Expressing the grave disapproval of the House of Representatives regarding the majority opinion of the Supreme Court in the case of Kelo et al. v. City of New London et al. that nullifies the protections afforded private property owners in the Takings Clause of the Fifth Amendment.

Mr. Chairman, I rise as a cosponsor of this amendment.

Specifically, the amendment seeks to prohibit funds in this act for the provision of mortgage insurance under the National Housing Act to lenders who engage in lending practices that are not prudent, as referenced in the Home Mortgage Disclosure Act and FDIC Improvement Act.

The gist of this amendment is to stop predatory lending. I want to pay tribute to the National Community Reinvestment Coalition and the hearing that was just held with the members of the Committee on Financial Services, including the gentlewoman from California (Ms. Waters), the gentleman from North Carolina (Mr. Watt), and the gentleman from Missouri (Mr. Clay), that presented this report from the National Community Reinvestment Coalition that indicated minorities, women, and low- and moderate-income borrowers across the United States of America receive a disproportionate amount of high-cost loans.

It also says that the Community Reinvestment Act has been unsuccessful, for example, in examining subprime lenders. So they have not been able to weed out those who might raise the interest rates so high that minorities and women and others are impacted negatively.

In order to improve the housing market and to give access to better interest loans, we believe that there should be greater oversight. So this amendment was constructed to provide greater oversight.

I am delighted to be able to join the gentleman from Missouri (Mr. Clay) on this amendment, but I hope that we will have the opportunity to work with our colleagues and really be able to provide an answer to this report, the ``2004 Fair Lending Disparities: Stubborn and Persistent.''

Mr. Chairman, will the gentleman yield?

Mr. Chairman, I want to make sure that we acknowledge and yield to the ranking member and thank him for his interest in this area and, of course, to be able to work with him during conference on this very important issue of trying to stop predatory lending.

Mr. Chairman, if the gentleman from Missouri will continue to yield, I want to thank the chairman very much. I did not hear the conclusion; I do not know if the gentleman from Michigan concludes after we conclude, with respect to report language, but I assume that is what we might be able to work with the chairman on.

Mr. Chairman, I offer an amendment.

The Acting Chairman. The Clerk will designate the amendment.

Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, I discuss this amendment to help educate my colleagues and to remind them that this amendment was passed in previous Congresses and the work of many of my colleagues, including the gentleman from New York (Mr. Rangel), has been ongoing to try to bring fairness to this process.

I would first like to say that none of us disagree with the idea of volunteer service. But my amendment simply says that it prohibits the use of funds in this act to implement the community service requirement for public housing tenants.

This proposal has a long history, and of course the reason is because this is a difficult provision to enforce. Part of the enforcement in this time of decreasing public housing is to evict individuals from public housing, the individuals who are most vulnerable, the individuals who are most needy, and the individuals who may be least able because of their physical condition to perform community service.

I have a letter here from the National Association of Housing and Redevelopment Officials which indicates: ``Dear Representative Jackson- Lee: I write on behalf of the National Association of Housing Redevelopment Officials to support your amendment to halt the implementation of the public housing community service requirement. This organization is the Nation's oldest and largest association of housing community development professionals and the leading advocate for adequate and affordable housing and strong, viable communities for all Americans, particularly those with low and moderate incomes. Our 21,000 agency and individual members help millions of families nationwide find safe and affordable housing.

``This organization has been opposed to the community service requirement since its enactment in 1998. Although a limited percentage of families nationwide meet the criteria for being subject to the community service requirement, all families must be screened and tracked for compliance. This requirement is an unfunded mandate that public housing can ill afford. In time of scarce resources, we believe that Federal funds could be better focused on maintaining safe, decent housing for 12 million low-income families.''

In essence, they are committed to providing this service themselves.

In fact, they say, ``many agencies partner with local service organizations to assist in case management and provide services. Other communities find it is necessary to augment local resources with programs and services that are easily accessible by public housing communities. The community is in the best position to make this decision.''

This amendment is a clean-up amendment. It allows the local authorities to provide the opportunities for community service, but it does not burden those public housing entities by

using Federal funds to require the oversight and then to evict those most needy for public housing.

I would ask my colleagues to support this amendment.

National Association of Housing

and Redevelopment Officials,

Washington, DC, June 29, 2005.

Hon. Sheila Jackson-Lee,

Rayburn House Office Building,

Washington, DC.

Dear Representative Jackson-Lee: I write on behalf of the

National Association of Housing and Redevelopment Officials

(NAHRO) to support your amendment to halt the implementation

of the public housing community service requirement under

Section 12(c) of the US Housing Act of 1937. NAHRO is the

nation's oldest and largest association of housing and

community development professionals and the leading advocate

for adequate and affordable housing and strong, viable

communities for all Americans--particularly those with low-

and moderate-incomes. Our 21,000 agency and individual

members help millions of families nationwide find safe,

affordable housing and economic opportunities through a

variety of local, state, and federal programs, such as Public

Housing, Section 8 Housing Vouchers, Community Development

Block Grants, HOME and the Low Income Housing Tax Credit.

NAHRO has been opposed to the community service requirement

since its enactment in 1998. Although a limited percentage of

families nationwide meet the criteria for being subject to

the community service requirement, all families must be

screened and tracked for compliance. This requirement is an

unfunded mandate that public housing can ill afford. In a

time of scarce resources, we believe that federal funds could

be better focused on maintaining safe, decent housing for 1.2

million low-income families, 47 percent of which are headed

by the elderly or persons with disabilities, and supporting

self-sufficiency programs that get real results.

Total funding for public housing has declined steadily in

recent years. The President's FY 2006 budget requested 20

percent less funding for public housing than Congress

provided in 2001. A Harvard Operating Cost study found that

public housing has traditionally been underfunded compared

with all other assisted housing. At the same time, basic

housing operating costs have increased exponentially due to

factors beyond local agencies' control, including employee

health care costs, energy and utility costs, and public

facilities insurance increases following 9/11. The cumulative

effect of several years of this funding crunch has been to

undermine local agencies' ability to provide basic services

and maintain our country's $90 billion investment in

affordable public housing.

We are pleased that Subcommittee Chairman Knollenberg and

Ranking Member Olver have been able to improve upon the

President's requested funding levels for Public Housing

Capital and Operating Funds in HR 3058. Despite their efforts

in this area, however, public housing is far from fully

funded. With so many stresses on our public housing, the

unfunded mandate of the community service requirement is

simply a drain on local agencies' ability to meet the core

mission of providing housing and meaningful support for

families seeking a better life.

Thank you for your efforts to remove this unfunded mandate

and pennit local housing agencies to focus on our core

mission of assisting families and preserving the country's

investment in affordable housing.

Sincerely,

Saul N. Ramirez, Jr.,

Executive Director.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, many of these residents are not able-bodied; and as indicated by the National Association of Housing and Redevelopment Officials, it is best utilized at the local levels. They have been partnering with local organizations to try to work through service. We all believe in service.

