A bill to amend title XXI of the Social Security Act to allow qualifying States to use all or any portion of their allotments under the State Children's Health Insurance Program for certain Medicaid expenditures.

Mr. President, I gave a speech a couple weeks ago about the situation in the Middle East. I want to just do a reprise of that in brief to discuss the context of introducing today what we call the Empower America: Securing America's Energy Future Act.

It comes from the basis that I believe we are facing in this country--a threat. We are, in my opinion, already in the very early stages of a world war. We can act now to make this threat--which I believe is a serious one but not yet fully actualized--less severe if we do certain things. One of them, as you will hear at the conclusion of my remarks, will be focusing on our energy situation here at home.

One of the things I hear as a frustration of so many people I talk to in Pennsylvania is they look at the conflicts we are in in Afghanistan, Iraq, and other places in the world, and they don't see an end or a strategy of how we succeed. I suggest that part of that strategy is in creating energy security and developing a whole host of energy resources in this country so that we are not dependent upon--or as dependent upon foreign sources of energy and that we develop the new technologies that will allow America to continue to grow and keep prices down, and not just because I want to keep them down for consumers, which is great, but so we are not providing enormous riches for people to develop nuclear weapons and turn around and harm the United States and our allies.

I believe the threat we face can be analyzed in a three-pronged approach. As I said on the floor last week or the week before, we face a threat, an enemy most people refer to as terrorists. I do not refer to them as terrorists; I refer to them as who they are: radical Islamic fascists. They have an ideology. These are not people who kill for the purpose of killing. They don't kill because of hatred. They kill because they have a belief, an objective.

I know that for a year or two, the President, right after 9/11, referred to these terrorists as ``cowards.'' I notice that he doesn't do that anymore. I don't know of anybody who does that anymore. There is a reason: They are not cowards at all. These are people with great conviction. Some would even say that, in a demented way, they have great courage. But they are certainly not cowards. Calling them cowards gives the wrong impression to the American people that we are fighting a foe who is afraid of us or afraid of something. The problem is they seem to be afraid of very little when it comes to this world. They are willing to give up their lives. In fact, they want to give up their lives, and their objective, by the way, is to take as many other lives in the process. The object in this war is not territory; the object of this war is submission and death.

So we are not dealing with a group of cowards. When we tell the American public we are dealing with cowards, they don't think this is a serious enemy that can defeat us. America would never lose to a group of cowards. But we can lose to a group of fanatical, zealous Islamists, who have a clear mission and a clear methodology by which to accomplish that mission.

These are people who are very serious about what they want to do, whether it is radical Sunnis or radical Shias. They have an objective and a common enemy--as does the radical left, represented so comically, in my opinion, so ridiculously, by the speech of Hugo Chavez yesterday at the United Nations. What do Mahmud Ahmadi-Nejad, President of Iran, and Hugo Chavez have in common? Nothing except their hatred of everything this country holds dear--freedom, democracy, and individual human rights. That is what they hate. I would suggest they have as much in common as Mussolini and Hitler and Tojo. They had very little in common ideologically. The Japanese believed in the superiority of the Japanese race and wanted to conquer and rule the world. Hitler didn't believe in that, but they formed an alliance because there was a common enemy.

That is the case here. We are seeing it. It is, hopefully, a frightening sight put on display over the last couple of days at the United Nations, as this character of a President, this ridiculous diatribe Hugo Chavez presented to the U.N. received applause from many around the world--most leaders around the world. This is a serious threat. We can look at it and put it in political terms and say we went to war for the wrong reason and this or that wasn't true. But that is looking in the rearview mirror when we have a huge

threat. So they have an ideology and a common enemy.

Secondly, they have a very effective methodology by which to conduct this war. It is one that doesn't require the kind of coordination and resources a traditional military campaign would require. They don't need to conquer land, to hold ground; they simply need to kill people every day. And they do--every day. And we cover it in America every day. American people watch it every day. And every day, the resolve of the American people is eroded. The resolve of the American people is eroded because--I will use the words of Osama bin Laden--because we Americans love life and the radical Islamists love death. That is how he said he would defeat us, because of America's and the West's love for life and respect for life, their attachment to this world, to the modern world, and the radical Islamist's attachment not to this world at all but to death, which, in their minds, means life--a better life with Allah. That is their objective, their methodology. Their methodology is to prey upon what they believe is the weakness of America, what they believe is the weakness of the West, which is the fact that we respect life, love life, we have human rights, and we believe in freedom. We believe it is our objective in this world to make it a better world. They don't care about that at all. So terror is a uniquely effective tactic that fits well into their culture of death and is particularly effective against our culture of life.

