A bill to amend title 18, United States Code, to prohibit the unauthorized disclosure of classified information.

Mr. President, today I am introducing the Export Products Not Jobs Act of 2006. Tomorrow, the Senate Finance Committee will hold a hearing to tackle the issue of tax reform and will hear from the chairman and vice chairman of the President's Advisory Panel on Federal Tax Reform. The panel's report took a broad look at our current tax law and made numerous recommendations. I agree with some of the recommendations and have concerns about others, but believe that the report provides a good starting place for a thorough discussion of tax reform.

In 1994, the IRS estimated that a family that itemized their deductions and had some interest and capital gains would spend 11\1/2\ hours preparing their Federal income tax return. This estimate has increased to 19 hours and 45 minutes in 2004. It is time for Congress to pass bipartisan tax legislation in the style of Tax Reform Act of 1986, which greatly simplified Tax Code. And our tax reform should be based upon the following three principles: fairness, simplicity, and opportunity for economic growth.

Our Tax Code is extremely complicated. Citizens and businesses struggle to comply with ru1es governing: taxation of business income, capital gains, income phase-outs, extenders, the myriad savings vehicles, recordkeeping for itemized deductions, the alternative minimum tax, AMT, the earned-income tax credit, EITC, and taxation of foreign business income. I believe that our international tax system needs to be simplified and reformed to encourage businesses to remain in the United States. And today, I am introducing legislation that I hope will be fully considered as we begin our discussions on tax reform.

Presently, the complexities of our international tax system actually encourage U.S. corporations to invest overseas. Current tax laws allow companies to defer paying U.S. taxes on income earned by their foreign subsidiaries, which provides a substantial tax break for companies that move investment and jobs overseas. Today, under U.S. tax law, a company that is trying to decide where to locate production or services--either in the United States or in a foreign low-tax haven--is actually given a substantial tax incentive not only to move jobs overseas but to reinvest profits permanently, as opposed to bringing the profits back to re-invest in the United States.

Recent press articles have revealed examples of companies taking advantage of this perverse incentive in our Tax Code. For instance, some companies have taken advantage of this initiative by opening subsidiaries to serve markets throughout Europe. Much of the profit earned by these subsidiaries will stay in Ireland and the companies will therefore avoid paying U.S. taxes. Other companies have announced the expansion of jobs in India. This reflects a continued pattern among some U.S. multinational companies of shifting software development and call centers to India, and this trend is starting to expand to include the shifting of critical functions like design and research

and development to India as well. Some companies are even outsourcing the preparation of U.S. tax returns.

The Export Products Not Jobs Act of 2006 would put an to end to these practices by eliminating tax breaks that encourage companies to move jobs overseas and by using the savings to create jobs in the United States by repealing the top corporate tax rate. This legislation ends tax breaks that encourage companies to move jobs by: (1) eliminating the ability of companies to defer paying U.S. taxes on foreign income; (2) closing abusive corporate tax loopholes; and (3) repealing the top corporate rate. It removes the incentive to shift jobs overseas by eliminating deferral so that companies pay taxes on their international income as they earn it, rather than being allowed to defer taxes.

Last month, the Ways and Means Subcommittee on Revenue held a hearing on international tax laws. Stephen Shay, a former Reagan Treasury official, testified that our tax rules ``provide incentives to locate business activity outside the United States.'' Furthermore, he suggested that taxation of U.S. shareholders under an expansion of Subpart F would be a ``substantial improvement'' over our current system. The Export Products Not Jobs Act of 2006 does just that.

Our current tax system punishes U.S. companies that choose to create and maintain jobs in the United States. These companies pay higher taxes and suffer a competitive disadvantage with a company that chooses to move jobs to a foreign tax haven. There is no reason why our Tax Code should provide an incentive that encourages investment and job creation overseas. Under my legislation, companies would be taxed the same whether they invest abroad or at home; they will be taxed on their foreign subsidiary profits just like they are taxed on their domestic profits.

This legislation reflects the most sweeping simplification of international taxes in over 40 years. Our economy has changed in the last 40 years and our tax laws need to be updated to keep pace. Our current global economy was not even envisioned when existing law was written.

The Export Products Not Jobs Act of 2006 that I am introducing today will not hinder our global competitiveness. Companies will be able to continue to defer income they earn when they locate production in a foreign country that serves that foreign country's markets. For example, if a U.S. company wants to open a hotel in Bermuda or a car factory in India to sell cars, foreign income can still be deferred. But if a company wants to open a call center in India to answer calls from outside India or relocate abroad to sell cars back to the United States or Canada, the company must pay taxes just like call centers and auto manufacturers located in the United States.

Currently, American companies allocate their revenue not in search of the highest return, but in search of lower taxes. Eliminating deferral will improve the efficiency of the economy by making taxes neutral so that they do not encourage companies to overinvest abroad solely for tax reasons.

The Congressional Research Service stated in a 2003 report that, ``[a]ccording to traditional economic theory, deferral thus reduces economic welfare by encouraging firms to undertake overseas investments that are less productive--before taxes are considered--than alternative investments in the United States.'' Additionally, a 2000 Department of Treasury study on deferral stated, ``[a]mong all of the options considered, ending deferral would also be likely to have the most positive long-term effect on economic efficiency and welfare because it would do the most to eliminate tax considerations from decisions regarding the location of investment.''

The revenue raised from the repeal of deferral and closing corporate loopholes would be used to repeal the top corporate tax rate of 35 percent. The tax differential between U. S. corporate rates and foreign corporate rates has grown over the last two decades and the repeal of the top corporate rate is a start in narrowing this gap.

The Export Products Not Jobs Act of 2006 would promote equity among U.S. taxpayers by ensuring that corporations could not eliminate or substantially reduce taxation of foreign income by separately incorporating their foreign operations. This legislation will eliminate the tax incentives to encourage U.S. companies to invest abroad and reward those companies that have chosen to invest in the United States. I urge my colleagues to join me in this effort, and ask for unanimous consent that the full text of the bill be printed in the Record.

Mr. President, I rise today as ranking Democrat on the Committee on Small Business and Entrepreneurship, in support of a bipartisan bill being reported out of our committee, the Small Business Reauthorization and Improvements Act of 2006. This bill, which originated in our committee and which is the product of many Senators' work, was voted out unanimously, 18 to 0. While there are no official cosponsors of the legislation because it is an original bill being reported out of committee, I would have been pleased to be added as an original cosponsor, and Senators Landrieu, Cantwell, Lieberman and Vitter also asked to be added as cosponsors. I would like to thank my colleague from Maine, Senator Snowe, for making this a bipartisan process. This is the fourth Small Business reauthorization bill I have worked on, having been a member of the committee for 21 years. Our committee has the reputation for working across party lines to put what is important for small businesses first, and I appreciate that the Chair and her staff have worked with us on reauthorization with that goal in mind. The result is a comprehensive approach to reauthorizing the SBA for the next 3 years that includes not Republican or Democratic priorities but instead the priorities of America's small businesses.

This reauthorization could not have came at a more opportune time to tackle some of the issues that are eating away at our small business programs and at the core mission of the SBA--which is to foster small business growth and bridge the gaps left by the private sector.

One of the most important things we are here to do today is to address the shortcomings and failures of the SBA's disaster loan program. Nearly a year has passed since Hurricanes Katrina, Rita and Wilma battered the gulf coast, and in that year I have visited New Orleans on three occasions. I can tell you that many of the streets are still covered in debris, and that many of the region's small businesses are barely keeping their doors open. The SBA needs to be prepared to handle an emergency of this magnitude. Thanks in large part to the hard work of Senator Landrieu and her dedicated staff, this bill provides the tools to respond swiftly and effectively following future large scale disasters.

Through federally guaranteed bridge loans, States can offer small businesses short-term access to capital so that they can remain open while they wait for other sources of assistance to come through. We provide the President with the authority to declare a new category of disaster--a catastrophic national disaster--which triggers nationwide economic injury disaster loans for businesses located outside the immediate geographic disaster area. And we improve the way SBA and FEMA coordinate disaster assistance. A greater importance needs to be placed on serving the victims, by making the process of applying for and receiving Federal assistance as painless and user friendly as possible. That is why we give the SBA the authority to work with private lenders to get disaster loans out quickly--an idea that members of our committee tried to get SBA to embrace last year. This will only work if we can ensure that these loans do not come at a high cost to disaster victims. We are hopeful that our approach will keep interest rates down.