This is an unfunded mandate. It is a burden on those who are most vulnerable in housing that cannot, either because of their physical or mental condition, perform this service and they are vulnerable to conviction.

I would suggest to my colleagues it is worthy of eliminating.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, how much time remains?

Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, let me indicate that I believe it is an unfunded mandate; but more particularly I hope that we will get to a point, if this amendment is not accepted by my colleagues, that we can come together and work for what is best for those most vulnerable. That is what public housing is for.

When it was passed in 1998, there were many good intentions. It was in the climate of welfare reform. But it is an unfunded mandate. It is burdensome. And it is disrespectful to suggest that those who are poor are not desirous of public service. It is discriminatory and it is unfair, patently so.

I hope that my colleagues will work together with many of us who believe that we can ensure good citizenship by those in public housing; at the same time we can be fair by making sure that they do not get the ultimate penalty which is eviction and force unfunded mandates and public housing authorities who can least afford this in this time of declining funds.

This is a burden. And I would ask that they go in any neighborhood of homeowners and ask the homeowners association whether or not to stay in your house, other than keeping your own house in a good condition, whether you are demanded to perform public service. Public service should be voluntary, and it should be out of your heart. I can assure you that poor people believe in public service. This is high-handed, up-handed, if you will, and elitist; and we know that it is a problem. And I would hope that my colleagues would vote for my amendment.

In the option they do not, we will keep working because we believe in fairness to all who are deserving of public housing and who need public housing and are the most vulnerable.

I ask my colleagues to vote for this amendment.

Mr. Chairman, I yield myself such time as I may consume to take this opportunity to discuss what I think is a very important issue.

While recognizing that this committee, the chairman and the ranking member, funded the air traffic controllers at the rate that the President asked for, at 595; and recognizing as well that there had been additional dollars placed in FAA for additional services which might be used for air traffic controllers, and I hope that will be the case, as recently acquiring Houston Intercontinental Airport in my Congressional district, and let me also say that I support the previous colloquy of the gentleman from New York (Mr. Crowley) on the dollars for soundproofing because all who live in the area are well aware of that need, but I wanted to quote for my colleagues the news report of the incident of yesterday: Stray Plane Sets Off Evacuation At Capitol. The last paragraph in the article in The Washington Post says ``A Federal official said radio communications between the pilot and the authorities indicated the pilot ended up in a restricted area while trying to avoid bad weather.''

I can only say, since it does not designate who the authorities were, that we know air traffic controllers are enormously busy. We are looking at increasingly congested skies and we are looking at overburdened and overworked air traffic controllers. In fact, in one airport in Texas, it was found that at this particular airport air traffic controllers and managers routinely covered up serious operational errors and deviations, including aircraft, for the last 7 years. The U.S. Office of Special Counsel said the controllers had allowed airplanes to fly too close to each other near the airport, and that supervisors either failed to investigate or did not report the incidents to the FAA headquarters as required. The independent Federal agency said the cover-up of controller mistakes have been jeopardizing air traffic safety.

We need more air traffic controllers, because 595, in my view, is certainly not enough. So my amendment was to offer $5 million that was offset by the Department of Transportation's Surface Transportation Board salaries and expenses.

This amendment is about establishing priorities. And even though the amount of monies is capped off and no more monies can be allowed in that particular account, I think that is an important issue. And I hope my colleagues, as they move into the next year and the next session in this appropriations process, they will recognize that our skies are getting busier and busier, our air traffic controllers are getting tireder and tireder, and they need increased training and they need relief.

I want to applaud our air traffic controllers. This is a very, very, very, very serious business. It requires great attention to detail. It requires nerves of steel, and we understand that. But the key is that there is a great need for more than 595.

Mr. Chairman, I will submit for the Record, at the appropriate time, this letter that I will read: ``I write this letter to support your amendment to H.R. 3058, to increase the amount made available for the Department of Transportation with respect to air traffic controllers. In these times of shortages of personnel and training, this amendment would provide much-needed relief to continued budgetary shortfalls. Please accept our a gratitude for your efforts.'' This is the National Association of Air Traffic Specialists.

So I am hoping we will have an opportunity to work on this. The point of order, of course, refers to the capping of this particular account, and I recognize the hard work of this committee, but I think in all seriousness, besides the danger that was proposed yesterday, we do know our skies are busy with small and large planes.

Mr. Chairman, the amendment seeks to increase the ``Federal Aviation Administration Operations'' account on page 6 by $5 million and would offset this amount from the ``Department of Transportation-Surface Transportation Board-Salaries and Expenses'' account in Title I.

This amendment is about establishing priorities. While the salaries of the staff within the Department of Transportation is of enormous concern, I would think that my colleagues would agree with me that providing funds to help navigate the ever-increasing air traffic is of a higher priority, especially given our new utilization of equipment such as we find at the Boston Terminal Radar Approach Control (TRACON)--which is America's newest FAA consolidated facility.

New technology requires adequate staffing. Therefore, my amendment would provide the necessary funds to make new employee recruitment and training possible. Problems exist within our Federal Aviation Administration, Mr. Chairman. I cite the June 24, 2005 article in the Dallas Morning News (page 1A) entitled ``Agency: Air traffic errors covered up Controller at D/FW spurs inquiry into unreported close calls'':

The U.S. Office of Special Counsel said the controllers had

allowed airplanes to fly too close to each other near Dallas/

Fort Worth International Airport and that supervisors either

failed to investigate or didn't report the incidents to

Federal Aviation Administration headquarters as required.

The independent federal agency said the cover-up of

controller mistakes had been ``jeopardizing air traffic

safety.''

``This was a substantial and specific danger to public

safety,'' it said.

[Furthermore,] a number of corrective actions' were taken

after a March report from the Department of Transportation's

Office of Inspector General substantiated . . . allegations.

Specifically, the D/FW Terminal Radar Approach Control, or

TRACON, was placed on probation for two years, the center's

quality assurance manager was reassigned, and one air traffic

controller was decertified.

In addition, the FAA placed the facility manager,

operations managers, supervisors and other controllers on

probation.

This citation alone underscores major problems in the system. In addition, it highlights the fact that the jobs should not be outsourced, an issue that my colleague Mr. Sanders has championed.

The key national security function of Air Traffic Control Specialists was evident during and immediately after the horrific 9/11 attacks. During this national tragedy, Air Traffic Control Specialists communicated crucial instructions

to planes in the air and on the ground, and were responsible for re- starting air traffic in the days afterward. Air Traffic Control Specialists also play a vital role in keeping commercial and general aviation airplanes out of restricted airspace, including the restricted airspace around the White House. And, Air Traffic Control Specialists are critical during a natural disaster. For example, when hurricanes hit the Southeast last year, the FAA closed air traffic facilities in the region, but kept Flight Service Stations open and Air Traffic Control Specialists working to ensure the safety of airline passengers.