In addition, they are trying to develop a new weapon; that is, a nuclear weapon. Iran has made it very clear and Chavez has announced his intention to develop a huge arsenal of weapons of mass destruction to use, in the words of Ahmadi-Nejad, ``to wipe Israel off the face of the earth'' and use that weaponry to get the rest of the Western World to submit to their radical, fanatical brand of Islam.

This is their ultimate threat. This is the ultimate tactic of death and terror--to have a country that is committed publicly to using nuclear weapons not to defend itself, not to gain an earthly dominion over the world, but to cause mass chaos and destruction, in the case of Iran, for a religious purpose, because what they seek to accomplish is the return of the Hidden or 12th Imam. That is the 12th descendant of the Prophet Muhammad who, in the late 800s, went into hiding, according to the Shia religion, and is destined to return as the messiah of the Islamic faith at the end of times--the end of times meaning Armageddon. The interesting twist that the radical Shia project onto the world stage today is they believe it is their obligation to bring about the return of the Hidden or 12th Imam by causing a modern-day Armageddon. That is what they believe. You may not have heard this before, but let me assure you, that is what they believe. That is what they say. That is what they talk about all the time, that this is their objective. It is a messianic vision; they are being compelled by their faith.

Some pass it off as a bunch of dictators who are just using religion to prop themselves up, to maintain control, or to try to dominate bigger areas of the world. Well, that would be bad enough. That would be dangerous enough. But I think we underestimate them when we say that. I think we underestimate President Ahmadi-Nejad and the ruling mullahs of Iran when we say that. I believe they are true believers, and I don't think we can afford the luxury of not believing that they believe this. I don't think we can dismiss them as another group of two-bit tyrants. These are two-bit tyrants who have billions upon billions of dollars and have allies like North Korea, who have access to nuclear technology. They have scientists from Russia who left Russia because there is nothing for them to do, and they are in Tehran today developing rocketry and the nuclear capability to project that power.

Some would say I am beating the drums of war. No. I am accurately describing the situation at hand. Some disagree with me, and they are welcome to. Do you want to take that chance? Do you want to take the chance of having a nuclear weapon? They are clear about their intention of developing it. Do you want to take that chance? I don't.

How did this happen? Radical Islam has been present in the Middle East for a long time. We have not heard much from them except when? In the last 30, 40 years. Why? The price of oil. It is oil, to begin with, and now the high price of oil. It gives them the resources to not only feed the people to keep them in power but to produce weapons to project power. The only reason, again, they have those resources is because of this one three-letter word--oil--which brings me back to the beginning of this discussion.

If we are going to defeat radical fascist Islam, then we have to have a strategy to take resources away from them so they cannot project the power they can today. The only way to do that is by developing a more secure energy future for America and reducing our dependency on that oil, which would reduce the price of energy around the world. We need to encourage not only alternative energy production in this country; we have to do so around the world. We have to do so around the world by using alternative technology such as, for example, as I talk about in the bill, coal.

One of the greatest new energy consumers in the world is China. They don't have a lot of oil, but they have a lot of coal. So it is an opportunity for us, with coal to gas and coal to liquid fuels technology, developing and commercializing that technology. And it is not just going to be coal to liquid fuels, but if you talk to folks in the business who are developing these plants right now--and one is being developed in Pennsylvania, which I have been involved with--they believe they can use all sorts of organic matter, such as waste products, to blend in with the coal to be able to produce liquid fuel.

We need to have that technology in America, and they need to have that technology, and they are developing it, by the way, in China. We need to create from the vast amount of energy opportunities that we have in America and around the world new technologies so oil becomes less of a valuable commodity. This is one concrete way we can fight the war on radical Islamic fascism.

