Association of Regulatory Utility Commissioners, the Business Council for Sustainable Energy, the U.S. Chamber of Commerce, and the International Brotherhood of Boilermakers.

Arkansas stands with other environmentally conscious States in understanding that waste-to-energy technology saves valuable land and significantly reduces the amount of greenhouse gases that would have been released into our atmosphere without its operation. The volume of waste is reduced by greater than 90 percent in a waste-to-energy facility, and EPA has confirmed that more than 33 million tons of greenhouse gases are avoided annually by the combustion of municipal solid waste. Municipal solid waste is a sustainable source of clean, renewable energy.

Local governments spent about $1 billion over the past five years on air pollution control equipment to comply with EPA's Maximum Achievable Control Technology, MACT, standards required under the Clean Air Act. These retrofits have made waste-to-energy one of the cleanest power generators in the country. In June, EPA announced that these facilities have shown ``outstanding performance'' resulting in ``dramatic decreases'' in emissions, resulting in reductions of mercury emissions of more than 95 percent from a decade ago. Communities with waste-to- energy facilities recycle 33 percent of their trash, on average, and historically have more successful recycling programs than cities without waste-to-energy plants.

We must sustain a level marketplace to achieve energy diversity and economic growth. I believe this Senate should pass tax legislation that includes production tax credits to spur energy generation, and I encourage all of my colleagues to join us and support this legislation.

The sixth bill I introduce today is the Resource Efficient Appliance Incentives Act of 2003. I am pleased to be joined in introducing this bill by Senators Allard, Grassley, Harkin, Stabenow, Hagel, Levin, and DeWine.

This legislation will provide a tax credit for the production of super energy-efficient clothes washers and refrigerators if those appliances exceed new Federal energy efficiency standards. The tax credit would only be available for five years and would be capped for each manufacturer.

In 2001, the Department of Energy issued new energy efficiency standards for clothes washers. This agreement accompanies rules for higher efficiency refrigerators issued by the department two years ago. The new rules are significant because clothes washers, clothes dryers, and refrigerators account for approximately 15 percent of all household energy consumed in the U.S. annually. The tax incentives contained in this legislation are constructed to encourage manufacturers not only to exceed these new efficiency requirements, but to exceed them by up to 35 percent.

Tax incentives are essential to accelerate the production and market penetration of leading-edge appliance technologies that create significant environmental benefits. The need for super energy-efficient appliances is greater this year than at any time in the past 20 years. Over the life of the appliances, over 200 trillion BTUs of energy will be saved. This is the equivalent of taking 2.3 million cars off the road or making available for other uses the energy of six coal-fired power plants for a year.

In addition, the clothes washers will reduce the amount of water necessary to wash clothes by 870 billion gallons, an amount equal to the needs of every household in a city the size of Phoenix, Arizona for two years. The water savings attributable to these new technology machines is not based on some computer generated model but an actual case study that gathered data in the small community of Bern, KS by the Dept. of Energy's esteemed Oak Ridge National Laboratory in 1998.

The Association of Home Appliance Manufacturers estimates these super energy-efficient appliances could save the average family $100 per year--or $1,400 per family over the lifetime of the appliance. This legislation will create the incentives necessary to increase the production and sale of these super energy-efficient appliances in the short term while passing along energy savings to the American consumer.

As a DOE analysis indicates, high efficiency washers and refrigerators are significantly more expensive to manufacture than those that simply meet existing federal standards. Further, market surveys of consumers indicate that they are generally not willing to pay more for high efficiency appliances, even when it can be demonstrated that high efficiency appliances will generate greater savings in utility costs over time. The tax credit will provide an incentive for manufacturers to develop a greater selection of super efficient models that will appeal to consumers at all price points. In addition, to assure increased sales of these appliances, manufacturers will be encouraged to redirect their marketing and advertising resources toward the high efficiency models. Enactment of this legislation will bring immediate, significant, and lasting environmental benefits to the nation, and I encourage all of my colleagues to join us in supporting in this effort.

The final bill I am introducing today is the Gas Distribution Infrastructure Investment Act of 2003. This legislation will amend the Internal Revenue Code to modify the depreciation of natural gas pipelines, equipment, and infrastructure assets from 20 to 10 years.

America's demand for energy is expected to grow by 32 percent during the next 20 years. Consumer demand for natural gas will grow at almost twice that rate, due to its economic, environmental, and operational benefits. That level of natural gas use is almost 60

percent greater than the highest recorded level. To satisfy this projected demand, we must substantially expand our existing gas infrastructure. This is especially true with respect to the delivery sector. Higher capacity utilization of existing infrastructure will meet some of this increased demand, but the delivery sector still will require capital investments of at least $123 billion for infrastructure enhancement and additions.