We should be strengthening, not weakening air traffic safety. In the 1980s we had 315 Flight Service Stations across the country. Today, we only have 61, and if the FAA gets its way there will only be 23 Flight Service Stations left in this country responsible for protecting over 600,000 general aviation pilots, as well as military and commercial pilots. This could only make our Nation's airspace less secure.

Mr. Chairman, we must support our Air Traffic Controllers by providing them with the support they need. I ask that my colleagues support this amendment.

National Association of

Air Traffic Specialists,

Wheaton, Maryland, June 30, 2005.

Hon. Sheila Jackson Lee,

House of Representatives,

Washington, DC.

Dear Representative Jackson Lee: I write this letter to

support your amendment to H.R. 3058 to increase the amount

made available for ``Department of Transportation--Surface

Transportation Board Salaries and Expense Federal Aviation

Operations Derived from the General Fund by $5,000,000. In

these times of shortages of personnel and training this

amendment would provide much needed relief to continuing

budgetary shortfalls.

Please accept our gratitude for your efforts in this regard

and let me know if I can be of any help in securing this

amendment.

Sincerely,

Kate Breen,

President.

Mr. Chairman, I reserve the balance of my time.

Point of Order

I do, Mr. Chairman. Let me say that I have acknowledged the point of order by the fact that the account itself is capped and, as was indicated, the issue regarding the authorization. But I raised this amendment, and I intend to withdraw this amendment, but I raised it because the discussion and the dollars are clearly needed.

I am hoping my colleagues will see that 595 air traffic controllers are not enough for the increasingly busy skies over the United States of America. I have cited in one airport the incident of air traffic controllers being cited for routinely covering up serious operational errors and deviations involving aircraft; I have cited, of course, the support by the National Association of Air Traffic Specialists.

I think that the difficulty is that we have a cap. We have $25 million for 595. I think we could use 1,000. Because of the budget shortfall, and because we do not have the money, we are faced with this dilemma. I happen to think the safety and security of Americans warrants increased dollars and an increased number of air traffic controllers.

I know that the busy airport I represent, Houston Intercontinental Airport, could stand additional well-trained air traffic controllers, the opportunity to give relief to air traffic controllers who, in fact, are working very hard. I am hoping, Mr. Chairman, that we will have an opportunity to work on this issue and recognize the dire needs and the crisis that we face if we do not continue to grow air traffic controllers, to train them and provide them the kind of support services necessary to protect the Nation's skies.

Mr. Chairman, I ask unanimous consent that I be allowed to withdraw my amendment.

Mr. Chairman, I do not think anyone should be censored, but I think having no information can sometimes be better than having bad information. And what the Council of Economic Advisers did was they took lock, stock, and barrel failed research. Then it gets repeated and repeated and repeated, this $800 million figure.

According to the pharmaceutical company themselves, that $800 million figure includes $400 million of opportunity costs. That means they could have taken that money and bought Microsoft shares and made more money. That is ridiculous.

Mr. Chairman, just read this report that I will include for the Record by Dr. Donald Light. He is from New Jersey. He teaches at a little school called Princeton. He also teaches at the Princeton medical school. He is the one who went through this. More importantly, in this 2-page report there are almost a page of footnotes. They document what they do.

The problem with the Council of Economic Advisers is they just took this number and they repeated it. They do not document it. They do not ask questions, and so now everyone is running around saying it cost $800 million to develop a new drug. That is not true, and it is worse than having no information at all.

This is one way to send a message to the Council of Economic Advisers, that if they are going to put out information so policymakers at the White House or here on Capitol Hill make decisions based on that information, you better make sure you check the numbers and document them first because bad information is worse than no information at all.

[From the American Journal of Bioethics, Jan. 2004]

Will Lower Drug Prices Jeopardize Drug Research? A Policy Fact Sheet

(By Donald Light and Joel Lexchin)

This documented fact sheet provides evidence that all drug

research by large firms, net of taxpayers' subsidies, is paid

for out of domestic sales in each country, with profits to

spare. Prices can be lower without jeopardizing basic

research for new drugs. More exposure to global price

competition would encourage more innovative research and less

of the derivative me-too research that now dominates.

In the U.S., the FDA Commissioner, Mark McClellan, and the

drug industry are responding to pressures for lower costs by

mounting a large campaign to pressure all other affluent

countries to raise their prices to U.S. levels. They claim

that lower prices do not pay for drug research costs, but we

provide evidence that this is untrue. Ultimately, however,

such nationalistic arguments are based on regarding basic

research and new discoveries, which can happen anywhere, and

the cost of trials, which are carried out in the countries

deemed most commercially advantageous, as part of national

companies and national accounts, when in fact they are part

of a global economy for pharmaceutical products.

fda myths

1. FDA Commissioner, Mark McClellan, holds that other

affluent countries like Canada and the UK set their prices

for patented drugs so low that they do not pay for research

and development (R&D) (McClellan 2003). We can find no

evidence to support that claim.

On the contrary, audited financial reports of major drug

firms in the UK, show that all research costs are paid, with

substantial profits left over, based solely on domestic sales

at British prices (Pharmaceutical Price Regulation Scheme

2002). Likewise, 79 research drug companies in Canada

submitted reports showing their R&D expenditures have risen

more than 50% since 1995, all paid for by domestic sales at

Canadian prices (Patented Medicine Prices Review Board 2002).

Sales to the U.S. and elsewhere are in addition to the

positive, domestic balance sheets.

2. FDA Commissioner McClellan says that European or

Canadian prices are ``slowing the process of drug development

worldwide'' (McClellan 2003). There is no known verifiable

evidence to support this claim. In fact, drug research has

been increasing steadily in Europe as well as in the U.S.,

with some countries having a more rapid increase than the

U.S. (Patented Medicine Prices Review Board 2002).

3. FDA Commissioner McClellan says that ``price controls

discourage the R&D needed

to develop new products'' (McClellan 2003). But there is no

known verifiable evidence to support this claim.

R&D expenditures have been growing rapidly, though it is

becoming more and more difficult to discover breakthrough

drugs on targets not already hit (Harris 2003). The truth

kept from Americans is that first-line treatment for 96% of

all medical problems requires only 320 drugs (Laing et al.

2003). In wealthy countries, more drugs might be appropriate

to treat people who do not respond to first-line agents.

4. FDA Commissioner McClellan charges that efforts to

negotiate lower prices for patented drugs by other countries

(and by major employers, unions and governors in the U.S.)

are ``no different than violating the patent directly'' to

make cheap copies (McClellan 2003). This charge echoes the

drug industry and implies that large buyers seeking better

value should be considered a criminal act.

5. FDA Commissioner McClellan paints a picture of other

wealthy countries driving down their prices to marginal

costs, but the widening gap between prices for patented drugs

in the U.S. and other countries is due to drug companies

raising U.S. prices, not other countries lowering theirs

(Sager and Socolar 2003; Families USA 2003).

6. The ``free-rider'' problem that McClellan emphasizes can

be solved by U.S. prices coming down to European levels,

where they will cover all R&D costs, plus profits that are

higher than those in most industries.

