Energy Emergency Consumer Protection Act of 2005

Madam President, first I thank the ranking member on the Senate Committee on Finance, Senator Baucus, for his leadership and for the extraordinary amount of work he does to make the work of the Committee on Finance as responsible as it can be.

There are many provisions in the underlying bill that has come out of the Committee on Finance that I support. I think they are broadly supported extensions of expiring tax provisions that ought to be extended.

I salute the chairman of the Committee on Finance, Senator Grassley, for the good job he has done in putting together this package. While I agree with many of the specific provisions, I have one profound area of disagreement. That profound area of disagreement is that this package is not paid for. The result, if we pass this package, will be to deepen the deficit, to add to the debt, when we already have record deficits and we already have runaway debt.

My colleagues are going to have to answer the question, Why shouldn't we pay for these tax provisions? Why shouldn't we cover the cost? Why shouldn't we prevent the deficit from being expanded? Why shouldn't we prevent the debt from being deepened?

That is the question posed by my amendment. It takes many of the provisions in the Committee on Finance bill, the expiring tax provisions, and extends them for 1 year. It pays for them fully.

It is very important to remember the history. How did we get in the position we are in today? My colleagues will remember this very famous chart that the administration and the Congressional Budget Office presented back in 2001. This part of the chart I call the fan chart showed the range of possible outcomes if we didn't change any budget policies. This range of possible outcomes from a best case scenario; to a median scenario, the midpoint between the range of possible outcomes is the prediction line adopted; to the worst case scenario. These were the projections given to us if we just did nothing.

My colleagues on the other side said: No, this is too conservative, this range of possible outcomes. They said: Don't you understand, if we have tax cuts we will get more revenue so we will be above the midpoint of the range. We might be even above the best case scenario. The problem with that theory is that it did not work out in reality.

Here is what happened in reality: This red line is far below the worst case scenario outlined by the Congressional Budget Office in 2001. I have caught the chairman's attention. He will remember the chart very well from 2001, what the Congressional Budget Office said was the range of possible outcomes. The Congressional Budget Office adopted this midrange of the estimates as their projection.

Many of my colleagues on the other side told me, when I said we shouldn't be betting on a 10-year forecast: Kent, you are way too conservative. Don't you understand if we cut taxes we will get more revenue. We will be above the midpoint of the range of possible outcomes.

Now we can go back and we can check what has actually happened. That is this red line. It is below the worst case possible outcome. Far below it.

So this notion that the tax cuts were going to generate more revenue and were going to prevent massive deficits proved to be wrong. It is very simple.

This is not theory. This is not ideology. This is reality. This is what really happened.

We can look at it in a different way. This chart looks back to 1980, the relationship between spending and revenue of the United States expressed as a share of gross domestic product. Why do we do it that way? Why do we do it as a share of gross domestic product? Because every economist says that is the appropriate way to compare spending over time and revenue over time because it takes out the effects of inflation and growth, so we are comparing apples to apples.

Here is what the line shows: Spending in the 1980s was between 21 and 23.5 percent of gross domestic production. During the 1990s, interestingly enough, during the Democrat administration, the spending came down as a share of gross domestic production each and every year, the 8 years of the Clinton administration. So at the end of that time we were below 19 percent of gross domestic production on spending. Since that time, spending has gone up to approaching 20 percent of gross domestic production now.

My colleagues on the other side of the aisle want to blame Democrats for spending. But Democrats have not been in charge during this period. During this period, Republicans have controlled the White House, the Senate, the House. They are responsible for every dime of this increase.

Let's look at the revenue side. When President Bush came in, revenue--as he correctly stated--was at a very high level historically, about 20.6 percent of gross domestic production. It was substantially above where it was in the 1980s and 1990s.

But look what has happened since. Revenue has collapsed. Last year it was the lowest it has been as a share of gross domestic production since 1959. Some of my friends on the other side want to concentrate on this uptick. And it is true, revenue has increased over the last year. But it is still way below where it has been historically and way below where it was in 2001. The result is the increased spending, the reduced revenue--by the way, about half the reduction in revenue is from tax cuts--the combination of increased spending and reduced revenue has opened up a chasm. That is why we have massive deficits and why we are going to have massive deficits going forward--and, I might add, at the worst possible time.

Why is it the worst possible time? Because the baby boomers are going to start to retire in 2008. Right here the baby boomers are going to start to retire. That is going to change everything in a dramatic way.

The President assured us when we embarked on this course that there would not be deficits. Then, the next year, he told us the deficits would be small and short term. Then, the next year, he told us they would be small by historical standards. Now he says he is going to cut them in half over the next 5 years.

Let's compare rhetoric to reality. Here is what has happened. In 2001, the first year he was in office, inheriting surpluses from the Clinton administration, we had a $128 billion surplus. The next year, we were back in deficit. The next year, 2003, we had the biggest deficit ever, only to be exceeded, in 2004, by an even larger deficit. And this year, again, we have the third largest deficit in our history but somewhat of an improvement.

Let me say to my colleagues, this modest improvement is largely illusory because it focuses just on the deficit. I say to my colleagues, what we ought to be thinking about, what is really far more important to the fiscal future of the country, is not the growth of deficits but the growth of the debt. Why do I say that? Because if you look at what happened to the increase in the debt last year, you see that it increased far more than the deficit figure that is quoted in the news media.

Why is that? Well, the biggest reason is because under the President's plan, $173 billion of Social Security money was taken to pay for other things. That all gets added to the debt. It all has to be paid back. But it is not included in the deficit calculation. Very frankly, these deficit calculations are increasingly irrelevant to understanding the true fiscal condition of the country.

Now, last year, instead of the debt increasing by what was the advertised deficit of $319 billion, the debt of the country actually increased by $551 billion. I find that this is largely not understood. When I do presentations, most people think, in kind of a commonsense way, that the debt must increase by the amount of the deficit. But that is not the case. The fundamental reason it is not the case is because under the President's plan money is being taken from every trust fund in sight to cover the spending, and it all gets added to the debt, but it is not included in the deficit calculation. So last year, the debt of the country increased by $551 billion.

This is so important to understand historically. I see the news media, very frequently, say: Well, as a share of GDP the deficit is not as big as the deficits were in the 1980s. That is true. But it is totally misleading. Why? Because back in the 1980s, there was virtually no Social Security surplus to be used to pay for other things. In fact, until 1984, there was no Social Security surplus--none. Then, in the 1980s, the Social Security surpluses were very modest. But look what has happened over time. The Social Security surpluses have exploded, masking the true size of what is being added to the debt of the country--masking the true size of the deficits is probably a better way to say it.

Last year, the amount of Social Security funds that were taken to pay for other things reached $173 billion, and not a dime of it got counted in the deficit calculation. It all got added to the debt. It is all going to have to be paid back, but you don't read about it anywhere in the news media. They don't talk about how much the debt increased.

This is a shell game of enormous proportion that is going on here. I say to my colleagues, if any private sector entity tried to do what we are doing here, they would be headed for a Federal facility. But it would not be the Congress of the United States, it would not be the White House, they would be headed to Federal prison because any private sector entity that tried to take the retirement funds of its employees and use them to pay for current expenses, they would be guilty of Federal violations of law. They would be guilty of fraud. You cannot take the retirement funds of your employees and use it to pay current expenses. That is exactly what we are doing here, every year.

Under the President's plan, over the next 10 years, at the very time he says Social Security is short of money for the long term, his budget plan and the budget plans that passed here in the Congress of the United States, are going to take $2.5 trillion from Social Security and use it to pay the operating expenses of the Federal Government.

Is anybody paying attention? Is anybody paying attention to what is going on here? Over the next 10 years, $2.5 trillion of Social Security money is going to be taken to pay for other things. We are headed for a train wreck. The President says: Don't worry. We are going to cut the deficit in half over the next 5 years.

Our problem is not a 5-year problem. In fact, that is the sweet spot of the budget cycle. That is the sweet spot because that is before the baby boomers have retired. In addition, the only way the President gets to his claim of reducing the deficit, over 5 years, in half is he just leaves out things. He left out war costs past September 30 of this year. That is $300 billion, according to the Congressional Budget Office. He left out the cost of fixing the alternative minimum tax. That costs $700 billion to fix. There is not a dime of it in his budget.

When you add back the things he left out, here is the picture we see emerging, and this is just the deficit calculation. The debt calculation, as I have described previously, is far worse. We are going into a circumstance in which the next 5 years--these are the good times; it is before baby boomers retire--we are headed for an extraordinarily serious set of circumstances if the budget plan of the President is maintained. Why? Because many of the proposals he has explode in cost right beyond the 5-year budget window. For example, the cost of his tax cuts absolutely explode right beyond the 5-year budget window. So does the cost of dealing with the alternative minimum tax. It explodes beyond the 5-year budget window.

We have had a lot of talk on the floor of the Senate about this being a deficit reduction package. No, it is not. This is not a deficit reduction package, this reconciliation package. This reconciliation package has three parts: spending changes that save $35 billion over 5 years, these additional tax cuts that cost $60 billion over 5 years--so you put the two together, that adds to the deficit; it does not reduce the deficit--and the third chapter is the chapter they do not want you to read in this book because the third chapter is to increase the debt of the country by $781 billion. It is all in one fell swoop.

As we look ahead to the 5-year budget that has been adopted by our colleagues--not with my support; I voted against it--but this is what is going to happen to the debt of the country over the next 5 years under this plan. By the way, these are not my numbers. These are their numbers. These are the numbers in their budget documents about what happens to the debt--not the deficits, the debt.

It is something the news media--it is interesting, the news galleries are absolutely empty. Oh, no, there is one lone soul there--one lone soul. The news media does not want to report on this. Why don't they want to report on it? Because it is a little bit complicated. You actually have to read. You actually have to do a little studying. It is not like covering the latest scandal. They love to cover scandal because that is easy to write about. Budget stories and what is happening to the fiscal condition of the country, that is much more difficult because you actually have to get your numbers right.

No one is paying attention. I have not seen a single national story on the growth of the debt. They are writing about the deficits because that is what they have written about for 20 years. They don't get the whole thing has changed dramatically since the 1980s because of how the policy of our Government has changed to raiding the Social Security trust funds for every dollar that is in them for the next 10 years.

But do you know what? It does not matter they do not write the story. It does not matter because the reality is coming in on us, and it is coming in on us much sooner than people understand because what really affects the strength of America, the fiscal strength of America, is the debt that is being built up, and the budget that has passed both Houses of Congress is going to increase the debt. It started at $7.9 trillion this year. It is going to go up to $8.6 trillion, then to $9.2 trillion, then to $9.9 trillion, then to $10.6 trillion, then to $11.3 trillion over the 5 years of this budget.

Again, these are not my numbers. These are not my numbers. These are the numbers in their own budget documents about their prediction about what will happen to the debt with the budget that has been adopted.

The debt is exploding before the baby boomers retire. What are the implications? Well, here is one of them. Foreign holdings of our debt have doubled in the last 5 years. It took 42 Presidents, pictured here, 224 years to run up $1 trillion of external debt. This President has exceeded them all. He was able to double foreign holdings of our debt in just 5 years. It took 42 Presidents 224 years to run up $1 trillion of external debt. This President has added more than $1 trillion of external debt in 5 years.

To whom do we owe the debt? Well, here is the latest scorecard. We owe Japan $687 billion. We owe China $252 billion. We owe the United Kingdom $182 billion. And my favorite, the Caribbean banking centers, we owe over $100 billion. We owe South Korea over $60 billion. I submit to my colleagues, that does not make America stronger. That makes America weaker.

So now we turn to the legislation before us. One would expect that the Congress would be about reducing the deficit, reducing the debt, in light of what has happened. In light of the fact that the debt during this Presidency has gone up $3 trillion already, in light of the fact that under the 5-year budget before us, the debt is going to go up another $3 trillion over the next 5 years, you would think we would be here trying to reduce the explosion of debt. Surprise, surprise. No. This reconciliation process, a fast-track process that was devised to circumvent the rules of the Senate, was put in place to reduce deficits. That is the whole purpose of reconciliation. But it has been hijacked, and now it is being used not to reduce deficits but to expand them.

I tell you, I go home some nights and I pinch myself thinking I am caught up in some surreal comedy. This has to be a comedy: The debt is exploding before the baby boomers retire, and in the Congress, the reconciliation process that was adopted to reduce deficits has been hijacked and is being used to increase deficits.

What is wrong with this picture? I submit what is wrong with this picture is, it is utterly and completely disconnected from reality. Now we have before us a bill that is going to cut taxes over the next 5 years by $60 billion. It is going to make the deficit worse by $60 billion.

