Domestic Spirits Tax Equity Act of 2005

Mr. President, I rise today with my friend and colleague, Senator Carper, to introduce the Postal Accountability and Enhancement Act of 2005, a bill designed to help the 225-year-old Postal Service meet the challenges of the 21st Century. This legislation represents the culmination of a process that began in the summer of 2002 when I introduced a bill to establish a Presidential Commission charged with examining the problems the Postal Service faces, and developing specific recommendations and legislative proposals that Congress and the Postal Service could implement.

I originally introduced the Postal Accountability and Enhancement Act last

May. In June of 2004, the bill was unanimously reported out of the the Homeland Security and Governmental Affairs Committee. That bill, S. 2468, had the strong endorsements of the National Rural Letter Carriers Association, the National Association of Letter Carriers, the National Association of Postmasters of the United States, and the Coalition for a 21st Century Postal Service--which represents thousands of the major mailers, employee groups, small businesses, and other users of the mail. It also had the strong bi-partisan support of twenty-two members of the United States Senate. Unfortunately, due to a variety of factors, my efforts to have the bill considered before the full Senate were stalled.

Since last Fall, Administration representatives have become actively engaged in postal reform efforts, and have given me their commitment to working with Congress to ensure passage of a reform bill this year. I have every expectation that this will be the year comprehensive postal reform legislation is signed into law.

It has long been acknowledged that the financial and operational problems confronting the Postal Service are serious. At present, the Postal Service has more than $90 billion in unfunded liabilities and obligations, which include $1.8 billion in debt to the U.S. Treasury, $7.6 billion for Workers' Compensation claims, $3.5 billion for retirement costs, and as much as $47 billion to cover retiree health care costs. The Government Accountability Office's Comptroller General, David Walker, has pointed to the urgent need for ``fundamental reforms to minimize the risk of a significant taxpayer bailout or dramatic postal rate increases.'' The Postal Service has been on GAO's ``High- Risk'' List since April of 2001. The Postal Service is at risk of a ``death spiral'' of decreasing volume and increasing rates that lead to further decreases in volume.

In December of 2003, President Bush announced the creation of a bipartisan commission charged with identifying the operational, structural, and financial challenges facing the U.S. Postal Service. The President charged this commission with examining all significant aspects of the Postal Service with the goal of recommending legislative and administrative reforms to ensure its long-term viability.

The President's Commission conducted seven public hearings across the country at which they heard from numerous witnesses. On July 31, 2003, the Commission released its final report, making 35 legislative and administrative recommendations for the reform of the Postal Service.

As I read through the Commission's report, I was struck by what I considered the Commission's wake up call to Congress: its statement that ``an incremental approach to Postal Service reform will yield too little, too late given the enterprise's bleak fiscal outlook, the depth of current debt and unfunded obligations, the downward trend in First- Class mail volumes and the limited potential of its legacy postal network that was built for a bygone era.'' That is a very strong statement, and one that challenged both the Postal Service and Congress to embrace far-reaching reforms.

To the relief of many, including myself, the Commission did not recommend privatization of the Postal Service. Instead, the Commission sought to find a way for the Postal Service to do, as Co-Chair Jim Johnson described to me, ``an overwhelmingly better job under the same general structure.''

The Postal Service plays a vital role in our economy. The Service itself employs more than 750,000 career employees. Less well known is the fact that it is also the linchpin of a $900-billion mailing industry that employs 9 million Americans in fields as diverse as direct mailing, printing, catalog production, paper manufacturing, and financial services. The health of the Postal Service is essential to the vitality of thousands of companies and the millions that they employ.

One of the greatest challenges for the Postal Service is the decrease in mail volume as business communications, bills and payments move more and more to the Internet. The Postal Service has experienced declining volumes of First-Class mail for three straight years. This is highly significant, given that First-Class mail accounts for 48 percent of total mail volume, and the revenue it generates pays for more than two- thirds of the Postal Service's institutional costs.

The Postal Service also faces the difficult task of trying to cut costs from its nationwide infrastructure and transportation network. These costs are difficult to cut. Even though volumes may be decreasing, carriers must still deliver six days a week to more than 139 million addresses.