7. Drug company profits, after all R&D costs, have long

been more than double the profits of Fortune 500

corporations. In recent years they have jumped to triple and

even quadruple the profits of other major companies (National

Institute for Health Care Management 2000). The global firms

spend two and a half to three times more for marketing and

administration than for research (Families USA 2001).

8. Americans pay for more R&D than any other country

because the United States accounts for more sales than any

other country. But while the U.S. accounts for 51% of world

sales, it took 58% of global R&D expenditures invested in the

US to discover only 43% of the more important new drugs

(NCEs) (European Federation of Pharmaceutical Industries and

Associations 2003). This means that other countries are

helping to pay for the large, inefficient U.S. R&D

enterprise, the opposite of what the editors of Business Week

claimed (Business Week editors 2003). William Safire's claim

of a ``foreign rip-off'' as Americans pay for the world's R&D

is contradicted by the facts above (Safire 2003).

research is misdirected by the industry, against patients' interests

9. Most drug innovation provides little or no therapeutic

advantage over existing * * *

Independent review panels plus a major industry review

conclude that only 10-15% of ``new'' drugs provide a

significant therapeutic breakthrough over existing drugs and

involve a new chemical or molecule (Barral 1996; Prescrire

International 2003; National Institute for Health Care

Management Research and Education Foundation 2002). Other

industry-sponsored figures are much higher but not reliable.

10. The FDA approves drugs that are better than nothing

(placebo) but does not test them against the best existing

drugs for the same problem. Most research is for ``new''

drugs to treat problems already treated by other drugs.

11. About 18% ofthe drug industry's research budget goes to

basic research for breakthrough drugs. About 82% goes to

derivative innovations on existing drugs and to testing.

The long-standing survey of basic research by the National

Science Foundation estimates that basic research has

increased to 18% of the total research and development (R&D)

budget for the pharmaceutical industry. It used to be less

(National Science Foundation 2003). Industry-sponsored

figures based on secret unverifiable data are much higher but

not reliable (DiMasi, Hansen, and Grabowski 2003). The 85-90%

of ``new'' drugs that have little therapeutic gain reflects

equal protection from competition for much less investment

and risk.

12. Congress has repeatedly extended patent protection for

drugs beyond what other industries enjoy, despite much higher

profits year in and year out. Government protection from

normal competition is now more than 50% greater for the drug

industry than a decade ago (National Institute for Health

Care Management 2000). These incentives reward research into

derivative large markets, rather than to finding effective

treatments for diseases that have none.

13. These facts constitute the Blockbuster Syndrome: the

lure of monopoly pricing and windfall profits for years spurs

the relentless pursuit for drugs that might sell more than $1

billion a year, regardless of therapeutic need or benefit.

Research projects for the disorders of affluent nations

proliferate, as do clinical trials. Doctors are paid like

bounty hunters to recruit patients for thousands of dollars

each. Most patients get the misimpression that the

experimental drug will be better than existing ones (Wolpe

2003). The corruption of professional judgment, ethics and

even medical science follow (Williams 2003; Wazana 2000;

Barnett 2003; Lexchin, Bero, Djulbegovic et al. 2003;

Bekelman, Mphil, and Gross 2003; Villanueva, Peiro,

Librero et al. 2003; Fletcher 2003).

Drug research costs much less than claimed

14. Drug companies claim to spend 17% of domestic sales on

R&D, but more objective data reports they spend only 10%

(National Science Foundation 2003). Thus, only 1.8% of sales

goes to research for breakthrough new drugs (18% x 10%) (Love

2003).

15. Taxpayers pay for most research costs, and many

clinical trials as well.

In 2000, for example, industry spent 18% of its $13 billion

for R&D on basic research, or $2.3 billion in gross costs

(National Science Foundation 2003). All of that money was

subsidized by taxpayers through deductions and tax credits.

Taxpayers also paid for all $18 billion in NIH funds, as well

as for R&D funds in the Department of Defense and other

public budgets. Most of that money went for basic research to

discover breakthrough drugs, and public money also supports

more than 5000 clinical trials (Bassand, Martin, Ryden et al.

2002). Taxpayer contributions are similar in more recent

years, only larger.

16. The average amount of research funds the drug industry

needs to recover appears to be much less than the industry's

figure of $800 million per new drug approved (NDA).

The $800 million figure is based on the small

unrepresentative subsample of all new drugs. It excludes the

majority of ``new'' drugs that are extensions or new

administrations of existing drugs, as well as all drugs

developed by NIH, universities, foundations, foreign teams,

or others that have been licensed in or bought. Variations on

existing drugs probably cost much less because so much of the

work has already been done and trials are simpler.

About half of the $800 million figure consists of

``opportunity costs'', the money that would have been made if

the R&D funds had been invested in equities, in effect a

presumed profit built in and compounded every year and then

called a ``cost.'' Drug companies then expect to make a

profit on this compounded profit, as well as on their actual

costs. Minus the built-in profits, R&D costs would average

about $108 million 93% of the time and $400 million 7% of the

time.

The $800 million estimate also does not include taxpayers'

subsidies via deductions and credits and untaxed profits

(DiMasi, Hansen, and Grabowski 2003; DiMasi, Hansen,

Grabowski et al. 1991). Net R&D costs are then still lower.

Contrary to some press reports from the industry, screening

for new compounds is becoming faster and more efficient and

the time from initial testing to approval has shortened

substantially (Kaitin and Healy 2000). The large size of

trials seems more due to signing up specialists to lock in

substantial market share. Advertising firms are now running

clinical trials (Bassand, Martin, Ryden et al. 2002; Peterson

2002; Moyers 2002).

17. Because clinical trials have become a high-profit sub-

industry, trial ``costs'' appear to be much more than is

necessary.

An international team of experts estimates that clinical

trials could be done for about $500 per patient rather than

$10,000 per patient, a 95% reduction (Bassand, Martin, Ryden

et al. 2002). The most detailed empirical study of trial

costs also concludes that costs can be much less than

reported (The Global Alliance for TB Drug Development 2001).

U.S. drug prices very high

18. Americans seem unaware how much more they are paying

for drugs than other countries, in the name of the ``free

market'' where prices are controlled by corporations. So-

called ``price controls'' abroad are negotiated wholesale

prices. Corporate price controls in the U.S. are un-

negotiated monopoly prices, which then large buyers negotiate

down.

According to a detailed analysis, American employers and

health plans pay at wholesale 2.5-3.5 times the prices in

Australia and other countries with comparable prices for

patented drugs (Productivity Commission of Australia 2001).

There is no evidence that these prices do not cover research

costs. U.S. generic prices shadow patent drug prices and are

also 2.5-3.5 times more.

19. High American prices are essentially monopoly rents

charged to employers in every other industry. They shift

profits from other industries to the drug industry.

