Non-Homeland Security Mission Performance Act of 2003

Mr. President, last November Congress enacted the largest reorganization of the Federal Government in half a century. At that time, the Senate was under extraordinary pressure to pass a bill quickly. The President traveled the country giving campaign speeches accusing the Senate of not caring about homeland security. The Senate responded by hastily approving the massive reorganization before Members had a chance to study the contents of the 484 pages that were dropped into our laps just a few days before the vote.

There were a lot of items in that legislation that would not have survived scrutiny had the Senate spent more time debating the bill. A number of Senators objected to certain provisions in the bill and introduced amendments. But those amendments were never considered because the Senate voted to shut off debate.

A good many Senators wanted to put the bill behind us even if it meant settling for a bill that needed more scrutiny. One of the imperfections that the Senate was willing to accept was the unprecedented secrecy that was given to the new Department of Homeland Security.

Although the original version of the bill took a responsible, moderate approach to ensure public accountability, the final version that was dumped on the Senate gave the Department carte blanche to conduct its operations in secret.

I filed amendments to scale back this excessive secrecy, as did several other Senators. But those amendments were never considered because, as I have already indicated, debate was shut off by cloture.

Now we read in the papers that full advantage is being taken of the secrecy in the Department. Their friends and contributors in the private sector have a seat at the homeland security table. Corporate leaders and campaign contributors have been awarded coveted seats on the advisory committees that make policy recommendations to Secretary Ridge and to others in the Department.

Consequently, not only do these companies have a direct role in shaping our homeland security policy, but they also have direct access to Department officials who award the private sector contracts for implementing those policies.

Last month, for the first time, the Homeland Security Advisory Council met to provide advice and recommendations to the Homeland Security Secretary about this Nation's homeland security needs.

It is my understanding Secretary Ridge took the opportunity to remind the council that the Homeland Security Department was soliciting a wide array of innovative counterterrorism technologies. ``There are several million dollars available to the private sector,'' Secretary Ridge said. That information no doubt would have been more than just passing interest to the members of the advisory council. With six CEOs and a member of the board of directors from three top companies, the Homeland Security Advisory Council represents some of the top business interests that are in competition for government contracts related to homeland security.

It is worth noting that, according to the New York Daily News, of the 818 members chosen to sit on the advisory committee, 11 members have collectively given more than $200,000 in direct contributions to the Republican Party at a time when questions are already being raised about the propriety of former aides to Secretary Ridge lobbying a Homeland Security Department for Government grants. It is troubling that the Homeland Security Secretary would risk further damage to the Department's credibility by naming to advisory council representatives of top companies that are vying for homeland security contracts and grants.

At a time when questions are being asked or raised about the preferential treatment given to major corporate campaign contributors in bidding on Government contracts, it is disconcerting that companies such as Dow Chemical, Eli Lilly, Conoco-Phillips,

Black & Decker, Procter and Gamble, and Lockheed Martin are representatives serving on the advisory council.

This volunteering by these companies of their CEOs and board members to serve on the advisory council may well be a selfless act of patriotism, but that does not stop them from profiting from the contracts and grants awarded by the Department.

Eli Lilly used its connections to use a provision in the Homeland Security Act to shield vaccine makers from lawsuits relative to the use of thimerosal, a mercury-containing preservative once added to childhood vaccines.

Dow Chemical received $1.4 million in port security grants from the Homeland Security Department last spring.

Lockheed Martin won a long-term contract to help modernize the Coast Guard, a contract that could be worth up to $17 billion. It also contracted to assist the Transportation Security Administration in developing CAPPS II, a controversial data tracking system that will reportedly collect information about nearly every adult American who buys an airline ticket.

Despite the specter of the conflict of interest, and despite numerous warnings from Government watchdog groups, the advisory council has been exempted from public disclosure laws. The American people have no way of knowing what is being discussed or what advice is being recommended. There is no way to identify the financial interests of these council members in any advice or recommendations they may make to Secretary Ridge.

With a $40 billion homeland security budget and the expectation that the Federal Government will spend hundreds of billions of dollars in the coming years on homeland defenses, corporate America is salivating over the money that is to be made from the grants and contracts being doled out by the Homeland Security Department.

Also, being at the table when advice is given to the Homeland Security Secretary can be a very powerful tool. That is all the more reason the Congress should provide the American public with some kind of check to ensure that the advice being given to the Secretary is in the best interests of the Nation's defenses and not just in the best interests of companies soliciting a Government contract.

I am concerned about the makeup of these advisory committees and how they are being used. We have no way of knowing what kind of recommendations these corporate CEOs are making to Secretary Ridge or what actions this Department is taking in response to those recommendations. We have no way of knowing whether there are real conflicts of interest when contracts are awarded to the same people who recommended the contracts in the first place.

By requiring that the Department of Homeland Security comply with the Federal Advisory Committee Act, my amendment will ensure that Congress and the American people know how these advisory committees are being used. This law has served us well for over 30 years for advisory committees throughout the Federal Government. It includes long-accepted protections for sensitive information relating to law enforcement and national security, so there is no danger of disclosing information that would make our Nation more vulnerable.

My amendment will require that the Department disclose basic facts about who is participating in these advisory committees and what kinds of recommendations are being made. The American people have a right to know that the Department of Homeland Security is acting in their best interests, not simply in the interests of any administration's friends in the private sector. This knowledge will strengthen our homeland security efforts, not weaken them, and will ensure public confidence in the policies that any administration--not only this one, but any future administration--chooses to follow.

The safety of the American people is at stake. I believe the amendment will make the people safer and better informed.

I urge the Senate to adopt this amendment.

Mr. President, I call attention to the fact that the amendment is proposed by Mr. Byrd, for himself, Mr. Lieberman, and Mr. Levin.

I ask unanimous consent that Senator Clinton's name be added as a cosponsor.

I send the amendment to the desk.

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

Mr. President, the Secretary can, under the Federal Advisory Committee Act, exempt committees from notice rules in an emergency

under existing law, whenever he determines it is necessary for national security.

It is important that this amendment be adopted. We are not just talking about this administration. We are not just talking about this Secretary of the Department. We are saying that there should not be a blanket exemption available to any Secretary of this Department, when we keep in mind that from a national security standpoint, the Department is exempted, the President can exempt it, the Department head in this case can exempt it.

But there are matters other than national security which are important and which are discussed by this Department. For the protection of the American people not only under this administration but also under other administrations that may come and may go, this amendment should be adopted. It is in the interest of the American people that they be protected and that we know that the American people know who is being asked to make recommendations, what recommendations are being made and whether those recommendations are in the interest of the American people.

I hope the amendment will be adopted. I urge my colleagues to vote in support of it.

Mr. President, I send to the desk an amendment by Mr. Durbin. I believe it has been cleared on the other side of the aisle. The manager will speak to that. I send to the desk the amendment.

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

Mr. President, I move that the vote by which the amendment was agreed to be reconsidered.

Mr. President, I send an amendment to the desk on behalf of Senator Feingold. This, too, has been discussed with the manager of the bill who will speak to it himself. I send the amendment to the desk and ask that in the reporting of the amendment, that further reading be dispensed with.

Mr. President, I move to reconsider the vote by which the amendment was agreed to.

It has been cleared on this side, may I say to the Senator from Mississippi.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Amendment No. 1379

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Amendment No. 1380

Mr. President, on behalf of Senator Feingold, I send an amendment to the desk.

Mr. President, this amendment has been cleared with the managers on both sides of the aisle. It provides for a report from the General Accounting Office on the data-mining programs from the Department of Homeland Security. I ask unanimous consent that the amendment be adopted.

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

Mr. President, this amendment has been cleared by the managers on both sides. It provides the Secretary of Homeland Security with flexibility in determining priorities for firefighting vehicles.

I ask unanimous consent that Senator Stevens of Alaska be added as a cosponsor.

Mr. President, I ask unanimous consent that the amendment be agreed to.

Mr. President, I move to reconsider the vote.

Mr. President, on behalf of Senator Landrieu, I send an amendment to the desk.

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

Mr. President, the amendment has been cleared on both sides of the aisle. The amendment provides for a report from the Department of Homeland Security regarding radar coverage gaps at our Nation's borders.

I ask unanimous consent that the amendment be agreed to.