Shrinking the lifetime over which an asset is depreciated does not change the amount of expense a company is allowed to claim over the asset's useful life, but simply shortens the expensing period for tax purposes. This shortened tax life generates higher cash flows in terms of reduced tax liability during the asset's early useful lifetime. Conversely, the cash flows are decreased, relative to the longer depreciation life, during the later part of the asset's useful life. The overall impact is zero on a gross basis.

I urge my colleagues to support this important legislation. Infrastructure development and expansion is crucial if America's homes are to continue to rely on clean-burning natural gas to heat their homes and fuel their appliances.

I ask unanimous consent that each of the seven bills I am introducing today be printed in the Record.

Mr. President, I rise today to introduce the ``Clinical Social Work Medicare Equity Act of 2003.'' I am proud to sponsor this legislation that will include clinical social workers among other mental health providers that are exempted from the Medicare Part B Prospective Payment System. This bill will ensure that clinical social workers can receive Medicare reimbursements for the mental health services they provide in skilled nursing facilities.

Since my first days in Congress, I have been fighting to protect and strengthen the safety for our Nation's seniors. Making sure that seniors have access to quality, affordable mental health care is an important part of this fight. I know that millions of seniors do not have access to, or are not receiving, the mental health services they need. For example, depression affects nearly 6 million seniors, but only one-tenth ever get treated. This is unacceptable. Clinical social workers

may also be the only mental health providers in some rural areas. Protecting seniors' access to clinical social workers can help make sure that our most vulnerable citizens get the quality, affordable mental health care they need.

Clinical social workers, much like psychologists and psychiatrists, treat and diagnose mental illnesses. In fact, clinical social workers are the primary mental health providers for nursing home residents. But unlike other mental health providers, clinical social workers cannot bill directly for the important services they provide to their patients. This bill will correct this inequity and make sure clinical social workers get the payments and respect they deserve.

Before the Balanced Budget Act of 1997, clinical social workers billed Medicare Part B directly for mental health services provided in nursing facilities to each patient they served. Under the Prospective Payment System, services provided by clinical social workers are lumped, or ``bundled,'' along with the services of other health care providers for the purposes of billing and payments. Psychologists and psychiatrists, who provide similar counseling, were exempted from this system and continue to bill Medicare directly. This bill would exempt clinical social workers, like their mental health colleagues, from the Prospective Payment System, and would make sure that clinical social workers are paid for the services they provide to patients in skilled nursing facilities. The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act addressed some of these concerns, but this legislation would remove the final barrier to ensuring that clinical social workers are treated fairly and equitably for the care they provide.

This bill is about more than paperwork and payment procedures. This bill is about equal access to Medicare payments for the equal and important work done by clinical social workers. It is also about making sure our Nation's most vulnerable citizens have access to quality, affordable mental health care. Without clinical social workers, many nursing home residents may never get the counseling they need when faced with a life threatening illness or the loss of a loved one. I think we can do better by our nation's seniors, and I'm fighting to make sure we do.

The Clinical Social Work Medicare Equity Act of 2003 is strongly supported by the National Association of Social Workers. I ask unanimous consent that a letter of endorsement from the National Association of Social Workers be printed in the Record. I also want to thank Senators Johnson, Murray, Stabenow, Corzine, Inouye, and Bingaman for their cosponsorship of this bill. I look forward to working with my colleagues to enact this important legislation.

Mr. President, today, I rise to talk about an issue that is very important to me, very important to my constituents in Maryland and very important to the people of the United States of America.

For the fifth Congress in a row, I am joining in a bipartisan effort with my friend and colleague, Senator Olympia Snowe, to end an unfair policy of the Social Security System.

Senator Snowe and I are introducing the Social Security Family Protection Act. This bill addresses retirement security and family security. We want the middle class of this Nation to know that we are going to give help to those who practice self-help.

What is it I am talking about? I was shocked when I found out that Social Security does not pay benefits for the last month of life. If a Social Security retiree dies on the 18th of the month or even on the 30th of the month, the surviving spouse or family members must send back the Social Security check for that month.

I think that is a harsh and heartless rule. That individual worked for Social Security benefits, earned those benefits, and paid into the Social Security trust fund. The system should allow the surviving spouse or the estate of the family to use that Social Security check for the last month of life.

This legislation has an urgency. When a loved one dies, there are expenses that the family must take care of. People have called my office in tears. Very often it is a son or a daughter that is grieving the death of a parent. They are clearing up the paperwork for their mom or dad, and there is the Social Security check. And they say, ``Senator, the check says for the month of May. Mom died on May 28. Why do we have to send the Social Security check back? We have bills to pay. We have utility coverage that we need to wrap up, mom's rent, or her mortgage, or health expenses. Why is Social Security telling me, `Send the check back or we're going to come and get you'?''