This is what Chairman Greenspan has said about the notion of cutting taxes by borrowing. Federal Reserve Chairman Greenspan opposes deficit- financed tax cuts. He said:

[W]e should not be cutting taxes by borrowing.

He is right. That is what we are doing. We are borrowing every dime of this, borrowing it from Japan, China, Caribbean banking centers.

Here is the effect of the reconciliation package, $35 billion of spending savings over 5 years, completely and totally wiped out by $60 billion of tax cuts not paid for. The net result is to increase the deficit, to increase the debt by $25 billion, but that is right in line with the fiscal policies that have been adopted by this President and by this Republican majority, because this is their record.

This is where they took over. The debt limit had not been increased for 5 years in this country. In 2002, in one year, they increased it by $450 billion. In 2003, they increased it by $984 billion. In 2004, they increased it by $800 billion. Now, with this reconciliation proposal, they want to increase the debt by $781 billion. Add it all up, and this President will have increased the debt in these 5 years by $3 trillion. Over the next 5 years, according to their own estimates, they are going to increase the debt another $3 trillion. That is real money.

The Chairman of the Federal Reserve has said this:

All I'm saying is that my general view is I like to see the

tax burden as low as possible.

Don't we all. I would like nothing better than to have my tax burden reduced.

And in that context, I would like to see tax cuts

continued. But, as I indicated earlier, that has got to be,

in my judgment, in the context of a PAYGO resolution.

What is pay-go? Pay-go says you can have more tax cuts, but you have to pay for them. You can have more spending, but you have to pay for it. Because if you don't, you add to the debt and deficit burden.

That brings me to the amendment that I send to the desk at this time.

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

Madam President, what does this amendment do? It provides for the extension of the expiring tax provisions that expire this year to be effective next year. It extends all of them. It does not extend provisions that expire next year for 2007 or 2008 or 2009. It is completely paid for over the 10 years. It provides for hurricane disaster relief identical to what Chairman Grassley has included in his provision. It provides for alternative minimum tax relief, but in an even better way than what is in the chairman's mark. Because while the chairman's mark says it is a hold-harmless provision, in fact, 600,000 more American taxpayers will pay the alternative minimum tax than paid it this year. We will go from 3 million people paying the alternative minimum tax to 3.6 million.

Remember, the alternative minimum tax, the old millionaire's tax, has now become a middle-class tax trap. My

amendment is a real hold harmless on alternative minimum tax. There will be no increase in the number of Americans paying the alternative minimum tax--none. Instead of a 600,000 increase of American taxpayers paying the AMT, we will only have the same number paying next year as this year.

In addition, we extend the R&D tax credit, the State sales tax deduction, the college tuition deduction, the welfare-to-work and work opportunity tax credits, the teacher classroom expenses deduction, the leasehold improvement and restaurant depreciation, and all other traditional tax extenders that expire this year to be effective next year. We pay for those provisions. Instead of putting it on the charge card, instead of running up the debt, adding to the deficit, shoving it off on our kids, we pay for it.

How do we do it? First, we use the same offsets that are in the chairman's package with the exception of the charitable revenue raisers because we don't have the charitable package here. They include the provisions that he has to close the tax gap by shutting down abusive tax shelters. I applaud the chairman for having those in his mark. He is exactly right to have them there. We adopt those same provisions.

In addition, we end the loophole for oil companies that lets them avoid taxes on their foreign operations. That is $10 billion. We end the tax benefit for leasing foreign subway and sewer systems. That saves $5 billion.

I want to explain this one to my colleagues. Here is what is going on. This is one of the biggest scams ever cooked up by accounting firms. Most accounting firms don't engage in this kind of activity, but there are a few who do. Here is what they are doing. They are buying foreign subway and sewer systems in U.S. shell operations, depreciating their assets for U.S. tax purposes, and leasing the subway and the sewer systems back to the foreign cities. I know this sounds unbelievable, but that is what is going on. This is a scam.

Some of my colleagues say: Senator, you are increasing taxes in order to pay for this tax cut package. I suppose you could say that. But is this a tax break anybody thinks should be in place? Do you think we should allow companies to buy foreign subway and sewer systems, depreciate them on their books, reduce their U.S. taxes, and then lease them back to those European cities? Does anybody believe that is not abuse?

We also require tax withholding on Government payments to contractors such as Halliburton. Why shouldn't they have withholding, just as working Americans have withholding on their tax obligations? That saves $7 billion.

We renew the Superfund tax so that polluting companies pay for cleaning up toxic waste sites. That tax is 9.7 cents a barrel. Oil right now is going for close to $60 a barrel. It seems entirely reasonable to me that we ask those who have contributed to these sites that need to be cleaned up to pay for it, 9.7 cents a barrel.

We close other tax loopholes as well. That is how we pay for this package. Why would we not pay for this package? Why should we not prevent the deficit and debt from being increased?

Some of my colleagues argued in the Finance Committee: Senator, you are raising taxes to pay for the tax cut. Here is what the chairman said:

We've found $180 billion over the last few years in things

that are examples of loophole closings and abusive tax

shelters. And that's what they are, people . . . that are

avoiding taxes--

I would amend that to companies as well.

--now that ought to pay taxes without changing the rate of

taxation.

The chairman had it exactly right. We now know the tax gap in this country, the difference between what is owed and what is actually being paid, is $350 billion a year. Let's close down these scams. Let's close down these loopholes. Let's close down these abuses and use a portion of it to pay for extending these very worthy tax provisions that are in this package. That is what my amendment is about.

For those who say they care about fiscal responsibility, for those who say they are concerned about the explosion of deficits and debt, here is a chance to prove it. Here is a chance to vote for this amendment that will extend the tax provisions that are expiring, those that are expiring this year for next year's taxes, and to pay for it by closing abusive tax shelters.

I yield the floor.

Reserving the right to object--and it is not my intention to object--I would like to inquire as to the parliamentary situation. How much time is left on my amendment?

So I have 53 minutes remaining on my side, and they have an hour left on their side?

I inquire of the Senator from California, why does she seek recognition and how much time does she require?

Is the Senator seeking time off the bill or she would have her own amendment time? I would not object to the request of the chairman to have speaking time. We would then intend to lay my amendment aside.

I will defer to the manager of the bill.

Mr. President, how much time did the Senator from Arizona consume?

Mr. President, I wish to take a few minutes to respond.

The Senator from Arizona started with a statement that is truly breathtaking. The Senator from Arizona said that deficit reduction created by the Bush administration policies was, I think he used the word ``extraordinary.'' Yeah, it is extraordinary all right. Here is what has happened to the debt under these policies.

When the President came in, there had been no increase in the debt limit of the United States for 5 years. After 1 year of the President's policies, the debt limit was increased $450 billion. The next year, they increased the debt $984 billion. The next year, they increased the debt $800 billion. In this reconciliation package, they are going to increase the debt limit $781 billion. The Senator from Arizona is on the floor saying they have done something to reduce the deficit? Come on. These are the biggest deficits, the biggest increase in the debt in the history of America, and it doesn't end with what they have already done.

Here is what they are going to do. These are not my calculations. These are the numbers that are in their own budget document. They are going to increase the debt another $600 billion next year, another $600 billion the next year, another $700 billion the next year, another $700 million the next year, and another $700 billion the next year. They already increased the debt $3 trillion, and under this budget plan, over the next 5 years they are going to increase it another $3 trillion, and he is out here talking about deficit reduction? Come on. There is no deficit reduction here.

No, I won't yield. The Senator had his chance. I am going to respond, and then I will be happy to engage in debate.

I did not refer to the Senator by name. I referred to ``the Senator from Arizona.'' The Senator from Arizona came out here and said there has been extraordinary deficit reduction. There is no deficit reduction. There is record explosion of debt, that is what is going on.

The Senator said that deficit, as a share of GDP, is not so bad. That is only because he leaves out something. And the something he leaves out is all the money that is being taken from Social Security and used to pay for other items because back in the eighties there was no Social Security surplus, or virtually none. Last year, the Social Security funds that were being used to try to mask the true size of what is going on was $173 billion. You add that back in, and the increase in debt of this country was 4.5 percent of GDP.

In the European Union, you can't be a member if you run deficits above 3.0 percent of GDP. But the addition to debt in this country last year was 4.6 percent of GDP when you add back all the money that is being taken from trust funds and used to pay for other items.

Here is what he doesn't want to talk about. Here is the explosion of Social Security money being taken to pay for other things. Look back in the eighties, there was virtually no Social Security surplus. In fact, in 1983, there was none. Then there was a couple hundred million dollars a year. Now it is approaching $200 billion a year, and they want to forget about it, they don't want to count it?

I tell you what is going on here is so utterly disconnected from reality. This chart shows the spending line since the eighties and the revenue line. In the nineties, we brought spending down each and every year as a share of GDP. Now we have had a big tick upwards. The Senator from Arizona said he wonders how we reached some nirvana of balance between spending and revenue. There is no balance, that is the point. That is what is wrong. We see the spending line and the revenue line. Look at the gap.

Our friends on the other side want to complain about the spending. Guess what. They are responsible for every dime of it. This happened on their watch. They control the House, they control the Senate, they control the White House. They are responsible for every dime of the increase in spending.

Here is what has happened to the revenue. It has collapsed. The result is an enormous gap, and he says he wonders how we reached some nirvana of balance between spending and revenue. There is no balance. That is the point.

Then our colleague talked about how wonderful the economic performance has been. No, it hasn't. Here is the record on job creation, comparing the average of the last nine recessions since World War II. Here is what happened over the period of time--this is in number of months on the bottom. This is a jobless recovery. This red line is the average of what has happened after the last nine recessions. By this stage, 55 months after the trough, typically 7 million jobs have been created in the private sector, more than have been created in this recovery.

So we are running 7 million private sector jobs behind the average of the last nine recoveries since World War II. This is great economic performance? It is the worst employment performance we have had of any of the nine recessions since World War II.

It is not just job growth, it is also GDP growth. GDP growth lags behind the typical recovery by 27 percent over the same period of time.

The Senator talked about business investment. Let's look at business investment. Let's look at the last nine recessions. At this stage, we are running 53 percent less business investment than in the nine previous recoveries from recessions. And he touts this economic record? Mr. President, this is not a record of which to be proud.

The Senator also talked about the dividend tax cut, and he talked about capital gains. They are not in the underlying amendment of the chairman of the committee. They are not in the Finance Committee's mark. So he is comparing apples to something else.

My amendment says we have to go back to the disciplines we have used in the past to restore fiscal discipline. What are they? Pay-go is one of the major budget disciplines, and it simply says: If you are going to have more tax cuts, fine, you have to pay for them. If you have more spending, fine, you have to pay for it. That is one of the key things we must do to get this Nation back on track.

This notion that we keep borrowing the money, keep spending the money, keep more and more tax cuts, don't worry if anything adds up is leading us deeper and deeper into debt. When are we going to stop this?

Mr. President, how much time do I have left?

I ask if the Chair will notify me when I have used 1 more minute.

Mr. President, let me say to my colleagues, I am beginning to wonder what are we thinking around here? What are we thinking of, Republicans and Democrats? When are we going to turn the corner? When are we going to say enough is enough? When are we going to say adding $3 trillion of debt in the last 5 years and headed for the next 5 years adding another $3 trillion, in effect, doubling the debt of our country in 10 years-- that is what we are doing. The result is foreign holdings of our debt have doubled in 5 years. Mr. President, I say to my colleagues, this is not sustainable.

On the Republican side, they say we should just cut the spending. OK, do it, cut it. If you don't want to tax anymore, cut the spending to match the taxes you are willing to levy.

I ask for another 30 seconds.

My Republican friends said they are fiscally responsible. When are they

going to demonstrate it? If you are only willing to tax at 17 percent of GDP, then cut the spending 17 percent of GDP. If they think, well, because of the war and because of the need for homeland security, we need to spend more than 17 percent of GDP, which is what they are doing in their budgets--they are not spending 17 percent of GDP, they are spending 19 percent of GDP, in fact they are going to 20 percent of GDP, then tax at 20 percent of GDP so you pay your bills. Do one of the two. But don't just keep putting it on the charge card.

I say to my Democratic colleagues the same thing. We cannot be for more spending than we are for levying the taxes to raise it. What is going on in this town is absolutely and totally irresponsible, and it is going to put us in a very weakened position as a country. We have increased foreign holdings of our debt 100 percent in 5 years. It took 224 years to run up a trillion dollars of external debt. This President has doubled it in 5 years. That does not strengthen America.

I thank the Chair, and I yield the floor.

Could I inquire as to the time on my amendment?

And the majority?