As Chairman of the Committee on Homeland Security and Governmental Affairs, I held a series of eight hearings, including a joint hearing with the House, during which we reviewed the recommendations of the President's Commission. The bill Senator Carper and I introduce today reflects what the Committee learned from dozens of witnesses.

First and foremost, the Collins-Carper bill preserves the basic features of universal service--affordable rates, frequent delivery, and convenient community access to retail postal services. As a Senator representing a large, rural State, I want to ensure that my constituents living in the northern woods, or on the islands, or in our many rural small towns have the same access to postal services as the people of our cities. If the Postal Service were no longer to provide universal service and deliver mail to every customer, the affordable communication link upon which many Americans rely would be jeopardized. Most commercial enterprises would find it uneconomical, if not impossible, to deliver mail and packages to rural Americans at rates charged by the Postal Service.

The Collins-Carper bill allows the Postal Service to maintain its current mail monopoly, and retain its sole access to customer mailboxes. It grants the Postal Service Board of Governors the authority to set rates for competitive products like Express Mail and Parcel Post, as long as these prices do not result in cross subsidy from market-dominant products. As a safeguard, our bill establishes a 30 day prior review period during which the proposed rate changes shall be reviewed by the Postal Regulatory Commission.

It replaces the current lengthy and litigious rate-setting process with a rate cap-based structure for market-dominant products such as First-Class Mail, periodicals and library mail. This would allow the Postal Service to react more quickly to changes in the mailing industry. The rate caps would be linked to the Consumer Price Index. The goal would be to make rate increases more predictable and less frequent and to provide incentives for the Postal Service to operate efficiently. Price changes for market-dominant products would be subject to a 45 day prior review period by the Postal Regulatory Commission.

Our bill would introduce new safeguards against unfair competition by the Postal Service in competitive markets. Subsidization of competitive products by market-dominant products would be expressly forbidden, and an equitable allocation of institutional costs to competitive products would be required.

The President's Commission recommended that the regulator be granted the authority to make changes to the Postal Service's universal service obligation and monopoly. The vast majority of the postal community, however, shared my belief that these are important policy determinations that should be retained by Congress. The Collins-Carper bill keeps those public policy decisions in congressional hands.

The existing Postal Rate Commission would be transformed into the Postal Regulatory Commission with greatly enhanced authority. Under current law, the Rate Commission has very narrow authority. We wanted to ensure that the Postal Service management has both greater latitude and stronger oversight. Among other things, the Postal Regulatory Commission will have the authority to regulate rates for non- competitive products and services; ensure financial transparency; establish limits on the accumulation of retained earnings by the Postal Service; obtain information from the Postal Service, if need be, through the use of new subpoena power; and review and act on complaints filed by those who believe the Postal Service has exceeded its authority. Members of the Postal

Regulatory Board will be selected solely on the basis of their demonstrated experience and professional standing. Senate confirmation of all Board Members will be required.

To meet the Presidential Commission's call for increased financial transparency, the Collins-Carper bill will require the Postal Service to file with the Postal Regulatory Commission certain Securities and Exchange Commission financial disclosure forms, along with detailed annual reports on the status of the Postal Service's pension and postretirement health obligations.

The Governmental Affairs Committee dedicated two hearings to the examination of the Commission's workforce-related recommendations. The Postal Service is a highly labor intensive organization, using $3 out of every $4 to pay the wages and benefits of its employees. Their workforce is comprised of more than 700,000 dedicated letter carriers, clerks, mail handlers, postmasters, and others, many of whom place great value on their right to collectively bargain. Our bill reaffirms that right. This bill only makes changes to the bargaining process that have been agreed to by both the Postal Service and the four major unions. We replace the rarely used fact-finding process with mediation, and shorten statutory deadlines for certain phases of the bargaining process.

Additionally, the Collins-Carper bill corrects what I believe to be an anomaly in the federal workers' compensation law that results in high costs for the Postal Service. Under the Federal Employees Compensation Act (FECA), federal employees with dependents are eligible for 75 percent of their take-home pay, tax free, plus cost of living allowances. In addition, there is no maximum dollar cap on FECA payments. As a result, employees often opt not to retire, staying on the more generous workers' compensation program permanently.