With all the problems in our country today, we ought to be going after drug dealers and tax dodgers, not honest people who have paid into Social Security, and not the surviving spouse or the family who have been left with the bills for the last month of their loved one's life. They are absolutely right when they call me and say that Social Security was supposed to be there for them.

I've listened to my constituents and to the stories of their lives. What they say is this: ``Senator Mikulski, we don't want anything for free. But our family does want what our parents worked for. We do want what we feel we deserve and what has been paid for in the trust fund in our loved one's name. Please make sure that our family gets the Social Security check for the last month of our life.''

That is what our bill is going to do. That is why Senator Snowe and I are introducing the Family Social Security Protection Act. When we talk about retirement security, the most important part of that is income security. And the safety net for most Americans is Social Security.

We know that as Senators we have to make sure that Social Security remains solvent, and we are working to do that. We also don't want to create an undue administrative burden at the Social Security Administration--a burden that might affect today's retirees. But it is absolutely crucial that we provide a Social Security check for the last month of life.

How do we propose to do that? We have a very simple, straightforward way of dealing with this problem. Our legislation says that if you die before the 15th of the month, you will get a check for half the month. If you die after the 15th of the month, your surviving spouse or the family estate would get a check for the full month.

We think this bill is fundamentally fair. Senator Snowe and I are old-fashioned in our belief in family values. We believe you honor your father and your mother. We believe that it is not only a good religious and moral principle, but it is good public policy as well.

The way to honor your father and mother is to have a strong Social Security System and to make sure the system is fair in every way. That means fair for the retiree and fair for the

spouse and family. We strongly feel that the current system is an injustice to spouses and families across the Nation. Just because a beneficiary passes away, it does not mean that their bills can go unpaid. Join us to correct this policy and to ensure that families and recipients are protected during this difficult time. That is why we support making sure that the surviving spouse or family can keep the Social Security check for the last month of life.

We urge our colleagues to join us in this effort and support the Social Security Family Protection Act. I ask unanimous consent that the text of my bill be printed in the Record.

Mr. President, I rise today to talk about an issue that is very important to me, very important to my constituents in Maryland and very important to government workers and retirees across the Nation. I am reintroducing a bill to modify a cruel rule of government that is unfair and prevents current workers from enjoying the benefits of their hard work during retirement. My bill has bipartisan support and the House companion bill

had nearly 300 cosponsors last year. With this strong bipartisan support, I hope that we can correct this cruel rule of government this year.

Under current law, a Social Security spousal benefit is reduced or entirely eliminated if the surviving spouse is eligible for a pension from a local, State or Federal Government job that was not covered by Social Security. This policy is known as the Government Pension Offset.

This is how the current law works. Consider a surviving spouse who retires from government service and receives a government pension of $600 a month. She also qualifies for a Social Security spousal benefit of $645 a month. Because of the Pension Offset law, which reduces her Social Security benefit by 2/3 of her government pension, her spousal benefit is reduced to $245 a month. So instead of $1245, she will receive only $845 a month. That is $400 a month less to pay the rent, purchase a prescription medication, or buy groceries. I think that is wrong.

My bill does not repeal the government pension offset entirely, but it will allow retirees to keep more of what they deserve. It guarantees that those subject to the offset can keep at least $1200 a month in combined retirement income. With my modification, the 2/3 offset would apply only to the combined benefit that exceeds $1200 a month. So, in the example above, the surviving spouse would face only a $30 offset, allowing her to keep $1215 in monthly income.

Unfortunately, the current law disproportionately affects women. Women are more likely to receive Social Security spousal benefits and to have worked in low-paying or short-term government positions while they were raising families. It is also true that women receive smaller government pensions because of their lower earnings, and rely on Social Security benefits to a greater degree. My modification will allow these women who have contributed years of important government service and family service to rely on a larger amount of retirement income.

The last time Congress passed a bill significantly effecting Social Security benefits was in 1999. At that time, the Senate unanimously voted for and passed H.R. 5, The Senior Citizens' Freedom to Work Act of 1999. This legislation ensured that senior citizens who choose to work or who must work can earn income after retirement without losing a portion of their Social Security benefit. That law helps senior citizens who earn above $17,000 per year. In contrast, my bill specifically targets those with much lower retirement incomes around $13,000 per year and less. I believe that we must work to ensure a safety net for all of our seniors--including those retired federal employees who every day are forced to make difficult choices between rent, food, and prescription drugs due to the drastic effects of the government pension offset.