I thank the Chair. Mr. President, I go back to the point that my colleague from Wyoming made about this relationship between spending and revenue. Here is the problem we have. Here is where we are in spending as a percentage of gross domestic product. We are at about 20 percent, a little over. Here is where we are in revenue. We are just over 17 percent. It is this gap between spending and revenue that is creating these massive deficits, and this is before the baby boomers retire. The question is, How do we close this gap?

We could do it one of three ways: We could cut the spending down to the amount of revenue that we are willing to levy. That would mean a 36-percent cut in every part of Federal spending if we were to hold harmless from the cuts Social Security, defense, and interest on the debt. We would have to cut everything else--homeland security, aid to veterans, education, parks, FBI. All the rest would have to be cut 36 percent to cut the spending down to the revenue we currently have.

A second possibility would be to raise revenue up to the spending line. That would mean a very significant revenue increase if we were to do it just with revenues. A third possibility is some combination of spending cuts and revenue increases.

One of the assumptions being made is that to increase revenue, taxes have to be increased. The fact is, the revenue service tells us the tax gap, the difference between what is owed and what is being paid, is now $350 billion a year.

Before we talk about a tax increase on anyone, before we have any suggestion of a tax increase, we ought to go after that tax gap and we ought to do it aggressively. That is part of the amendment that I have offered. Frankly, it is a part of the chairman's mark because the chairman closes $30 billion of loopholes in his proposal.

I agree with those, but I say to the Senator from Iowa he does not go far enough at closing loopholes. In my proposal, we go further. For example, we end the tax benefit for leasing foreign subway and sewer systems.

Why would we not do that? Why do we allow companies to go and buy the sewer and subway systems of foreign cities and depreciate them on their U.S. taxes, cutting their taxes in our country, and then lease back the subway and sewer systems to foreign cities? What a scam. Why are we allowing that? Somebody calls that a tax increase? Is that really a tax increase to say to companies that they cannot go buy the sewer system in a foreign country's city and depreciate it on their U.S. taxes? That is what is going on.

We also would require tax withholding on Government payments to contractors like Halliburton. Just like all the rest of us who have withholding on our taxes, why do they not have withholding on theirs? It would save us a lot of money; renewing the Superfund tax, 9.7 cents a barrel on $60-per-barrel oil to clean up these toxic sites.

One can call those tax increases; I call them closing loopholes. I call them closing scams. We ought to do it and use the money to pay for extending these tax reductions that are included in my amendment; the extending of tax reductions that are reasonable, that are in this package.

I hope my colleagues will think for a minute about what we are doing. Debt is growing out of control. Why are we taking steps to add to the deficit, to add to the debt? Why not pay for something around here?

Let us start paying our bills. That is what pay-go is all about. It says, if my colleagues want more tax cuts, they have to pay for them. If they want more spending, they have to pay for it. That is an American value, paying one's bills. We are not doing that. We are stacking debt on top of debt. We have added $3 trillion to the debt over the 5 years of this Presidency. Under this budget plan, we are getting ready to add another $3 trillion of debt before the baby boomers retire. We can do better than that. America deserves better than that. It certainly does not deserve us stacking debt on top of debt.

I yield the floor and reserve my time.

I will be happy to use my time at this point if that will help the managers.

Mr. President, the question before us is, What is our vision for the future? If this chart shows your vision of the fiscal future of the country, vote against my amendment. If you think the answer to our fiscal future is just to add more and more to the debt, then vote against me. If you believe it is time to get our fiscal house in order, at least to begin steps to get our fiscal house in order, vote with me. If you believe the underlying budget makes sense, here is what the underlying budget does. For the next 5 years it adds to the debt, going from just under $8 trillion to over $11 trillion. It is going to add over $3 trillion to the debt over the next 5 years.

If you think that is a mistake, then support the alternative that I am offering, which says: Yes, we will provide the hurricane disaster relief; yes, we will provide extensions of the expiring provisions on alternative minimum tax--in fact, we will protect 600,000 more taxpayers than the chairman's mark. And we will provide the R&D tax credit, the State sales tax deduction, the college tuition deduction, the Welfare-to-Work and Work Opportunity Tax Credits, the teacher classroom expenses deduction, the leasehold improvement and restaurant depreciation, and all other traditional tax extenders--but we will pay for them.

How do we pay for them? We take the offsets that are in the chairman's mark that are loophole closers that shut down abusive tax shelters, and we add additional tax shelters and loophole closers-- ending a loophole for oil companies that lets them avoid taxes on foreign operations, ending the tax benefit for the leasing of foreign subway and sewer systems--again, I say to my colleagues, why would we ever permit that?--require tax withholding on Government payments to contractors like Halliburton, and renewing the Superfund tax so that polluting companies pay for cleaning up toxic waste.

I ask my colleagues to support my amendment to pay for the tax breaks we want to extend. I thank the Chair.

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

I ask for the yeas and nays.

Mr. President, I rise today to introduce with my colleagues, Senators Feinstein, Grassley, Kyl, and Cornyn, a comprehensive bipartisan bill to increase gang prosecution and prevention efforts. The bill I introduce today is identical to S. 1735 that was favorably reported by the Senate Judiciary Committee in the 108th Congress.

This legislation, ``The Gang Prevention and Effective Deterrence Act of 2005,'' authorizes approximately $650 million over the next five years to support law enforcement and efforts to prevent youngsters from joining gangs. Of that, $450 million would be used to support Federal, State and local law enforcement efforts against violent gangs, and $200 million would be used for intervention and prevention programs for at- risk youth. The bill increases funding for the Federal prosecutors and Federal Bureau of Investigation (FBI) agents needed to conduct coordinated enforcement efforts against violent gangs.

This bill also creates new criminal gang prosecution offenses, enhances existing gang and violent crime penalties to deter and punish illegal street gangs, enacts violent crime reforms needed to prosecute effectively gang members, and implements a limited reform of the juvenile justice system to facilitate Federal prosecution of 16- and 17-year-old gang members who commit serious violent felonies.

The problem of gang violence in America is not a new one, nor is it a problem that is limited to major urban areas. Once thought to be only a problem in our Nation's largest cities, gangs have invaded smaller communities. Gangs in Salt Lake County result in significant measure from the influence of gangs existing in Los Angeles and Chicago, but with local mutations.

Constituents frequently mention to me their extreme concern about gang violence in Utah. According to the Salt Lake Area Gang Project, a multi-jurisdictional task force created in 1989 to fight gang crime in the Salt Lake area, there are at least 250 identified gangs in Utah with over 3,500 members. In Utah, there are street gangs that are ethnically oriented, such as Hispanic gangs, as well as those affiliated with gangs from other cities, such as the Crips and Bloods, Folks and People, motorcycle gangs, Straight Edge gangs, Animal Liberation Front, Skinheads, Varrio Loco Town, Oquirrh Shadow Boys, Salt Lake Posse, and the list goes on. Some of these gangs are racist; some are extremist.

And what I find particularly troubling is that over one-third of the total gang membership is made up of juveniles. Thus, these crimes have a particular impact on youths.

Gangs now resemble organized crime syndicates which readily engage in gun violence, illegal gun trafficking, illegal drug trafficking and other serious crimes. All too often we read in the headlines about gruesome and tragic stories of rival gang members gunned down, innocent bystanders--adults, teenagers and children--caught in the cross fire of gangland shootings, and family members crying out in grief as they lose loved ones to the gang wars plaguing our communities.

Recent studies confirm that gang violence is an increasing problem in all of our communities. Based on the latest available National Youth Gang Survey, it is now estimated that there are more than 25,000 gangs, and over 750,000 gang members who are active in more than 3,000 jurisdictions across the United States. The most current reports indicate that in 2002 alone, after five years of decline, gang membership has spiked nationwide.

I have been--and remain--committed to supporting Federal, State and local task forces as a model for effective gang enforcement strategies. Working together, these task forces have demonstrated that they can make a difference in the community. In Salt Lake City, the Metro Gang Multi-Jurisdiction Task Force stands out as a critical player in fighting gang violence in Salt Lake City. We need to reassure outstanding organizations like this that there will be adequate resources available to expand and fund these critical task force operations to fight gang violence.

In my study of this problem, it has become clear that the government needs to work with communities to meet this problem head-on and defeat it. If we really want to reduce gang violence, we must ensure that law enforcement has adequate resources and legal tools, and that our communities have the ability to implement proven intervention and prevention strategies, so that gang members who are removed from the community are not simply replaced by the next generation of new gang members.

In closing, I want to commend my colleagues--Senators Feinstein, Grassley, Kyl and Cornyn. They have worked very closely with me as we considered these issues last Congress and I look forward to working with them and others as we proceed this year. I urge my colleagues to join with us in promptly passing this important legislation.

Mr. President, I rise today to introduce the Family Entertainment and Copyright Act of 2005. This important legislation consists of a package of smaller intellectual property bills that the House and Senate have been working to enact since last Congress. This legislation passed the Senate not once, but twice, during the waning days of the last Congress. Unfortunately, though, it was doomed by a non-germane amendment unrelated to intellectual property law. My hope is that we can work together this Congress to avoid this type of pitfall, and I commit to work with other members to do so.

Before beginning my substantive discussion of the bill, I would like to thank my colleagues Senators Leahy, Cornyn, and Feinstein for their ongoing efforts on this legislation. Just as it was last year, this legislation is a group effort, and I want to take care to recognize the contributions and their excellent work along with that of Representatives Sensenbrenner, Smith, Berman, and Conyers in the House.

Before going into a title-by-title discussion of the bill, I would like to express my particular support for the Family Movie Act, which has been included in this legislation. Chairman Lamar Smith and I worked on this bill last Congress. It's important legislation both to parents who want the ability to use new technologies to help shield their families from inappropriate content as well as the technology companies, such as ClearPlay in my home State of Utah, that are working to develop these technologies. The Family Movie Act will give parents more say over what their children see, without limiting the creative control of directors and movie studios.

Title I of this Act, the Artists' Rights and Theft Prevention Act of 2005, (the ART Act), contains a slightly modified version of S. 1932, authored by Senators Cornyn and Feinstein in the 108th Congress. This bill will close two significant gaps in our copyright laws that are feeding some of the piracy now rampant on the Internet.

First, it criminalizes attempts to record movies off of theater screens. These camcorded copies of new movies now appear on filesharing networks almost contemporaneously with the theatrical release of a film. Several States have already taken steps to criminalize this activity, but providing a uniform Federal law--instead of a patchwork of State criminal statutes--will assist law enforcement officials in combating the theft and redistribution of valuable intellectual property embodied in newly-released motion pictures.

Second, the bill will create a pre-registration system that will permit criminal penalties and statutory-damage awards. This will also provide a tool for law enforcement officials combating the growing problem of music and movies being distributed on filesharing networks and circulating on the Internet before they are even released. Obviously, the increasingly frequent situation of copyrighted works

being distributed illegally via the Internet before they are even made available for sale to the public severely undercuts the ability of copyright holders to receive fair and adequate compensation for their works.

Title II of this Act, the Family Movie Act of 2005 (the FMA), resolves some ongoing disputes about the legality of so-called ``jump- and-skip'' technologies that companies like Clearplay in my home State of Utah have developed to permit family-friendly viewing of films that may contain objectionable content. The FMA creates a narrowly defined safe-harbor clarifying that distributors of such technologies will not face liability for copyright or trademark infringement, provided that they comply with the requirements of the Act. I have been working with my colleagues in the Senate and several leaders in the House-- including, most importantly Chairmen Smith and Sensenbrenner--for the past couple of years to resolve this issue. The FMA will help to end aggressive litigation threatening the viability of small companies like Clearplay which are busy creating innovative technologies for consumers that allow them to tailor their home viewing experience to their own individual or family preferences.

The Family Movie Act creates a new exemption in section 110(11) of the Copyright Act for skipping and muting audio and video content in motion pictures during performances of an authorized copy of the motion picture taking place in the course of a private viewing in a household. The version passed last year by the House explicitly excluded from the scope of the new copyright exemption so-called ``ad-skipping'' technologies that make changes, deletions, or additions to commercial advertisements or to network or station promotional announcements that would otherwise be displayed before, during, or after the performance of the motion picture. This provision was included on the House floor to address the concerns of some Members who were concerned that a court might misread the new section 110(11) exemption to apply to ``ad- skipping''' cases, such as in the recent litigation involving ReplayTV.

In the Senate, however, some expressed concern that the inclusion of such explicit language could create unwanted inferences with respect to the merits of the legal positions at the heart of recent ``ad- skipping'' litigation. Those issues remain unsettled in the courts, and it was never the intent of this legislation to resolve or affect those issues in any way. Indeed, the Copyright Act contains literally scores of similar exemptions, and none of those exemptions have been or should be construed to imply anything about the legality of conduct falling outside their scope. As a result, the Copyright Office has now confirmed that such an explicit exclusion is unnecessary to achieve the desired outcome, which is to avoid application of this new exemption in potential future cases involving ad-skipping devices. In order to avoid unnecessary controversy, the Senate bill omits the exclusionary language with the understanding that doing so does not in any way change the scope of the bill.