Mr. President, it was just 1 year ago that the Senate was preparing to begin debate on the creation of a Department of Homeland Security. The September 11 attacks had occurred just 9 months earlier, and fear that more had to be done to protect the homeland pervaded.

In that atmosphere, at a time when few wanted to look too closely at the fine print for fear of being labeled a stumbling block to the enhanced security of the American people, the administration pushed through a bill to create a huge new Federal department, the Department of Homeland Security.

The budget for the Department of Homeland Security is $28.5 billion, a level well below that needed to meet the Nation's true and pervasive homeland security challenges. Billions of those dollars are up for grabs in that budget for entities outside the Department, and outside the Government.

The administration repeatedly reminds the American people that the next terrorist attack could come any day, any time, anywhere. Do not think that companies have not noticed. The Department's budget is being eyed like a huge honey pot. Thousands of U.S. companies are reinventing themselves, repackaging products, rearranging priorities, renaming operations, and just plain salivating to cash in on what they hope will be hundreds of billions of dollars in new spending on domestic defense.

Some companies would like to sell their wireless communications systems to Government emergency response agencies. Others are hoping to win a Government contract to produce an antidote for anthrax. Still others are pitching their software as an ideal tool for integrating sensitive computer systems in the defense community. One company is trying to persuade the Federal Government to buy its dial-up video technology to install onboard thousands of airplanes to monitor cabin security. One software giant has already sold its financial management software to the Transportation Security Administration.

Go to the Washington Convention Center and one will find vice presidents of homeland security divisions standing in promotional booths describing homeland security technology that would be ideal for the Homeland Security Department. Publicly, the Homeland Security Department says it will judge businesses upon merit, but that is not stopping the more experienced insiders from quietly gobbling up contracts with the help of Washington's lobbying corps.

The campaign finance research group PoliticalMoneyLine reported last spring that in early 2002 there were 157 companies registered to lobby on homeland security issues. By April 2003, the number had more than tripled to 569, and this month the New York Times reported that the number had grown to 799. A New York Times editorial read, in part, the big boom in lobbying in Washington in the past 18 months has been in the lucrative world of homeland security where the role of new registrants intent on selling the Government antiterror products and services has grown fivefold to 799 and counting.

So lobbying firms are creating whole new departments for the sole purpose of lobbying for homeland security contracts. In fact, the homeland security lobbying industry has blossomed full flower. The spring rains have not had any impact on them. I failed to set out my tomato plants this year because of the heavy rains, but the rains have not stymied the growth of these lobbying activities.

The Federal Homeland Security Department is still being stitched together while the homeland security lobbying industry has blossomed full flower. Among these lobbyists are a number of former aides to Homeland Security Secretary Tom Ridge who are lobbying on behalf of companies seeking contracts with the new Department of Homeland Security.

Last April, the New York Times reported that at least four of Secretary Ridge's senior deputies at the White House are working as homeland security lobbyists, as is his chief of staff from his days as the Governor of Pennsylvania.

I ask unanimous consent that this article from the New York Times news service be printed in the Record at the end of my remarks.

The Times article is dated April 29, 2003.

I also ask unanimous consent that the New York Times editorial to which I earlier referred, dated July 8, 2003, be printed in the Record at the close of my remarks.

Many Senators may not be surprised by these revelations. It is a well-established practice for former Government workers to lobby their old colleagues. What is alarming about this situation is how quickly Secretary Ridge's former aides stepped into new careers as domestic security lobbyists. Those very people responsible for setting up the Homeland Security Department are the first people standing in line with their hands out. These are the same people who argued so vociferously in favor of rolling back the civil service laws to allow contractors more access to Government work. They said that the new Secretary must have the flexibility to run the new Department, to hire and fire public servants, and now some of those same people are working for the very companies that are competing for homeland security contracts.

The Homeland Security Secretary has promised to put into place strict ethical standards to make sure the agency's decisions are based on merit. I commend him for the promise but I am impatient for the follow- through. Chairman Cochran has taken the bold step of not earmarking first responder, science and technology and infrastructure funds for specific communities or specific technologies. This action places a great deal of discretion in the hands of the Secretary and his staff. We must make sure that in allocating

the funds contained in this bill, that the decision making process is fair, even-handed and free of improper outside influence.

So, I am offering an amendment to apply the same ethical post employment standards that apply to Senators and their senior staff to employees of the Department of Homeland Security and the Office of Homeland Security within the White House. All employees who have an income of 75 percent or more of a level II of the Executive Schedule, which is comparable to a Senator's pay, would be prohibited from lobbying the Department of Homeland Security or the Office of Homeland Security for one year. An individual who violates this restriction would pay a civil penalty equal to 100 percent of all gross receipts received by the individual from the conduct that violated the restriction.

The appearance of impropriety is enough to suggest that we cannot wait for Secretary Ridge to issue new ethics rules for his sprawling, young department. The administration has pinned the hopes of the American public on this new department being able to protect them from another terrorist attack, and even the appearance of a conflict of interest undermines the department's mission.

We cannot afford to handicap this new department. I urge the adoption of my amendment.

Exhibit 1

[From the New York Times News Service, Apr. 29, 2003]

From Ridge Aide to Security Lobbyist

(By Philip Shenon)

When Tom Ridge arrived here after the Sept. 11 attacks and

opened the White House Office of Homeland Security, he

quickly surrounded himself with a group of trusted deputies,

many of them drawn from the staff he had assembled when he

was governor of Pennsylvania.

But when Ridge was sworn in this year as the first

secretary of the Department of Homeland Security, many of his

inner circle did not follow. They took a spin through

Washington's revolving door, emerging as lobbyists whose

corporate clients want contracts from Ridge's multibillion-

dollar agency.

Lobbying disclosure forms filed in Congress show that at

least four of Ridge's deputies at the White House office are

now working as ``homeland security'' lobbyists, as is a chief

of staff from his days as Pennsylvania governor.

They are a small part of a booming new lobbying business in

Washington that is focused on helping large corporations get

a share of the billions of dollars that will be spent by the

vast domestic-security bureaucracy that Ridge oversees.

Ridge and the Homeland Security Department, with a budget

of about $40 billion this year, are obvious targets for an

array of industries and their lobbyists in the capital.

``My one year is up, so I can lobby him and lobby the White

House and lobby the Hill,'' said Rebecca Halkias, who was

Ridge's legislative affairs director in the White House,

referring to the one-year ban on contacts between former

senior government officials and their colleagues.

Halkias, who also managed Ridge's Washington office when he

was governor, is now a partner in a lobbying company, C2

Group, and congressional filings show that her clients

include Tyco electronics, which is eager to sell its wireless

communications systems to government emergency-response

agencies.

``I'm not really comfortable talking about homeland

security lobbying,'' Halkias said in a brief telephone

interview, declining to answer most questions. Asked if she

was concerned about any conflict of interest in lobbying

Ridge, she said, ``This conversation is over,'' and hung up.

There is nothing unusual about former government workers

lobbying their old colleagues. The surprising thing about

Ridge's former aides is how quickly they chose to take up new

careers as domestic-security lobbyists.

Ridge's spokesmen at the Homeland Security Department said

that he was giving no special attention to products that were

being promoted by lobbyists who had worked for him at the

White House or in Pennsylvania.

The boom in domestic-security lobbying is viewed

skeptically by government watchdog groups, which say they

intend to monitor closely how the department spends its money

and how Congress appropriates money to Ridge.

``Homeland Security appears to be viewed by the lobbying

firms as a huge honey pot,'' said Fred Wertheimer, president

of Democracy 21, a group that advocates restrictions on

corporate lobbying.

Mr. President, the able Senator from Mississippi is correct in stating that this provision would apply postemployment standards to more employees at the Department of Homeland Security than other executive departments. The amendment applies the same standard, as I indicated, as is applied to Senators and their senior staffs.

The reason I believe this amendment is appropriate is that the legislation creating the Department gave the Department extraordinary authorities. For example, the Department has extraordinary flexibility with regard to civil service rules and procurement standards. Secretary Ridge and his staff were given unusual discretion and perhaps that is why lobbyists are swarming all over the Department.

I believe my amendment is appropriate. I think it is in the interests of the American people that we adopt this amendment. Congress should do no less. I urge my colleagues to join in voting for the amendment.

I concur with the distinguished Chairman's assessment and support the Senator from Rhode Island's efforts to assist his State's airport.