This bill also addresses the effects that the energy crisis is having on America's small businesses. Gas prices are once again approaching record highs, and for the small businesses that depend on fuel to put food on the table, rising prices mean more than having to decide whether or not to drive to work. Included in the bill is the bipartisan Small Business Energy Emergency Relief Act, a bill which has passed the Senate before, which provides low-interest loans to small businesses dependent on fuel. The loans are triggered when oil prices increase significantly over the average price from the previous two years. This proposal is complemented by Chair Snowe's 7(a) express loans for small businesses that are willing to invest in renewable energy solutions.

In looking at our core programs, this bill makes a strong statement about the need for the SBA to fill the lending gap in our minority communities. It is unacceptable that since 2001, while numbers of 7(a) loans have gone up for African Americans, the actual dollars loaned have remained stagnant. In the Microloan program, African Americans received 28 percent of the total number of microloans made in 2001 as compared to only 21 percent of the total number of loans made in 2005. Native Americans went from 2 percent of the total number of microloans made in 2001 to less than 1 percent--a mere .93 percent--in 2005. If this trend continues--Native Americans alone will be completely cut out of the Microloan program. The stagnant lending in these communities represents a failure of this administration to expand access to capital to our underserved communities, communities where conventional lending is not meeting the need.

The bill provides an incredible framework for the SBA to reverse this trend. It creates an Office of Minority Small Business Development at the SBA, similar to offices devoted to business development of veterans and women and rural areas, and, it creates a grant program to develop a cross campus curriculum at Historically Black Colleges and Universities, Tribal Colleges, and Hispanic-Serving Institutions to encourage minority students in a wide range of fields to consider entrepreneurship. There is much to be done to bridge the wealth gap in minority communities and this is one approach worth pursuing. Finally, the bill incorporates legislation from my colleague, Senator Johnson, to provide financial assistance to tribal governments, tribal colleges, Native Hawaiian organizations, and Alaska Native corporations to create Native American business centers.

One of the keys to ensuring access to capital is making sure that SBA-backed financing remains affordable to the small business community. As we all know, the administration insisted on eliminating all funding for 7(a) loans and shifting the cost to borrowers and lenders by imposing higher fees. The President's budget reveals that borrowers and lenders already pay too much in fees, generating more than $800 million in overpayments since 1992 because the government routinely overestimates the amount of fees needed to cover the cost of the program. This bill seeks to address overpayments by requiring the SBA to lower fees if borrowers and lenders pay more than is necessary to cover the program costs or if the Congress appropriates money for the program.

The bill also reauthorizes the PRIME program through 2009 and includes a provision that Senator Bingaman and I worked closely to develop that will expand PRIME with a separate $2 million authorization to provide technical assistance and counseling to disadvantaged Native American small business owners. The bill also includes technical yet important changes in the Microloan program such as making loans to persons with disabilities as one of the statutorily enumerated ``purposes'' of the Microloan program and changing the average smaller loan size in the Microloan program from $7,500 to $10,000.

In reauthorizing one of our other core programs, SBA's 504 loan program, I am pleased that we were able to come

up with a bipartisan approach to preserving the local economic development focus of the program. The ability of our certified development companies, CDCs, to expand operations into multiple States, in conjunction with the growing demand for 504 loans, required that we put in place accountability measures. The 504 program was not created for CDCs to expand operations and simply create revenue from one state to another. CDCs are more than lenders and should not act like for- profit banks. This bill allows CDC board members to serve on another CDC board, but institutes safeguards to prevent control of multiple boards.

The bill also incorporates legislation I have introduced to create a Child Care Lending Pilot Program to expand the availability of affordable, quality childcare in this country by using the 504 loan program to spur the establishment and expansion of childcare providers. Right now only for-profit childcare businesses are eligible for 504 loans, yet in some States a majority of affordable childcare is delivered through nonprofit providers and in the neediest communities nonprofits are often the only provider.

I am pleased that our bill reauthorizes the Women's Business Centers and makes permanent the Women's Business Center Sustainability Pilot Program through the creation of 3-year ``renewal'' grants for centers with sustainability grants, and 4-year ``initial'' grants for new centers across the country. We should not be abandoning our existing centers--many of which leverage Federal dollars to do excellent work in our communities--to run and create new ones. Senator Snowe and I have been fighting for this for a long time, since I first introduced legislation in 1999: It is time we get this adopted. Our bill also reauthorizes Small Business Development Centers and builds on this excellent resource by creating a pilot program to provide regulatory assistance to small businesses, in addition to the role SBDCs play in the minority entrepreneurship initiative.

One area of our bill which does not deal with reauthorizing SBA programs is just as critical to small businesses--Federal contracting. Earlier this month, we heard the new SBA inspector general Eric Thorson testify about the largest impediments to small businesses receiving their fair share of prime and subcontracting opportunities. He explained how many of the problems in applying and enforcing small business contracting statutes are simply due to contracting officer error. Contracting officers do not know or do not care about small business requirements, and small businesses suffer the consequences. This bill seeks to do something about the disregard that is shown to small businesses with respect to federal procurement policy.

Procurement center representatives, or PCRs, are responsible for advocating on behalf of small businesses in cases affecting Federal contracting, such as the bundling or consolidation of contracts. Unfortunately, there are not enough of them to effectively get the job done. By requiring the SBA to assign no fewer than one PCR per major procurement center, this bill takes steps to limit the incidence of contractor error referred to by Mr. Thorson. We can no longer tolerate the level of neglect that is currently the norm. It is time for the SBA to staff up and fulfill its responsibility as a watchdog for small businesses.

In addition to mandating adequate staffing levels, this bill takes many significant steps to enforce subcontracting and bundling laws already on the books. Firms bidding for small business contracts are required to certify annually as small businesses so we do not have large businesses taking small business contracts, and large prime contractors are required to certify that subcontracting goals will be met. If subcontractors are not paid on a timely basis, Federal agencies are permitted to withhold payments and to pay subcontractors directly. We must stop fraudulent misrepresentation by large firms, and require the administration to start looking out for the interests of small firms that want to do business with the Federal Government.

The time has also come to implement the women's procurement program. The administration has postponed implementing a women's procurement program that became law 6 years ago. This bill tells SBA to get it done within 90 days. It also makes clear that America's service disabled veteran small businesses deserve the same advantages as other subgroups with respect to sole source contracting. Our veterans are returning from Iraq and Afghanistan, and we owe it to them to give them every opportunity at fulfilling the dream of entrepreneurship.

Another program sorely needing our attention: The 8(a) program was created to assist socially and economically disadvantaged small businesses, but the financial threshold for inclusion in the program is out dated and too restrictive. This bill allows for an inflationary adjustment to be made so that businesses that belong in this program aren't being shut out.

Finally, let me say a few words about SBIR, the Small Business Innovation Research Program. The Small Business Committee had a hearing on SBIR earlier this month, and at that time, I made clear my concern that we were being premature in going ahead with reauthorizing SBIR when the program's authorization doesn't expire until 2008. There is a $5 million National Academy of Sciences study due to come out at the end of this year that I am certain will give us much to consider. Yet, this bill does reauthorize SBIR, making it permanent, and it includes some strong provisions to protect SBIR companies' intellectual property and to reign in excessively large awards--which are a particular problem at NIH. While SBIR Phase IIs are supposed to be $750,000, NIH Phase II are often larger. One Phase II award reportedly equalled $6 million. While the firms getting these large awards may be doing important work, we need to keep in mind that if one firm receives $6 million, there are many firms that are not getting Phase IIs at all. That is why I am glad that we have adopted Senator Bayh's proposal to increase the overall share of SBIR funds from 2.5 percent to 5 percent of Federal research budgets, so that more small businesses will have a chance to compete in this program. I also support several provisions in the bill to encourage commercialization, one of the biggest challenges facing the program.

There is one provision in this bill that was added during our committee markup which concerns me, a provision which gives Federal agencies the option to direct 25 percent of SBIR funds to firms which are majority backed by venture capital investment. The firms which will benefit from this provision are primarily biotechnology firms and no one disagrees that they are doing critical work and should receive Federal support. I am committed to finding a way to help biotechnology firms but I am concerned that this set-aside may crowd out small firms that are not blessed with venture capital. SBIR is the only Federal research and development program devoted to small business and it has been universally praised for fostering innovative technologies and lifesaving therapies and medical devices that may never attract the support of venture capital firms. SBIR serves as seed funding for the companies that are willing to take on these research and development projects. It is important to retain the integrity of this program, and I look forward to working with my colleagues to find a way to strike a balance so that we can continue to support cutting edge research that is at so early a stage it has yet to attract the private sector.