I have put together a bill that talks about making--it does, if it would be passed--a huge investment, a huge investment in alternative technologies, a huge investment in coal, a huge investment in renewables to create a more secure energy future for America. We can no longer talk about how we are going to do this or that we will do it at some future date. We must act now, quickly. We need to provide support for the commercialization of this technology. We are not going to see energy produced at $20 a barrel, the equivalent of oil. We are not going to see it done at $30 or $40 a barrel. It may be more expensive. We have to make sure we provide proper support in loan guarantees, incentives, and tax credits to make this a profitable venture and a secure venture for people to invest in.

This is not something that normally I have come to the Chamber and said that this is the Government's job. This is national security. This is not about subsidizing big business. This is about producing energy here for the security of our country. We either make the investment here or we pay a horrible price, human as well as financial, in the future.

We need to think big, and we need to think now. That is why--when I spoke about the comments the Senator from Louisiana made before I came to the floor on opening up OCS--it is unconscionable for us to look at the national security situation we look at today, to look at the subsidies we are providing to our enemies and say: Oh, oh, we can't explore for oil in Alaska or OCS. Oh, we are worried about the environment.

I am worried about the environment, too. In my State of Pennsylvania, in the western part of our State, we drill 3,000 gas wells a year-- 3,000--on farms, in neighborhoods, outside neighborhoods, in people's backyards. At Oakmont Country Club, which is where the U.S. Open is going to be played, they are going to drill a gas well right next to Oakmont Country Club. That is pretty much an environmental area. Nobody wants to pollute Oakmont Country Club. We are going to drill a gas well there.

Yet there are people on this floor who won't drill those wells in Alaska where nobody goes, where nobody is. As a result, our country is at risk. We feed an enemy huge resources to combat us

in their attempt to destroy us. It is unconscionable for us, a country that produces oil and gas cleaner and more efficiently than any other country in the world, to allow our enemy to hold us, not just hostage, but to gain resources to destroy us because we placate an interest group who funds, campaigns, and influences voters.

I know many in this Chamber and many in this country do not believe we are at war or do not believe this war is serious. Time will tell. I think, unfortunately, time will tell us in a relatively short period of time how serious this is, and we will look back on this time as we stood year after year for the past 10 years twiddling our thumbs, not doing what we can do to provide a more secure energy future for this country, and we will look back in horror of the blinders, of the scales we had on our eyes that we could not see the threat before us.

We must do something. The bill I am introducing today is a comprehensive package that does a lot to make America a safer country, first and foremost, from a national security perspective and, secondly, from an economic perspective.

I know we only have a week left. The Senator from Louisiana talked about trying to get a bill done. Let's get something done. I plead for us to get something done to create some new sources of energy for this country, to put some downward pressure on world market prices. It is essential for us to do so.

We need to make this commitment for the future of our country.

Mr. President, today I am pleased to introduce the Medicare Durable Medical Equipment Access Act with my colleague Senator Kent Conrad of North Dakota. This bill makes several modest changes to the competitive acquisition process for this equipment.

In 2007, a competitive acquisition program will replace the current reimbursement policy for durable medical equipment in Medicare. This shift toward a market-based approach to payments for durable medical equipment was mandated through the Medicare Modernization Act (MMA) of 2003.

Our bill was written with two key goals in mind. The Medicare Durable Medical Equipment Access Act would preserve access to home medical equipment in rural areas for older or disabled Americans who need this equipment. In addition, the bill will allow small businesses that provide homecare equipment to continue to participate in the Medicare Program if they qualify and meet the competitively bid price.

Our legislation is identical to H.R. 3559 which was introduced earlier this Congress by Congressmen David Hobson and John Tanner. That bill has broad, bipartisan support and 132 House cosponsors.

As background, section 302(b)(I) of the MMA requires Medicare to replace the current durable medical equipment payment methodology for certain items with a competitive acquisition process beginning in 2007 in 10 of the largest metropolitan statistical areas (MSAs).

The Medicare Durable Medical Equipment Access Act would require several modest changes to the competitive acquisition program.

First, the MMA requires the Secretary to include quality standards in the competitive acquisition process and also allows the Secretary to waive the application of quality standards if applying the standards would delay implementation of the process. However, quality standards are essential to ensuring that beneficiaries are not forced to use the lowest-cost provider without consideration of the quality of the medical equipment items provided. This bill would require the Secretary to include quality standards before implementing competitive acquisition.