I concur with the remarks of the distinguished chairman and I support the interest of the Senator from Rhode Island in establishing an investigative presence in his State. There is no substitute for having investigators and special agents on the ground who are closely familiar with the ports of entry and organizations they are required to monitor.

Madam President, I rise to speak about the subject of taxation from a little different perspective, a legislative proposal which, if adopted, would add very considerably to productivity in America, and that is a proposal for a flat tax. In the fall of 1994, Richard Armey of the House of Representatives introduced a flat tax. I studied it, then in the spring of 1995, I introduced a flat tax for the Senate. That was the first one introduced. I have introduced it in successive years.

I usually pick April 15, because April 15 is tax filing day. But this year we are going to be in recess for the spring break. I had thought today would be the last day we would be in session. That is open to debate at this point. I just came from a conference of the Appropriations Committee, and there are a great many unresolved issues. I posed the question to my colleagues on the Appropriations Committee: What time do we vote on Sunday?

Some of my colleagues may be listening on C-SPAN2, and that will give them a jolt: What time do we vote on Sunday? Or we might not vote as early as Sunday. We might pick a time on Monday.

I got the attention of the clerks, too, by talking about something important: When are we going to finish the business of the Senate? The distinguished Parliamentarian is nodding his head in chagrin as to what is happening here.

Some suggestions have been floated around the Appropriations Committee of a way to solve this impasse between the House and the Senate on appropriations, the impasse between the House and the Senate on the budget, and that is a constitutional amendment for a unicameral legislature. That would be a shocker. For anybody watching C-SPAN2, that means one chamber. Then the question would come up: Which chamber will it be?

Nobody is going to go to a unicameral legislature, and I do not know when we are going to conclude the business of the Senate. I may be offering this flat tax legislation on the wrong day. Perhaps I ought to wait, because we may still be here on April 15, which would be next Tuesday.

In all seriousness, we have the most extraordinarily complex system for filing taxes ever devised. In the midst of an overwhelming bureaucracy and a regulatory system in Washington, DC, nothing compares to the Federal tax code.

The Federal tax code has grown from 744,000 words in 1955 to 6.9 million words and 17,000 pages at the present time. A study showed that more than 13 hours are consumed by the average American--rather, more than 13 hours are consumed on average--there is no such thing as an average American--on average by taxpayers in filling out the principal Form 1040. And if one goes to the various schedules, it can be another 5\1/2\ hours or 7\1/2\ hours.

I just finished filling out my tax return, and it is inordinately complicated. It is insufficient to be a Philadelphia lawyer to understand the Federal tax code, and then the State taxes, and then city taxes, the wage tax, the property tax, and the real estate tax. It is a nightmare.

It is possible to change all of that by going to a flat tax, and then the tax return would be on a postcard. The wonders of television. People can see the postcard. It will take about 15 minutes to fill out a postcard, which would identify the individual, specify the total compensation, specify the allowance, the number of dependents, and in the course of 15 minutes it would be finished.

This tax would be calculated on a flat rate of 20 percent. It would be very beneficial to people at all levels of the income strata except for those who engage in tax shelters. The average American today, or in the middle income, a family of four, which does not itemize deductions, pays taxes on all income over $19,850. Under this flat tax, there would be a personal exemption of $27,500 for a family of four, and taxes would be paid only over that amount.

After having just criticized charts, my staff has brought me a chart which they prepared. I certainly would not want to omit the showing of this chart. The writing is too small for reading on C-SPAN2, but it specifies the identity of the person, the total compensation, the personal allowance, and it can be filled out in the course of 15 minutes.

A superior depiction, in my opinion, is the postcard. People can deal more easily with postcards than they can with charts.

I have provided for two deductions which I am maintaining, deductions on interest and charitable contributions. It may be that ultimately we will have a totally flat tax, which would reduce another percent down to 19 percent. I have included interest on home mortgages because it is so prevalent, and I believe Americans might be very surprised not to be able to deduct their interest on home mortgages. That interest on home mortgages has been a great stimulus for housing construction and also a great encouragement for people to own their own homes. That is very important as a societal matter.

I have also retained the deduction on charitable contributions, which remains very important. That was reinforced by the Senate earlier this week by providing an increase in charitable contributions deductibility looking toward faith-based initiatives.

What I would like to do most emphatically would be to get the debate started. This body, the House, and the Treasury Department have never seriously considered a flat tax. It ought to be seriously considered. Whether it would be accepted or not would be the outcome of the debate. The flat tax proposal which I am bringing to you today, which is modeled after the outline by Professor Hall and Professor Rabushka of Stanford University, has been very carefully thought through. It is a neutral tax scheme. An analysis of people at various income levels shows that it is universally beneficial for all except those who engage in tax shelters and pay no tax at all.

The greatest benefit would be the savings to the American people of some 5.8 billion hours a year and some $194 billion in preparation expenses. I have actually seen estimates on the cost of tax compliance as high as $800 billion. Again, these estimates are such that nobody really knows, but as lawyers say in litigation, the pain and suffering that goes with filing these returns, or the cruel and unusual punishment involved in making these computations and the study involved, it would be a great relief to the American people. It would be win, win, win. There would be great savings in time. There would be savings in individual taxes, and there would be a tremendous stimulus to the economy so that so many corporations and businesses would no longer have to have a special office, which is the practice in many places, for the tax collector who comes in to conduct the audit on a yearly basis.

To reiterate, in less than one week, American taxpayers face another Federal income tax deadline. The date of April 15 stabs fear, anxiety, and unease into the hearts of millions of Americans. Every year during ``tax season,'' millions of Americans spend their evenings poring over page after page of IRS instructions, going through their records looking for information, and struggling to find and fill out all the appropriate forms on their Federal tax returns. Americans are intimidated by the sheer number of different tax forms and their instructions, many of which they may be unsure whether they need to file. Given the approximately 325 possible forms, not to mention the instructions that accompany, simply trying to determine which form to file can in itself be a daunting and overwhelming task. According to the Tax Foundation, American taxpayers, including businesses, spend more than 5.8 billion hours and $194 billion each year in complying with tax laws. That works out to more than $2,400 per U.S. household. Much of this time is spent burrowing through IRS laws and regulations which fill 17,000 pages and have grown from 744,000 words in 1955 to over 6.9 million words in 2000. By contrast, the Pledge of Allegiance has only 31 words, the Gettysburg Address has 267 words, the Declaration of Independence has about 1,300 words, and the Bible has only about 1,773,000 words.

The majority of taxpayers still face filing tax forms that are far too complicated and take far too long to complete. According to the estimated preparation time listed on the forms by the IRS, the 2002 Form 1040 is estimated to take 13 hours and 10 minutes to complete. Moreover this does not include the estimated time to complete the accompanying schedules, such as Schedule A, for itemized deductions, which carries an estimated preparation time of 5 hours, 37 minutes, or Schedule D, for reporting capital gains and losses, shows an estimated preparation time of 7 hours, 35 minutes. Moreover, this complexity is getting worse each year. Just from 1998 to 2002 the estimated time to prepare Form 1040 jumped 96 minutes.

It is no wonder that well over half of all taxpayers, 56 percent according to a recent survey now hire an outside professional to prepare their tax returns for them. However, the fact that only 29 percent of individuals itemize their deductions shows that a significant percentage of our taxpaying population believes that the tax system is too complex for them to deal with. We all understand that paying taxes will never be something we enjoy, but neither should it be cruel and unusual punishment. Further, the pace of change to the Internal Revenue Code is brisk--Congress made about 9,500 Tax Code changes in the past 12 years. And we are far from being finished. Year after year, we continue to ask the same question--is there not a better way?

My flat tax legislation would make filing a tax return a manageable chore, not a seemingly endless nightmare, for most taxpayers. My flat tax legislation will fundamentally revise the present Tax Code, with its myriad rates, deductions, and instructions. This legislation would institute a simple, flat 20 percent tax rate for all individuals and businesses. This proposal is not cast in stone but is intended to move the debate forward by focusing attention on three key principles which are critical to an effective and equitable taxation system: simplicity, fairness, and economic growth.