Mr. President, before I close, I want to note that while this bill is truly bipartisan, so was our last reauthorization bill back in 2003, S. 1375. However, the reauthorization bill that was finally adopted back in 2004, was a notably partisan product, attached to an omnibus appropriations bill, with almost all Democratic provisions dropped. I urge the Senate to maintain today's spirit of bipartisanship as we move forward, so that the final reauthorization bill truly reflects all of our efforts.

Will the Senator yield?

I commend my colleague from Rhode Island for raising this issue, particularly the point he raised about how long we have known about this.

I commend to my colleagues a report dated March 28 of this year, Army Equipment RESET Update to HAC-D.

I further ask my colleague, just to make the point, this has been known for some time. The fact that the

Commander in Chief did not send up a budget, including the necessary resources knowing exactly what my colleague from Rhode Island has described, is troublesome. I commend him in joining our colleagues who offered the amendment last evening, although I would still suggest we are still in excess of $6 billion short of what our uniformed services are telling us they need.

It might be appropriate here to have an amendment that would include a soft mark that would allow the military, if they are able to do it, have the resource capability to fill in the gaps that are necessary. The amount we are talking about here, based on what we presently know, would allow them to meet what they can do with the money that has been appropriated, yet there is a significant shortfall still, but to make sure the units are going to be combat ready. Lord forbid they are called upon to respond to a crisis in the Korean Peninsula or elsewhere.

I appreciate the comments of my colleague from Rhode Island. I will have some comments myself, and then discuss the possibility of an amendment that might require the soft mark that would not require the spending to occur, but if the military could use those resources, we ought not to deprive them of the cash they need if the units are ready. I do not know if he has any additional comments to make.

Mr. President, I want to take a few minutes, if I can, and speak on similar subject matter. I appreciate the comments of the distinguished Senator from Alaska and my great friend from Hawaii who brings a wealth of knowledge and information, including his personal experiences, of the importance of adequate equipment.

America's soldiers, sailors, airmen, and marines are courageously waging wars on two fronts against terrorism and militant insurgents, with 19,000 U.S. servicemembers still engaged in combat in Afghanistan and 132,000 of our troops in uniform in Iraq, as we speak this morning on the floor of the Senate.

No other military service bears the brunt of these military operations more than the U.S. Army and Marine Corps. And no other Americans are sacrificing more in these wars than the soldiers, marines, and their families involved in these conflicts.

It is therefore critically important, as Senator Reed from Rhode Island has pointed out, and my colleagues on the floor--Senator Inouye and Senator Stevens--that we pay particular attention to their uniformed leadership when these leaders speak out about equipment shortfalls that they warn could jeopardize our missions and our military's overall combat readiness.

When the U.S. Army's Chief of Staff repeatedly sounds the alarm in testimony before Congress--repeatedly--that the budgets drawn up by the civilian leaders at the Pentagon and the White House have left them with a $17 billion shortfall in vehicles and equipment they need, then we should take heed and listen to what they are saying.

And when our Army and Marine Corps' top leaders are telling us such shortfalls are so severe that major portions of their forces are unprepared for combat duty, then I think we need to take action.

I am deeply concerned, as I think others are, that we are not meeting our obligations to these men and women in uniform. Amendments may serve as a first step toward addressing the needs of our soldiers and marines. Out of the $17 billion identified by the Army Chief of Staff that is needed to address equipment shortfalls, the amendment that was adopted last evening would add $7.8 billion on top of the $2.5 billion that is also included in the underlying bill, and another $5.3 billion for the Marine Corps.

Nonetheless, I remain concerned, as I hope my colleagues are as well, that there remains almost a $7 billion shortfall of what we are being told by the uniformed military leaders we need to address the Army's outstanding requirements, as expressed by GEN Pete Schoomaker, the Army's top general.

As the Senator from Rhode Island has pointed out, these shortfalls have been known for months. The report that I included in the Record a moment ago is dated March of this year. They were not suddenly discovered last evening or in the last few days. I have a slide presentation that the Army provided to the House Appropriations Committee on March 28 of this year that specifically identifies all of these shortfalls without exception. And yet, despite that briefing in March, the administration and Congress did little or nothing about it.

Today, I do not think we can stand by--in the remaining days of this Congress--and allow this Congress to proceed further without addressing our Nation's major and most pressing needs, particularly as our men and women in uniform continue to defend America in combat operations each and every day.

We are not talking about arbitrary budget numbers that we pulled out of

thin air. These are very specific allocations requested by our top leaders in uniform--leaders such as General Schoomaker and his deputies: LTG James Lovelace and LTG David Melcher. They have testified repeatedly--repeatedly--that the Bush administration has once again proposed a Defense budget that falls far short of what our troops need.

As far as this Senator is concerned, the days of sort of nickel and dimming our national defense needs should be over when it comes to these soldiers in uniform. We can no longer afford to continue down the path the Bush administration has brought us.

Regrettably, this is not the first time we have had to address the administration's poor budget planning for this war. But I hope it might be the last. I have come to the floor to try to address, in the past, some lacking resources for our military's essential equipment needs from the very first year of this conflict.

In 2003, the Army identified $322 million in shortfalls in critical health and safety gear--ranging from body armor, camelback hydration systems, and combat helmets, to equipment for deactivating high explosives--all of them are listed as priorities that the Rumsfeld Pentagon and Bush administration failed to provide in their initial budgets.

I offered an amendment, in 2003, to the emergency appropriations bill to resolve those problems. Unfortunately, the administration opposed this legislation, and the amendment was defeated, despite the fact that our top uniformed military leaders were asking otherwise.

In 2004, we tried a different approach, in an amendment I offered requiring the Department of Defense to reimburse military personnel who bought equipment for their military service in Iraq and Afghanistan that the Rumsfeld Pentagon had failed to provide. This time, despite ardent objections from the Secretary of Defense, Congress approved the legislation. And in October 2004, the President signed that bill--the larger bill which included those amendments--into law.

We approved similar legislation last year because the Pentagon did not act on them, despite the fact that Congress had voted overwhelmingly in support of those provisions and the President signed them into law. And on the very day I offered a new amendment, I received a call from the Pentagon saying on that day--a year later-- they were beginning to implement the legislation as required under law.

This year, the difficulties associated with equipment shortfalls pose a far more serious problem. The ones I identified earlier, which my colleagues will recall--having servicemen stand up and admit they were rummaging--rummaging--through garbage dumps in Baghdad to provide equipment to up-armor their humvees and other equipment because they were not getting it from the Pentagon. These were not some dissidents, some activists outside complaining. These were our men and women in uniform telling us what they had to do in a theater of war to protect themselves because they were not getting it from the Pentagon

Well, today the problems are more serious. The ones that Senator Reed has identified are real. And the concerns are being expressed by our top military leaders. It is disgraceful it takes an amendment being offered on the floor of Congress to try to provide for these needs rather than coming from the leaders at the Pentagon, the civilian leadership or out of the White House.

We are not talking today about a shortage of flapjackets or gun scopes. Today, the challenge is that our Army's entire fleet of tanks, aircraft, and vehicles are wearing out. And we are not doing enough about it.

Recent media accounts have indicated that the administration's failure to fund the replacement and repair of this critical hardware is greatly affecting America's overall military readiness. The Associated Press reported on July 26 that up to two-thirds of the Army's combat brigades are not ready for wartime missions, largely because they are hampered by equipment shortfalls.

In other words, if America does not finally heed the warnings of the U.S. military's top generals, and fully fund our equipment needs, the Armed Force's ability to respond to future challenges to America's national security--whether on the Korean Peninsula, the Middle East or elsewhere in the world--could be harmed, to put it mildly.

Maintaining a wartime military is very different from business as usual--something I am afraid that the Rumsfeld Pentagon does not seem to entirely understand, after 5 years of combat in Iraq and Afghanistan. Having 16 to 18 combat brigades deployed in combat at one time over the last year 3 years, in addition to other U.S. forces, has placed tremendous stress on the military's equipment.

In Iraq, U.S. tanks are being driven over 4,000 miles per year--five times the expected annual usage of 800 miles. Army helicopters are experiencing usage rates up to two to three times their planned usage. The Army's truck fleet is experiencing some of the most pronounced problems of excessive wear, with usage rates of five to six times the normal rates, further exacerbated by the addition of heavy armor.

This increased use, obviously, shortens the life of equipment and demands much earlier and larger investments in maintenance and procurement. On top of that, our equipment is being further degraded by the sand and extreme heat in that part of the world, which harm the mechanical and electronic systems, not to mention rocket-propelled grenade and explosive attacks that are causing grave harm and loss of equipment at an alarming rate.