Second, the MMA allows the Secretary to exempt rural areas and urban areas with low population density to ensure that competitive acquisition is not implemented in areas that lack the health care infrastructure to support it. This bill would require the Secretary to exempt MSAs with fewer than 500,000 people.

Third, the MMA created a Program Advisory and Oversight Committee composed of stakeholders to advise the Secretary on the implementation of competitive acquisition. However, the MMA does not apply the Federal Advisory Committee Act (FACA) to it. The purpose of FACA is to ensure that advice rendered to the executive branch by advisory committees be both objective and accessible to the public. This bill would apply FACA to this oversight committee.

Fourth, the MMA allows the Secretary to contract with only as many providers as the Secretary deems necessary to meet the demand of an area. Any provider not awarded a contract would be prohibited from participating in Medicare for up to 3 years. This bill would allow applicable small businesses that did not receive a contract to continue to provide durable medical equipment in Medicare at the competitive acquisition bid rate.

Fifth, the MMA explicitly prohibited administrative or judicial review for competitive acquisition of DME. This means that providers do not have legal recourse to appeal the bid amount or contracts. My bill would restore appeal rights for competitive acquisition of DME. These rights exist elsewhere in the Medicare program.

Sixth, under the MMA, the Secretary can only competitively acquire an item if the Secretary believes that doing so would result in significant savings to Medicare. It is important for the Secretary to show that the savings from competitive acquisition justify constructing a bureaucracy to implement the program. To that end, this bill would require the Secretary to show that competitive acquisition would result in savings of at least 10 percent.

Finally, under the MMA, the Secretary can use competitive acquisition bid rates in one MSA to set the reimbursement for another MSA. Our bill would require that, before doing so, the Secretary conduct a comparability analysis of the two MSAs. This will help prevent any applications of bid rates outside of an MSA that are inappropriate.

The new, market-based competitive acquisition program in Medicare is designed to save money and make Medicare more efficient. In order to achieve this goal, we need to preserve access to care and preserve the cost-effective health care infrastructure that homecare represents. This bill will help ensure that the market reforms enacted by the MMA accomplish both cost savings and continued access to cost-effective care.

Before I close, I would like to give a real life example from my home state of Utah on why this legislation is needed and necessary. A small provider of durable medical equipment in Utah approached me about how current law will impact him. This company was established in 1997 with just one employee. It has grown over the years by providing its customers the products that they need to stay at home and out of the hospitals.

When competitive bidding hits the State of Utah in 2007, this small company will be forced to bid against large national companies. Much larger companies compete with the smaller ones to provide medical equipment such as wheelchairs, in home hospital beds, and home oxygen. If my Utah company loses the bid, it will go out of business, as will many of its smaller competitors in Utah. This company prides itself on being able to provide customers with a high quality of service. The owner of the company has asked me how he can continue to provide great service when his company has been forced to bid to the lowest price possible just to keep from going out of business.

Therefore, this legislation means a lot to small companies not just in Utah, but all over the country, by allowing them to continue to provide medical equipment to those who need it.

I heard from several small medical equipment companies in my home State of Utah for several years on this issue and they made very convincing arguments. That is why I am introducing the Medicare Durable Medical Equipment Access Act. I strongly urge my colleagues to talk to their constituents back home who own small durable medical equipment companies. I am certain that these companies are experiencing concerns similar to those shared with me.

I urge my colleagues to cosponsor this legislation so that Medicare beneficiaries will continue to receive quality care at affordable prices for their medical supplies.

Mr. President. I rise today to introduce with Senator Feinstein legislation to establish a pilot program that is intended to enhance the level of expertise in patent cases among United States district court judges. In conversations with a number of constituents and both small and large companies in my home State of Utah, I have found that one of the frequent complaints by those who had been involved in patent litigation was that many district court judges had relatively little expertise in patent law, and--partially as a result-- the decisions of trial courts are often overturned on appeal due to technical errors in construing patent claims. Obviously, this is frustrating for litigants, because it prolongs the uncertainty they experience and makes an expensive appeal of the trial court's decision much more likely. This bill seeks to address that problem by providing a way to increase the level of expertise among district court judges in patent cases.