Why do we punish people who have committed a significant portion of their lives to government service? We are talking about workers who provide some of the most important services to our community--teachers, firefighters, and many others. Some have already retired. Others are currently working and looking forward to a deserved retirement. These individuals deserve better than the reduced monthly benefits that the Pension Offset currently requires.

Government employees work hard in service to our nation, and I work hard for them. I do not want to see them penalized simply because they have chosen to work in the public sector, rather than for a private employer, and often at lower salaries and sometimes fewer benefits. If a retired worker in the private sector received a pension, and also received a spousal Social Security benefit, they would not be subject to the Offset. I think we should be looking for ways to reward government service, not the other way around. I believe that people who work hard and play by the rules should not be penalized by arcane, legislative technicalities.

Frankly, I would like to repeal the offset all together. But, I realize that budget considerations make that unlikely. As a compromise, I hope we can agree that retirees who have worked hard all their lives should not have this offset applied until their combined monthly benefit, both government pension and Social Security spousal benefit, exceeds $1,200.

I also strongly believe that we should ensure that retirees buying power keeps up with the cost of living. That's why I have also included a provision in this legislation to index the $1,200 amount to inflation so retirees will see their minimum benefits increase along with the cost of living.

The Social Security Administration recently estimated that enacting the provisions contained in my bill will have a minimal long-term impact on the Social Security Trust Fund--about 0.01 percent of taxable payroll. Additionally, my bill is bipartisan and is strongly supported by CARE, the Coalition to Assure Retirement Equity with 43 member organizations including the National Association of Retired Federal Employees, NARFE, the American Federation of Federal State County and Municipal Employees, AFSCME, the National Education Association, NEA, and the National Treasury Employees Union, NTEU.

I urge my colleagues to join me in this effort and support my legislation to modify the Government Pension Offset. I ask unanimous consent that the text of my bill be printed in the Record.

Mr. President, I rise today to introduce legislation that I believe will go a long way in helping to reduce congestion and improve safety and security throughout the Nation's transportation network. Today I am introducing the National Transportation Modeling and Analysis Program Establishment Act, or NATMAP for short.

The purpose of this bill is to authorize the Secretary of Transportation to complete an advanced computer model that will simulate, in a single integrated system, traffic flows over every major transportation mode, including highways, air traffic, railways, inland waterways, seaports, pipelines, and other intermodal connections. The advanced model will simulate flows of both passenger and freight traffic.

Our transportation network is a central component of our economy and fundamental to our freedom and quality of life. America's mobility is the engine of our free market system. The food we eat, the clothes we wear, the materials for our homes and offices, and the energy to heat our homes and power our businesses all come to us over the Nation's vast transportation network. Originating with a producer in one region, materials and products may travel via any number of combinations of truck, rail, airplane, and barge before reaching their final destinations.

Today, the Internet connects the world electronically. But it is our transportation network that provides the vital links for the movement of both people and goods domestically and around the world. According to the latest statistics, our transportation industry carries over 11 billion tons of freight per year worth about $7 trillion. Of the 3.7 trillion ton-miles of freight carried in 1998, 1.4 trillion went by rail, 1 trillion by truck, 673 billion by domestic water transportation, 620 billion by pipeline, and 14 billion by air carrier.

Individuals also depend on our transportation system--be it passenger rail, commercial airline, intercity bus, or the family car--for business travel or simply to enjoy a family vacation. Excluding public transit, passengers on our highways traveled a total of 4.2 trillion passenger-miles in 1998. Airlines carried another 463 billion passenger-miles. Transit companies and rail lines carried 50 billion.

We are also interconnected to the world's transportation system, and, as I am sure every Senator well knows, foreign trade is an increasingly critical component of our economy. Our Nation's seaports, international airports, and border crossing with Canada and Mexico are the gateways through which passengers and cargo flow between America and the rest of the world. The smooth flow of trade, both imports and exports, would not be possible without a robust transportation network and the direct links it provides to our international ports of entry.

It should be clear that key to our continuing economic strength is a transportation system that is safe, secure and efficient. Today, we are fortunate to have one of the best transportation networks in the world, and I believe we need to keep it that way. However, we are starting to see signs of strain from the dramatic increase in traffic. For example, according to the Department of Transportation, from 1980 to 2000, highway travel alone increased a whopping 80 percent. Between 1993 and 1997, the total tons of freight activity grew by over 14 percent and truck activity grew by 21 percent. In the future, truck travel is expected to grow by more than 3 percent per year--nearly doubling by 2020. As a result of the increased highway traffic, the operational performance, a measure of congestion, has deteriorated dramatically. For example, FHWA estimates that a typical trip that would take 20 minutes in 1987 now takes over 30 minutes--a dramatic 50 percent increase.