As this chart I put up shows, just a few years in combat will age military equipment dramatically. These statistics are coming from the U.S. Army. They are not ones I made up. So my colleagues can appreciate what we are talking about here.

For example, the Abrams tank, listed up here--it may be hard to read on the TV screen--but the first item here, the Abrams tank, usually has a lifespan of 20 years before it needs to be overhauled. It is seeing its lifespan being cut short to just over 5 years because of where they are.

The flatbed truck, which we have listed here as well--this item here--normally has an expected lifespan of 20 years. It is getting 3.3 years today--substantially less than would normally be expected to be the case.

The humvee has a 15-year normal, expected lifespan. And 2.5 years is what we are getting here.

The semitrailers and trailers--all 20 to 15 years--but the actual numbers they are getting is in the range of 2.5 to 3.3 years

This is what we are being told and have been told repeatedly. These numbers didn't pop up yesterday or the week before. We have been told repeatedly by top military leaders that this problem has persisted and is growing.

Recently, Army officials testified before Congress that it will cost $36 billion to fully reset the force due to this situation. But this estimate assumed that the United States would fully draw down its forces by the end of 2007. Army Chief of Staff Peter Schoomaker conceded that if the Army continues to operate in Iraq at its current pace, the reset cost will total over $72 billion and will eventually require steady reset expenditures for a full 2 years after the U.S. military withdraws from Iraq. These estimates do not even take into account the Marine Corps' reset requirements. In the meantime, the Army intends to leave over 280,000 major items in theater and will not redeploy this equipment to be reset until forces draw down in Iraq.

The situation in the Army National Guard, which my colleague from Rhode Island who is knowledgeable on these matters has pointed out, is particularly alarming. In late 2003, the Army began to direct redeploying Guard units to leave their equipment in theater for use by deploying forces. Under current regulation, the Pentagon requires the Army to replace equipment transferred to it from the Guard. But under Secretary Rumsfeld's leadership, the Army has not tracked much of the Guard equipment left in theater nor prepared to replace it.

The National Guard and Reserves comprise 40 percent of the forces now fighting in Iraq. If you consider that the National Guard began the Iraq war with less capable equipment than the Active Force to begin with, it only seems reasonable to assume that they have lost ground as the occupation has continued. The Army claims that the

National Guard has been directed to transfer more than 75,000 pieces of equipment, valued at $1.7 billion, to the Army. But the Army does not have a complete accounting of these items. An independent analyst at the Government Accountability Office put the cost of resetting the Guard at $20 billion. Since much of the stay-behind equipment is relatively old, I presume it will never return to the United States.

The drawdown of the National Guard equipment in the United States to support the war effort is so extensive that it raises doubts about preparedness for homeland defense. As the Senator from Rhode Island pointed out, we are now going into the hurricane season and the problems that can ensue there. I don't think the National Guard is going to be ready to respond to those situations because of the situation we are in today.

For that reason, I am joining my colleague from Vermont, Senator Leahy, in supporting an amendment he will be offering to provide necessary funding for the National Guard that for too long has been neglected by this administration. On Tuesday of this week, the Chief of the National Guard Bureau, LTG H. Steven Blum, admitted that more than two-thirds of the Army National Guard's 34 brigades are now not combat ready due largely to the vast equipment shortfalls that will take as much as $21 billion to correct. General Blum addressed the situation this way:

I am further behind or in an even more dire situation than

the active Army, but we both have the same symptoms, I just

have a higher fever.

In spite of all the administration's rhetoric that we have turned a corner, I think many of us believe that the insurgents are not in their last throes, as the Vice President said only a few months ago, or that the mission is accomplished, as others have suggested. Our military commitments in Afghanistan and Iraq have only grown, as we are hearing now additional requests for troops to protect the Baghdad area, to the point that our forces are now larger in number in these countries than they were when we started the wars in 2001 and 2003. And there is some indication that our forces in Iraq may increase even more. Now it seems that the effect on our own forces has been devastating. Our forces are stretched thin. Our fleets of aircraft, tanks, and trucks are wearing out. But the administration's only answer for Iraq and Afghanistan is to stay the course.

I can tell you, with today's situation, that is not an option. If we are going to maintain America's edge in the war on terrorism, retain the ability to respond to other future threats, then we need to provide some relief to our Armed Forces and start putting critical investments into rebuilding these forces.

During two Presidential election campaigns, the Bush-Cheney team sold its candidacy to the American people as a solution to all of our Nation's security needs. A vote for that ticket, we were told, would shore up our Nation's vulnerabilities at home and keep us on the offensive overseas. Sadly, I submit, the policies of this administration have only left our Nation weaker, as the administration shortchanges the needs of our Armed Forces and fails America's National Guard personnel.

The 2000 campaign disparaged President Clinton' stewardship of the Armed Forces, and it was leaked that two of the Army divisions were rated C-3 and C-4, the lowest levels of preparedness and readiness, the lowest category, according to the Army's own scale, decrying that ``two Army divisions could not report for duty.'' The then-Governor of Texas pointed out that he promised help was on the way. Instead today, as a result of the administration's strain on our forces, the situation is dramatically worse.

According to the Army's own accounts, our forces are being drained of critical resources to meet our homeland security needs in the United States and to stay prepared to address our military threats in the future.

While the sheer size and scope of U.S. Army readiness remains classified, one thing is for certain, our military hardware is stretched thin. Our fleets of aircraft, tanks and trucks are wearing out. Those are the facts. The military leaders are telling us that in clear, uncomplicated voices. U.S. military experts and media reports have long been sounding the alarm about the Iraq and Afghanistan wars and their impact on military readiness.

The Washington Post recently said the following:

The unexpected heavy demands of sustained ground combat are

depleting military manpower and gear faster than they can be

fully replenished. Shortfalls in recruiting and backlogs in

needed equipment are taking a toll, and growing numbers of

units have been broken apart or taxed by repeated

deployments, particularly in the Army National Guard and Army

Reserve.

That was from a year and a half ago. Things have only gotten worse since then. The administration's failures are literally breaking the back of the U.S. Armed Forces. I am worried about it. I know my colleagues are. In addition to the amendment we have adopted, and while the Senator from Alaska is correct, the amount of money they can receive and actually spend is constrained. But I am hopeful our military leaders will be able to do a better job. I ask them to consider the possibility of what we might call a soft mark that would provide the resources now, not wait until next spring, and that if our military leaders can find the way to expend the dollars to increase the readiness of this equipment, we ought not wait another almost year to do so. If they can't spend the money, then it doesn't get spent. It comes back to the Treasury. But I wouldn't want them saying we could have used the money, but you didn't appropriate it on an emergency basis for us.

So while I appreciate the amendment that was adopted last night, as I pointed out, we are still $7 billion short, according to the military leaders testifying before Congress in the last number of months. I think it is not only appropriate but required of us here to provide those resources, put them in place. And if they can be spent, they ought to be spent to make sure this equipment we are falling so short on is going to be replenished and repaired so that our units can be combat ready, not only for the present crises but also for future ones we may face.

Again, my compliments to the Senator from Alaska and the Senator from Hawaii, who historically have placed the needs of our military very high on their agenda. My criticism is not focused on them. It is focused on the fact that the Secretary of Defense and the Commander in Chief should have been having these numbers in the budget coming up here, not requiring us to ask them to do a better job. That is what the two Senators did last night. They should have been telling us how the leadership of the Pentagon and the White House put the numbers in and that we were supporting them, not requiring an amendment to be adopted out here to fill the needs.

I am urging my colleagues to take a look at some additional funding we may need in order to meet these requirements.

I am happy to yield.

I thank my colleague.

Mr. President, what is the pending matter?

Mr. President, I will not speak on an amendment at this time, but if others do not object, I would like to call up amendment No. 4775 and ask unanimous consent that the pending amendment be set aside.

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

I yield the floor.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I had previously offered and called up amendment No. 4775, and I ask that Senator Kyl of Arizona be made an original cosponsor.

Mr. President, a few weeks ago, on May 17, by a vote of 83 to 16, we approved my amendment to mandate the construction of at least 370 miles of fencing and 500 miles of vehicle barriers along the southwest border of the United States. That was a very strong vote. It represented the request of Secretary Chertoff of the Department of Homeland Security. It was the amount of barriers and construction that he felt was necessary to help him create a secure border. I believe this Senate meant it when we voted to do that.

When the vehicle came forward on Homeland Security, we failed to fund this project. I think it left this body in an embarrassing position, telling the American people we are for barriers at the border, we are for meeting the request of the Secretary of Homeland Security, but, by the way, we are not going to put up any money to fund it.