20. If American prices were cut in half, research budgets

would not have to suffer unless executives decided to cut

them in favor of marketing, luxurious managerial allowances

or high profits. They probably would not, because R&D gets

such favorable tax treatment compared to other expenses.

Lower prices would save other Fortune 500 companies billions

in drug benefit costs, and drug company profits could come

into line with the profits of the companies who pay for their

drugs.

Realign incentives to reward true innovation

21. Current incentives strongly reward derivative

innovation. We get what we reward.

22. Because the U.S. is by far the biggest spender, it has

by far the most R&D and new drugs. Four other industrialized

countries, however, devote more of their GDP to R&D for new

drugs than the U.S. (Patented Medicine Prices Review Board

2002).

23. Officials of drug companies commonly claim that nearly

all new drugs are discovered in the U.S. However, the

industry's own studies (and others) show that over the past

quarter century, the U.S. has accounted for less than or

about the same as its proportionate share of international

new drugs, not more and certainly not nearly all (Barral

1996; European Federation of Pharmaceutical Industries and

Associations 2000). Until 2002, even the U.S. pharmaceutical

industry was investing an increasing percent of its R&D

budget in highly productive research teams abroad

(Pharmaceutical Research and Manufacturers of America 2002).

24. Americans are getting less innovation and paying a lot

more. Competing countries profit from these American self-

delusions by covering their R&D and keeping their own drug

prices reasonable, while leaving drug companies to make

bonanza profits from the monopoly American market.

25. Price competition has been the greatest spur to

innovation for over 200 years. Price protections reward

derivative and me-too innovation as well as excessive costs

and a focus on blockbuster marketing. If we want lower prices

and more breakthrough innovations, we need to change the

incentives to reward those goals (Baker and Chatani 2002).

Mr. Chairman, will the gentleman yield?

Mr. Chairman, I just want to come back to one point because I think a lot of people may not have been paying attention. This study that we are talking about where we got the $800 million figure originally started with a study that was funded by pharmaceutical companies. That number then gets repeated by the President's Council of Economic Advisers, and we all believe that it is true. We have an independent research that was not financed by PhRMA. That was done by a professor who was at Princeton from New Jersey. More importantly, he was an adviser to this President on health policy. Let me add one other thing: He is a Republican.

Now, this is, I think, far more credible than that number that keeps getting bantered around and bantered around. Bad numbers are worse than no numbers at all. This is the one way to say to the Council of Economic Advisers to the President of the United States they ought to be ashamed.

Whether or not this amendment passes, the point, I think, is made: that if they are going to put information out to the President, out to the public, out to policymakers about important issues like this, they had better make sure that the facts are correct.

Mr. Chairman, I rise in opposition to the amendment, and I yield myself such time as I may consume.

Mr. Chairman, my good friend, the gentleman from Colorado, has offered this any number of times; and I am not counting, but I know he has done this before. He is getting very good at it.

With all due respect to the gentleman from Colorado, I believe this to be an unnecessary amendment. The Congress cannot and should not abdicate its responsibility to review individual programs and make individual recommendations based on that review. The desire to hold spending in check should be based on congressional oversight of specific programs. We should not take a meat-ax approach, and we should not yield our power to the executive.

I ask, therefore, that this amendment be defeated.

Mr. Chairman, I yield back the balance of my time.

Mr. Chairman, I move to strike the last word.

Mr. Chairman, I want to first yield to the gentleman from Virginia (Mr. Moran).

Mr. Chairman, I am prepared to accept this amendment.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield 4 minutes to the gentleman from New York (Mr. Walsh).

I do.

Mr. Chairman, I yield 3 minutes to the gentleman from California (Mr. Lewis), the chairman of the Committee on Appropriations.

Mr. Chairman, I yield 2 minutes to the gentleman from California (Mr. Hunter), chairman of the defense authorizing committee.

Mr. Chairman, I yield 6 minutes to the gentleman from Indiana (Mr. Buyer).

Mr. Chairman, I yield the balance of my time to the gentleman from Texas (Mr. DeLay), the majority leader.

Mr. Chairman, I reserve a point of order on the gentleman's amendment.

Mr. Chairman, I will take just a few moments to rise in opposition to this amendment which attempts to use the appropriations process to control the content of information about our economy, which I think is a wrong thing to do. I believe the committee is about learning facts, not ignoring them or being denied them.

Moreover, the proposed amendment does not change the 2005 economic report of the President which discusses the average cost of developing and introducing a new prescription drug, as has been mentioned, a new drug to the market at $800 million or more. I have been informed that the administration strongly objects to the proposed Brown amendment. Preventing any discussion on the factors that contribute to pharmaceutical pricing or in fact any other topic that might be controversial would compromise the credibility of the future economic reports of the President.

So I join my colleagues in opposing the Brown amendment and urge that it be defeated.

Mr. Chairman, I offer an amendment.

Mr. Chairman, I yield myself such time as I may consume.

This is a very simple amendment. It would simply partially restore funds to HUD's Working Capital Fund that were cut by an amendment adopted yesterday. This amendment has been cleared with the minority, and I urge its adoption.

If I were to just briefly talk about it, this is not just a random pot of money. The Working Capital Fund pays the cost of all computers and phones at HUD, which is a huge expenditure. So, briefly, that is the essence of it.

I yield to the gentleman from Massachusetts.

Mr. Chairman, reclaiming my time, I thank the gentleman for his comments.

Briefly, we have had, what is it, over the last 15 hours, some interesting conversations about money, and we have drawn money from a number of sources and, frankly, not too many sources, and some of that does create pain. In the case of this particular situation, these moneys are needed now. So I very much appreciate the gentleman's agreeing with me that this money should go to that particular source.

So I am content to accept his approval and move forward.

Mr. Chairman, I yield back the balance of my time.

Mr. Chairman, I reserve a point of order against the gentleman's amendment.

Mr. Chairman, will the gentleman yield?

Mr. Chairman, I do appreciate and share the concern that my colleagues have about abusive lending practices and the need to eliminate predatory lending by financial institutions. I also recognize that HUD has been working on a regulation for more than 3 years to address the problem, the very problem my colleague mentioned.

I commit to my colleagues that, as this bill moves forward, I will work with my colleagues to include report language which helps to evaluate and accelerate a solution to what is a national problem.

Mr. Chairman, I seek the time in opposition, and I yield myself such time as I may consume.

I oppose this amendment because it will shut down the GSA e-travel program.

In 1996, GAO recommended that travel management should be consolidated government-wide; and in 2001, they found that decentralized travel operations at the agency level resulted in the following: inconsistent and/or duplicative travel processes and procedures. It is costly to maintain these multiple, redundant systems on a stand-alone basis and with an inability to effectively monitor and manage the travel function at the agency level.

Further, many agencies were developing expensive in-house custom systems. These ``boutique'' systems, if you will, were not connected, causing a heavy burden on the traveler. OMB recommended that a common government-wide travel management service would significantly improve the traveler's experience and save the government money. Government- wide e-travel is projected to save approximately $450 million over the 10-year cycle. It is expected to achieve a 15 percent savings in transactional costs over status quo in the base period of the contract, and 20 percent in outlying years.