The core provisions of this bill authorize a pilot project in at least five judicial districts that have a significant patent litigation caseload. Under the pilot program, judges in these districts will be allowed to form a smaller pool of judges who are willing to accept a larger portion of the patent litigation docket in the district. The bill also authorizes additional resources to allow participating courts to hire law clerks with expertise in patent law and to provide for educational programs relating to patent law for the participating judges. It is our intention that this program will allow these judges to acquire greater experience in handling patent trials, decrease the amount of time that patent cases take to resolve, and reduce reversals on appeal by enhancing the level of experience and expertise of judges and law clerks handling these cases. The project is authorized for at least five judicial districts, to be designated by the Administrative Office of the United States Courts, and will last for a 10 year period.

The bill also requires Administrative Office of the United States Courts and the Federal Judicial Center to provide a report to Congress on the results of the pilot program, along with additional information that will allow Congress to determine whether this approach has had the beneficial effects that we anticipate.

Those who are following the patent debates in Congress closely will notice that this bill is very similar to a bill introduced in the House by Representatives Issa and Schiff, and I would like to acknowledge their work on this issue, as well as the work of other members of the House Judiciary Committee and the Subcommittee on Courts, the Internet, and Intellectual Property. I would also like to thank my colleague from California, Senator Feinstein, for her interest in this issue and for her willingness to cosponsor this bill.

I should also note that further refinements to this language will likely be necessary as it moves through the legislative process. In particular, we need to include a provision which would preserve a sufficient element of random assignment among judges. I understand some of my Senate colleagues have reservations about including this provision, but we will deal with that issue as the bill progresses.

I hope my colleagues in the Senate will join Senator Feinstein and me by supporting this legislation.

I yield the floor.

Mr. President, I am introducing legislation today at the request of the executive branch and will be seeking unanimous consent to request its passage as soon as possible. The Foreign Affairs Management Authorities Act of 2006 contains provisions requested by the State Department and the Broadcasting Board of Governors that will enable the two agencies to carry out their work more efficiently and effectively.

Title I of this bill creates a new pay for performance system for Foreign Service officers with the rank of 01 and below and creates a uniform worldwide pay scale. The American Foreign Service Association supports these. I am including a letter from Anthony Holmes, the AFSA President.

The Senior Foreign Service already participates in a pay for performance plan as mandated in previously enacted law, Section 412(a)(2) PL108-447, Div. B. The legislation replaces ``within grade increases'' with a requirement that, upon the introduction of the new Foreign Service Schedule in April 2008, any further adjustments in pay are tied to individual performance rather than longevity of service. It directs the Secretary of State to pay to each member of the Service an adjustment taking into account ``individual performance, contribution to the mission of the Department, or both, under a rigorous performance management system that makes meaningful distinctions based on relative performance and that clearly links individual pay and performance under precepts prescribed by the Secretary.'' Each Secretary/head of agency utilizing the Foreign Service personnel system may implement this section in a manner most suitable to the unique circumstances of his or her agency. Poor performers would get no increase in pay. As with the Senior Foreign Service, the pay for performance planned for the Foreign Service would utilize multiple levels of performance distinctions. Performance-based adjustments normally would be made only once in any 12-month period.

Title I also provides a number of employee protections. It specifically guarantees a minimum funding pool for performance-based pay adjustments to ensure that, in the aggregate, employees are not disadvantaged by conversion to the new pay system. It authorizes selection boards to rank order employees for the purpose of recommending pay for performance salary adjustments, and requires agencies that use selection boards for pay for performance to follow the selection board rankings in allocating salary increases, except in special circumstances. The legislation does not impact the negotiation of procedures and appropriate arrangements for adversely affected employees with the employees' representative, the American Foreign Service Association, AFSA.

Title I provides transitional authorities to the Secretary of State for use during the interim period before April 2008 when the new Foreign Service Schedule is established. It contains provisions that govern the conversion of employees to the new schedule and it provides for a one-year transition period from the current 14-step system. It also gives the Secretary authority to establish transitional rules that prevent a reduction in a member's rate of pay by reason of conversion to the new system, among other measures that are to be applied to provide for a smooth transition.

In a long needed reform, Title I also provides uniform compensation for worldwide service by April 2008. It eliminates the disparity in pay between those serving in Washington, DC, and other domestic posts who receive locality pay increases and those serving overseas who do not. The discrepancy has skewed incentives to serve overseas and is inconsistent with mandatory worldwide and rotational assignment requirements. The Department estimates the cost of its three-stage transition to the new pay system to be $32 million in its 2007 budget, $64 million in 2008, and $32 million in 2009. The legislation provides for pay conversion and establishes temporary rules for the period leading up to April 2008 as the transition takes place.