My flat tax plan would eliminate the kinds of frustrations I have outlined above for millions of taxpayers. This flat tax would enable us to scrap the great majority of the IRS rules, regulations, and instructions and delete most of the 6.9 million words in the Internal Revenue Code. Instead of billions of hours of non-productive time spent in compliance with, or avoidance of, the tax code, taxpayers would spend only the small amount of time necessary to fill out a postcard- sized form. Both business and individual taxpayers would thus find valuable hours freed up to engage in productive business activity or for more time with their families instead of poring over tax tables, schedules, and regulations.

My flat tax proposal is dramatic, but so are its advantages: a taxation system that is simple, fair and designed to maximize prosperity for all Americans. A summary of the key advantages are:

A 10-line postcard filing would replace the myriad forms and attachments currently required, thus saving Americans up to 5.8 billion hours they currently spend every year in tax compliance.

The flat tax would eliminate the lion's share of IRS rules, regulations and requirements, which have grown from 744,000 words in 1955 to 6.9 million words and 17,000 pages currently. It would also allow us to slash the mammoth IRS bureaucracy of 117,000 employees.

Economists estimate a growth of over $2 trillion in national wealth over 7 years, representing an increase of approximately $7,500 in personal wealth for every man, woman, and child in America. This growth would also lead to the creation of 6 million new jobs.

Investment decisions would be made on the basis of productivity rather than simply for tax avoidance, thus leading to even greater economic expansion.

Economic forecasts indicate that interest rates would fall substantially, by as much as two points, as the flat tax removes many of the current disincentives to savings.

Americans would be able to save up to $194 billion they currently spend every year in tax compliance.

As tax loopholes are eliminated and the tax code is simplified, there will be far less opportunity for tax avoidance and fraud, which now amounts to over $120 billion in uncollected revenue annually.

Simplification of the tax code will allow us to save significantly on the $7 billion annual budget currently allocated to the Internal Revenue Service.

The most dramatic way to show what the flat tax is to consider that the income tax form for the flat tax is printed on a postcard--it will allow all taxpayers to file their April 15 tax returns on a simple 10- line postcard. This postcard will take 15 minutes to fill out.

At my town hall meetings across Pennsylvania, the public support for fundamental tax reform is overwhelming. I would point out that in those speeches that I never leave home without two key documents: 1, my copy of the Constitution; and, 2, a copy of my 10-line flat tax postcard. I soon realized that I needed more than just one copy of my flat tax postcard. Many people wanted their own postcard so that they could see what life in a flat tax world would be like, where tax returns only take 15 minutes to fill out and individual taxpayers are no longer burdened with double taxation on their dividends, interest, capital gains and estates.

This is a win-win situation for America because it lowers the tax burden on the taxpayers in the lower brackets. For example in the 2002 tax year, the standard deduction is $4,700 for a single taxpayer, $6,900 for a head of household and $7,850 for a married couple filing jointly, while the personal exemption for individuals and dependents is $3,000. Thus, under the current tax code, a family of four which does not itemize deductions would pay taxes on all income over $19,850-- these are personal exemptions of $12,000 and a standard deduction of $7,850. By contrast, under my flat tax bill, that same family would receive a personal exemption of $27,500, and would pay tax on only income over that amount.

The tax loopholes enable write-offs to save some $393 billion a year. What is eliminated under the flat tax are the loopholes, the deductions in this complicated code which can be deciphered, interpreted, and found really only by the $500-an-hour lawyers. That money is lost to the taxpayers. $120 billion would be saved by the elimination of fraud because of the simplicity of the tax code, the taxpayer being able to find out exactly what he or she owes.

This bill is modeled after legislation organized and written by two very distinguished professors of law at Stanford University, Professor Hall and Professor Rabushka. Their model was first introduced in the Congress in the fall of 1994 by Majority Leader Richard Armey. I introduced the flat tax bill--the first one in the Senate--on March 2, 1995, S. 488. On October 27, 1995, I introduced a Sense of the Senate, resolution calling on my colleagues to expedite Congressional adoption of a flat tax. The Resolution, which was introduced as an amendment to pending legislation, was not adopted. I reintroduced this legislation in the 105th Congress with slight modifications to reflect inflation- adjusted increases in the personal allowances and dependent allowances. I re-introduced the bill two Congresses ago on April 15, 1999--income tax day--in a bill denominated as S. 822. More recently, I introduced my flat tax legislation as an amendment to S. 1429, the Tax Reconciliation bill. The amendment was not adopted.

Over the years and prior to my legislative efforts on behalf of flat tax reform, I have devoted considerable time and attention to analyzing our Nation's Tax Code and the policies which underlie it. I began the study of the complexities of the Tax Code over 40 years ago as a law student at Yale University. I included some tax law as part of my practice in my early years as an attorney in Philadelphia. In the spring of 1962, I published a law review article in the Villanova Law Review, ``Pension and Profit Sharing Plans: Coverage and Operations for Closely Held Corporations and Professional Associations,'' 7 Villanova L. Rev. 335, which in part focused on the inequity in making tax-exempt retirement benefits available to some kinds of businesses but not others. It was apparent then, as it is now, that the very complexities of the Internal Revenue Code could be used to give unfair advantage to some. Einstein himself is quoted as saying ``the hardest thing in the world to understand is the income tax.''

The Hall-Rabushka model envisioned a flat tax with no deductions whatever. After considerable reflection, I decided to include in the legislation limited deductions for home mortgage interest for up to $100,000 in borrowing and charitable contributions up to $2,500. While these modifications undercut the pure principle of the flat tax by continuing the use of tax policy to promote home buying and charitable contributions, I believe that those two deductions are so deeply ingrained in the financial planning of American families that they should be retained as a matter of fairness and public policy--and also political practicality. With only those two deductions maintained, passage of a modified flat tax will be difficult, but without them, probably impossible.

In my judgment, an indispensable prerequisite to enactment of a modified flat tax is revenue neutrality. Professor Hall advised that the revenue neutrality of the Hall-Rabushka proposal, which uses a 19- percent rate, is based on a well-documented model founded on reliable governmental statistics. My legislation raises that rate from 19 percent to 20 percent to accommodate retaining limited home mortgage interest and charitable deductions.

This proposal taxes business revenues fully at their source so that there is no personal taxation on interest, dividends, capital gains, gifts or estates. Restructured in this way, the Tax Code can become a powerful incentive for savings and investment--which translates into economic growth and expansion, more and better jobs, and raising the standard of living for all Americans.

The key advantages of this flat tax plan are threefold: First, it will dramatically simplify the payment of taxes. Second, it will remove much of the IRS regulatory morass now imposed on individual and corporate taxpayers and allow those taxpayers to devote more of their energies to productive pursuits. Third, since it is a plan which rewards savings and investment, the flat tax will spur economic growth in all sectors of the economy as more money flows into investments and savings accounts.

Professors Hall and Rabushka have projected that within 7 years of enactment, this type of a flat tax would produce a 6-percent increase in output from increased total work in the U.S. economy and increased capital formation. The economic growth would mean a $7,500 increase in the personal income of all Americans. No one likes to pay taxes. But Americans will be much more willing to pay their taxes under a system that they believe is fair, a system that they can understand, and a system that they recognize promotes rather than prevents growth and prosperity. My flat tax legislation will afford Americans such a tax system.

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

Mr. President, I send an amendment to the desk.

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

Mr. President, earlier this week, the Senate debated a comprehensive amendment by Senator Byrd with respect to deficiencies in this bill regarding resources for homeland security. Essentially, what Senator Byrd was trying to do was to match the resources we need with the rhetoric we have heard about protecting the homeland of the United States.

I am disappointed Senator Byrd's amendment did not prevail. Within

that amendment, there were resources devoted to transit security. Today, I offer an amendment on behalf of myself and Senator Sarbanes to address what I think is an amazing and unacceptable lack of resources and investment for securing and protecting our Nation's trains, buses, and ferries. Indeed, these vehicles and these transportation modes provide transportation for millions of Americans each day, and they require protection.

I want to be clear. This is not the fault of the committee, and certainly not the fault of the chairman who has done an extraordinary job in securing an additional $1 billion for the subcommittee's allocation. But the fact is that the administration has not asked for sufficient resources to protect the transit systems in the United States. Again, this is why, together with Senator Sarbanes, I am offering this amendment to add $100 million for the protection of our public transit systems.