Meanwhile, the strong growth in foreign trade is putting increased pressure on ports, airports, and border crossings, as well as contributing to congestion throughout the transportation network. According to DoT, U.S. international trade more than doubled between 1990 and 2000, rising from $891 billion to $2.2 trillion.

Congestion and delay inevitably result when traffic rates approach the capacity of a system to handle that traffic. I do believe increased congestion in our transportation system is a growing threat to the nation's economy. Delays in any part of the vast network lead to economic costs, wasted fuel, increased pollution, and a reduced quality of life. Moreover, in the future new security measures could also increase delays and disruptions in the flow of goods through our international gateways.

To deal with the ever-increasing loading of our transportation network we will need to find ways to improve system efficiency as well as to expand some critical elements of the system. However, in planning for any improvements, we must examine the impact on the whole transportation system that would result from a change in one part of the system That's exactly the goal of the bill I am introducing today.

By simulating the Nation's entire transportation infrastructure as a single, integrated system, the National Transportation Analysis and Modeling Program will allow policy makers at the State, regional, and national levels to evaluate the implications of new transportation policies and actions. To ensure that all possible interrelated impacts are included, the model must simulate individual carriers and the transportation infrastructure used by each of the carriers in an interdependent and dynamic system. The advantage of this simulation of individual carriers and shipments is that the nation's transportation system can be examined at any level of detail--from the path of an individual truck to national multi-modal traffic flows.

Some of the transportation planning issues that could be addressed with NATMAP include: What infrastructure improvements result in the greatest

gains to overall system security and efficiency? How would the network respond to shifts in population or trade flows? How would the system respond to major disruptions caused by a natural disaster or another unthinkable terrorist attack? What effect would system delays due to increased security measures have on traffic flow and congestion?

Preliminary work on an advanced transportation model has been underway for several years at Los Alamos National Laboratory. As I'm sure most senators know, Los Alamos has a long and impressive history in computer simulations of complex systems, including the recent completion of the TRANSIMS model of transportation systems in metropolitan areas. The development of TRANSIMS for FHWA was originally authorized in section 1210 of TEA-21. NATMAP builds on the original work at LANL on the TRANSIMS model.

The initial work at LANL on NATMAP, funded in part by DoT, DoD, and the lab's own internal research and development program, demonstrated the technical feasibility of building a nation-wide freight transportation model that can simulate the movement of millions of trucks across the nation's highway system. During this initial development phase, the model was called the National Transportation Network and Analysis Capability, or NTNAC for short. In 2001, with funding from the Federal Highway Administration, LANL further developed the model and completed an assessment of cargo flows resulting from trade between the U.S. and Latin America.

These preliminary studies have clearly demonstrated the value to the nation of a new comprehensive modeling system. I do believe that the computer model represents a leap ahead in transportation modeling and analysis capability. Indeed, Secretary of Transportation Norm Mineta, in a letter to me dated April 9 of this year, had this to say about the early simulations: ``The DOT agrees that NTNAC shows great promise of producing a tool that would be useful for analyzing the national transportation system as a single, integrated system. We agree that NTNAC would provide DOT with important new capabilities to assess and formulate critical policy and investment options and to help address homeland security and vulnerabilities in the nation's transportation network.''

I ask unanimous consent that a copy of Secretary Mineta's letter be printed in the Record.

The bill I am introducing today establishes a six-year program in the Office of the Secretary of Transportation to complete the development of the advanced transportation simulation model. The program will also support early deployment of computer software and graphics packages to federal agencies and states for national, regional, or statewide transportation planning. The bill authorizes a total of $50 million from the Highway Trust Fund for this effort. When completed, NATMAP will provide the nation a tool to help formulate and analyze critical transportation policy and investment options, including major infrastructure requirements and vulnerabilities within that infrastructure.

Congress will soon take up the reauthorization of TEA-21, the six- year transportation bill. I am introducing this bill today so my proposal can be fully considered by the Senate's Environment and Public Works Committee and by the Administration as the next authorization bill is being developed. I look forward to working with Senator Inhofe, the Chairman of the EPW Committee, and Senator Jeffords, the ranking member, as well as Senator Bond, the Chairman of the Transportation, Infrastructure, and Nuclear Safety Subcommittee and Senator Reid, the ranking member, to incorporate this bill in the reauthorization of TEA- 21.

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

Mr. President, I rise today to introduce a bill with my friend and colleague, the senior Senator from Hawaii, Mr. Inouye, which would clarify the political relationship between Native Hawaiians and the United States. This measure would extend the Federal policy of self-determination and self-governance to Hawaii's indigenous, native peoples--Native Hawaiians, by providing a process for the reorganized Native Hawaiian governing entity to be recognized for the purposes of a government-to-government relationship with the United States.