As Secretary Rice works to fill difficult posts around the world, including in Iraq and Afghanistan, and as our diplomats come increasingly under fire in tough places, it is common sense to restructure a pay system that, without reform, provides disincentives to serving overseas. The Foreign Service must know that our country stands behind them, appreciates their service, and is grateful for the contributions they make to the security of our country and the well- being of our citizens.

Title II contains a number of provisions that are contained in S.600, still being held on the Senate calendar. It also contains provisions that were requested by the executive branch subsequent to the Senate Foreign Relations Committee's passage of S. 600. The provisions in Title II of this legislation are as follows:

Section 201. Education allowances modifies current law to: 1. permit payment of certain fees required by overseas schools for successful completion of a course or grade; 2. allow for travel to the United States for children in kindergarten through 12th grade when schools at post are not adequate; 3. allow for education travel to a school outside the United States for children at the secondary and college level; 4. provide for educational travel at the graduate level for children who are still dependents (students older than 22 would be ineligible for such travel); and 5. allow the option of storing a child's personal effects near the school during their trip to post, rather than transporting the effects back and forth.

Section 202. Fraud Prevention and Detection Account broadens the Secretary of State's authority to use a portion of fees collected for H-1B, H-2B and L-1 visas to investigate fraud in other visa categories, including fraud in connection with terrorist activities. Allowing an expanded use of the funds will assist the Department in developing a system that concentrates on H and L visa fraud, but will potentially reduce fraud among all visa classifications and increase the U.S. ability to disrupt terrorist travel.

Section 203. Extension of Privileges and Immunities extends diplomatic privileges and immunities to the African Union Mission to the United States and to the Permanent Observer Mission of the Holy See, and to members of both of these missions.

Section 204. International Litigation Fund allows the Department to retain awards of costs and attorneys' fees when defending against international claims in addition to amounts currently allowed to be retained when it successfully prosecutes a claim.

Section 205. Personal Services Contracting; BBG, the legislation extends for one year a pilot program allowing the BBG to hire 60 U.S. citizens or foreign nationals on contract rather than as full-time government employees. Such authority gives the BBG the flexibility to hire, for the short or medium-term, broadcasters and on-air hosts in difficult languages, some with many dialects. The BBG uses the authority, for example, for surge capacity in Urdu and Arabic.

Inspector General, this section also establishes a limited authority for the State Department's Office of the Inspector General (OIG) to hire personal service contractors (PSCs) to augment its ability to conduct oversight of programs and operations related to Afghanistan and Iraq. No more than 20 PSCs may be hired at any one time and, absent exceptional circumstances, the contract length for each PSC may not exceed two years. The Inspector General anticipates a need for additional staff once the Special Inspector General for Iraq Reconstruction's (SIGIR's) portfolio is either partially or fully transferred to the State Department. The OIG also expects an increase in short-term staffing needs to

carry out oversight responsibilities related to Afghanistan.

Section 206. Facilitating Service in Iraq and Afghanistan is a technical correction to an inadvertent drafting error in section 1602(a) of the Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006 (P.L. 109-234). The intent behind section 1602(a) was to provide the Secretary of State with additional authority to waive annuity limitations on reemployed Foreign Service annuitants to support U.S. efforts in Iraq and Afghanistan. As enacted, however, section 1602(a) has the unintended effect of cutting back significantly on the Secretary of State's pre- existing authority to waive Foreign Service annuity limitations in an emergency involving a direct threat to life or property or other unusual circumstances, without regard to geographic location. This technical correction restores the Secretary's pre-existing authority and provides the intended additional authorities with respect to Iraq and Afghanistan.

Section 207. Discontinuance of Duplicative or Obsolete Reports discontinues a number of reports that have been overtaken by events or contain material that is covered in other executive branch submissions to the Congress.

I ask my colleagues to give favorable and speedy consideration to this measure.

I ask unanimous consent that a letter be printed in the Record.

Mr. President, in order for the United States to continue to stand for the fairest, most transparent and efficient financial markets in the world, I believe we must provide assistance to America's small public companies in their efforts to comply with the Sarbanes- Oxley Act.