That this change in no way affects the scope of the exemption is clear when considering that the new section 110(11) exemption protects the ``making imperceptible . . . limited portions of audio or video content of a motion picture. . . .'' An advertisement, under the Copyright Act, is itself a ``motion picture,'' and thus a product or service that enables the skipping of an entire advertisement, in any media, would be beyond the scope of the exemption. Moreover, the phrase ``limited portions'' is intended to refer to portions that are both quantitatively and qualitatively insubstantial in relation to the work as a whole. Where any substantial part of a complete work, such as a commercial advertisement, is made imperceptible, the new section 110(11) exemption would not apply. The limited scope of this exemption does not, however, imply or show that such conduct or a technology that enables such conduct would be infringing. This legislation does not in any way deal with that issue. It means simply that such conduct and products enabling such conduct are not immunized from liability by this exemption.

This bill also differs from the version passed by the House last year in that it adds two ``savings clauses.'' The copyright savings clause makes clear that there should be no spillover effect from the passage of this law: that is, nothing shall be construed to have any effect on rights, defenses, or limitations on rights granted under title 17, other than those explicitly provided for in the new section 110(11) exemption. The trademark savings clause clarifies that no inference can be drawn that a person or company who fails to qualify for the exemption from trademark infringement found in this provision is therefore liable for trademark infringement.

Title III of this Act, the National Film Preservation Act of 2004, will reauthorize the National Film Preservation Board and the National Film Preservation Foundation. These entities have worked successfully to recognize and preserve historically or culturally significant films--often by providing the grants and expertise that enable local historical societies to protect and preserve historically significant films for the local communities for which they are most important. This fine work will ensure that the history of the 20th century will be preserved and available to future generations.

As a conservative Senator from a socially conservative state, I occasionally take a few swings at the movie industry for the quality and content of the motion pictures they are currently creating, but I will note for the record that I commend efforts to ensure that important artistic, cultural, and historically significant films are preserved for future generations. I commend my friend from Vermont for his perseverance in reauthorizing Federal funds to continue this important effort.

Title IV of this act, the ``Preservation of Orphan Works Act,'' also ensures the preservation of valuable historic records by correcting a technical error that unnecessarily narrows a limitation on the copyright law applicable to librarians and archivists. This will strengthen the ability of librarians and archivists to better meet the needs of both researchers and ordinary individuals and will result in greater accessibility of important works. I applaud my colleague in the House--Representative Howard Berman of California--for his efforts on this bill and am pleased to see it included in this Senate package.

Just to conclude, I will again thank Ranking Democratic Member Leahy, Senator Cornyn, Chairmen Sensenbrenner and Smith, as well as Mr. Conyers and Mr. Berman for their bicameral, bipartisan approach to these bills and to intellectual property issues generally.

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

I would be happy to yield for a question from the distinguished Senator from Texas.

I thank my friend, the Senator from Texas, for that reminder. I would certainly have no objection to entering our previous colloquy into the Record again and ask unanimous consent that it appear after our remarks.

Mr. President, Section 102 of the ART Act establishes a new provision of Title 18 entitled, ``Unauthorized Recording of Motion Pictures in a Motion Picture Exhibition Facility.'' I ask Senator Cornyn, what is the purpose of this provision?

I have heard it said that this bill could be used against a salesperson or a customer at stores such as Best Buy or Circuit City if he or she were to point a video camera at a television screen showing a movie. Is this cause for concern?

Does the Senator from California agree with your colleague from Texas?

I have also heard some say that this statute could be used to prosecute someone for camcording a DVD at his home. Is this a fair concern?

Do the users of hearing aids, cell phones or similar devices have anything to fear from this statute?

It appears that there is no fair use exception to this provision. Is that correct?

Does the Senator from Texas agree?

My cosponsor, Senator Cornyn, raises an important point. While we removed the ``ad-skipping'' language from the statute to avoid this unnecessary controversy, you are absolutely correct that this does not in any way change the scope of the bill. The bill protects the ``making imperceptible . . . limited portions of audio or video content of a motion picture . . .'' An advertisement, under the Copyright Act, is itself a ``motion picture,'' and thus a product or service that enables the skipping of an entire advertisement, in any media, would be beyond the scope of the exemption. Moreover, the phrase ``limited portions'' is intended to refer to portions that are both quantitatively and qualitatively insubstantial in relation to the work as a whole. Where any substantial part of a complete work, such as a commercial advertisement, is made imperceptible, the new section 110(11) exemption would not apply.

The limited scope of this exemption does not, however, imply or show that

such a product would be infringing. This legislation does not in any way deal with that issue. It means simply that such a product is not immunized from liability by this exemption.

Certainly.

Yes it is. Let me ask that a copy of the section-by- section analysis of the Family Movie Act as amended by the Senate be included in the Record. This section-by-section analysis contains a more complete analysis of the bill as proposed today in the Senate, including the limited changes made by the bill Senators Leahy, Cornyn, Biden, and I offer today.

The analysis follows.

Section-by-Section Analysis of the Family Movie Act of 2004, Amended

and Passed by the Senate

overview

Title II of the Family Entertainment and Copyright Act of

2004 incorporates the House-passed provision of the Family

Movie Act of 2004, with limited changes as reflected in this

section-by-section analysis. As discussed herein, these

changes are not intended to and do not affect the scope,

effect or application of the bill.

The purpose of the Family Movie Act is to empower private

individuals to use technology to skip and mute material that

they find objectionable in movies, without impacting

established doctrines of copyright or trademark law or those

whose business models depend upon advertising. This amendment

to the law should be narrowly construed to effect its

intended purpose only. The sponsors of the legislation have

been careful to tailor narrowly the legislation to clearly

allow specific, consumer-directed activity and not to open or

decide collateral issues or to affect any other potential

or actual disputes in the law.

The bill as proposed in the Senate makes clear that, under

certain conditions, ``making imperceptible'' of limited

portions of audio or video content of a motion picture--that

is, skipping and muting limited portions of movies without

adding any content--as well as the creation or provision of a

computer program or other technology that enables such making

imperceptible, does not violate existing copyright or

trademark laws. That is true whether the movie is on

prerecorded media, like a DVD, or is transmitted to the home,

as through pay-per-view and ``video-on-demand'' services.

Subsection (a): Short Title

Subsection (a) sets forth the short title of the bill as

the Family Movie Act of 2004.

Subsection (b): Exemption from Copyright and Trademark

Infringement for Skipping of Audio or Video Content of

Motion Pictures

Subsection (b) is the Family Movie Act core provision and

creates a new exemption at section 110(11) of the Copyright

Act for the ``making imperceptible'' of limited portions of

audio or video content of a motion picture during a

performance in a private household. This new exemption sets

forth a number of conditions to ensure that it achieves its

intended effect while remaining carefully circumscribed and

avoiding any unintended consequences. The conditions that

allow an exemption, which are discussed in more detail below,

consist of the following:

The making imperceptible must be ``by or at the direction

of a member of a private household.'' This legislation

contemplates that any altered performances of the motion

picture would be made either directly by the viewer or at the

direction of a viewer where the viewer is exercising

substantial choice over the types of content they choose to

skip or mute.

The making imperceptible must occur ``during a performance

in or transmitted to the household for private home

viewing.'' Thus, this provision does not exempt an

unauthorized ``public performance'' of an altered version.

The making imperceptible must be ``from an authorized copy

of a motion picture.'' Thus, skipping and muting from an

unauthorized or ``bootleg'' copy of a motion picture would

not be exempt.

No ``fixed copy'' of the altered version of the motion

picture may be created by the computer program or other

technology that makes imperceptible portions of the audio or

video content of the motion picture. This provision makes

clear that services or technologies that make a fixed copy of

the altered version are not afforded the benefit of this

exemption.

The ``making imperceptible'' of limited portions of a

motion picture does not include the addition of audio or

video content over or in place of other content, such as

placing a modified image of a person, a product, or an

advertisement in place of another, or adding content of any

kind.

These limitations, and other operative provisions of this

new section 110(11) exemption, merit further elaboration as

to their purposes and effects.

The bill makes clear that the ``making imperceptible'' of

limited portions of audio or video content of a motion

picture must be done by or at the direction of a member of a

private household. While this limitation does not require

that the individual member of the private household exercise

ultimate decision-making over each and every scene or element

of dialog in the motion picture that is to be made

imperceptible, it does require that the making imperceptible

be made at the direction of that individual in response to

the individualized preferences expressed by that individual.

The test of ``at the direction of an individual'' would be

satisfied when an individual selects preferences from among

options that are offered by the technology.

An example is the C1earPlay model. C1earPlay provides so-

called `` filter files'' that allow a viewer to express his

or her preferences in a number of different categories,

including language, violence, drug content, sexual content,

and several others. The version of the movie that the viewer

sees depends upon the preferences expressed by that viewer.

Such a model would fall under the liability limitation of the

Family Movie Act.

This limitation, however, would not allow a program

distributor, such as a provider of video-on-demand services,

a cable or satellite channel, or a broadcaster, to make

imperceptible limited portions of a movie in order to provide

an altered version of that movie to all of its customers,

which could violate a number of the copyright owner's

exclusive rights, or to make a determination of scenes to be

skipped or dialog to be muted and to offer to its viewers no

more of a choice than to view an original or an altered

version of that film. Some element of individualized

preferences and control must be present such that the viewer

exercises substantial choice over the types of content they

choose to skip or mute.

It is also important to emphasize that the new section

110(11) exemption is targeted narrowly and specifically at

the act of ``making imperceptible'' limited portions of audio

or video content of a motion picture during a performance

that occurs in, or that is transmitted to, a private

household for private home viewing. This section would not

exempt from liability an otherwise infringing performance, or

a transmission of a performance, during which limited

portions of audio or video content of the motion picture are

made imperceptible. In other words, where a performance in a

household or a transmission of a performance to a household

is done lawfully, the making imperceptible limited portions

of audio or video content of the motion picture during that

performance, consistent with the requirements of this new

section, will not result in infringement liability.

Similarly, an infringing performance in a household, or an

infringing transmission of a performance to a household, are

not rendered non-infringing by section 110(11) by virtue of

the fact that limited portions of audio or video content of

the motion picture being performed are made imperceptible

during such performance or transmission in a manner

consistent with that section.

The bill also provides additional guidance, if not an exact

definition, of what the term ``making imperceptible'' means.

The bill provides specifically that the term ``making

imperceptible'' does not include the addition of audio or

video content that is performed or displayed over or in place

of existing content in a motion picture. This is intended to

make clear in the text of the statute what has been expressed

throughout the consideration of this legislation, which is

that the Family Movie Act does not enable the addition of

content of any kind, including the making imperceptible of

audio or video content by replacing it or by superimposing

other content over it. In other words, for purposes of

section 110(11), ``making imperceptible'' refers solely to

skipping scenes and portions of scenes or muting audio

content from the original, commercially available version of

the motion picture. No other modifications of the content are

addressed or immunized by this legislation.

The House sponsor of this legislation noted in his

explanation of his bill, and the Senate is also aware, that

some copy protection technologies rely on matter placed into

the audio or video signal. The phrase ``limited portions of

audio or video content of a motion picture'' means what it

would naturally seem to mean (i.e., the actual content of

the motion picture) and does not refer to any component of

a copy protection scheme or technology. This provision

does not allow the skipping of technologies or other copy-

protection-related matter for the purpose of defeating

copy protection. Rather, it is expected that skipping and

muting of content

in the actual motion picture will be skipped or muted at

the direction of the viewer based on that viewer's desire

to avoid seeing or hearing the action or sound in the

motion picture. Skipping or muting done for the purpose of

or having the effect of avoiding copy protection

technologies would be an abuse of the safe harbor outlined

in this legislation and may violate section 1201 of title

17.

Violating the Digital Millennium Copyright Act, and

particularly its anti-circumvention provisions, is not

necessary to enable technology of the kind contemplated under

the Family Movie Act. Although the amendment to section 110

provides that it is not an infringement of copyright to

engage in the conduct that is the subject of the Family Movie

Act, the Act does not provide any exemption from the anti-

circumvention provisions of section 1201 of title 17, or from

any other provision of chapter 12 of title 17. It would not

be a defense to a claim of violation of section 1201 that the

circumvention is for the purpose of engaging in the conduct

covered by this new exemption in section 110(11), just as it

is not a defense under section 1201 that the circumvention is

for the purpose of engaging in any other non-infringing

conduct.