The bill we introduce today is identical to legislation that was reported by the Senate Committee on Indian Affairs during the 107th Congress. This bill does three things. First if provides a process for Federal recognition of the Native Hawaiian governing entity. Second, it establishes an office within the Department of the Interior to focus on Native Hawaiian issues and to serve as a liaison between Native Hawaiians and the Federal Government. Finally, it establishes an interagency coordinating group to be composed of representatives of federal agencies which administer programs and implement policies impacting Native Hawaiians.

While Federal policies towards Native Hawaiians have paralleled that of Native American Indians and Alaska Natives, the Federal policy of self-determination and self-governance has not yet been extended to Native Hawaiians. This measure extends this policy to Native Hawaiians, thus furthering the process of reconciliation between Native Hawaiians and the United States, and providing parity in the Federal Government's interactions with American Indians, Alaska Natives, and Native Hawaiians.

This measure does not establish entitlements or special treatment for Native Hawaiians based on race. This measure focuses on the political relationship afforded to Native Hawaiians based on the United States' recognition of Native Hawaiians as the aboriginal, indigenous peoples of Hawaii. While the United States' history with its indigenous peoples has been dismal, in recent decades, the United States has engaged in a policy of self-determination and self-governance with its indigenous peoples. Government-to-government relationships provide indigenous peoples with the opportunity to work directly with the Federal Government on policies affecting their lands, natural resources and many other aspects of their well-being.

This measure does not impact program funding for American Indians and Alaska Natives. Federal programs for Native Hawaiian health, education, and housing are already administered by

the Departments of Health and Human Services, Education, and Housing and Urban Development. The bill I introduce today contains a provision which makes clear that this bill does not authorize new eligibility for participation in any programs and services provided by the Bureau of Indian Affairs. This bill does not authorize gaming in Hawaii. In fact, it clearly states that the Indian Gaming Regulatory Act, IGRA, does not apply to the Native Hawaiian governing entity.

Finally, this measure does not preclude Native Hawaiians from seeking alternatives in the international arena. This measure focuses on self- determination within the framework of Federal law and seeks to establish equality in the Federal policies extended towards American Indians, Alaska Natives and Native Hawaiians.

We introduced similar legislation during the 106th and 107th Congresses. A previous version of this legislation was passed by the House of Representatives during the 106th Congress. The legislation is widely supported by our indigenous brethren, American Indians and Alaska Natives. It is also supported by the Hawaii State Legislature which passed two resolutions supporting a government-to-government relationship between Native Hawaiians and the United States. Similar resolutions have been passed by the Alaska Federation of Natives, National Congress of American Indians, Japanese American Citizens' League, and the National Education Association.

The essence of Hawaii is captured not by the physical beauty of its islands, but by the beauty of its people. Those who have lived in Hawaii have a unique demeanor and attitude which is appropriately described as the ``aloha'' spirit. The people of Hawaii demonstrate the aloha spirit through their actions--through their generosity, through their appreciation of the environment and natural resources, through their willingness to care for each other, through their genuine friendliness.

The people of Hawaii share many ethnic backgrounds and cultures. This mix of culture and tradition is based on the unique history of Hawaii. The Aloha spirit is the legacy of the pride we all share in the culture and tradition of Hawaii's indigenous, native peoples, the Native Hawaiians. Hawaii's State motto, ``Ua mau ke'ea `o ka `aina i ka pono,'' which means ``the life of the land is perpetuated in righteousness,'' captures the culture of Native Hawaiians. Prior to western contact, Native Hawaiians lived in an advanced society, in distinct and structured communities steeped in science. The Native Hawaiians honored their `aina, land, and environment, and therefore developed methods of irrigation, agriculture, aquaculture, navigation, medicine, fishing and other forms of subsistence whereby the land and sea were efficiently used without waste or damage. Respect for the environment formed the basis of their culture and tradition. It is from this culture and tradition that the Aloha spirit, which is demonstrated throughout Hawaii, by all of its people, has endured and flourished.

Despite the overthrow of the Kingdom of Hawaii, Native Hawaiians never directly relinquished their inherent sovereignty as a people over their national lands, either through their government or through a plebiscite or referendum. Ever since the overthrow of their government, Native Hawaiians have sought to maintain political authority within their community. The Federal policy of self-governance and self- determination recognizes and provides for this inherent right within Federal law.

Throughout my service in the Congress and the Senate, I have worked to establish a proper foundation of reconciliation between the United States and Native Hawaiians to positively address longstanding issues of concern resulting from the overthrow. The legislation we introduce today to clarify the political relationship between Native Hawaiians and the United States proceeds from our efforts to promote reconciliation. This endeavor enjoys overwhelming support from Native Hawaiians and all the people of Hawaii.