Just a few years ago, the trust and confidence of the American people in their financial markets was dangerously eroded by the emergence of serious accounting irregularities by some companies and possible fraudulent actions by corporations like WorldCom, Inc., Enron, Arthur Andersen and others. The shocking malfeasance by these businesses and accounting firms put a strain on the growth of our economy. The misconduct by a few senior executives has cost the jobs of thousands of hard-working Americans. The lack of faith in our financial markets contributed to an overall decline in stock values and has caused grave losses to individual investors and pension funds.

By all accounts, Sarbanes-Oxley has been effective in bringing accountability to corporate governance, auditing, and financial reporting for public companies. The dark days of the Enron scandal have given way to a new corporate culture that embraces responsibility and transparency, and for this we have Sarbanes-Oxley to thank. Sarbanes- Oxley has helped restore confidence in our capital markets and helped improve our nation's future economic growth.

However, with compliance also comes cost. And while the cost of complying with the law is small enough to be absorbed by larger corporations, smaller public companies, particularly small minority public companies, have been disproportionately affected by these costs. Small business is the engine of economic growth in our Nation. Almost 60 percent of Americans are employed by small businesses. Small business growth has been critical in developing the high wage jobs for America's future.

Unfortunately, an April 2006 report to the Senate Committee on Small Business and Entrepreneurship by the United States Government Accountability Office (GAO) found that small public firms are incurring much higher audit fees and increased costs in complying with the Sarbanes-Oxley Act.

The report finds that of the 2,263 public firms with market capitalization of less than $75 million, just 66 have fully implemented Section 404 of the law that requires firms to construct formal internal control frameworks and filed internal control reports. These 66 firms reported paying $1.14 in audit fees per $100 of revenue, compared to just $.13 per $100 for firms with greater than $1 billion in market capitalization. I believe we must take action to help small

companies comply with the regulatory burdens of the Sarbanes-Oxley Act.

In addition to the costs associated with internal controls, 81 percent of small firms responding to the GAO survey said they brought in outside consultants to comply with the Act. Nearly half of the small firms reported ``opportunity costs'' related to complying with the regulatory burden placed on them by the Sarbanes-Oxley Act such as deferring or canceling operational improvements, and more than one- third of respondents were forced to defer or cancel information technology investments. Too many small firms simply do not have the resources and expertise necessary to implement the formal internal control frameworks required by Section 404, and as a result, they are disadvantaged compared to larger firms that are absorbing these costs.

The U.S. Securities and Exchange Commission has provided a lengthy compliance period for small businesses to comply with the Sarbanes- Oxley regulations and is attempting to develop additional methods to ease the regulatory burden. However, I believe additional efforts are needed.

In order to assist these firms with the increased costs of implementation and help our small businesses keep our economy moving forward, I am introducing the Small Business Sarbanes-Oxley Compliance Assistance Act of 2006. The bill would authorize the U.S. Small Business Administration to award grants to small public companies and small business concerns to help lessen the burden of these costs. If Congress is asking these small firms to bear the burden of cost for compliance with Sarbanes-Oxley, the least we can do is chip in and help pay for it. My legislation authorizes $5 million to be awarded annually through 2011.

My legislation also creates a task force, assembled by the SBA Chief Counsel for Advocacy, and comprising of representatives from the SEC and other appropriate bank regulatory agencies, to report semi-annually on how to assist small public companies in complying with Sarbanes- Oxley. My hope is that this task force will continually find new ways to lift the regulatory burden on small businesses attempting to comply with the law. Each report of the task force will be required to evaluate upgrades or alternatives to the SEC's Electronic Data Gathering Analysis Retrieval System so that companies might submit filings to the SEC without the need for third party intervention. The task force will also report on the potential to reduce inefficiencies related to SEC filings; the feasibility of synchronizing filing requirements for substantially similar small firms; whether the SEC and bank regulatory agencies should commit additional resources to aiding small public firms with filing requirements; whether the SEC needs to publish guidance on reporting and legal requirements aimed at assisting smaller public firms; and the feasibility of extending incorporation by reference privileges to other Government filings containing equivalent information.