There are a number of companies currently providing the

type of products and services covered by this Act. The Family

Movie Act is intended to facilitate the offering of such

products and services, and it certainly creates no impediment

to the technology employed by those companies. Indeed, it is

important to underscore the fact that the support for such

technology and consumer offerings that is reflected in this

legislation is driven in some measure by the desire for

copyright law to be respected and to ensure that technology

is deployed in a way that supports the continued creation and

protection of entertainment and information products that

rely on copyright protection. This legislation reflects the

firm expectation that those rights and the interests of

viewers in their homes can work together in the context

defined in this bill. Any suggestion that support for the

exercise of viewer choice in modifying their viewing

experience of copyrighted works requires violation of either

the copyright in the work or of the copy protection schemes

that provide protection for such work should be rejected as

counter to legislative intent or technological necessity.

The House-passed bill included an explicit exclusion to the

new section 110(11) exemption in cases involving the making

imperceptible of commercial advertisements or network or

station promotional announcements. This provision was added

on the House floor to respond to concerns expressed by

Members during the House Judiciary Committee markup that the

bill might be read somehow to exempt from copyright

infringement liability devices that allow for skipping of

advertisements in the playback of recorded television (so

called ``ad-skipping'' devices). Such a reading is not

consistent with the language of the bill or its intent.

The phrase ``limited portions of audio or video content of

a motion picture'' applies only to the skipping and muting of

scenes or dialog that are part of the motion picture itself,

and not to the skipping of commercial advertisements, which

are themselves considered motions pictures under the

Copyright Act. It also should be noted that the phrase

``limited portions'' is intended to refer to portions that

are both quantitatively and qualitatively insubstantial in

relation to the work as a whole. Where any substantial part

of a complete work (including a commercial advertisement) is

made imperceptible, the section 110(11) exemption would not

apply.

The House-passed bill adopted a ``belt and suspenders''

approach to this question by adding exclusionary language in

the statute itself. Ultimately that provision raised concerns

in the Senate that such exclusionary language would result in

an inference that the bill somehow expresses an opinion, or

even decides, the unresolved legal questions underlying

recent litigation related to these so-called ``ad-skipping''

devices. In the meantime, the Copyright Office also made

clear that such exclusionary language is not necessary. In

other words, the exclusionary language created unnecessary

controversy without adding any needed clarity to the statute.

Thus, the Senate amendment omits the exclusionary language

while leaving the scope and application of the bill exactly

as it was when it passed the House. The legislation does not

provide a defense in cases involving so-called ``ad-

skipping'' devices, and it also does not affect the legal

issues underlying such litigation, one way or another.

Consistent with the intent of the legislation to fix a narrow

and specific copyright issue, this bill seeks very clearly to

avoid unnecessarily interfering with current business models,

especially with respect to advertising, promotional

announcements, and the like. Simply put, the bill as amended

in the Senate is narrowly targeted to the use of technologies

and services that filter out content in movies that a viewer

finds objectionable, and it in no way relates to or affects

the legality of so-called ``ad-skipping'' technologies.

There are a variety of services currently in litigation

that distribute actual copies of altered movies. This type of

activity is not covered by the section 110(11) exemption

created by the Family Movie Act. There is a basic distinction

between a viewer choosing to alter what is visible or audible

when viewing a film, the focus of this legislation, and a

separate entity choosing to create and distribute a single,

altered version to members of the public. The section 110(11)

exemption only applies to viewer directed changes to the

viewing experience, and not the making or distribution of

actual altered copies of the motion picture.

Related to this point, during consideration of this

legislation in the House there were conflicting expert

opinions on whether fixation is required to infringe the

derivative work right under the Copyright Act, as well as

whether evidence of Congressional intent in enacting the 1976

Copyright Act supports the notion that fixation should not be

a prerequisite for the preparation of an infringing

derivative work. This legislation should not be construed to

be predicated on or to take a position on whether fixation is

necessary to violate the derivative work right, or whether

the conduct that is immunized by this legislation would be

infringing in the absence of this legislation. Subsection (b)

also provides a savings clause to make clear that the newly-

created copyright exemption is not to be construed to have

any effect on rights, defenses, or limitations on rights

granted under title 17, other than those explicitly provided

for in the new section 110(11) exemption.

Subsection (c): Exemption from Trademark Infringement

Subsection (c) provides for a limited exemption from

trademark infringement for those engaged in the conduct

described in the new section 110(11) of the Copyright Act. In

short, this subsection makes clear that a person engaging in

the conduct described in section 110(11)--the ``making

imperceptible'' of portions of audio or video content of a

motion picture or the creation or provision of technology to

enable such making available--is not subject to trademark

infringement liability based on that conduct, provided that

person's conduct complies with the requirements of section

110(11). This section provides a similar exemption for a

manufacturer, licensee or licensor of technology that enables

such making imperceptible, but such manufacturer, licensee or

licensor is subject to the additional requirement that it

ensure that the technology provides a clear and conspicuous

notice at the beginning of each performance that the

performance of the motion picture is altered from the

performance intended by the director or the copyright holder.

Of course, nothing in this section would immunize someone

whose conduct, apart from the narrow conduct described by

110(11), rises to the level of a Lanham Act violation. For

example, someone who provides technology to enable the making

imperceptible limited portions of a motion picture consistent

with section 110(11) could not be held liable on account of

such conduct under the Trademark Act, but if in providing

such . . .

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

(Mr. McGOVERN asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I want to thank the gentleman from Georgia (Mr. Gingrey), my colleague, for yielding me the customary 30 minutes.

Mr. Speaker, let me begin by saying that every single Member of this House is concerned about gang violence in our communities and throughout our country, and every single Member of this House is dedicated to trying to make our communities and our Nation safer. However, some of us want to pass not a press release but tough legislation that will indeed make our communities safer.

So, Mr. Speaker, I rise today in strong opposition to H.R. 1279, the so-called Gang Deterrence and Community Protection Act. It is bad policy wrapped in a bad bill that will simply not do the job the sponsors claim it will do.

Do not let the title of the bill fool Members. It has nothing to do with deterrence or community protection. This bill does nothing to address the causes of gang activity. Instead, its primary purposes include unjustifiable punishment and ineffective enforcement of the law.

The bill unjustifiably expands death penalty provisions, removes judicial discretion over transferring juveniles to the adult court system, and imposes ineffective mandatory minimum sentencing.

Mr. Speaker, Time magazine focused on the spike in gang activity in Los Angeles in the September 3, 2001, edition. In that story, Father Greg Boyle, a Catholic priest who worked in a

gang-infested area of East Los Angeles, said that California's anti- gang strategy, which has been copied across the country, ``is bankrupt. You have the three strikes law and jail and so on, but you can't terrify a kid into being hopeful about his future.''

The following quote is even more telling: ``We don't need new laws. We have a penal code a foot thick. You can't just work gangs with police suppression. You need prevention and intervention programs, too.'' Mr. Speaker, that statement was not made by a social worker or community activist. No, Mr. Speaker, it came from Sergeant Wes McBride, founder of the California Gang Investigators Association and a 28-year veteran of anti-gang policing.

After reading this legislation, it is clear to me that this bill will do nothing to deter gang activity and, instead, will sentence American youth to lives of crime and violence instead of proactively intervening in our communities to prevent our children and our youngsters from joining gangs in the first place.

This legislation contains several provisions that unjustifiably expand the Federal death penalty. Despite numerous studies that have documented both the exposure of innocent individuals to the death penalty system and its discriminatory nature, the proponents of this bill want to make this already-flawed system worse.

Mr. Speaker, let me say this clearly. I am opposed to the death penalty. I do not believe the death penalty deters future crimes. It has been proven that the death penalty unfairly targets minorities. It has also been proven that innocent people have been sent to death row and have been put to death. Inclusion of the death penalty in this bill is wrong and should be stripped out.

Since 1973, 119 innocent people have been released from Death Row. A study performed by the Criminal Justice Reform Education Fund reported that over two-thirds of all capital convictions and sentences between 1973 and 1995 were reversed because of serious error during trial or sentencing. How can we expand the death penalty system, especially to include juveniles, when it is proven to be faulty, discriminatory, and not an effective deterrent to violent behavior?

Let me remind my colleagues that President Bush signed the Justice for All Act into law on October 30, 2004. This law, which was approved overwhelmingly by this body, improved the fallibility of the death penalty system by making DNA technology available to our criminal justice system in order to improve its ability to exonerate the innocent, as well as identify and convict the guilty. However, the important provisions in the Justice For All Act that would improve the fallibility of the death penalty system are not even being funded. As if that were not bad enough, the bill before us today would actually create new death penalty provisions.

In effect, Mr. Speaker, with this bill, we are adding more death penalty cases to an already-broken system that is desperately in need of repair. By not funding the protections provided under the Justice for All Act and by expanding the death penalty to new cases, this bill makes the death penalty system worse, not better.

Another provision that I strongly disagree with is the transferring of juveniles to the adult court system. Research performed by the Department of Justice has shown that youths tried as adults are more likely to commit a greater number of crimes upon release and that these crimes will be violent. Youths sent to prison with adults end up victims of rape, assault and become high repeat offenders. When these prisoners are released and attempt to reenter society, what are their options? It is most likely they will pick up where they left off and contribute once again to the cycle of gangs and violence.

Moving a youth into the adult court system and prison system will not reduce the amount of youth crime and gang activity. If anything, it will make it worse.

Another flawed aspect of H.R. 1279 is its emphasis on mandatory minimum sentencing. Mandatory minimum sentencing will not prevent youths from joining gang or reduce violent crime among youths. Mandatory minimums were originally created to decrease the disparity in sentencing of like offenders. However, the Judicial Conference of the United States and the U.S. Sentencing Commission has found mandatory minimums ``require sentencing courts to impose the same sentence on offenders when sound policy and common sense call for reasonable differences in punishment.'' In other words, judges are prevented from assessing what type of punishment fits the crime.

Removing sentencing power from judges and shifting discretion to prosecutors will not prevent any youth from joining a gang, committing his first crime or becoming a repeat offender. In fact, this is exactly what the U.S. Supreme Court concluded in January when it ruled to allow Federal judges to deviate from sentencing guidelines. I submit, Mr. Speaker, that this bill's host of harsh mandatory sentences is directly in defiance of the Supreme Court ruling.

Mr. Speaker, we know that intervention programs work in the majority of cases. For the most violent and dangerous individuals, we already have laws on the books that address these actions. But we have a real chance through prevention and intervention programs to make a difference in the lives of these young people. Instead of expanding death penalty provisions and trying juveniles as adults, we need to address the problem of youth crime and violence through early intervention and treatment methods. Programs like Head Start and the Job Corps have proven to be an effective means of deterring crime.

Studies of Head Start demonstrate that $3 is saved for every $1 spent on the program by reducing the future cost of crime, remedial education and welfare. This is clearly more cost effective than spending $9 billion over the next 10 years for prison bed construction and inmate upkeep, which happens to be the cost impact of H.R. 1279 estimated by the Sentencing Commission.

Job Corps programs deter crime by guiding at-risk youths and adults to getting a job or full-time study. About 75 percent of Job Corps participants move on to a full-time job or study and are one-third less likely to be arrested than nonparticipants. This approach makes sense as a crime deterrent, and it is also economically beneficial.

Youth crime and gangs are an issue in many cities around the country. In my home city of Worcester, Massachusetts, I helped coordinate a community-wide forum this past fall to address the issue of gang violence. Local police, city government officials, the district attorney, the sheriff's office, and hundreds of individuals were among the attendees. Also participating in this event was the Boston Ten Point Coalition, a nationally recognized leadership foundation whose mission is to reach out to at-risk youth and gang members in hopes of reducing violence in the community.

One particular item the Coalition discussed was the Adopt-A-Gang program, in which city churches keep their doors open and serve as a support center for troubled youth. The churches work with local law enforcement to communicate messages of nonviolence and zero tolerance for crime to these youths. And I am happy to say that the churches of the city of Worcester, along with the city government, the police department and local businesses are currently working with the Coalition to implement this program.

Hands-on, coordinated efforts like the Adopt-A-Gang program are how youth crime can be deterred, not through codification of a so-called gang-buster bill like H.R. 1279. Early prevention programs like Head Start reduce crime; expansion of death penalty provisions will not. Recruitment efforts by Job Corps deter gangs; prosecuting young people as adults will not. Collaborative interventions like Adopt-A-Gang program protect our community; mandatory minimum sentencing will not.

Mr. Speaker, none of the provisions in this bill have proven to be effective ways of dealing with gangs and violent youth behavior. Instead of taking a comprehensive approach to the problem, H.R. 1279's ``punishment first, prevention last'' methodology does not dedicate any efforts toward early intervention, education or rehabilitation.