In 1978, the people of Hawaii acted to preserve Native Hawaiian culture and tradition by amending Hawaii's State constitution to establish the Office of Hawaiian Affairs and to give expression to the right of self-determination and self-governance at the State level for Hawaii's indigenous peoples, Native Hawaiians. Starting with statehood, Hawaii endeavored to address and protect the rights and concerns of Hawaii's indigenous peoples in accordance with authority delegated under Federal policy. The constraints of this approach are evident. This bill extends the Federal policy of self-determination and self- governance to Native Hawaiians at the Federal level through a government-to-government relationship with the Native Hawaiian governing entity.

This measure is not being introduced to circumvent the 1999 United States Supreme Court decision in the case of Rice v. Cayeano. The Rice case was a voting rights case whereby the Supreme Court held that the State of Hawaii must allow all citizens of Hawaii to vote for the trustees of a quasi-State agency, the Office of Hawaiian Affairs. Nothing in this legislation would alter the eligibility of the electorate who votes for the Board of Trustees for the Office of Hawaiian Affairs.

This measure is critical to the people of Hawaii because it provides the structure necessary to address many longstanding issues facing Hawaii's indigenous peoples and the State of Hawaii. By addressing and resolving these matters, we continue our process of healing, a process of reconciliation not only within the United States, but within the State of Hawaii. The time has come for us to be able to address these deeply rooted issues in order for us to be able to move forward as one.

I cannot emphasize how important this issue is for the people of Hawaii. At the state level, I will continue to work with the Hawaii State Legislature which has expressed its support for this legislation. I will also be working with Governor Linda Lingle, Hawaii's newly elected Governor, who has expressed her support for Federal recognition for Native Hawaiians. I look forward to continuing my discussions with officials within the Federal Government to address issues related to this bill, and I continue to welcome input from the people of Hawaii as to how we should move forward as a State, and as a community, to address longstanding issues resulting from the overthrow of the Kingdom of Hawaii.

We have an established record of United States' commitment to reconciliation with Native Hawaiians. This legislation is another step forward to honoring that commitment. I ask all my colleagues to join me in enacting this critical measure for the people of Hawaii.

Mr. President, I ask unanimous consent that the text of this measure be printed in the Record.

Mr. President, I am pleased to join with Senator Craig Thomas in introducing the Federal Prison Industries Competition in Contracting Act. Our bill is based on a straightforward premise: it is unfair for Federal Prison Industries to deny businesses in the private sector an opportunity to compete for sales to their own government.

I repeat: the bill that we are introducing today, it enacted, would do nothing more than permit private sector companies to compete for Federal contracts that are paid for with their dollars. It may seem incredible that they are denied this opportunity today, but that is the law, because if Federal Prison Industries says that it wants a contract, it gets that contract, regardless whether a company in the private sector may offer to provide the product better, cheaper, or faster.

We have made considerable progress on this issue since Senator Thomas and I introduced a similar bill in the 107th congress. Two years ago, the Senate voted 74-24 to end Federal Prison Industries' monopoly on Department of Defense contracts. Not only was that provision enacted into law, we were able to strengthen it with a second provision in last year's defense bill.

Despite this progress, much work remains to be done. As of today, Federal Prison Industries retains its monopoly on the contracts of every agency of the Federal Government, other than the Department of Defense. This means that all other Federal agencies, including the new Department of Homeland Security, may be required to purchase products from Federal Prison Industries. It also means that private sector companies may find it impossible to sell their products to their own government, even when their products outperform FPI products in terms of price, quality and time of delivery.

The bill that we are introducing today would not limit the ability of Federal Prison Industries to sell its products to Federal agencies. It would simply say that these sales should be made on a competitive, rather than a sole-source basis.

FPI starts with a significant advantage in any competition with the private sector, since FPI pays inmates less than two dollars an hour, far below the minimum wage and a small fraction of the wage paid to most private sector workers in competing industries. And of course, the taxpayers provide a direct subsidy to Federal Prison Industries products by picking up the cost of feeding, clothing, and housing the inmates who provide the labor. Given those advantages, there is no reason why we should still require Federal agencies to purchase products from FPI even when they are more expensive or of a lower quality than competing commercial items. I can think of no reason why private industry should be prohibited from competing for these federal agency contracts.

We have made several changes to this bill since it was introduced in the 107th Congress. The new bill has been harmonized with the provisions that we have already enacted for the Department of Defense, to ensure that we will have a single, government-wide procurement policy for agencies purchasing products available from Federal Prison industries. This government-wide policy would be codified in the Office of Federal Procurement Policy Act, which is the primary procurement statute that applies to both defense and non-defense agencies. I believe that these changes will strengthen the bill and reinforce its underlying intent.