This legislation will help some but not all of the thousands of small firms that are public or hope to become public. As more information becomes available, I am hopeful that the task force will provide ideas on how the SEC can help more of the small, non-accelerated filers implement the Sarbanes-Oxley regulations. We must do all we can to insure that small firms can demonstrate that transparency and accountability in the private sector is thriving without having to incur such a burdensome cost. This legislation is supported by the National Black Chamber of Commerce as well as Small Business Majority. I ask all my colleagues to support this legislation.

Mr. President, I rise today to introduce the Children's

Health Protection and Eligibility Act of 2006. I am delighted to have Senator Murray, Bingaman, and Mikulski introduce this bill with me today.

As health insurance costs continue to rise and the number of employers that offer health coverage to their employees decline, our safety net programs are all the more critical, especially for the health of our children. It is more important than ever to sustain existing health care coverage for our children--and, in fact, to expand it. It's the best way to reduce costs and improve access. It's about keeping children healthy.

New Census data released last month showed that the number of uninsured has grown from 41.2 million in 2001 to 46.6 million in 2005. These are largely working families--the number of fulltime workers without any insurance increased to 17.7 percent in 2005 from 16.8 percent in 2002.

In Washington, our Medicaid program is currently providing coverage for more than 500,000 children. Our State Children's Health Insurance Program is providing coverage to another 11,000 children. But 100,000 of our kids in Washington State remain uninsured even though they are eligible for one of the public programs.

One barrier to expanding kids' access to health care in Washington is the funding rules that were put into place when SCHIP was enacted in 1997. In short, our state has been punished for its early innovation for doing the right thing.

When SCHIP was enacted at the Federal level in 1997, Washington was one of only four States already providing health coverage for children at the level Federal lawmakers wanted SCHIP to reach. Under the original Federal rules, Washington was not allowed to use new funds to pay for children who were covered prior to SCHIP's implementation.

As a result, we have been penalized and prevented from fully using our share of the funding. That is why in 2002 I worked to ensure a temporary fix to the funding inequity and I have been fighting to make this fix permanent ever since. And as a result of these temporary fixes, Washington has been able to extend coverage to an additional 60,000 children and reinvest $47.3 million in children's health safety net programs.

Despite this success, the State has still been forced to return over percent of its share of Federal funding. Over the first decade of the SCHIP program, Washington is expected to return $191 million in Federal funds.

Let me say that again: we're returning millions of dollars to the Federal Government and we still have 100,000 uninsured children in our State--the majority of whom are eligible for these public programs.

It's unacceptable and it runs contrary to the central goal of the SCHIP program. We need a permanent solution once and for all so that Washington and the other States that expanded eligibility in their Medicaid programs before the enactment of SCHIP in 1997 are no longer penalized for their early innovation and their commitment to the health of children.

This is why we are introducing the Children's Health Protection and Eligibility Act of 2006.

This legislation will give states the ability to use SCHIP funds more efficiently to prevent the loss of health care coverage for children. States that have made a commitment to insuring children could use their entire SCHIP funds allotment to maintain access to health care coverage for all low-income children in the state. The bill also ensures that all of the qualifying States that have demonstrated a commitment to providing health care coverage to children can access SCHIP funds in the same manner to support children's health care coverage. Finally, this bill allows States that have expanded coverage to the highest eligibility levels allowed under SCHIP, and meet certain requirements, to receive the enhanced SCHIP match rate for any kids that had previously been covered above the mandatory level.

The requirements are best practices that have been tested and proven all across our Nation: a simplified application process, twelve-month continuous eligibility and easy access to enrollment staff are just a few of the examples of actions that we have taken in Washington that are proven to work. They result in more children having coverage and accessing appropriate care. Many of our States are working to make the program easier for children and families to navigate and now Congress needs to make it easier for all States to access their SCHIP allotment in order to expand and improve coverage to our youngest citizens.

Children are the leaders of tomorrow; they are the very future of our great Nation. We owe them nothing less than the sum of our energies, our talents, and our efforts in providing them a foundation on which to build happy, healthy and productive lives. With the rising number of uninsured and the ever-increasing healthcare costs, it is more important than ever to maintain existing health care coverage for children in order to hold down health care costs and to keep children healthy. Removing barriers for innovative states and allowing them to fully access their SCHIP allocation is a major step in achieving this goal. I urge my colleagues to join us in support of this bill and ask unanimous consent that the text of the bill be printed in the Record.