So I do not believe that this is the answer that the gentlewoman is seeking, which brings forward the shutdown, entire shutdown of the e- travel program. So I would suggest that we all unite and vote against this amendment.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield myself the balance of my time.

Let me say this about the amendment. What the amendment would do, it would shut down E-travel, just shut it down. The E-travel system saves money, saves taxpayers money and is easier to navigate for travel. The answer to the question that she has does not involve shutting down E- travel.

I would simply urge a no vote on this amendment.

Mr. Chairman, I yield back the balance of my time.

Mr. Chairman, I make a point of order against the amendment because it proposes to change existing law and constitutes legislation in an appropriation bill and therefore violates clause 2 of rule XXI. That rule states in pertinent part, an amendment to a general appropriation bill shall not be in order if changing existing law. This amendment requires a new determination, and I insist on the point of order.

Mr. Chairman, I yield myself such time as I may consume.

The Van Hollen amendment harms taxpayers, in my judgment, by preventing agencies from conducting public private competitions under OMB's revised circular A-76. By forcing agencies to return to the rules of the old circular world, the old circular world would disadvantage, Number 1, Federal employees by allowing much of their work to be directly converted to private sector performance without even considering in-house capabilities or the cost implications of outsourcing. It will also harm taxpayers by making them bear the cost of processes that are outdated, inefficient and not results oriented. The advantages of the revised circular are that they were developed with broad input, broad input from the public to ensure competition is used in a fair manner that accommodates the diverse needs of our citizens. And it focuses on achieving the best results for the taxpayer by requiring agencies to evaluate cost and permitting agencies to also consider the quality of the service provided such as technology support and security.

I would just stop there, but suggest to the gentleman from Virginia that this is not a friendly amendment in regard to the taxpayer. It truly is not. The committee opposes it and certainly I oppose it, and I would ask or urge for a no vote.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, let me respond to the gentleman's comments. Those appropriations bills, I believe there were five, it was different in each one of them because it was applied specifically, tailored to that particular bill and the operation of that bill.

Mr. Chairman, I yield 1\1/2\ minutes to the gentleman from Texas (Mr. Sessions).

Mr. Chairman, I yield myself the balance of my time.

In closing very quickly, the gentleman from Maryland (Mr. Van Hollen) referenced the fact that his idea actually was passed last year, included in the bill and there was a threat of a veto then, and so it was removed from the bill. And this administration is prepared to do the very same thing this year. So I would suggest to him that it is enough of a problem or an annoyance to them that it will be something that will be subject to a veto threat and perhaps go through the same process again.

Mr. Chairman, I reserve a point of order on the amendment.

Mr. Chairman, I withdraw my point of order.

Mr. Chairman, I rise to claim time in opposition to the amendment.

Mr. Chairman, in 1998 the last time the Congress authorized the public housing and section 8 programs, they established this policy that tenants of public housing should undertake two responsibilities: number one, they should do some community service. The act requires that individuals in public housing do 8 hours of public service each month. There are numerous exemptions from their requirements for those that cannot do even the most minimal amount of service. The act also requires tenants to be part of the self-sufficiency program, a program designed to help tenants get jobs, keep jobs, and move off and out of public housing so other people may benefit.

My own view is that this was a sound policy then, and it is a sound policy now. Neither appears to be a huge burden and the Department of Housing and Urban Development has not indicated any large-scale problems with the provision that would need this type of action.

This is clearly an amendment that should be taken to the authorizers, and they are, by the way, right now reviewing all public housing assistance programs. So until Congress changes the policy, I believe that the policy should remain in force.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield myself the balance of my time.

I just reiterate what I said. I am in opposition to the amendment, and I urge everyone to oppose this amendment.

Mr. Chairman, I yield back the balance of my time.

Mr. Chairman, I thank the gentleman for raising his concerns on this matter. If there has been a slow-down in the release of Federal soundproofing dollars from the FAA, we do need to know. We appreciate the gentleman bringing this to the floor. I thank the gentleman for his comments and pledge to work with him on this issue.

Mr. Chairman, I reserve a point of order on the gentlewoman's amendment.

Mr. Chairman, I insist on my point of order, and I would like to respond in this fashion.

I raise a point of order against the amendment. The amendment proposes to increase an appropriation not authorized by law and, therefore, is in violation of clause 2(a) of rule XXI.

Although the original account funding for FAA operations is unauthorized, it was permitted to remain in the bill pursuant to the provisions of the rule that provided for the consideration of this bill. When an authorized appropriation is permitted to remain in a general appropriations bill, an amendment merely changing that amount is in order; but the rules of the House apply a ``merely perfecting standard'' to the items permitted to remain and do not allow the insertion of a new paragraph, not part of the original text permitted to remain, to increase a figure permitted to remain.

The amendment cannot be construed as merely perfecting and, therefore, Mr. Chairman, I ask that the Chair rule the amendment out of order.

Mr. Chairman, I submit the following for the Record:

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Mr. Chairman, I move that the Committee do now rise and report the bill back to the House with sundry amendments, with the recommendation that the amendments be agreed to and that the bill, as amended, do pass.

Mr. Chairman, I move to strike the last word.

I yield to the gentleman from Ohio.

I yield to the gentleman from Minnesota.

Mr. Chairman, will the gentleman yield?

Mr. Chairman, I have no objection to this amendment.

I just want to point out that we had quite a number of different places from which money was taken as a result of the amendments. During the course of the debate yesterday, very sizable money was taken from the GSA accounts, the building account, that is to say, the building fund in the GSA; and also from the Secretary of Transportation's budget; as well from, as the amendment here suggests, the Working Capital Fund within HUD. There is also money taken from the Air Transportation Stabilization Fund.

And if I could remember off the top of my head, I would probably be able to come up with about six other places where money was taken from from last year's. But I think what the chairman has proposed is to put this back in the Management and Administration Working Capital Fund of the Department of Housing and Urban Development, and this one is as difficult a spot. So I have no objection to having that done in that place.

Mr. Chairman, I move to strike the last word.

Mr. Chairman, as we are coming now close to the very end of this bill and as it would appear there are about three or four other people from, in fact, both sides of the aisle who have indicated that they wish to propose amendments, I want to take a couple of minutes to allow for the possibility that they may, in fact, come in defense of their positions and the amendments that they had, and to again commend the staff for the great work that they have done on this committee.

The people on both the minority and majority side, the majority clerk, Dena Baron, and the other members of her staff; and on the minority side, Mike Malone and Michelle Burkett, who are seated next to me and have done a yeoman's service in providing assistance to the minority and the minority members, the minority members of the subcommittee and the general minority members in the preparation of this legislation.