Ask any cop. Aggressive policing alone will never break the cycle of

gang violence. However, one of the things this bill also does not address is the shortage of police officers across the country. The Federal Government is cutting the COPS program. Local communities all across this country are laying off police officers at a time when we should be increasing the number of police who are on our streets. Intervention and preventive programs like Head Start, Job Corps and the Ten Point Coalition are crucial to any hopes of deterring gangs.

Mr. Speaker, for the past decade, this House has worked in a bipartisan manner to effectively draft and pass comprehensive juvenile justice legislation. This bill is a sharp break with that tradition. Getting tough should mean passing legislation that works, not just passing legislation that sounds tough.

Mr. Speaker, finally, let me just say that 16 Democratic amendments were not made in order by the Committee on Rules last night. Why? I have no idea. According to our schedule, we are going to be done today by around 4 p.m. Surely it is not because we do not have the time to be able to debate some of these important amendments.

This is the kind of legislation where people from different communities, from urban areas and from rural areas who are dealing with this issue of gang violence have important ideas. They brought them forward in the Committee on Rules last night. Yet, last night, the Committee on Rules said to 16 Democrats that you will be shut out of this debate. I do not think that is the way we should be discussing a bill like this.

So, Mr. Speaker, I would ask my colleagues to oppose H.R. 1279 and oppose the rule.

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

Mr. Speaker, I yield myself such time as I may consume to respond to my colleague by saying that all the groups he has mentioned, and so many more, also support the COPS program, too, which the President has cut by $40 million. We can talk all we want about using all this harsh rhetoric, but the bottom line is, there are laws already on the books if you commit a violent crime in this country. Right now, if you commit a murder, you will go to jail.

One of the things that is most troubling to me as we talk about how we make our communities safer, there is no talk about the fact that we are cutting funds for our local police departments. We need more police on the streets. That is not the only answer here, but clearly, the answer is not cutting the COPS program, which the Republican majority in this House is doing, and the President has suggested in his budget.

Mr. Speaker, I yield 2 minutes to the gentlewoman from Texas (Ms. Eddie Bernice Johnson).

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

I always enjoy listening to the distinguished chairman of the Committee on Rules, the gentleman from California (Mr. Dreier). He mentions that a handful of Democratic amendments were made in order, and I guess we all should be grateful on this side of the aisle because usually we get shut out totally. But the fact of the matter is 16 Democratic amendments were not made in order. Sixteen amendments have been shut out from this debate. If this issue was so important, and it is important, then why can we not take the time to debate all the various ideas? As I said, according to the schedule, we may be out of here at 4 o'clock today. I am willing to stay until 5, or even until 6 or even until 7 to give these other people an opportunity to have their concerns voiced on this floor.

We all represent communities, unfortunately, that have been touched by gang violence. All of us have dealt with community leaders, with our local police, in trying to figure out how best to deal with this violence. We all have good ideas. I think, especially on an issue like this, as many people who have these ideas should be able to bring them to the floor and to be able to debate them. But, unfortunately, 16 amendments have been totally blocked from consideration on this bill.

Mr. Speaker, I yield 4 minutes to the gentleman from Virginia (Mr. Scott).

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

The gentleman from Washington just said that our local law enforcement would appreciate the support of the Federal Government.

I could not agree with him more. Then why are we cutting community policing programs? I mean it does not make any sense to me. And why did the Committee on Rules last night deny the gentleman from Massachusetts (Mr. Capuano) and the gentleman from

New York (Mr. Weiner) the right to offer an amendment that reauthorizes the Community Oriented Policing Services, the COPS program for fiscal year 2006, 2008? That was denied. We could have had a vote on the floor today on that amendment and a full debate, and that was denied in the Committee on Rules.

The gentleman from New York (Mr. Crowley) had an amendment that would require that the purchase of firearms, ammunition and explosives to be made in person and to require records to be kept on how the purchases were made. The reason why this is an important amendment because more and more we find out that gangs are purchasing weapons over the internet. Yet that was not even made in order. I know the gun lobby does not like that amendment, but even so, if we want to make sure that gang members have a more difficult time getting access to firearms, we certainly should have debated that amendment.

The gentlewoman from Texas (Ms. Jackson-Lee) had an amendment that would make it illegal to transfer a firearm to any individual that the Federal Government has designated as a suspected or known gang member or terrorist. I am trying to find where the controversy is with that amendment. Yet the Committee on Rules would not allow that amendment to be made in order on the floor today.

The gentlewoman from Texas (Ms. Jackson-Lee), the gentleman from Virginia (Mr. Scott), the gentleman from Massachusetts (Mr. Delahunt), and the gentlewoman from California (Ms. Waters) had an amendment that strikes the section of the bill that allows the Attorney General to charge as adults those juveniles who commit violent crimes and are at least 16 years old. We can disagree on whether or not juveniles should be tried as adults, but, nonetheless, it is an important enough issue that we should have debated it on the floor here today and let Members decide that. And yet that was not made in order.

The gentlewoman from Texas (Ms. Eddie Bernice Johnson) had an amendment that establishes funding for prevention and intervention programs for the suppression of youth and gang violence. That was deemed to not be made in order.

The gentleman from California (Mr. Schiff), the gentleman from California (Mr. Cardoza), the gentlewoman from California (Ms. Watson), and the gentlewoman from California (Ms. Linda T. Sanchez) had an amendment that authorizes the expansion and the enhancement of law enforcement and community-based prevention and intervention programs targeting criminal street gangs, gang members and at-risk youth. That was ruled out of order by the Committee on Rules. I mean, I can go on and on and on. There are really good ideas here, and yet, for whatever reason, the Committee on Rules last night said they are not going to have their day on the House floor. And I do not understand why, and nobody who has spoken on the other side has explained to me why those amendments were not made in order, not even the Chairman of the Committee on Rules. We have the time. This is an important issue. These amendments should have been made in order. And, quite frankly, I think it is a disgrace and does a great disservice to a lot of people in this country who care about this issue that these Members were denied their right to offer these amendments.

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

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

What shocks me is that we have people who get up and talk about the importance of supporting our local law enforcement officials, and at the same time, we are supporting budgets that cut money to our local law enforcement agencies.

Mr. Speaker, I include for the Record a letter from the National Council of La Raza opposing this bill. I also include for the Record a statement that has been signed by the American Bar Association, the American Civil Liberties Union, Chamber of Commerce of the United States, the Children's Defense Fund, the Commission on Social Action of Reform Judaism, Leadership Conference on Civil Rights, the National Urban League, Murder Victims' Families for Human Rights, the NAACP, the National Federation of Independent Business, and the United States Conference on Catholic Bishops, all in opposition to this legislation. I also include for the Record, Mr. Speaker, a letter that has been signed by the President of Catholic Charities USA, also opposed to this legislation. And I include for the Record, so that it is there, the 16 amendments that the majority of the Committee on Rules decided to not make in order today on this important legislation.

National Council of La Raza,

Washington, DC, May 9, 2005.

Re Oppose provisions in the ``gang buster bill'' H.R. 1279

that prosecute youth as adults and impose mandatory

minimum sentences.

Dear Member of Congress: On behalf of the National Council

of La Raza (NCLR), the largest national Latino civil rights

organization in the U.S., I urge you to oppose provisions

contained in the ``Gang Deterrence and Community Protection

Act of 2005'' (H.R. 1279) which is on the suspension calendar

this week. Please be advised that NCLR will recommend that

votes relevant to the Latino community and final passage of

the bill be included in the National Hispanic Leadership

Agenda Congressional Scorecard.

The Latino community is directly affected by gang violence,

consequently NCLR is committed to finding a solution to

combat it; however, the approach in H.R. 1279 is ineffective,

irresponsible and simplistic, given that it does nothing to

get to the root causes of the problem, and it further

exacerbate youth violent behavior. H.R. 1279 will if enacted

into law, would have a disparate impact on Latino youth and

their families. This bill would undermine overa11 public

safety, given that it imposes excessively severe measures

aimed at only punishing and not reforming youth violent

behavior. Specifically, NCLR strongly opposes two

provisions--the prosecution and transfer of youth into the

adult system and the inclusion of various mandatory minimum

sentences for a broad category of offenses that are labeled

``gang crimes'' and numerous other offenses.

Section 115 of the bill allows for the prosecution and

transfer of youth into the adult system. The latest research

shows that transferring youth to adult status is a failed

public policy approach, resulting in the opposite of what

this bill is purporting to do. It will increase--not

decrease--youth violence. The research shows that young

people prosecuted as adults, compared to those prosecuted as

juveniles, are more likely to: (a) commit a greater number of

crimes upon release; (b) commit more violent crimes upon

release; and (c) commit crimes sooner upon release. The

research also shows that youth held in adult facilities,

compared to youth held in juvenile facilities, are five times

as likely to be sexually assaulted by other inmates, twice as

likely to be beaten by staff, 50% more likely to be assaulted

with a weapon, and eight times as likely to commit suicide.

With these kinds of risks, it does not make sense for the

House to pursue legislation that includes the power to

prosecute juveniles as adults in federal court for activities

that the states are already well-equipped--indeed, better-

equipped--to handle than the federal system. Also, putting

the transfer decision at the sole discretion of a prosecutor,

not a judge as the law currently requires, violates the most

basic principles of due process and fairness.

Section 103 of the bill includes and expands mandatory

minimum sentences for a broad category of offenses that are

deemed ``gang crime.'' Under this bill, the mandatory minimum

sentences for these crimes range: from 5 to 30 years.

Although the offenses are serious and individuals who are

convicted should be properly held accountable, mandatory

sentences often prevent judges from determining the

appropriate punishment. When judges are restricted by

mandatory sentences, they cannot assess an individua1s

culpability during the crime or other factors that have

bearing on recidivism, thus resulting in inappropriate

sentences.

Although mandatory minimums were intended to reduce the

racial disparities that were associated with indeterminate

sentencing, in practice they exacerbate and mask such

disparities by shifting discretion from the judge to the

prosecutor. Prosecutors retain the power to plea bargain by

offering defendants plea agreements that avoid the mandatory

penalty. Studies have shown that this discretion results in a

disparity in sentencing outcomes based largely on race and

quality of defense attorney. According to testimony from the

U.S. Sentencing Commission, in 1999, 39% of those receiving

mandatory sentences were Hispanic, 38% were African American,

and 23% were White. Hipanics comprised 44% of those subject

to five-year mandatory sentences in 1999, 37% of the ten-year

mandatory sentences, 20% of the 20-year mandatory sentences,

and 8% of the mandatory life sentences. The reality for

African American defendants is even bleaker.

NCLR respectfully asks you to oppose legislation that

prosecutes and transfers youth into the adult system and that

includes and expands mandatory minimum sentences. These

provisions will only exacerbate youth violent behavior, at a

time when data from the FBI's Uniform Crime reporting program

that breaks down the age of people arrested for serious

offenses in 2003 showed that the number of people under 18

arrested declined by 30%. Instead, NCLR calls for a

comprehensive research--based approach that gets at the root

causes of youth violence--which includes but is not limited

to prevention, treatment, and effective alternatives to

incarceration. If you have any questions please contact

Angela Arboleda, NCLR Civil Rights Policy Analyst, at (202)

776-1789.

Sincerely,

Janet Murguia,

President and CEO.

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

I will be asking Members to vote ``no'' on the previous question. If the previous question is defeated, I will amend the rule to allow the House to consider the Capuano-Weiner amendment on the COPS program. This amendment was offered in the Committee on Rules last night but was defeated on a straight party-line vote. This amendment will reauthorize the Community Oriented Policing Services, the COPS program, for the next 3 years. The COPS program, created as a result of the Violent Crime Control and Law Enforcement Act of 1994, focuses on crime prevention at the local level. This program puts law enforcement professionals on the streets and assigns them a beat so they can build mutually beneficial relationships with the people that they serve. By earning the trust of members of their community and making those individuals invest in their own safety, community policing makes law enforcement more efficient and makes America safer.

Mr. Speaker, if we are really serious about stopping the growing gang problem that is occurring in this country, we need to start at the local level, and we need to include prevention as well as enforcement. I know of no better program to meet this worthy goal than the COPS program.

Members should be aware that a ``no'' vote will not prevent consideration of the gang deterrence bill and it will not affect any of the amendments that are in order under this rule. But a ``no'' vote will allow us to add this important amendment that is one of our most effective tools in the war against violence.

Mr. Speaker, as I said at the beginning, if we are truly interested in dealing with the gang problem in this country, we need to do more than pass legislation that sounds tough. We need to have legislation that is tough, that will do the job. We need to do more than a press release here.

I urge my colleagues to vote ``no'' on the previous question.

Mr. Speaker, I ask unanimous consent that the text of the amendment be printed in the Record immediately prior to the vote on the previous question.