I know there were reasons that some felt it couldn't be afforded under the amendment process, which gave the appropriators a requirement to find it within the $30-billion-plus Homeland Security bill, but we are now in a position where we feel there are funds available that we can utilize to make this step.

We believe this is a germane amendment to the Defense bill. The National Guard is going to be a part of our border security, and the National Guard does have the authority to enter into construction and other engineering projects as part of their directive to assist in securing the border.

That is where we are today. I think this is an appropriate amendment. I see my colleague, Senator Kyl from Arizona, is here. I would say it has been my honor to work with him quite a number of years--ever since I have been in the Senate. There is not a single Senator here who has ever spent anything like the number of hours he has spent in advocating for a legitimate, sound method of border security, nor has anyone voted more consistently than he to establish that. I am glad he is a cosponsor.

Senator Kyl understands this process. He is one of the leaders in the Senate. I am glad he feels this is an appropriate way we can go forward.

I thank the Chair and yield the floor.

Will the Senator yield for a question?

I had a call several months ago, before I offered the amendment, from Congressman Duncan Hunter of San Diego, who chairs the House Armed Services Committee, and he shared with me his positive view of what the San Diego fencing had meant for that area. Crime had gone down. Economic growth had occurred on both sides of the border--it was so positive. I know there is fencing in Arizona, and it is not the best kind, not the most attractive. As was said, it is not something you can see through--landing mats.

But based on the Senator's experience and many years of examining what has happened at the border, is he convinced and would he share his thoughts about how this could be helpful in the overall view of creating a border in which the law is followed and we have security?

One more question, if I could ask the Senator from Arizona. Would he share with us and the American people some information he might have about the size and scope and numbers of people that are crossing in the Arizona area? I know he cares about that. That is one reason the Senator feels so strongly about it. But I am not sure a lot of people understand the scope of the problem. He has already shared that fencing is a component of fixing the problem, but would the Senator share with us the scope of the problem?

I thank Senator Kyl. I yield the floor.

Mr. President, I thank the chairman for his interest and support. I know he indicated we needed to work on it the last time we voted on it. Perhaps I would like to speak a little more on it. And I think I would ask for a rollcall vote.

I thank the Chairman.

Mr. President, I would like to share a few remarks

about the amendment I have offered, No. 4775. It is to actually fund the border barriers and fencing that we authorized by an 83-to-16 vote just a few weeks ago, on May 17. This Senate said that is what we wanted to do. Unfortunately, when the more appropriate time came to fund it, we failed to have the money to do it.

I think there is a great deal of cynicism among the American people about Congress's commitment to actually creating a lawful system of immigration for America. They are not only cynical, but they are determined to see to it that Congress does. We are the vehicles for the American people to accomplish national goals of importance.

As a person who had been a law enforcement officer for many years involving Federal law, it is just heartbreaking to see, with regard to immigration, law made a mockery. People have every right to be upset with us, upset with the President--this President--and previous Presidents, previous Congresses.

Twenty years ago, in 1986, we developed a system that was supposed to work to deal with immigration. We gave a one-time amnesty to several million people. We promised we were going to make the system work in the future. And we never funded anything that would work. That is undisputable. It just cannot be denied by any person, I do not think, who would look at the situation as it has developed since 1986. There was a promise to do something. That promise was not fulfilled. So we do not want to head down that road again.

I think the House of Representatives is correct. Let's make sure we follow through this time. We have a credibility gap. We have a problem. People are not confident we are going to do it. Indeed, money gets tight around here. We spent $30-something billion on homeland security, but we could not find $1.8 billion to fund the fencing we voted to authorize and that DHS wants--fencing is a one-time expenditure that would reduce the number of Border Patrol agents, reduce the number of people who attempt to come in, and reduce the overall cost in the long run of making the border secure. But we did not do it. Why not? Well, those are the kinds of questions we are dealing with.

Now, the President has done some things that indicate he is committed to border enforcement. On July 25, Border Patrol Chief David Aguilar and National Guard Bureau General Steven Blum held a press conference on Operation Jump Start. That is where the National Guard is helping us at the border, as the President requested that they do. Chief Aguilar and General Blum explained: The National Guard is assisting them--the Border Patrol--with their ``tactical infrastructure so they can be more effective; . . . better roads so they can move along the border laterally . . . '' You have to be able to move along the border. You cannot have people elbow to elbow trying to stop people coming here illegally. When you see people come, you have to be able to move laterally along the border. And quote: ``fences and lighting and sensors.''

So that is what the National Guard is doing.

Now, yesterday, on August 1, we received a letter from Ralph Basham, the Border Patrol Commissioner, and Paul McHale, Assistant Secretary of Defense, announcing the fulfillment of President Bush's promise to deploy 6,000 National Guardsmen to the border by August 1. He met that goal. This is a good step. It is not the solution. They are not allowed to participate as a law enforcement agency. They have a lot of restrictions on them. But it is an assistance, and it is also part of a signal to the world that a wide-open border no longer exists, that we are taking steps to maintain security at our borders, like most nations of the world strive to do.

The letter describes how 6,199 soldiers and airmen are now working in four border States. One of the capacities they are serving in is ``forward deployment,'' which includes ``engineering and other efforts.'' This refers to the National Guard's role in building tactical infrastructures--roads and fencing.

So the National Guard is already charged with helping build the tactical infrastructure needed on the southern border. But they just do not have enough money to build what the Senate authorized: 370 miles of fencing and 500 miles of vehicle barriers that are less expensive but at least keep people from driving across the border in their vehicles.

So the amendment we have before us now, and the vote we will have, will finally appropriate the funds that will build fencing on the border. This is a real vote. What we often do in this Chamber is authorize expenditures. We authorize programs to be undertaken that will serve some good purpose. But if the appropriating committees and the Senate do not get around to actually funding those authorized activities, they never occur.

This is an appropriations bill, and it is a bill that has real power to fund a fence, in this case. So it is a real vote.

The language of the amendment is simple. We take the amount of money already in the bill to fund emergency National Guard activities and increase that money by the amount needed to construct the 370 miles of fencing and 461 miles of vehicle barriers on the southern border. Because 39 new miles of vehicle barriers were already funded in the Senate-passed Homeland Security bill we moved some weeks ago, we only fund 461 miles of vehicle barriers with this amendment.

Of course, the number of miles of barriers and fencing is what was requested by the Secretary of Homeland Security, Mike Chertoff, to the Congress. It is what he stated he needed to be effective on the border.

It is also important that we send that signal to the world that there has been a change in policy. We can deny we had a policy of open borders, but in reality we basically did. We have had an open borders mentality, so people around the world have received a message; and that is, if they are determined and if they come to our border, they can figure out a way to get across. That has been happening. We do not need to send that signal. We need to send a signal that the open borders time is over by passing this amendment. It is not a bottomless pit of costs. In fact, these barriers are one-time costs, but they will help us have good enforcement with fewer agents for decades to come. The net result will be that we will be able to save money. It will also save money in its signal capacity in that I believe we are going to have fewer people attempting to violate the law, as a result of a clear commitment to use the National Guard, fencing, increased Border Patrol, and also detention beds and deportation activity.

We are not playing games. The American people have every right to be dubious and concerned about the commitment of this Congress to follow through. However, I believe we can follow through. This is a test for us. I believe we will be ready to pass the test.

The cost to construct these miles of fencing and barriers will run between $1 and $3 million per mile for fencing, based on whether the military constructs the fencing or they use private contractors, and they are authorized to use contractors that they supervise, and $1.4 million per mile of vehicle barriers. The total construction cost for these miles will be less than $2 billion. That is not a small amount of money, but it is a manageable amount.

In a budget that spends over $900 billion a year, we ought to be able to find a couple of billion dollars to follow through on a commitment we made and the commitment the American people expect us to fulfill.

Fencing is a proven approach. With the establishment of the San Diego border fence, crime rates in San Diego have fallen off dramatically. According to the FBI crime index, crime in San Diego County dropped 56 percent between 1989 and 2000, after the fence was built. This is a whole county. It was a huge lawless area. Congressman Duncan Hunter, chairman of the House Armed Services Committee, lives in San Diego. He called me several months ago to give me some personal insight into the economic growth, the security, and safety on both sides of the border, after this lawless area was brought under control by a fence. It is a proven success.

Vehicle drive-throughs, where people drive across the border and run right past anybody who may be watching them, have fallen between 6 to 10 per day before the construction of the border infrastructure to only four drive-throughs in the whole year of 2004.

Those occurred only where the secondary fence was incomplete. It is undeniable that fencing has reduced illegal entries into San Diego.