Each day, millions of Americans, old and young, rich and poor, every kind of American, board a bus or a train to go to work, school, or a doctor's appointment. Each year the Federal Government spends billions of dollars to build and maintain these systems. Yet to date, shockingly, the Federal Government has only invested below $90 million in fiscal years 2002 and 2003 for transit security if we exclude the very special circumstances of rebuilding transit systems that were attacked and severely damaged during the September 11 attack.

We have recognized the need to protect our airlines and we have spent billions of dollars to do so, but there is the same compelling need to protect the transit systems of the United States.

There are two major reasons we must protect these transit systems: First, we want to avoid, preempt, and prevent, a terrorist event involving a transit system; second, we need transit systems that have interoperable communications, trained personnel, and additional equipment to mitigate the consequences of any type of terrorist event in the United States.

It is quite clear transit systems are a target of terrorists. According to a report in 1994 by John P. Sullivan and Henry I. DeGeneste: ``Transit systems are attractive targets for a number of reasons. They carry large numbers of people within concentrated, predictable areas and timeframes. They are accessible since they provide easy user access. Finally, their target-rich infrastructure which often covers extensive geographic areas frequently renders countermeasures impractical.''

So we know this. Indeed, the Federal Transit Administration knows it. To their credit, they have taken meager resources to provide transit assessment assistance to any transit system that is required or requested. They have been able to advise these transit systems. But advice is not dollars. Advice does not build or buy equipment that will protect commuters in our transit systems.

We already know transit systems are a target, in many cases targets of choice. The Mineta Institute indicates that between 1997 to 2000 there were 195 terrorist attacks against transit systems worldwide. Most of these attacks were against buses. I should point out, 90 percent of these attacks occurred against buses. In the Middle East, we have seen the horrific pictures of buses blown up by suicide bombers. No one wants to see such pictures in the United States.

Of course, the most horrific example of a terrorist attack against transit was the 1995 sarin gas attack in Japan where 11 people were killed and 5,500 innocent people were injured due to the work of a small band of crazed individuals.

We understand there is a great potential for terror attacks against transit systems. Given the increasing danger of proliferation of weapons of mass destruction, these transit attacks could be horrific in the future.

I also mention that not only do we need to avoid attacks against transit, we need to be prepared in the case of another terrorist attack in the United States. I refer to testimony before my subcommittee last year, as I chaired the subcommittee with respect to transit's role in September 11. The first is a statement by Jenna Dorn, the Administrator on the Federal Transit Administration.

At 8:52 a.m. on September 11th, minutes after the first

hijacked jet plowed into One World Trade Center, a Port

Authority Trans-Hudson (PATH) train master gave life-saving

instructions to conductors and operators.

A train from Newark, carrying about 1,000 passengers, had

just pulled into the station below the World Trade Center.

The train master told the crew to keep everyone on the train,

board everyone in the station, and immediately depart for the

Exchange Place stop in Jersey City. Public transportation

employees immediately evacuated passengers who mistakenly

left the train.

A train from Hoboken carrying another 1,000 people was just

behind the Newark train. The train master told that crew to

keep the doors closed at the Trade Center and head

immediately to Jersey City.

The train master then told another train in Jersey City to

discharge all passengers and head back to the World Trade

Center to evacuate remaining travelers and transit personnel.

That train departed with its precious cargo at 9:10 a.m., 40

minutes before the first building collapsed.

That train master, Richie Moran, and PATH's emergency

response plan, saved thousands of lives. As we watched the

death toll climb in New York, it is astounding to realize

that no one riding the PATH or New York City subway lines

that morning was injured.

That is not an accident. That is the result of good communications, planning, training, all the issues that they showed in New York City. But let me suggest the level of planning, training, and equipment in New York City is not duplicated in many cities around this country--and it should be.

Also, I ask unanimous consent to have printed in the Record excerpts from the statement by Richard A. White, the general manager of the Washington Metropolitan Area Transit Authority, who talks of the integral role of that system in evacuating personnel during the attack on the Pentagon.

Senator Sarbanes and I asked for a GAO report on transit security. The GAO visited 10 transit properties all over the country of varying sizes and characteristics. They surveyed 200 of the 6,000 transit operators of the Nation. Their report clearly indicates the compelling need for Federal assistance.

In addition to that, it clearly indicates the scope of that system. Of just eight of the transit systems that had conducted professional security assessments and asked professionals to come in and review procedures, equipment, personnel, the cost to upgrade these systems, for just 8 out of 6,000, was $700 million. If we were to upgrade all of our transit systems in this country, it would be on the order of billions of dollars. Yet, those costs have not been met by the administration for this compelling need.

The administration has barely funded transit security, about $88 million. Some of this, frankly, was discretionary funding from the Department of Homeland Security which they, to their credit, decided to commit to the issue of transit security.

We have to provide the resources. In addition, we have to also ensure that there is appropriate responsibility and oversight. That is why our amendment also calls on the Department of Homeland Security and the Department of Transportation to sign a memorandum of agreement to ensure that the two

agencies, as well as the Federal Transit Administration and the Transportation Security Administration, have in place strong linkages, coordination, and understanding of their mutual and separate roles. We have been repeatedly assured that this agreement was imminent. It has yet to be produced, yet to be issued. Our amendment asks that this be done expeditiously. My colleague, Senator Sarbanes, will address these points also.

Our position today is not to cause panic but to prevent panic by having the resources so that our transit systems are not targets of terrorists and that our transit systems can, in fact, provide value to the support in the wake of any type of attack on a major urban area in the United States by terrorists. This is a well-crafted amendment. Certainly the need is there. I urge support of the amendment.

I recognize at some point the chairman may raise a budget point of order against my amendment, and at the appropriate time either I or Senator Reid of Nevada will move to waive the point of order. I urge my colleagues to support my motion to waive.

I yield the floor.

I am happy to yield 8 minutes.

Mr. President, the purpose of our amendment is not necessarily to impede any deployment of technology. It simply recognizes that even if this technology is deployed, tested, or evaluated in 6 stations or 100 stations, the cost of implementing this system and other systems--the amendment talks about protecting transportation facilities, not just subway lines, but buses and interurban transportation, all types and modes of transportation--even if you could deploy, the cost would be significant.

Our amendment asks that this budget recognize those significant costs.

Again, there is no question that the chairman has tried his best to come up with the resources to try to meet this need. But the need is so staggering--billions and billions of dollars. The funds in this bill devoted to transit security is so meager that our amendment simply tries to strike a balance. The $100 million would go to help systems buy equipment and train personnel. All of that is necessary.

We also would ask that the Department of Homeland Security issue the plans they have long said they were going to do between the proper transportation and the proper homeland security to coordinate their activities with respect to transit security.

I urge the amendment be adopted.

I further point out that even if we were to adopt this amendment--I understand at the appropriate moment the Senator from Mississippi will make a budget point of order--this is truly a very modest downpayment on the cost of ensuring that all of our transit systems, our buses, and our subway systems have the same degree of preparedness as we are trying to develop for our airlines and for other modes of transportation.

If we reject this amendment, we will simply be in a situation where we might be able to demonstrate a few projects, and we might be able to test the system, but we will never deploy those systems across the Nation in transit systems. There are 6,000 transit systems.

Again, it is $100 million, just a meager downpayment for what is really a multibillion-dollar requirement for the United States.

I recognize that the Senator has said he is proposing to make a point of order.

At this point, I yield my time in anticipation of such a point of order.

Mr. President, pursuant to section 904 of the Congressional Budget Act of 1974, I move to waive the applicable sections of that act for purposes of the pending amendment, and I ask for the yeas and nays.

I ask unanimous consent for 2 minutes equally divided.

I ask unanimous consent that Senator Clinton be added as a cosponsor.

Mr. President, there are 6,000 transit systems throughout the United States in every State in the Union. All of them need additional resources to improve their security. We know they are targets. Worldwide, there already have been 195 attacks against transit systems from buses in Israel to a sarin gas attack against the subway system of Tokyo which killed 11 and injured over 5,000 individuals.

To fully protect all of these systems, the GAO has estimated we would need billions of dollars. The Reed-Sarbanes-Clinton amendment is a modest first step to authorize the appropriation of $100 million for grants to transit systems for equipment, training, and other security needs. The need is clear. The threat is obvious.

I urge support for this amendment and retain the remainder of my time.