Federal Prison Industries has repeatedly claimed that it provides a quality product at a price that is competitive with current market prices. Indeed, the Federal Prison Industries statute requires them to do so. That statute states that FPI may provide to Federal agencies products that ``meet their requirements'' at prices that do not ``exceed current market prices''.

Yet, FPI remains unwilling to compete with private sector businesses and their employees, or even to permit federal agencies to compare their products and prices with those available in the private sector. Indeed, FPI has tried to prohibit Federal agencies from conducting market research, as they would ordinarily do, to determine whether the price and quality or FPI products is comparable to what is available in the commercial marketplace. Instead, Federal agencies are directed to contact FPI, which acts as the sole arbiter of whether the product meets the agency's requirements.

The result is totally and understandably frustrating to private sector businesses and their employees who are denied an opportunity to compete for Federal business, as well as to the Federal agencies who are forced to buy FPI products. The frustration of these businesses comes through in a series of letters that were placed in the record of a House Small Business Committee hearing in the last Congress. One letter stated with regard to UNICOR--the trade name used by Federal Prison Industries:

Dear Mr. Chairman: My name is Billy Carroll; I am an

outside sales representatives with C&C Office Supply Co. in

Biloxi Mississippi. Our company has been in business for over

20 years and we employ 20 people.

During the course of our 20-year history we have done

considerable business with numerous governmental agencies and

military installations. Some of them being Naval Construction

Battalion in Gulfport, Mississippi; Air National Guard in

Gulfport; Keesler Air Force Base in Biloxi; Naval Station in

Pascagoula; and NASA in Stennis Space Center.

As a result of FPI's unfair monopolistic practices, we have

seen sales from these governmental agencies go from

$100,000.00 a month to less than $5,000 a month.

There are numerous horror stories we hear from our

customers who deal with UNICOR. The most recent one being

that a customer had to wait 5 months to get their furniture.

When the furniture finally arrived, it wasn't even what they

had ordered. This is something that would have been averted

had they been able to use our company or another dealer.

I could go on about how we could have sold the product much

cheaper, which would have saved taxpayers money, faster

delivery, which would have increased productivity, and

finally better service, but I won't. You get the picture.

Sincerely,

Billy Carroll,

C&C Office Supply Company, Biloxi, MS.

Other vendors expressed even greater frustration about FPI's unfair business practices:

Dear Mr. Chairman: During the past 5 years I have had

representatives from UNICOR tell my customers that they had

to turn over my proprietary designs to UNICOR, without

payment to the dealership. They have told my customers that

if they do not buy UNICOR, they will be `reported to

congress' and that there is no place else to go for

government furniture. They frighten young department of

defense officials with words like `illegal' when they ask

about waivers.

The UNICOR reps routinely refuse waivers on the first

approach. The answer is a standard `UNICOR has products which

will meet your needs.' No explanation. They refuse to answer

waiver requests in a timely fashion. I have had a $110,000

order for the Arizona Air National Guard in Tucson literally

taken away by UNICOR. The representative demanded the designs

and said that UNICOR would fill the request. There would be

no waiver and no discussion. And she was right. Despite the

fact that all of the programming phase had been completed by

my designers, at no cost to the federal government, this rep

insisted that she knew what was best for this customer. Of

course, the products arrived late, in poor condition, was

much more expensive than the budgeted GSA furniture--and the

reps have not been heard from. The answer is `a 10% discount'

or a `free chair.'

In Texas, my representative worked for 4 months with a

customer, completing designs and meeting all relevant

criteria. She proposed only products on GSA contract. UNICOR

unilaterally refused to waive the chairs, approximately

$50,000 worth, because their factories were not at capacity.

The fact that the UNICOR chairs do not meet the price point,

that UNICOR spent no time with the customers determining

function, color or other requirements has no meaning. The

seating portion of the order is lost. The remaining portion

would have been lost, as well, if the customer had not spent

approximately 30 days going from one appeal process to the

other attempting to get waivers. Very few customers will take

the time to do this. Of course, when the project finally

arrives, it will be late and missions will be compromised.

Sincerely,

Ruthanne S. Pitts,

Simmons Contract Furnishings,

Tucson, Arizona.

These letters are far from unique. In case after case, Federal Prison Industries insists on taking contracts away from private businesses, even where FPI's products are inferior, their prices are higher, and they are not prepared to deliver in a timely manner. This is wrong.

Avoiding competition is the easy way out, but it isn't the right way for FPI, it isn't the right way for the private sector workers whose jobs FPI is taking, and it isn't the right way for Federal agencies, which too often get stuck with the bill for inferior products that can't compete with private sector goods. Competition will be better for Federal agencies, better for the taxpayer, and better for working men and women around the country.