According to the numbers provided by the San Diego sector Border Patrol in February of 2004, apprehensions decreased from 531,689 in 1993--they apprehended 531,689 people on the San Diego sector in 1993. As a result of the fencing at the most busily crossed area in 2003, there were 111,515. Isn't that great? That is about one-fifth as many, indicating that one-fifth as many people were trying to cross the border overall. They apprehended in the San Diego area last year--in 2003--111,000 people attempting to enter this country illegally, and there are hundreds of thousands now crossing in Texas and Arizona, far more than are crossing where the San Diego fence was built.

So the scope of this problem is huge. I can't understand the concern that people would have that barriers would be somehow impractical when we are dealing with these kind of numbers. Fencing has also reduced drug trafficking in San Diego. In 1993, before the fence, authorities apprehended over 58,000 pounds of marijuana coming across the border. In 2003, after the fence helped stem the tide, only 36,000 pounds of marijuana were apprehended. In addition, cocaine smuggling decreased from 1,200 pounds to approximately 150 pounds. We have made a lot of progress there. We need to replicate that. We have learned from it, and we need to follow our own example. It is a one-time expense that this bill would meet and will allow us to meet those challenges.

I am convinced that physical barriers at the border are an essential part of a cost-effective solution to our current border security crisis. Virtual fences are intriguing and may be good in remote areas, but they don't impress me with regard to high traffic areas where we are talking about half a million or a million people crossing per year. There are only two alternative routes that we can take to secure the border: manpower alone or manpower plus infrastructure. We can take either: just personnel alone or we can do personnel plus infrastructure. The latter is much more cost effective. It will save us money.

Attempting to secure the entire 2,000-mile border with manpower alone could require as much as 150,000 agents, if you put 15 per mile over the 2,000 miles of the border. Then you have 7 days a week, 24 hours a day. How serious is this? It is a huge cost, were we not to have barriers at the most troubled areas.

If we only build a virtual fence and not a real one, we will be spending millions on technology to detect illegal crossings, and then we will be spending millions on manpower to chase down, apprehend, arrest, process, and deport the illegal crossers. That is not what we want to do. We don't want to play an expensive game where we catch and release and chase and catch and apprehend and pay to deport and pay to house while they are being deported. Apprehension is manpower intensive, slow, and legally complex. It requires additional related activities and costs such as incarceration and repatriation, courts, appeals, transport, lawyers. We don't want to do that. We want to get away from that.

We want to send a message to the world that this border is no longer open, that if you attempt to cross our border illegally, you are not going to succeed. You need to apply and wait in line to come legally. We are generous about how many people we allow now and how many people we will allow in the future. We are a very generous nation with regard to immigration. We will remain so. But we want people to make their application and wait in line, not to pour across the border. Many of the illegal crossers are coming from areas of the world that have terrorist influences. Once they are inside the border, they are that much harder to catch. Preventing people from coming here illegally is the right approach. Prevention is the right approach. We need to get to that place.

I talked to President Bush about this issue recently. He agreed that we need to get to what you might call a tipping point. Once we are serious and get border enforcement up and going in a real way, we get more Border Patrol agents, we end the catch-and-release policy, we put up fences and vehicle barriers, and we have sufficient detention beds so people don't have to be released on bail after they have been apprehended, never to show up again when they are asked to come back to court, if we end all of that, all of a sudden we will see a dramatic reduction in the number of people attempting to come. Couple that with a really workable biometric identifier card for people who come here with a lawful entry right and a job, and they have to present that card or they can't get work, people will wait in line to get that card. If we crack down on businesses who are hiring people without the proper identification, they will quit hiring people. Most businesses will do what you tell them to do.

We can get to that point very easily, far easier than a lot of people believe, where we can go back to a lawful system of immigration for America. That is what the American people want. They have every right to insist on it. They have been insisting on it for 40 years. We were supposed to have fixed it in 1986, 20 years ago. We did not do so. I am telling you, this Senator is not going to support any kind of immigration legislation that will not work to serve the interests of the United States and will not create a system that is lawful and not lawless. No Member of this Senate should.

I urge my colleagues to take this step and vote for this amendment because it is narrow. It simply adds money to the emergency National Guard account already in this bill to provide funds for the construction of physical barriers on the most vulnerable miles along the southern border, the area that Secretary Chertoff and the Department of Homeland Security favor. If we don't use the emergency funds provided in the budget for this purpose, they will get used for something else. The Senate has already voted overwhelmingly to approve construction of physical barriers along the border. We missed a chance to fund that barrier in the Department of Homeland Security appropriations bill. With this vote, there are no difficult choices to make. We can actually say to our constituents that we followed through and we walked the walk as well as talked the talk. I am confident that we will be successful.

I thank Chairman Stevens for his consideration. I understand we may have a vote later this afternoon, which would be pleasing to me.

I yield the floor.

Mr. President, while I certainly appreciate the efforts last evening of Senator Stevens and Senator Inouye to add roughly $13 billion to this appropriations bill for the readiness of the U.S. Army and the Marine Corps, it is emergency spending, but it should come as no surprise that it is necessary.

What I find surprising is that apparently the requests by the Department of the Army, the Department of Defense, and also the OMB were turned down until it became obvious--and publicly obvious--that the readiness condition of the Army and the Marine Corps is the worst it has been in several decades. The principle is the lack of repaired, rehabilitated, and in certain cases replaced equipment. We are in a difficult situation with threats across the globe, with an Army that is heavily committed and a Marine Corps that is heavily committed to both Iraq and Afghanistan, and we are in a situation now in which our readiness is the worst it has been in three decades. This is a situation which requires not only the remedy of money, but it requires accountability.

How did the Department of Defense and this administration allow our military forces to become so degraded? In the judgment of many people, including former Secretary of Defense Bill Perry, myself, and others, two-thirds of the Army's operating force, Active and Reserve is now reporting in as unready. There is not a single non-deployed Army brigade combat team in the United States that is ready to deploy. Our Army currently has no ready strategic reserve. Not since the Vietnam era and its aftermath has the Army's readiness been so degraded.

How did that happen? It is not a surprise. Months ago, in February, I came to this Chamber and proposed an amendment to the tax reconciliation bill which would provide a fund of $50 billion to provide for the reset recapitalization of Army and Marine equipment. I was offsetting that, as I think it is appropriate to do, with the upper income tax breaks that were being voted on in that bill. My measure didn't survive conference, but the tax cuts did. I believe that is an unfortunate paradigm of what is happening here too often.

We are sending soldiers and marines in harm's way, and we are not repairing their equipment. We don't have time to wait until it is too late--until the emergency is upon us. But we have plenty of time to debate tax cuts and estate tax reform.

I can tell you that I served, as so many others did, and in fact, we are privileged to have the chairman and ranking member of this committee as distinguished veterans of the Army Air Corps and U.S. Army. I don't know many soldiers who qualify for the estate tax, but every soldier needs adequate, decent equipment to do their job. Their lives depend upon it.

Yesterday Lieutenant General Blum, chief of the National Guard Bureau, stated:

I am further behind or in more dire situation than the

Active Army.

This is the Reserve National Guard forces. The National Guard is charged not only with assisting in operations such as Enduring Freedom and Iraqi Freedom, they are the first line of protection at home. They are the first responders in a hurricane situation. They are in worse shape than our active forces.

At the end of June--again, several weeks ago--at a hearing before the House of Representatives, Congressman Ike Skelton asked the Chief of Staff of the Army:

Are you comfortable with the readiness level for the non-

deployed units that are in the continental United States?

General Schoomaker replied: No. The Chief of Staff of the United States Army says in a public hearing he is not comfortable with the readiness condition of our forces in the United States. That is a stunning admission.

Senator Dodd and I were ready to propose an amendment to this Defense bill, along with Senators Lautenberg, Mikulski, Lieberman, and many others, to try to rectify this. We would offer $10.2 billion in emergency spending. I not only support but commend the leadership of this committee, Senator Stevens and Senator Inouye, proposing $13.1 billion. The money is necessary. I concur in their judgment and their action.

This is not a situation where suddenly yesterday someone jumped up and said, we need some money. This is a situation that has been recognized for months. Not only was nothing done, but the budget sent here by the White House was inadequate and they knew it At a time of war when soldiers are committed, at a time of contest and conflict around the globe when we have to respond to threats, they lowballed money for the Army and the Marine Corps. We can give them all the money we want, but we need a little accountability, also. We didn't reach this position overnight. This was not a midnight discovery. This is years in the making.