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

Mr. Speaker, I object to the vote on the grounds that a quorum is not present and make the point of order that a quorum is not present.

I send an amendment to the desk.

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

Mr. President, my amendment is based on S. 1735 which has been sponsored by about 29 of my colleagues. I certainly appreciate the fact that this amendment is being cosponsored by Senators Bayh, Schumer, Boxer, Carper, and Lieberman. I thank my colleagues for paying attention to what I believe is a very important issue for us to address before we adjourn; that is, the issue of price gouging and the fact that the Senate should say loud and clear that we think price gouging should be a Federal crime. That is exactly what my amendment does. It creates a new Federal statute to make sure that consumers are protected from price gouging.

How did we arrive at this point? While my colleagues, I am sure, would like to adjourn and continue to think about the complications and challenges, the American economy is being hurt by the high price of gasoline, as we saw this summer prior to Katrina. Certainly, we are anxious about the winter months and home heating oil and the costs that consumers are going to pay when they get their bills in the next couple of months.

It is important to note that Americans will spend over $200 billion more on energy this year than they did last year. That is hundreds of billions of dollars coming directly out of family budgets and the bottom lines of businesses across the country. The airline industry is expected to spend $30 billion more on fuel alone this year, which is twice what they spent in 2003. In fact, if you look at what the airline industry is expected to lose this year, it is about $9.5 billion. If you look at the increase in the expense of fuel costs for the airline industry, it is $9.2 billion.

For the airline industry, there is a high correlation between their actual loss and the amount they are paying in higher fuel costs. For the trucking industry, where diesel fuel accounts for almost a quarter of their operating expenses, each penny increase in diesel fuel costs the trucking industry $350 million a year. And what about our farmers who are obviously on low profit margins--about 5 percent--and their challenge? Well, they have had a combination of record diesel fuel costs and price increases of fertilizer of more than 20 percent. So it makes it very challenging for the American farmer to be competitive in this kind of environment.

What about the Air Force? I know the Presiding Officer is interested in the Air Force. The Air Force energy budget is expected to increase 50 percent this year, costing taxpayers another $400 million. Even the Postal Service is paying higher fuel prices, expecting to add another $300 million to the Postal Service transportation costs.

And what about the taxpayers? Well, they pay every week at the pump for higher fuel costs and they want us to protect them. But I don't know if they know that the taxpayers are even paying more for the President's travel. According to reports, the per-hour fuel cost for the travel of Air Force One has increased from $3,974 to now $6,029.

The cost of energy integrated into our economy is costing us all more money and at a time when we are seeing oil companies reach record profits and billions are being sent to countries such as Saudi Arabia, Iran, and Venezuela. I guarantee you do not have our interests at heart.

I am offering an amendment today to say that price gouging is a Federal crime and we should pass this before we adjourn.

Why is it so important to pass new Federal legislation? First, there are 28 States in America, the District of Columbia included, Gulf States such as Louisiana, Mississippi, Alabama, Florida, and Texas, that currently have price-gouging statutes on the books. These States have taken legal action to try to make sure that gas distributors or service stations or oil companies are investigated when allegations of price gouging have occurred, and certainly when you have a state of emergency as we have had after hurricanes. So these State statutes are the very statutes we are saying ought to be in Federal law.

As to examples of how these have been prosecuted at the State level, retailers have been charged with unconscionable pricing attributed to an increase in unreasonable wholesale gasoline prices or because gasoline, oil, or fuel commodities in general are raised to what is an unconscionable price. We based this on what is a New York statute that has been upheld in court. I think it is very important to note that the Federal court system has taken this term of unconscionable pricing and has Federal case law related to it.

Why did we get to this point? We got to this point primarily because current Federal law and the focus of the FTC has been whether there has been collusive pricing activities by these oil companies, collusive meaning whether they got together and fixed the price.

That Federal statute gives very little room to investigate and examine what I believe are key issues about supply and demand. We hear a lot from the oil industry that this is about simple economics and supply and demand.

I guarantee you we ought to be demanding more information about the possible manipulation of supply and why supply was exported out of the United States at a time when it was so needed for American consumers.

We need to pass a Federal price-gouging law to make sure that the current law on the books does not leave us emptyhanded when coming to pursue this issue and to make our point in protecting the American consumers.

This last week we heard from attorneys general at a joint hearing of the Senate Commerce Committee and the Senate Energy Committee talking about this issue. One attorney general from New Jersey, Peter Harvey, who has utilized his own statute on antiprice gouging, told us:

We need a Federal price gouging statute that applies

nationwide to the sale of essential goods and services.

I am also pleased that the attorney general from New York--as I said, we have based this statute on New York law--has also championed this legislation in a letter of support that I ask unanimous consent to have printed in the Record.

Attorney General Spitzer says:

Accordingly, there are levels in the chain of distribution

where Federal assistance would be both helpful and

appropriate . . .

Currently, the FTC can act against such companies if they

unlawfully agree to fix price, but cannot act if unfair

practices occur simultaneously but without collusion.

I think the Attorney General of New York has it right as to why we need this Federal statute.

We also want to make sure we are recognizing in the next several months what further damage is going to happen to the economy if we do not act, that is, if we leave here without getting a good Federal statute on the books.

For example, in my home State a farmer from Lamont, WA, wrote to tell me that his fertilizer prices have gone up 75 percent since May and 100 percent since last year, and fuel costs have gone from $2 to $3.15. Another eastern Washington farmer told me he is paying more for a gallon of fuel than he received for a bushel of grain. So these farmers are looking at this issue, and as Senator Roberts said the other day, the agricultural industry is facing something like a category 5 fuel and fertilizer hurricane. We can't leave these farmers emptyhanded this winter as we go away, without enacting a good, strong Federal statute.

Home heating oil is another issue in which consumers are going to feel an impact. For an American family, it is believed that they will pay an average of $306 or 41 percent more this winter than they did last winter. So we certainly want to implement the Federal statute to protect them during these winter months. I can tell you people are worried in my State. Unfortunately, our local jurisdictions are doing their best, but I think it shows what kind of anxiety Americans have about being able to keep warm this winter.

In my State, in Whatcom County, after the Whatcom County Opportunity Council advertised last week they would take up the low-income energy assistance applications but would only take 200 walk-ins or the first 400 phone-ins, they had over 200 people line up outside their doors, some people standing outside all night long, just to receive assistance from this program, and the local phone service, Verizon, called to say that the unusual volume of incoming calls trying to get energy assistance basically crashed the system for the entire area. I can tell you consumers are anxious about these high fuel costs.

We are dealing in the Senate with airline bankruptcies and pensions. I can tell you the airline industry has been hardest hit by the increase in fuel costs. As Southwest Airline CEO Steve Kelly told the Seattle Times recently:

We are now facing energy prices that no airlines can make

money at, at least with today's [ticket prices].

I want to make sure we do not have other pensions that are defaulted on, other people losing their jobs or their life savings because we have not enacted tough legislation saying that price gouging is a Federal crime.

The amendment I am offering today does a couple of things. First, it creates a ban on price gouging during a national emergency declared by the President of the United States. As I said earlier, the antiprice gouging standard is based on the successfully tested New York State statute.

Second, it gives the FTC and AGs and, because it creates criminal penalties, the Department of Justice the authority to levy civil and criminal penalties for proven price gouging of up to $3 million and 5 years in jail. Additionally it puts in place a new ban on market manipulation and falsifying information to the Federal Government about fuel prices, which is based on a provision of the Energy bill we passed here this year related to electricity and natural gas, trying to stop the market manipulation that happened in response to Enron and the market manipulation in the western energy crisis.

In addition, the bill gives additional remedies available to the FTC to levy fines up to $1 million for violation of market manipulation and false information.

I am very satisfied that this bill has the teeth in it that we need in a strong Federal statute to over the next several months give the Federal Government, attorneys general, and others the ability to prosecute market manipulation of energy prices.

Why do I think this is so important? My colleagues have been on the floor talking about the questions that were asked to oil company executives this week, the questions about whether they cared about tax incentives or tax breaks, whether they participated in energy meetings. My questions were more about the supply of fuel here in the United States and whether we have a greater understanding about the protection and possible manipulation of that fuel supply.

Now for my colleagues in the West who have been out on the floor, we have reeled from an energy crisis on electricity, and my colleagues, Senators Wyden from Oregon and Feinstein from California, all had economies that were very hurt by the manipulation of the electricity market. In fact, there are some cases in Federal courts now talking about the manipulation of natural gas prices. So I guarantee you with five refineries in the State of Washington, we are doing our part at refining fuel, but we still have some of the highest gas prices in the Nation and had those prior to Katrina, so my constituents want to know what are we going to do to make sure the prices are not manipulated.

Mr. President, I ask unanimous consent to have printed in the Record a letter from attorneys general across the country who are also supporting my legislation.

I am also submitting this letter for the Record because I think the attorneys general who are chief law enforcement officers across the country for their individual States said it well. If there is no market manipulation going on, then no harm, no foul. It does not mean this is an automatic incrimination; it simply means we have a good Federal statute in place. I certainly appreciate the support of those attorneys general who have signed this letter in support of this legislation.

What we found in our hearings--and the attorney general of Arizona brought this up--is over the last several years the oil industry has moved to a new inventory prop called ``just-in-time inventory.'' Just- in-time inventory is a great idea for the oil industry because it actually saves them dollars because they don't have the same amount of inventory they used to. It used to be that oil companies had a 20 to 30-day supply inventory. Now they only have about 3 to 5 days of supply. You can imagine if you only have 3 to 5 days of supply versus 30 days of supply, the price is going to be different.

Here is what Attorney General Terry Goddard said:

Just in time delivery almost leaves no cushion when

supplies are delayed.

He testified that:

The entire oil industry has moved to this just in time

delivery system vastly reducing the number of refineries

available on a nationwide basis and minimizing inventories at

stage site. The effect is a constant and precarious supply-

demand balance which is exceedingly beneficial to the

industry in lowering operating costs but harmful to consumers

so that supply is set at a fragile stage where price spikes

can occur.

I applaud the attorney general from Arizona for pointing out how important this inventory issue is and how it ought to be investigated. The Energy Department itself had a similar analysis. It found in a 2003 study:

The reduction of spare capacity has helped drive up the

price at the pump and leaves the market vulnerable to

shortages caused by plant breakdown or other unpredictable

events.

So even the Department of Energy knows the supply issue is what can drive price spikes. But what we want to know is whether oil companies are purposely exporting product. I asked a question at the hearing I thought was very important; that is, have oil companies ever exported oil products to foreign countries for a cheaper profit than they would have gotten if they would have kept the supply in the United States?

The reason I asked this question is because I wanted to know if they were artificially trying to limit supply in the United States just to drive up the price. One would think that is not something they would do. They, obviously, want to sell in the United States. There is one case in the West that we have been very sensitive to, according to the Oregonian newspaper that has reviewed what had been secret reports and documents basically found that BP/Amoco systematically jacked up west coast oil prices by exporting Alaskan crude oil to Asia for less than it could have sold it to U.S. refineries. So there is a specific example where an oil company exported product for cheaper profits just to have less supply in the United States to drive up the overall market. That, I think, is exactly what my amendment is trying to get at.

According to the Department of Energy, between January and August of this year, over 48 million barrels of refined product was exported out of the United States. As my friend, the Senator from Wisconsin, Mr. Kohl, points out, that is 24 times the amount that is stored in the Northeast heating oil reserve, a critical safety net in times of shortage.

One can imagine that my colleagues want answers to why they would export

48 million barrels of refined product at a time when, if you would have kept it in a heating oil reserve for the Midwest, it might actually keep prices down in the Midwest this winter.

As I said, I have already had enough of this as it relates to Enron. In 2001 I sat in a lot of hearings in the Energy Committee and heard from a lot of different people testifying that the electricity market had nothing to do with manipulation. It was all about the fact that some environmental laws prevented us from building enough supply.

After 3\1/2\ years of investigation, we found out there was a lot of manipulation going on that terms such as Fat Boy, Get Shorty, and Ricochet were schemes perpetrated on the consumers of the western energy market just to manipulate supply. So you can bet we want to know whether supply is being manipulated in a similar fashion in oil markets today, and we want answers.

The only way to get answers is to put a new Federal statute on the books that says price gouging is a Federal crime and to give the Federal agencies the tools to prosecute that crime.

I feel very strongly that this body needs to act on this legislation before we adjourn. We need to get this to the President's desk and get it signed.