Mr. President, I rise to engage the chairman and ranking member in a colloquy regarding letters of intent for the installation of airport security equipment.

The bill before us includes $309 million for the installation of Electronic Detection Systems, also known as EDS, at our Nation's airports, which is an increase of $309 million over the President's request.

I applaud the inclusion of these funds as our Nation's airports face increased security demands and limited growth in passenger traffic revenues in the wake of September 11. My State's airport authority, the Rhode Island Airport Corporation, RIAC, was amongst the first airports to have EDS screening of all passenger bags. However, RIAC was forced to place these large machines in the terminal waiting area at my State's main airport, T.F. Green, causing significant disruption. Since that time, RIAC and my office have worked to make sure that the TSA and FAA are aware of this situation and the need for Federal assistance to modify the terminal at T.F. Green to increase the efficiency of the facility, the security of the EDS machines, and ease of passenger movement.

I would ask my colleagues, the Senators from Mississippi and West Virginia, if it is their understanding from the Transportation Security Administration that the level of funding included in this bill is sufficient to meet the needs of airports such as T.F. Green which are far along in the planning process and that the TSA believes that it cannot expend more than the $309 million in fiscal year 2004?

I thank my colleagues for providing this level of funding, and I look forward to working with them to ensure that our Nation's airports can successfully meet their security needs.

Bureau of Immigration and Customs Enforcement

Mr. President, I rise to engage the chairman and ranking member in a colloquy regarding the increasing demand for investigative work by the Bureau of Immigration and Customs Enforcement in Rhode Island.

Neither the Bureau nor its predecessor, the U.S. Customs Service, has stationed a permanent investigator or special agent in Rhode Island. Several years ago, two special agents were designated to serve my State but were stationed in Boston, where they have frequently been pulled away to other duties.

Without a permanent investigative presence in Rhode Island, serious and growing challenges remain unaddressed, including financial crimes, money laundering, and the smuggling of narcotics and other contraband that enter by marine vessels and on international flights at Rhode Island's T.F. Green Airport.

The legislation before us includes an additional $20,300,000 to increase investigations staffing for the Bureau of Immigration and Customs Enforcement. I applaud the chairman and ranking member for providing these funds and for including language in the committee report recognizing the need to devote additional resources to the core investigative missions of the Bureau. I would ask my colleagues, the Senators from Mississippi and West Virginia, to join me in urging the Bureau to ensure that Rhode Island and other underserved States receive a permanent investigative presence to meet these growing challenges.

I thank my colleagues for their support, and I look forward to working with them to ensure that the Bureau of Immigration and Customs Enforcement can successfully meet its investigative responsibilities in Rhode Island and throughout the Nation.

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

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

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

Mr. President, I ask unanimous consent that Senator Reid of Nevada be added as a cosponsor of the amendment.

Mr. President, it is truly appropriate that Senator Reid be the principal cosponsor of this amendment because this is an issue which he has raised over the years with great passion, great feeling. This would just as appropriately be a Reid-Levin, et al., amendment as well as my offering it on our behalf.

Young men and women are putting their lives on the line for us and our country while some corporations have stiffed our country, renouncing their citizenship, going through phony reincorporations in Bermuda or other tax-haven countries to avoid paying taxes. This process is called corporate inversion. It is one of the abuses about which we all know as a shell headquarters being opened up in a tax haven, while all the benefits of living in America remain, all the benefits we would hope to provide in this bill--for instance, protection, homeland security, police, fire, port security. They take advantage of all the other services which are provided to these particular corporations. But because a shell headquarters has been opened up for a few of these corporations in Bermuda, they have avoided paying taxes.

They continue to use our roads and our law enforcement, our education system. They use our free trade laws. But then they avoid paying taxes by opening up a post office box and a computer in a tax haven.

One of the colleagues of ours who was most deeply involved in trying to correct this was Paul Wellstone. He said: If they want to make that decision, we haven't yet stopped them from gaining the tax benefits, but at least let's not give them government contracts while they are doing this type of activity. And when he was alive, our dear friend and colleague Paul Wellstone offered an amendment such as the one Senator Reid and I are offering today that was adopted. It was modified in conference so that it came back in such a weakened state that there are still some loopholes in it which need to be closed.

That is what this amendment does. Basically what this amendment does is provide that the language of the amendment will apply to the subsidiaries of the fake corporations in Bermuda or elsewhere so that we get to the actual corporation which has remained in America and that we also apply this to new contracts to corporations which have already inverted, as the word goes. We obviously would not in any way attempt to affect existing contracts. We don't intend to do that. We don't do that. In fact, we can't do that in any event under the Constitution.

What we do believe, as Paul Wellstone passionately believed, is we don't have to provide advantages through contracting with these companies, if they have chosen to abandon this country and to take the unpatriotic course of creating these phony headquarters and a tax haven while they are still here, in fact, enjoying all of the services of this country.

To reiterate, while young men and women are putting their lives on the line for us and for our country, some corporations are stiffing our country, renouncing their citizenship, and going through phony reincorporations in Bermuda or other tax haven countries to avoid paying taxes. This process, called a corporate inversion, is one of the most egregious of all of the tax haven abuses that we know about--just a shell headquarters being opened up in a tax haven, but all of the benefits of living in America continue. These corporations continue to use our roads, use our law enforcement, use our education system, use our markets and use our free trade laws, among other things, but they avoid paying billions in taxes by setting up a post office box and a computer in a tax haven. One of the architects of these inversions warned that for companies planning on doing this, patriotism was going to have to take a backseat to profits--boy did she have that right.

Inversions are unfair to the taxpayers who are left holding the bag and unfair to the U.S. companies that are doing the right thing by not inverting but who nevertheless are at a competitive disadvantage because of these sham moves. Last year, Senator Wellstone tried to do something about this problem, and we in the Senate agreed with him. Senator Wellstone introduced an amendment to the Homeland Security Act which prohibited inverters and their subsidiaries from entering into homeland security contracts with the government. We adopted the amendment. Why, Senator Wellstone wondered, should those that renounce their citizenship to avoid paying taxes--and who nonetheless receive all of the benefits of being U.S. citizens--get rewarded further through homeland security contracts? Why would we continue to permit inverters to take advantage of the competitive edge their sham moves have provided them for as long as they've been inverted? Why should good corporate citizens that do not engage in this egregious behavior continue to be penalized for doing the right thing and staying in the U.S.? There were no good answers to these questions last year when we passed the Wellstone amendment, and there are no good answers to these questions today.

Unfortunately, the Wellstone provision came back from conference so watered down that, when it was passed as part of the Homeland Security Act, it actually did nothing. All of those who engaged in these specious inversion transactions in past years can still enter into homeland security contracts--the current prohibition in the law only applies to future inverters, not those that did so previously. This in reality means that the law applies to no one, because no one is going to invert in the future in light of Senator Grassley's statements that the tax benefits sought from future inversions won't be recognized. The competitive advantage these inverters enjoy vis-a-vis every other U.S. company therefore remains undisturbed.

The gutted version of the prohibition also only prevents the foreign ``parent'' corporations, i.e., the paper Bermuda companies, from entering into homeland security contracts with the government. This, too, does nothing, because the U.S. ``subsidiaries,'' actually the main company but because of the inversions called subsidiaries, are actually the ones entering into the contracts with the government. Prohibiting the shell parents from entering into homeland security contracts therefore has no impact whatsoever on

inverted companies or the homeland security contracts they wish to receive.

My amendment would correct these two glaring loopholes in the current law, neither of which would exist had we stuck with the Wellstone amendment which we passed last year.

First, this amendment would prohibit those that inverted in the past from receiving future--and I stress the word future--homeland security contracts in fiscal year 2004. The existing law lets inverters continue to take advantage of the competitive edge they enjoy over other U.S. companies by letting them enter into future homeland security contracts. We therefore continue to reward these companies for their decisions to invert on paper to a tax haven.

Second, this amendment, consistent with the Wellstone amendment, would apply the prohibition on fiscal year 2004 homeland security contracts to the subsidiaries of the foreign ``parent'' corporations. As I mentioned, the current law prohibits only the foreign parent from entering into homeland security contracts. This does nothing because the U.S. ``subsidiaries'' are actually the ones entering into the contracts with the government. This amendment would correct that obvious problem.