The gentleman from Michigan (Chairman Knollenberg) has been an entirely fair chairman for this subcommittee. It is the first time that he is dealing with this newly expanded subcommittee. It is actually, of course, the first time that I have served as ranking member of the expanded Transportation, Treasury, HUD, The Judiciary, District of Columbia, and Independent Agencies Subcommittee, now covering a good many more agencies than it did before. And I found that it is very easy to work with the chairman. I appreciate very much the kind of relationship that we have been able to have. He has been very accessible and very kind in his consideration of all of the amendments and positions that I have brought forward to end on my own part and on the part of members of the subcommittee and, at the same time, for members of the minority that are not on the subcommittee that may be on the full committee or not on the Committee on Appropriations at all.

And I know that he has listened very carefully to the concerns of people from all of those categories within the House of Representatives, those that I have mentioned.

In particular, I want to thank him at this time for having listened, at a late stage in the preparation of the legislation, to the concerns that I had about the funding for the accounts for tax law compliance in the IRS, for the development and the funding for YouthBuild, which we actually chose a very creative way to allow for the funding of YouthBuild by giving some additional money which was needed back to the account for the Community Development Block Grant and then speaking here on the floor about the use of that money for the continuation of YouthBuild.

I would hope that, in fact, by the time we get to a conference committee, we may have well have had a reauthorization of YouthBuild in a different place. And if that is the case, then that money will be available for Community Development Block Grant purposes without the consideration of use for YouthBuild, but it then serves as a possibility of dealing in either place of working in either location, and I am very grateful for him to do that.

Earlier in the process, the chairman was very responsive to the request to provide funds for the Community Development Financial Institutions Fund in the Department of the Treasury and funded that well for the coming year, the 2006 fiscal year.

So there were those and a whole number of other occasions when we were able to work together well.

Amendment Offered by Mr. Clay

Mr. Chairman, I appreciate my colleagues for bringing this matter before the House, as I agree that predatory lending is a well- recognized problem in many jurisdictions around the Nation. I will be happy to work with the chairman, as he has already indicated, to work with our colleagues as we go on through this process to conference in bringing this legislation to fruition, which will be some months from now.

Mr. Chairman, I move to strike the last word.

Mr. Chairman, I am going to support the amendment that has been offered by the ranking member of the Committee on Small Business; and for the reason, I will just cover it simply, for the reason that in the conference report for the fiscal year 2004 omnibus appropriation covering GSA, concern was expressed about the mandatory nature of the e-travel service.

In fact, the report states, and I am quoting from the report: ``The conferees agree that GSA has been responsive to the House's concerns that e-travel initiatives should not involve mandatory participation by Federal agencies. Furthermore, the conferees agree that in its management of e-travel prime contractors, GSA should seek to preserve that portion of the Federal travel agent business that is currently served by small businesses and local entrepreneurs.''

Now, not to demand that there be a particular portion or whatever that goes to those Federal travel agent businesses that are currently served by small businesses and local entrepreneurs but, rather, to point out that the vast majority, probably over 90 percent of travel agencies have fewer than 30 employees, and are, therefore, categorized as small businesses.

While I recognize what the chairman has said, that sometimes by a very large economy-of-scale kind of contract you give everything to one, you can then wipe out the small businesses from being able to compete in that process, I think that, as I have quoted from the conference report for the 2004 appropriations act concerning GSA, there was the sense of the Congress that we did not want that to happen, that we wanted some of this business to remain with the local and small business entrepreneurs.

So I support the amendment.

I yield to the gentlewoman from New York.

Mr. Chairman, I move to strike the last word.

Mr. Chairman, I have no intention of taking 5 minutes. I just want to point out since my friend, the chairman, has the chance to close, I just want to point out that this amendment has been passed each of the last 2 years in the House by fairly strong bipartisan votes. And it has then gone to conference committee and never reappeared from the conference committee in either of those years.

It suggests that there is no intention on the part of the majority of adhering to the will of the House which ought to carry at least as much weight as the President's management agenda, so-called, and so I am going to just urge that we again pass this and give the conference one more chance to reject the will of the House, which seems to be its full intent year after year to do and thereby show its total contempt for the will of the House of Representatives.

Mr. Chairman, I hope for the last time I move to strike the last word, and I yield to the gentleman from New York (Mr. Crowley).

I yield to the gentleman from Michigan.

Mr. Chairman, I thank the gentleman from New York for raising the issue. I, too, am concerned about the reported slow-down in this release of funds for an obviously good cause, the release of soundproofing funds to eligible recipients, in this particular case, the Lexington School in Queens.

Though I do not know whether it is very close to La Guardia Airport or to Kennedy Airport, I, too, pledge to work with the gentleman from New York on this issue to ensure the early release of these funds.

I yield to the gentleman from New York.

I did not want to put it in the flight path of La Guardia Airport, so I brought in Kennedy Airport as well.

Announcement by the Acting Chairman

I yield to the gentleman from California.

Mr. Chairman, yes, I have done this before. In fact, I was going to apologize to the staff and the chairman of the subcommittee for destroying the good working relationship that we have had over time, and that I complimented them so broadly about earlier, by actually offering this motion to strike the last word at a point when I really was not expecting to do so.

I do know that this may have lasting implications, given the work that has been done by Dena Baron, Cheryle Tucker, Dave Gibbons, Steve Crane, Tammy, Hughes, Kristen Jones, and David Napoliello, all of whom would dearly love to get off this floor and on to the votes that we have coming before us.

This bill has been a long slog year, and I have heard some people on the other side have had low-level headaches. There have been times here, as the afternoon has worn on, that I have nearly sunk under the table when amendments came, as long as the amendments we have had here today and yesterday, and with the votes on the rule on the day before, I think, though I may have lost a day in this process, so that there comes a point where I would be surprised if the chairman or I actually were able to remember our names. And it has been just suggested that I could also thank David Pomerantz of our staff, which is probably the only person I have not previously thanked.

And with that, Mr. Chairman, I do, in fact, apologize to the chairman and all of the staff, not only the majority staff but the minority staff as well, because the ranking member has concluded that he does not wish to speak.

Sequential Votes Postponed in Committee of the Whole

Mr. Chairman, I thank the gentlewoman for yielding and for her leadership on this important subject. As a distinguished member of the Appropriations Committee, she has been a voice for strong national security in our country, including this initiative today.

Mr. Chairman, I believe that the comments of the previous speaker speak eloquently to the need for us to get our fiscal House in order because we are seeing the consequences of going so deeply in debt to other countries where we are really held hostage in terms of our own decision making because they own our debt.

Mr. Chairman, the Chinese National Overseas Oil Company's bid to acquire UNOCAL Corporation is a graphic example of America's energy vulnerability. President Bush should refuse to prove the acquisition and Congress should indicate its disapproval as well.

I urge my colleagues to support the gentlewoman from Michigan's amendment. And again I thank her for her leadership on this issue.

The Chinese bid for UNOCAL is compelling evidence of America's strategic energy vulnerability. China has clearly decided to meet its growing demand by obtaining control of energy assets around the world.