I know my colleagues are going to offer amendments about various tax proposals and tax incentives, whether the oil industry wants those or doesn't. But I care about what is happening to the consumer, to the American farmer who is really getting squeezed out of his family farm, to those flight attendants and pilots who are losing their pensions because we have seen a 293-percent increase in jet fuel costs over 5 years, and to the small businesses in my State that can't exist on low profit margins when they see a 50-percent increase in home heating and fuel costs. So I want to protect consumers, not just now, but if this crisis happens again in the future, I want consumers to be protected.

I hope we can pass this legislation in a good bipartisan effort, that my colleagues will support every effort right now to protect consumers as we head toward the winter months, and we act responsibly in giving Federal regulators the statutes they need to prosecute these crimes.

Mr. President, I also would like to add Senators Clinton and Salazar as cosponsors of the amendment.

I reserve the remainder of my time.

Mr. President, I am pleased to introduce this bill today along with Senator Boxer as cosponsor to direct the Interior Secretary to conduct a study to evaluate the suitability and feasibility of expanding the Santa Monica National Recreation Area to include the Rim of the Valley Corridor.

The Rim of the Valley Corridor encircles the San Fernando Valley, La Crescenta, Simi, Conejo, and Santa Clarita Valleys, consisting of parts of the Santa Monica Mountains, Santa Susanna Mountains, San Gabriel Mountains, Verdugo Mountains, San Rafael Hills and connects to the adjacent Los Padres and San Bernardino National Forests.

This parcel of land is unique because of its rare Mediterranean ecosystem and wildlife corridor that stretches north from the Santa Monicas. With the population growth forecasted to multiply exponentially over the next several decades, the need for parks to balance out the expected population growth has become critical in California.

Since the creation of the Santa Monica Recreation Area in 1978, Federal, State, and local authorities have worked successfully together to create and maintain the highly successful Santa Monica Mountains National Recreation Area, the world's largest urban park, hemmed in on all sides by development.

Park and recreational lands provide people with a vital refuge from urban life while preserving valuable habitat and wildlife. With the passage of this legislation, Congress will hold true to its original commitment to preserve the scenic, natural, and historic setting of the Santa Monica Mountains Recreation Area.

With the inclusion of the Rim of the Valley Corridor in the Santa Monica Mountains Recreation Area, greater ecological health and diversity will be promoted, particularly for larger animals like mountain lions, bobcats, and the golden eagle. By creating a single contiguous Rim of the Valley Trail, people will enjoy greater access to existing trails in the Recreational Area.

After the study called for in this bill is complete, the Secretary of the Interior and Congress will be in a key position to determine whether all or portions of the Rim of the Valley Corridor warrant national park status.

This bill enjoys strong support from local and State officials and I hope that it will have as much strong bipartisan support this Congress, as it did last Congress. Congressman Adam Schiff plans to introduce companion legislation for this bill in the House and I applaud his commitment to this issue.

I urge my colleagues to support this legislation and I ask unanimous consent that the text of this proposed legislation be printed in the Record.

Mr. President, I rise today to join my good friend and colleague Senator Orrin Hatch, to introduce the ``Gang Prevention and Effective Deterrence Act of 2005.''

Gangs are spreading across our country, increasing in violence and power in every State. The growth and spread of these gangs illustrate the simple fact that they are no longer a local problem. They are a national problem, and require a national solution. This bill is designed to contribute to that solution by bringing together Federal, State and local law enforcement, equipping them with the right legal tools, and providing authorization for funds to make this partnership effective.

First, let me illustrate the scope of the problem we face: In 2002, there were approximately 731,500 gang members and 21,500 gangs in the United States. Additionally, the FBI report on national crime statistics found that youth-gang homicides had jumped to more than 1,100 in 2002, up from 692 in 1999. According to a report commissioned by a coalition of big city police chiefs, gang-related killings skyrocketed by 50 percent from 1999 to 2002. In 2002, there were a little more than 16,000 homicides in the United States--more than a thousand of those murders were gang-related. In Southern California alone there have been about 3,100 gang-related killings since 1999. 87 percent of U.S. cities with a population of more than 100,000 have reported gang problems, according to the Department of justice.

The bottom line is that this is a major problem.

This legislation before us today squarely addresses these serious issues. Its main point is to create a new type of crime, by defining and criminalizing ``Criminal Street Gangs.'' This recognizes the basic point of a street gang--it is more powerful, and more dangerous, than its individual members. Defeating gangs means recognizing what is so dangerous about them, and then making that conduct against the law.

This bill does exactly that. It makes illegal participation in a criminal street gang a federal crime. A ``criminal street gang'' is defined to mean a formal or informal group, club, organization or association of 3 or more persons who act together to commit gang crimes. This legislation makes it a crime for a member of a criminal street gang to commit, conspire or attempt to commit two or more predicate gang crimes; or to get another individual to commit a gang crime. The term ``gang crime'' is defined to include violent and other serious State and Federal felony crimes such as: murder, maiming, manslaughter, kidnapping, arson, robbery, assault with a dangerous weapon, obstruction of justice, carjacking, distribution of a controlled substance, certain firearms offenses and money laundering. And it criminalizes violent crimes in furtherance or in aid of criminal street gangs.

These two provisions are at the heart of this legislation. Armed with this new law, Federal prosecutors, working in tandem with State and local law enforcement, will be able to take on gangs in much the same way that traditional Mafia families have been systematically destroyed by effective RICO prosecutions. The legislation also recognizes that the core changes, standing alone, are not sufficient.

The Gang Prevention and Effective Deterrence Act is a comprehensive bill to increase gang prosecution and prevention efforts. The bill authorizes approximately $650 million over the next five years to support Federal, State and local law enforcement efforts against violent gangs including the funding of witness protection programs and for intervention and prevention programs for at-risk youth. In support of this effort, the bill increases funding for Federal prosecutors and FBI agents to increase coordinated enforcement efforts against violent gangs.

Witness protection is particularly important--as an example, recent press reports from Boston show that gang members are distributing what is, in essence, a witness intimidation media kit, complete with graphics and CDs that warn potential witnesses that they will be killed--one CD depicts three bodies on its covers. In another incident, a witnesses' grand jury testimony was taped to his home--soon afterward he was killed.

The Act also creates new criminal gang prosecution offenses, enhances existing gang and violent crime penalties to deter and punish illegal street gangs, proposes violent crime reforms needed to effectively prosecute gang members, and proposes a limited reform of the juvenile justice system to facilitate Federal prosecution of 16 and 17 year old gang members who commit serious acts of violence--specifically it:

Makes recruiting minors to join criminal street gangs a Federal crime and requires offenders to pay the costs associated with housing and treating any recruited minor who is prosecuted for their gang activity.

Makes murder and other violent crimes committed in connection with drug trafficking Federal crimes.

Creates a new offense of multiple interstate murders, where an individual crosses State lines and intends to cause the death of two or more people.

Allows for prosecution of gang members who cross State lines to obstruct justice, intimidate or retaliate against witnesses, jurors, informants, or victims.

Creates tougher laws for certain Federal crimes like assault, carjacking, manslaughter, conspiracy, and for specific types of crimes occurring in Indian country.

Requires that someone convicted of hiring another person to commit murder be punished with imprisonment, instead of a fine.

Makes sexual assault a predicate act under RICO and increases the maximum sentences for these RICO crimes.

Allows for detention of persons charged with firearms who have been previously convicted of prior crimes of violence or serious drug offenses. Current law does not allow a prosecutor to

ask that a person be held without bail even if the person has previously been convicted of a crime of violence or a serious drug offense. This bill would allow prosecutors to make that request of a judge but would allow a criminal defendant the right to argue why he or she should not be held.

Makes it clear that in a death penalty case, the case can be tried where the murder, or related conduct, occurred.

Extends the time within which a violent crime case can be charged and tried. For violent crime cases, the time is extended from 5 years to 10 years after the offense occurred or the continuing offense was completed, and from 5 years to 8 years after the date on which the violation was first discovered.

Permits wiretaps to be used for new gang crimes created by this bill.

Allows for a murdered witness's statements to be admitted at trial in cases where the defendant caused the witness's death.

Makes clear where a case can be tried involving retaliation against a witness--in either the district where the case is being tried, or where the intimidation took place.

Increases penalties for criminal use of firearms in crimes of violence and drug trafficking.

Includes modified juvenile provisions. This bill will allow prosecutors to more easily charge 16 and 17 year olds who are charged with serious violent felonies. A judge will review every decision a prosecutor makes to charge a juvenile as an adult.

Creates and provides assistance for ``High Intensity'' Interstate Gang Activity areas. This legislation requires the Attorney General to designate certain locations as ``high intensity interstate gang activity areas'' and provides assistance in the form of criminal street gang enforcement teams made up of local, State and Federal law enforcement authorities to investigate and prosecute criminal street gangs in each high intensity interstate gang activity area.

Authorizes funding of $500 million for 2004 through 2008 to meet the goals of suppression and intervention: $50 million a year will be used to support the criminal gang enforcement teams. $50 million a year will be used to make grants available for community-based programs to provide for crime prevention and intervention services for gang members and at-risk youth in areas designated as high intensity interstate gang activity areas.

Authorizes $150 million over five years to support anti-gang efforts including: Expanding the Project Safe Neighborhood program to require U.S. Attorneys to identify and prosecute significant gangs within their district; coordinating such prosecutions among all local, State, and Federal law enforcement; and coordinating criminal street gang enforcement teams in designated high intensity interstate gang activity areas. Supporting the Federal Bureau of Investigation's Safe Streets Program. Creating and expanding witness protection programs, the hiring of additional State and local prosecutors, funding gang prevention and community prosecution programs and purchasing equipment to increase the accurate identification and prosecution of violent offenders.

The bottom line is that this legislation would provide the tools and the resources to begin that national task of destroying criminal street gangs. It is designed to emphasize and encourage Federal, State and local cooperation. It combines enforcement with prevention. It is a tough, effective and fair approach.

This is not a new bill. I have been working on it for almost ten years. In 1996, I joined Senator Hatch and others to develop the Federal Gang Violence Act, which would have increased criminal penalties for gang members, made recruiting persons into a criminal street gang a crime, and enhanced penalties for transferring a gun to a minor. Many of the provisions of that bill were incorporated into the 1999 Juvenile Justice bill, which was approved overwhelmingly (73-25) by the Senate in the 106th Congress. However, the Juvenile Justice bill stalled in conference, and these provisions were never signed into law.

In the years that followed we kept up our efforts, with Republicans and Democrats working together on this critical issue. In the 108th Congress a version of this bill was introduced, and eventually was co- sponsored by Senators Hatch and others. That bill was the subject of much discussion and debate. Some of my colleagues raised some valuable suggestions and criticisms, many of which were incorporated in the bill last year. The result of that compromise was reported favorably by the Judiciary Committee last Fall, but was never considered by the full Senate.

The legislation today is the same as that which was approved by the Judiciary Committee, and I hope this year we will move quickly to pass it into law. That said, I understand that some of my colleagues are still concerned about certain aspects of the bill. My intention is to continue to negotiate in the weeks ahead. I am open to change, and welcome further discussion and analysis.

We all agree that gangs are a terrible and growing problem. We all agree that something needs to be done. I believe that this legislation is desperately needed, and I look forward to working with my colleagues on both sides of the aisle to take this bill and make it law.

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

Absolutely on all points.

No, it is not. The definition of a motion picture exhibition facility includes the concept that the exhibition has to be ``open to the public or is made to an assembled group of viewers outside of a normal circle of a family and its social acquaintances.'' This definition makes clear that someone recording from a television in his home does not meet that definition. It is important to emphasize that the clause ``open to the public'' applies specifically to the exhibition, not to the facility. An exhibition in a place open to the public that is itself not made to the public is not the subject of this bill.

Thus, for example, a university film lab may be ``open to the public.'' However, a student who is watching a film in that lab for his or her own study or research would not be engaging in an exhibition that is ``open to the public.'' Thus, if that student copied an excerpt from such an exhibition, he or she would not be subject to liability under the bill.

Of course not. The statute covers only a person who ``knowingly uses or attempts to use an audiovisual recording device to transmit or make a copy of a motion picture or other audiovisual work protected under Title 17, or any part thereof. . . .'' In other words, the defendant would have to be making, or attempting to make, a copy that is itself an audiovisual work, or make, or attempt to make, a transmission embodying an audiovisual work, as that term is defined in Section 101 of Title 17. As such, the Act would not reach the conduct of a person who uses a hearing aid, a still camera, or a picture phone to capture an image or mere sound from the movie.

This is a criminal provision under Title 18, not a copyright provision under Title 17. Accordingly, there is no fair use exception included. However, Federal prosecutors should use their discretion not to bring criminal prosecutions against activities within movie theaters that would constitute fair use under the copyright laws. The object of this legislation is to prevent the copying and distribution of motion pictures in a manner that causes serious commercial harm. This legislation is not intended to chill legitimate free speech.