That is the entire amendment. There is nothing new here: Both of these changes are identical to what we all agreed was the right solution just last year. Those that have engaged in these inversion pretenses should not continue to be rewarded for their egregious conduct to the detriment of their U.S. competitors and the U.S. public at large.

This provision is not retroactive. It does not affect existing contracts. It refers exclusively to future homeland security contracts, i.e., to contracts entered into in the future. We are not asking companies to provide any refunds for past contracts or to break existing homeland security contracts. It is solely meant to apply to contracts in the future, on a going forward basis, not those in the past.

Failure to correct this problem will continue to give companies that entered into these sham deals a significant competitive edge over the other U.S. companies out there. Listen to what some U.S. companies who compete with inverters have said. Stanley Tools of New Britain, CT, a tool manufacturer that itself contemplated inverting prior to changing its mind and doing the right thing, stated: ``Not only are we disadvantaged against our foreign competitors, but two of our major U.S. competitors have a significant advantage over Stanley Works because they have already reincorporated [in Bermuda].'' Conair Corporation of East Windsor, NJ, a personal and healthcare products manufacturer, stated: ``Our competitors have registered in Bermuda and evade paying a great deal of American taxes which makes it very difficult and unfair for Conair to operate in an environment where people are price-conscious of the products they are buying.''

It is a fact that U.S. companies that compete with these inverters are at a competitive disadvantage because of the tax and other benefits that inversions provide. Failure to act now will continue to skew the playing field against the U.S. companies who have chosen to remain in the U.S. and pay their taxes like the rest of us.

Inverted companies have received unjustified benefits of moving their P.O. box to Bermuda. These ill-begotten gains have meant years of lower U.S. taxes while competitors pay taxes, giving inverters a competitive edge over other U.S. companies. As a result of their fake move to a tax haven, these companies have had the best of all worlds for far too long, all to the detriment of their U.S. competitors, the U.S., and the public as a whole.

The solution for these companies is easy--come back home. No headquarters, jobs or operations would need to be moved since it was all a paper transaction in the first place. That is their decision but it is ours as to whether we will give them more contracts.

Companies that entered into these transactions knew this could happen. Laws change all the time, and these inverters knew that some may not be pleased with their decision to put profits ahead of patriotism. They weighed the risks at the time and decided that renouncing their U.S. citizenship was the way they wanted to go. That was their choice, and they made it. The choice we have now is whether we want to continue to reward unpatriotic companies that enjoy all the benefits of being in the U.S.--our police, roads, security provided in this bill but don't pay their share of the countless benefits they receive year in and year out.

We should not continue to reward the inversion pretense. It is unfair to the U.S. companies forced to operate on an uneven playing field, and it is unfair to the rest of our taxpayers who pay their fair share. Let's do what we intended to do when we passed Senator Wellstone's amendment last year.

I understand this amendment may be accepted. I haven't had a chance to talk to our good friend from Mississippi. I don't know that for sure. I ask him at this time whether or not the rumor mill is correct that, in fact, this might be accepted.

Mr. President, I greatly appreciate my good friend's words, as always, and his counsel.

Mr. President, I move to reconsider the vote.

Mr. President, on another matter, this is an amendment which I had intended to offer but will not. I want to spend about 2 minutes discussing the formula which is in the bill before us relative to the distribution of the homeland security first responder grant funds. Typically bills have what is called a small State guarantee. That is not unusual. What is unusual in this bill is that the guarantee, the set-aside for small States, is so unusually high. That means other States with larger populations have less funds available to them because of the small State guarantee. It is deeply troubling to those of us who are from larger States, be it California, New York, Ohio, Illinois, or many others. Due to this small state minimum, many other States do not receive what we consider to be an equitable or fair portion of the funds that are in here.

There has been great debate over the level of funding because of this small State guarantee. The leading organization that analyzes Federal grants, the Federal Funds Information for States, FFIS, has stated the structure ``of the three quarters of 1 percent guaranteed minimum as a base represents a departure from traditional small State minimums which are typically half of 1 percent or less.''

There is an authorization bill moving along, which has come out of the Governmental Affairs Committee, which is the Homeland Security first responder grant authorization bill. It also has the same formula in it, three quarters of 1 percent. Again, this is a rare and unusual formula. But this is not the time, in my judgment, to force the resolution of this issue. Better it be resolved on the authorization bill, which is on the calendar, so we will address it at that time. I know feelings run deep in all of our States on this issue. Those of us, however, who represent more populous States really believe this particular formula is overreaching. It is almost unprecedented, prior to the Homeland Security agency coming into effect.

We will save the debate on my amendment or other amendments similar to it for a different day. I thank those Members of the Senate who have worked so closely with me on this amendment. Senators from many of the populous States who believe very strongly about the issue have worked closely with me on it. I simply tell them I hope this decision meets with their approval. It seems to me the wiser course, rather than on an appropriations bill where there are some

technical problems with this, is to raise it instead on an authorization bill. Hopefully by then all of us can come together and figure out a more traditional way of protecting the small States with some kind of a minimum guarantee. I will not offer the amendment tonight.

I thank my cosponsors, including Senators Boxer, Feinstein, New York Senators, my colleague from Michigan, Senator Stabenow, and other Senators who have been very supportive. Senator Voinovich and I, for instance, in the Governmental Affairs Committee, worked on an approach to this that is somewhat different than the amendment I was going to offer. I know how deeply Senator Voinovich feels about this formula, and I welcome his support on a related amendment.

I see the good Senator from Texas on the floor. I will yield to her because she has been very deeply involved as well. She and I have had some very productive conversations about the subject. She and many other States believe very strongly as I do about it. I thank her and all others who have been supportive of trying to resolve this in a fair way.

I yield the floor.

I thank the Senator.

Amendment No. 1364

Mr. President, this first appropriations bill for the Department of Homeland Security should have been a highpoint in our shared quest to secure the homeland. In the anguished days after September 11, Members of both parties were able to unite around our commitment to fight for a different, more secure future. The new Department of Homeland Security, DHS, should be a monument to that commitment. But the Department and its partners cannot make a difference without real resources to fight terrorism here at home. This bill does not provide those resources, and it does not provide them because the President has refused to lead on this issue.

We are fighting a war on terrorism that demands our full energy and determination. It must be waged not only overseas, but also at home. Yet President Bush has repeatedly balked at carrying out a serious effort at homeland defense. In the face of numerous expert reports chronicling the terrorist threat to U.S. citizens and property here at home--and the need for a dramatic infusion of new Federal funds-- President Bush has consistently failed to embrace the challenge of homeland security with vision or resources.

Recall that President Bush had to be dragged to the table to consider a Department of Homeland Security. For months, President Bush rejected calls by myself and others to create a Cabinet-level department that could robustly tackle the daunting challenge of homeland security. Critical time was lost as the administration continued to insist that the monumental task of securing our homeland could be handled by a policy advisor in the White House without budget or line authority over any of the Federal workers tasked with our homeland security. But when the administration changed tacks and signed onto the idea of a new department last summer, I welcomed them to the cause. And when the legislation was passed to create the department, I held out hope that the administration would now vigorously address the vulnerabilities in our homeland defenses.

Sadly, that trust was misplaced. Having belatedly agreed to create the Department of Homeland Security, the President now refuses to seek the resources DHS--and its partners at the State and local level--must have in order to succeed. Even before the legislation to create the department went through, I had urged the White House

to boost spending on critical homeland security programs. Yet throughout the last appropriations cycle, the administration resisted repeated Democratic attempts to obtain more resources for first responders and other critical homeland security accounts. Whether the question was equipping our first responders, bolstering our border personnel or money for transit security--to cite just a few items--the administration kept saying no.

Then, in February, with the Department of Homeland Security nearly launched, the President sent the Congress a status quo budget for homeland security for fiscal year 2004--requesting only $300 million more than it planned to spend on homeland defense activities in the preceding year. Incredibly, the President's request included no new money for first responders, no new money to equip our hospitals and public health clinics to combat bioterrorism, and no money at all for port security grants. The President's proposed budget actually cut funds for the Transportation Security Administration, TSA, an agency whose urgent work is just beginning. It provided almost no money to assess and help protect our Nation's critical infrastructure. It was a business-as-usual budget, when we needed a call to arms to address the dire new threats confronting us. And that timid request drove the budget debate this spring and shaped the broad contours of the appropriations bill before us.