I would say to the gentleman from Virginia (Mr. Moran), it is true, China will turn to Iran and Sudan and other countries. In fact, they already have. Arrangements have been made in Iran, Sudan, Venezuela and other places that illustrate their strategy. With the UNOCAL bill the Chinese plan reaches our doorstep. The Chinese government's control of CNOOC made the bid possible, not the free market.

My Republican colleagues and Democratic colleagues who are all dedicated

to the free market system should understand that this is not a free market transaction. Government-provided low interest loans allow the company to bid at rates not otherwise available. And if acquisition of UNOCAL is critical to the Chinese, they would probably allow the bid to be increased to any level needed to seal the deal.

Control of energy assets by China means China controls where those assets go and when. That raises serious national security concerns for the United States. Among those other serious national security concerns are the transfer of technology associated with the UNOCAL acquisition. It is reported that China could assume ownership of the cavitation technology with applications. Cavitation is a process which UNOCAL uses to go into deep water drilling for oil. That same technology can be used by the Chinese to do nuclear tests underground and to mask them so we would not ever be able to detect them. It would also have applications again for locating matter in deep water.

Given China's commitment to improving its military capabilities, why would the United States permit the sale of this kind of technology? Left on its own, we probably would not. But as part of the UNOCAL deal, it is being pulled through with this Trojan horse.

The reason the Chinese believed a bid for UNOCAL could succeed, as the gentleman from Virginia (Mr. Moran) mentioned in his support, no, his opposition to our position, the reason the Chinese believe a bid for UNOCAL could succeed lies in our dependence on them to finance a significant portion of our massive budget deficit. Our reliance on the Chinese to finance our debt gives them far too much leverage over our decision making process.

I go back, you know, 15 years now, our arguments that expanded trade with China would result in increased freedom for the Chinese people. We were proved wrong long ago. At that time just before Tiananmen Square, our trade deficit with China was $3.5 billion a year. And we thought, with that huge trade deficit that it would give us leverage for improving China's human rights record, for improving their behavior in terms of fair trade and for stopping China's proliferation of weapons of mass destruction. We failed in persuading Congress to do that, and today the trade deficit with China, not $3.5 billion a year, has grown to $3.5 billion a week. $3.5 billion a week. With all that capital China is able to purchase our debt, have leverage over us so that now we have to, hopefully not, but some believe, agree to their buying a strategic asset which UNOCAL represents. Our reliance on China to finance our debt weakens our ability to influence China on human rights, proliferation of weapons of mass destruction, North Korea, you name it.

This is the price we pay for failing to live within our means, and it is long past time we recognize that danger and addressed it. On that, the gentleman from Virginia (Mr. Moran) and I agree. Let us heed the wake up call provided by the Chinese bid for UNOCAL. Let us get serious on both issues, reducing risk in energy by adopting an innovative energy policy for the 21st century and getting our fiscal House in order.

And again, I caution our colleagues that a serious transfer of technology that would be contained in this purchase of UNOCAL and urge our colleagues to support the Kilpatrick amendment.

Mr. Chairman, I thank the distinguished gentleman for yielding me this time, and I acknowledge the great leadership of the gentleman from Michigan (Mr. Knollenberg) as the chair of the Appropriations Subcommittee.

I say to the gentleman from Wisconsin (Mr. Obey), every chance I get I want to salute his leadership, his championing the rights of America's families and now today something that should be very clear and obvious, but having to make the point that we should have truth and honesty in our dealings with the American people.

Mr. Chairman, I rise in strong support of the Obey amendment.

It is ridiculous that we are debating on the floor of the people's House the need for truth. The need for truths is self-evident.

The truth and trust are fundamental to a democracy. We owe every American the truth in our dealings here. All Americans, as I say, deserve the truth. But our veterans deserve it even more. They are willing to make the supreme sacrifice for us. They are courageous, they are patriotic. They have given us the opportunity to have peace on Earth, good will to men over generations, and now they are not being dealt with honestly.

The need for truth is made painfully clear in the current crisis we are facing on veterans health care funding shortfalls. On April 5, Department of Veterans Affairs Secretary Jim Nicholson said, ``I can assure you the VA does not need emergency supplemental funds in FY 2005 to continue to provide timely quality service.''

Last week, less than 3 months later, Secretary Nicholson and the Bush administration finally acknowledged their failed budgetary policies and misplaced priorities and owned up to the shortfall in veterans funding. In the meantime, the supplemental bill passed the Congress, went to the President's desk without covering that shortfall because of the misrepresentations that were made by the Secretary to the Congress.

This should come as no surprise to anyone. Over the past 2 years, Democrats have stood shoulder to shoulder with veteran service organizations calling for adequate funding for the VA. Time after time, Democrats have put forward proposals to increase funding for our veterans, and time after time Republicans have voted them down. We have had straight party line votes. There have been some moments of clarity and truth from Republicans in this fight.

In February 2004, Veterans Affairs Secretary Anthony Principi acknowledged the inadequacy of President Bush's FY 2005 budget for the VA. He said, ``I asked OMB for $1.2 billion more than I received.'' It was his professional judgment that that $1.2 billion was needed a year and a half ago for fiscal year 2005 and here we are today still without it. Secretary Principi knew then that the Bush budget was inadequate.

The Committee on Veterans' Affairs chairman, the gentleman from New Jersey (Mr. Smith), knew that the Bush budget was inadequate. That is why he joined the ranking Democrat on the Committee on Veterans' Affairs, the gentleman from Illinois (Mr. Evans), a champion for veterans, in calling for additional funds for the VA.

The result? Not increasing funding for veterans but ousting the chairman, the gentleman from New Jersey (Mr. Smith), for daring to stand up to the Republican leadership and a new VA Secretary who hides the truth so that he can be in lockstep with the failed budgetary policies and misplaced priorities of this administration.

How can we even face our veterans when we as a Congress say to them, and as a country, including the President, it is more important to us, we place a higher value in giving the people who make over a million dollars a year, $140,000 in tax cuts, but we are not giving you the health benefits that you earned, that you deserve, and that you were promised.

Democrats are united on this issue. Every single Democrat joined me yesterday in writing to President Bush calling for an emergency supplemental to fund veterans health care. This should not be partisan and I hope that later today we will right this wrong. But even if we pass a bill on the floor today, we will go into the Fourth of July weekend without correcting the situation, because it would have to come back after the recess, go into conference, et cetera, pass the Senate with which there is no guarantee.

Our veterans deserve nothing less than our honoring our commitment to them.

Mr. Chairman, in time of war, the military says we will leave no soldier behind on the battlefield. When they come home we must leave no veteran behind when it comes to delivering our promises to them.

Our Founding Fathers, over 200 years ago, declared independence with their wisdom, their enlightenment, their courage, and their willingness to sacrifice, they launched what would become the United States of America, a free and independent country. Our veterans have kept us that way. We honor our Founding Fathers' vision and we honor the sacrifice of our veterans, our men and women in uniform, when we keep our promises to them. We owe them nothing less. I support the Obey amendment.