The Army told those who would listen that for every year of intense operations in Afghanistan and Iraq, they need $12 billion for reset. Last year we only provided a fraction of that, so this year the bill was $17 billion. Some of those funds cannot be used in this year so it will be pushed forward a bit, but basically we know what is happening. It will continue to happen every year. Twelve billion baseline for reset. If we do not make that number, it is rolled over to next year. This is not going to be a one-time affair. It is an emergency, but it is a chronic emergency. We have to understand the Army will need another $12 billion and the Marine Corps will need another $12 billion next year and the next year, as long as we are committed. It is the real course of

Iraq, the course that seldom is found in speeches about ``staying the course,'' or ``when they stand up, we will stand down.'' We have to pay those costs.

Last October, GAO released a report on military readiness. It assessed the state of 30 pieces of equipment, predominantly tanks, vehicles, helicopters, and aircraft. They made several disturbing operation observations last October:

GAO's analysis showed reported readiness rates declined

between fiscal years 1999 and 2004 for most of these items.

The decline in readiness, which occurred more markedly in

fiscal years 2003 and 2004, generally resulted from, 1, the

continued high use of equipment to support current operations

and 2, maintenance issues caused by the advancing ages and

complexity of the systems. Key equipment items--such as Army

and Marine Corps trucks, combat vehicles, and rotary wing

aircraft--have been used well beyond normal peacetime use

during deployments in support of operations in Iraq and

Afghanistan.

Let me relate a story. I was in Fallujah about 3 weeks ago with the 1st Marine Expeditionary Force. They are doing a superb job, as all our forces are. We asked questions about the state of the helicopters. They told us their helicopters are flying 200 percent more than in peacetime. They told us this before we got on the helicopters. We got on anyway because the helicopters are being maintained. But it costs money to maintain those helicopters. It costs money to repair those helicopters. If you fly any helicopter, fixed-wing aircraft, or you drive any military vehicle 200 percent more than its normal allocation, they wear out very quickly. That is what is happening.

A report of the GAO went on to say:

Until the DOD ensures that condition issues for key

equipment are addressed, DOD risks a continued decline in

readiness trends, which could threaten its ability to

continue meeting mission requirements. The military services

have not fully identified near and long-term program

strategies and funding plans to ensure that all the 30

selected equipment items can meet defense requirements.

Another GAO report released last October assessed the readiness of the Army National Guard. It found:

To meet the demand for certain types of equipment for

continuing operations, the Army has required the Army

National Guard units to leave behind many items for use by

follow-on forces. The Army Guard estimates that since 2003 it

has left more than 64,000 items, valued at more than $1.2

billion, overseas to support operations. Without a completed

and implemented plan to replace all Guard equipment left

overseas, Army Guard units will likely face growing equipment

shortages and challenges in regaining readiness for future

missions.

Again, this is the Army National Guard. These are the people we expect in the next few weeks to respond to a hurricane if it strikes the gulf coast, the Atlantic coast. These are the folks we expect to respond to earthquakes and to other problems any place in this country. They have left a great deal of their equipment overseas. They need help, also.

In April of this year, still 3 months before the markup of this Defense appropriations bill, the Lexington Institute and the Center for American Progress jointly released the report called ``Army Equipment After Iraq.'' This report clearly stated:

High utilization rates and harsh conditions have greatly

accelerated the aging of equipment. A significant amount of

equipment is being destroyed due to both combat losses and

the wear associated with constant use. Equipment readiness in

deployed units has shown a gradual erosion as the service

struggles to keep up with maintenance and replacement needs.

Readiness in nondeployed units has plummeted as equipment is

transferred to deploying units or left behind when troops

depart Iraq.

Again, warning bells were sounded, but the administration was deaf. The Army knew the situation was growing increasingly difficult--indeed, perilous. They always knew that there would be a reset bill. Last November, as I suggested, they said it would cost $12 billion a year for each year of ongoing operations until 2 years after that. The Marines estimated at that time that they needed $11.7 billion over a 5- year-period for reset. These figures were confirmed by our March GAO report, entitled ``Preliminary Observations on Equipment Reset Challenges and Issues for the Army and the Marine Corps.'' Again, these pleas for help were ignored.

However, when the Army and Marine Corps submitted their reset needs to the Office of the Secretary of Defense and the Office of the Management and Budget, these requirements, the requirements of the commanders in the field, were slashed. The Army's request was reportedly cut by $4.9 billion and the commanders in the field were not able to submit a rebuttal argument as they have in othe administrations. Our military leaders were told what they would get by the budget experts and that was the end of the discussion until it became so painfully obvious and publicly obvious that we are not ready to deploy significant forces that are here in the United States.

In February, the President's budget request was submitted to Congress. The shortfall for reset was obvious. Again, I recognized this, as others did. That is why in February I submitted my amendment to the reconciliation bill to provide a fund of $50 billion over the next several years so we could deal with this readiness problem, not through emergency spending but through an offset where we would use proposed tax cuts for the very wealthiest Americans to buy equipment for our soldiers and marines in the field. This amendment was rejected and the tax cuts went through. The equipment remained unrepaired.

As early as 2005, information on the state of Army and Marine Corps readiness was readily available for all who were willing to pay attention. Billions of dollars would be needed to solve this problem. Now here we are in August of 2006. We are debating the fiscal year 2007 Defense appropriations bill and until last night there was only $2.5 billion in this bill for the Army for their reset needs.

Again, we all must commend and thank the chairman and ranking member for taking the action they did last night. But we have to ask serious questions about an administration that would allow this situation to develop, that would tell commanders that they were not going to get the money they needed to provide for the equipment and troops in the field.

This administration has tried to run a serious war on the cheap. They have tried gimmicks. They have hidden costs. They have failed to admit staggering costs that are involved already. It goes not only to the equipment, but having just returned from Iraq, having observed reconstruction that has produced very little after $30 billion, having listened to Prime Minister Maliki in his speech ask for further reconstruction aid, if we are ever going to make a difference there, we would have to complement our military effort with renewed reconstruction. That is a multibillion dollar proposition. Where are we going to get the money?

I am pleased the Army and Marine Corps will receive this $13.1 billion, but that is just an installment payment. As long as we are committed, we will continue to see this type of expenditure go on and on and on. We have to provide for it, not on an emergency basis, not suddenly with the expression of surprise. We have to understand this will happen again and again and again. Anyone who goes to Iraq or Afghanistan, anyone who has the privilege of being with soldiers, marines, sailors, and airmen, knows the extraordinary sacrifices they make. Anyone who has ever been around a military unit knows one of the quickest ways to undermine morale, undermine the spirit of these troops, is to give them lousy equipment and not repair their equipment. They know their life depends upon the equipment. They also know that it is not the speeches, not the parades, not the flag pins in the lapel that say what you mean about troops; you have to give them what they need to fight. Last evening, we did that.

This administration has to be accountable. I don't understand how we can have both an administration and a Secretary of Defense who would see the readiness numbers that are presented today and deny money, forcing Congress to put it in. There is a gross lack of accountability bordering on dereliction.

I yield.

Mr. President, I thank my colleague. He has been extraordinarily active in ensuring us the resources are available for our military forces. I would be happy to explore with him the possibility of additional funding if it is necessary.

Again, let me thank Senator Dodd. We traveled together in October of last year to Iraq and saw the great service that is being rendered by our soldiers and the need for the equipment, the honest need. But I will, at this juncture, Mr. President, yield the floor.

I yield the floor.

I thank the Senator.

Mr. President, I call for the regular order with respect to amendment 4775 and send a second-degree amendment to the desk.

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

Mr. President, this amendment simply adds $100,000 to the sum that would otherwise be appropriate to the National Guard for the purpose of constructing the fence. There is some question about whether the appropriations for vehicle barriers we have in the Department of Homeland Security appropriations bill will be added to construct the full number of barriers that are required. This is a very slight addition to the funding called for in the underlying amendment to help ensure we have that funding as well.

What Senator Sessions and I are committed to doing is ensuring that the authorization for construction of fencing is fully funded so that we can assure our constituents that we have done everything necessary to provide the fencing on the border that the experts have said is necessary. When we talk about vehicle barriers, let me describe briefly how that fits into fencing.

Fencing is primarily a way for the Border Patrol to ensure, as it patrols the border in urban areas primarily, that it is very difficult to cross. It is hard for the Border Patrol in urban areas to be able to patrol on a continuous basis and deal with the large volume of people who could come across if there is not adequate fencing. I think we have all seen the pictures of the rush to the border at border points of entry where large numbers of people congregate on the Mexican side of the border, come rushing across, and it is virtually impossible for the Border Patrol to deal with that mass of people when they cross. In order to make it more difficult in the urban areas where this is likely to occur, they prefer fencing as one of the mechanisms for securing the border.