I can hardly overstate the gravity of this failure to lead. The Federal Government may have no more fundamental obligation than to provide for the common defense. Today, as September 11 so painfully showed us, that means more than building a strong military and deploying our outstanding servicemen and women in hot spots around the world. Now, it also means securing our borders and, within the country, building a network of shared security with our State and local governments. We must equip and empower our frontline homeland defense workers--be they Customs inspectors, baggage screeners, local police and firefighters or public health professionals--just as robustly as we have readied our soldiers, sailors, and airmen for combat overseas.

Homeland security is expensive. We must invest in the people and the technologies that can prevent or help respond to terrorism, and that means making substantial new investments in our services and infrastructure. We must employ, train and equip top-flight first responders. We must hire more border personnel, create biometric security systems, install information sharing networks and develop biological and chemical testing and treatment capabilities. Securing the Nation's ports, as well as chemical and nuclear plants, must become a top priority. In transportation, we must move beyond aviation and also secure mass transit, highways, rails, air cargo, container shipments, pipelines, tunnels, and bridges. Dollars alone will not solve these challenges, but they certainly cannot be conquered without more resources. Nor should we ask State and local governments, who are already facing the worst fiscal crises in decades, to shoulder an unfair portion of the burden. The war against terrorism is a national fight, and a substantial portion of the financial responsibility falls to the Federal Government.

That is why, in February, I called for an additional $16 billion for homeland security in fiscal year 2004, including an additional $7.5 billion for grants for first responders. My proposal advocated significant new resources for port security grants, public health preparedness, heightened security in all modes of transportation, critical infrastructure protection, and more. I argued that we must approach homeland security with the same urgency, and resources, that we would deploy against terrorists overseas. In the same vein, last month I sought to authorize $10 billion for first responders in fiscal year 2004 during consideration of S. 1245, a bill to improve the process for distributing first responder grants to State and local governments, in the Governmental Affairs Committee. Unfortunately, my amendment was rejected on a party-line vote.

An expert task force has recently delivered the same message about the urgent needs of our first responders. An Independent Task Force of the Council on Foreign Relations, led by former Senator Warren Rudman and former White House terrorism adviser Richard Clarke, called for billions more to equip and train the Nation's first responders. The report's title says it all: ``Drastically Underfunded, Dangerously Unprepared.'' The task force, which included a former Director of the FBI and CIA as well as a former Chairman of the Joint Chiefs of Staff, found a nation still ``dangerously ill-prepared to handle catastrophic attack on U.S. soil.'' It found fire departments without proper breathing apparatuses and interoperable radios, cities without the means to determine whether terrorists had struck with dangerous chemicals or other hazardous materials, and public health labs incapable of responding to a chemical or biological attack. This expert task force concluded that government would need to spend an additional $98.4 billion over 5 years to prepare the Nation's first responders. The administration's response to the warning from this respected commission? The administration brushed off the report's spending recommendation as ``grossly inflated.''

The administration simply cannot be listening to our first responders. Far from seeming inflated, the funding recommendations of the task force report only corroborated what I have heard from first responders around the country, including testimony before the Governmental Affairs Committee. First responders need equipment such as personal protective clothing, respirators, and devices for detection of chemical, biological, and radiological hazards. They need training to use such equipment effectively and to learn how to respond to a serious terrorist attack. However, local fire and police officials at our hearings told the committee that they do not have the resources to pay for training or equipment that they need to prepare for a possible attack.

For instance, Captain Bowers of Prince Georges County, MD, told the Governmental Affairs Committee that approximately 57,000 firefighters lack personal protective clothing and many fire departments do not have enough portable radios to equip more than half of the firefighters on shift. Indeed, most emergency workers still do not have the training or the equipment they require. State and local governments and first responder organizations cannot train and equip these personnel on their own, and they are not getting the help they need from the Federal Government. The administration's own budget documents estimate that only about 80,000 first responders were trained and equipped in 2002 with funding at the Federal level of $750 million.

Unless this administration provides significantly more funding, it will take us decades to train our first responders to cope with weapons of mass destruction. That is time we do not have.

First responders are not the only homeland workers left in the lurch by this administration. Independent experts and the General Accounting Office, GAO, have cited substantial shortfalls in other areas of homeland security as well. Transportation security is one glaring example. By law, the Transportation Security Administration is responsible for security in all modes of transportation. But TSA has thus far focused almost exclusively on commercial aviation, leaving treacherous weaknesses in other transportation systems--a problem I outlined in a July 9 letter to Secretary Ridge. With respect to maritime transportation, the Coast Guard has identified billions of dollars worth of necessary improvements--and Congress has mandated greater security--yet the administration requested no money for port security grants to help make the changes. This even as expert upon expert has identified the Nation's 360 commercial ports as a leading cause for concern on the homeland front--in large part because of the valuable goods and energy imports channeled through these ports and because the millions of containers that enter this country by sea can hide untold dangers.

Stephen Flynn, a homeland security specialist at the Council on Foreign Relations, summed it up this way in the June 21 Boston Globe:

A government that is wringing its hands over 1 or 2

million-dollar grants is still a nation that hasn't come to

grips with the fact

that the threat has changed. I was more forgiving in the

first 18 months, but when you pass an act and you make sure

there is no money to execute it, that goes beyond being slow

to not taking this seriously.

Mass transit systems are another grave source of concern. According to a December 2002 GAO report, mass transit systems are frequent targets for terrorists. We all remember the 1995 attack on the Tokyo subway, when members of a Japanese cult released sarin, a lethal chemical nerve gas, on five subway trains during rush hour. Twelve people were killed and thousands injured. Only mistakes by the terrorists kept the death toll from being far higher.

Here in the United States, our transit systems remain vulnerable to such an attack. The GAO report concluded that ``insufficient funding is the most significant challenge in making . . . transit systems as safe and secure as possible.'' Yet the administration is not seeking any significant resources to secure our Nation's transit systems--a project that could run into billions of dollars. Nor do we see a commitment to improve rail security, although vast quantities of hazardous materials are shipped by rail. Even in the area of passenger aviation, where TSA has focused virtually all its resources, troubling gaps remain. Officials have made strides in screening passengers themselves and their baggage, yet they have not developed a reliable system to screen commercial cargo loaded onto the very same planes.

Look in almost any direction, and you will find pressing, unmet security needs. The administration's budget will not fulfill existing congressional mandates to secure the borders with more personnel and better, biometric identification systems. Our Nation's critical infrastructure--chemical and nuclear plants, energy grids, water systems and more--remain dangerously exposed, yet the administration seems content to continue studying these vulnerabilities rather than move aggressively towards creating greater protections.

In March, I wrote to Secretary Ridge seeking firm timetables for completing inventories, risk assessments and protective measures for a wide array of critical infrastructure segments. The Secretary has yet to provide these timetables.

These shortfalls are disturbing enough when taken in isolation. Seen together, they form a shockingly dismal picture of our homeland security. That is why former Senators Gary Hart and Warren Rudman, who were the first to call for a Department of Homeland Security and who warned of terrorist attacks within the United States even before the September 11 tragedy, last fall issued a new report warning that: ``America remains dangerously unprepared to prevent and respond to a catastrophic terrorist attack on U.S. soil.'' They concluded the Federal Government must invest more to equip and train first responders, to boost the health community's capacity to prepare for and respond to chemical or biological attacks, and to improve transportation security beyond commercial aviation. Several months later, an expert study by the Brookings Institute came to a similar conclusion: The Administration was shortchanging key homeland security accounts such as port security and critical infrastructure protection.

Even Republicans here in Congress have called for more. Indeed, this bill does go beyond the President's request to provide some additional funds for certain homeland security accounts. But the appropriators do not go nearly far enough. So, as our firefighters and police officers face layoffs due to tight budgets, this bill would offer even less assistance to first responders than in fiscal year 2003. And as the Coast Guard predicts it will cost $1 billion this year to conduct the most basic port security assessments and improvements, this bill provides only $150 million for port security grants and would not give Coast Guard the personnel it needs to carry out its statutory mandate to review port security plans. It makes no sense to me that the Bush administration is willing to shortchange homeland security. This is a profound failure of leadership that threatens to undermine our promise to the American people to do all we can to ensure this country never again suffers the tragic loss and disruption experienced on September 11 and its aftermath.