Fencing is not effective unless you also have Border Patrol to patrol along the fencing because it is possible, in most cases, to get over a fence or through a fence. But it slows people down to the point that the Border Patrol is able to apprehend them and ensure that they do not cross illegally. One of the reasons for a double fence is that the Border Patrol can get to the point where people are trying to cross illegally if you have a double fence, and that is what this funding is helping to achieve.

Right now, we have this single fence constructed of steel. It is excess or surplus landing mat steel that the military has no more use for but used to be the equipment they would lay down on a field in order to be able to land planes on an emergency basis. This is surplus steel. They put that on end, welded together, and it constructs a fence. It is somewhat effective in the urban areas, but much of it is deteriorating in the areas where it has been constructed for a long time, and it is also not as effective because the Border Patrol cannot see through it and therefore it does not as easily know what is happening on the other side of the fence--whether people are congregating there. They would prefer to replace that deteriorating landing mat fencing with other kinds of fencing.

What the amendment from Senator Sessions does is ensure the National Guard will have the funds necessary to put the landing mat fencing up that they are currently constructing in those areas where that is appropriate but also that there will be adequate funding to convert to the other kind of fencing we are familiar with in the form of a very heavy gauge chain link kind of fencing with barbed wire, and so forth, to prevent entry.

The vehicle barriers we speak of are a real necessity now because the Border Patrol is gradually gaining control of the border, and their control is being contested by the cartels and the coyotes who in the past have had significant control of that territory. They are responding with violence, and they are using pretty high-caliber weapons.

What the Border Patrol says is that every time they see a vehicle coming across the border, they know they have a problem because it is big enough to carry weapons. It is also big enough to carry contraband, usually drugs, which is protected by weapons. So unlike the

situation with illegal immigrants crossing the border, they know that the coyotes and the cartels, the gangs that are in control, are going to use weapons to protect their turf, protect their territory, and enable that contraband to get across the border. So vehicles present a special threat to the Border Patrol.

The vehicle barriers they will construct and they are constructing will prevent, in the flat areas, beyond the urban areas, these vehicles from coming across. They are constructed in such a way that animals or people could get through them, but vehicles cannot. In some of the more mountainous areas, obviously it is not possible to put up either fencing or vehicle barriers. But the combination of those two items, plus cameras that can view large areas of the border at a time, plus lights that enable the Border Patrol to see at night and sensors in the more remote areas, in addition to the unmanned aerial vehicles, fixed- wing and helicopters that patrol the border, provides a mechanism that supports the vehicular patrols of the Border Patrol and the combination of which provides the mosaic for securing the border.

All this is a part of the Border Patrol's recommendations--the Department of Homeland Security recommendations--and is authorized by legislation we have adopted. But the funding is not adequate to complete all of this work. That is what the amendment Senator Sessions has offered would do. It would in effect put our money where our mouth is. It would provide the funding that is needed to achieve the goals we have all agreed we need to achieve.

Just a final point. When the previous appropriations bill was before us, and Senator Sessions referred to this, we had amendments--for example, one that I offered that was accepted which applied more funding to achieve the authorization we had previously passed to fund more detention spaces to end the catch-and-release program. Right after that or very shortly after that amendment was adopted, the amendment of Senator Sessions was laid down. Through no fault of his, there was a problem in funding--that is, it would have provided a potential across- the-board funding reduction of everything else--so some of us were caught in a catch-22. We very much wanted to support what Senator Sessions was doing--he is absolutely right, we needed to secure more money for the construction of fencing--yet in my case it could have been taken out of funding I had just succeeded in adding to the bill. So it was an impossible vote for us.

One of the reasons this amendment is before us is to correct that and ensure that all of the things we need to fund will be funded: the detention spaces that I was able to add, more border patrol that we have added, as well as the fencing that has to be added. So in effect this is the last block in the foundation for the effort we have of securing the border. We need to put it in place.

We have authorized the work. Everybody agrees it needs to go forward. There has simply been a difference between the funding appropriated and the funding required. This amendment will provide that funding and will do so in a way that will do harm to no other account and will help us to achieve the goal of securing the border.

I am very happy to support the amendment. The second-degree amendment that I laid down, as I said, is technical; it simply adds $100,000 to ensure there is enough money to provide for the vehicular barrier construction as well.

I am happy to.

Mr. President, I appreciate that. We had testimony before the Terrorism Subcommittee of the Judiciary Committee, which I chair and on which Senator Feinstein is the ranking member, about what the results of that fencing in San Diego have meant--on both sides of the border. The testimony was that it has reduced crime on both sides of the border. The people in Mexico are very pleased because the gangs and the coyotes that used to gather together before they would try to bring their load of illegal immigrants across the boarder--preying on them, stealing from them, robbing them, beating them, and committing other crimes against them--that whole milieu has ended because the fencing has made it impossible to cross, so the coyotes have gone to other places to try to take their loads across the border. They are no longer congregating and hanging out in that area in Tijuana and south of the San Diego area, and as a result, on both sides of the border, crime has gone down dramatically. The environment has improved dramatically because you don't have these thousands and thousands of people crossing, cutting all these trails, leaving their garbage behind.

In fact, I am told nobody has actually gotten across the fencing in that entire sector. I don't have the statistics off the top of my head here, but the testimony before our subcommittee was dramatic in terms of the number of apprehensions before the fencing and the number of apprehensions afterward. I am proud that I was a sponsor, along with Senator Feinstein, of the fencing in that area which has made such a dramatic difference there.

As I said in the Judiciary Committee, when I got the authority to add fencing in Arizona, a lot of those folks who were crossing in California are now trying to do it in Arizona. Wherever that traffic is now attempting to cross the border, we need to provide the Border Patrol with all the tools it needs to get the job done, and that includes a substantial amount of fencing.

Let me illustrate with a couple of examples. There are so many things one could talk about. For example, the violence at the border has increased 108 percent, according to the U.S. attorney in Arizona, Paul Charlton, in testimony before our subcommittee. The number of crimes and number of criminals crossing is up dramatically. Over 10 percent of all of the people apprehended now at the border have criminal records--and these are serious crimes. This is murder and rape and kidnapping and drug crimes and the like. So it is not just people coming across the border to find work here. There is a substantial number of criminals, and they are not just from our neighbor to the south, Mexico; they are from countries all over the world.

When you see the apprehensions of people from Russia and Vietnam or China or Iran or Iraq or other countries, you also wonder how many people we are not apprehending who are criminals or who can be terrorists. So there is that element.

I spoke to the matter of vehicle barriers. One of the areas they are adding barriers right now and want to add more is in the area of the Barry Goldwater Gunnery Range. This is known to the people in the military as the finest area of training for our pilots in the world. There are wide-open spaces. There is nothing to prevent the kind of activity that occurs, which includes dropping bombs. From all over the country, our pilots come to train there. There is one problem. With illegal immigration, the Marine Corps now has to go out on patrol to make sure there are not any illegal immigrants in the

area where the bombing or strafing will occur. Obviously you don't want to hurt anyone.

They do that at great cost. They come back and report the area is clear, our planes are gassed, ready, loaded with the bombs and so on, maybe take off, and then they get a report that more immigrants are streaming into the area.

They have had to call off their missions. Over the past couple of years there have been hundreds of missions that had to be canceled. Thousands of flying hours have been lost as a result.

My point is this: There are costs for not having secured the border that I think many in America aren't even aware of. There are huge environmental costs. Tons of garbage are left behind rotting, a danger that leads to the people as well as to the livestock, the way the ranchers' operations are disrupted when the fences are torn down, the water lines are broken, and all the other things that occur.

The bottom line is that we have to secure the border, and adding fencing helps to do that.

That is why the amendment is so important. We have to make up the difference between what we have authorized and what the Border Patrol says they need, with what we have already provided in funding in the amendment to make up the difference to ensure that we have full funding for what we have to do at the border.

Madam President, I wish to compliment our colleague. I know the

Senator from Georgia wishes to speak so I will simply say this: Senator Cornyn and I proposed something rather radical here and that is that we actually put our money where our mouth is. That is to say, all the things we authorized, all the things the President requested to make sure we can secure the border, we actually fund so we can get the job done. That is what this amendment does. It basically takes the difference between what we said we want to do and what we fund and closes the gap so we fund it all. It is an important amendment to ensure that we can secure the border first as part of a comprehensive immigration reform.

I appreciate the work my colleague Senator Cornyn has done. I am proud to cosponsor it.

I yield the floor.