According to a March 2003 audit issued by the Postal Service's Office of Inspector General, the Postal Service's workers' compensation rolls include 81 cases that originated 40 to 50 years ago, with the oldest recipient being 102 years old. The IG's office found 778 cases that originated 30 to 40 years ago; and 1,189 cases that originated 20 to 29 years ago.

The Collins-Carper bill works to protect the financial resources of the Postal Service by converting workers' compensation benefits for total or partial disability to a retirement annuity when the affected employee reaches 65 years of age. This change would reflect the fact that disabled postal employees would likely retire at some point were they not receiving workers' compensation. I would like to note that the average postal employee retires far earlier than age 65, so this is still a generous program. It is important to point out that the Postal Service has reduced their workplace injury rate by twenty-eight percent over the past three years.

The Collins--Carper bill also puts into place a three-day waiting period before an employee is eligible to receive 45 days of continuation of pay. This is consistent with every state's workers' compensation program that requires a three- to seven-day waiting period before benefits are paid.

To address the President's Commission's recommendation for improved executive compensation, this bill will allow the Postal Service to raise their overall executive compensation level from Executive Level 1 to that of the Vice President. This would bring the Postal Service in line with authority granted to federal agencies. This new authority will be contingent upon the development of a meaningful performance appraisal system.

Our bill has reached an important compromise on the issue of workshare discounts. The workshare program was developed by the Postal Service and the Postal Rate Commission to enable customers to pay lower rates when they perform mail preparation or transportation activities. The language in our bill supports the principle that workshare discounts should generally not exceed the costs that the Postal Service avoids as a result of the worksharing activity. However, the bill spells out certain circumstances under which workshare discounts in excess of avoided costs are warranted.

Finally, our bill would repeal a provision of Public Law 108-18 which requires that money owed to the Postal Service due to an overpayment into the Civil Service Retirement System Fund be held in an escrow account. Repealing this provision would essentially ``free up'' $78 billion over a period of 60 years. These savings would be used to not only pay off debt to the U.S. Treasury and to fund health care liabilities, but also to mitigate rate increases as well. In fact, failure to release these escrow funds could mean, for mailers, a double-digit rate increase in 2006--an expense most American businesses and many consumers are ill-equipped to afford.

The bill would also return to the Department of Treasury the responsibility for funding CSRS pension benefits relating to the military service of postal retirees. No other agency is required to make this payment. Ratepayers should not be held responsible for this $27 billion obligation.

The Postal Service has reached a critical juncture. If we are to save and strengthen this vital service upon which so many Americans rely for communication and their livelihoods, the time to act is now.

I look forward to working with all of my colleagues in the Senate, and House Government Reform and Oversight Committee Chairman Tom Davis, who, together with Congressman John McHugh, also recently introduced a postal reform bill, H.R. 22.

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

Mr. President, today I introduce the Postal Accountability and Enhancement Act of 2005, a bill designed to help the 225-year-old Postal Service meet the challenges of the 21st century. I originally introduced this bill last May. In June of 2004, the bill was unanimously reported out of the Homeland Security and Governmental Affairs Committee. That bill, S. 2468,

had the strong endorsements of the National Rural Letter Carriers Association, the National Association of Letter Carriers, the National Association of Postmasters of the United States, and the Coalition for a 21st Century Postal Service--which represents thousands of the major mailers, employee groups, small business, and other users of the mail. It also had the strong bi-partisan support of twenty-two members of the United States Senate. Unfortunately, the 108th Congress expired before my bill passed the Senate.

It has long been acknowledged that the financial and operational problems confronting the Postal Service are serious. At present, the Postal Service has roughly $70 billion to $80 billion in unfunded liabilities and obligations, which include $1.8 billion in debt to the U.S. Treasury, $7.6 billion for workers' compensation claims, $3.5 billion for retirement costs, and as much as $47 billion to cover retiree health care costs. The Government Accountability Office's Comptroller General, David Walker, has pointed to the urgent need for ``fundamental reforms to minimize the risk of a significant taxpayer bailout or dramatic postal rate increases.'' The Postal Service has been on GAO's ``High-Risk'' List since April of 2001. The Postal Service is at risk of a ``death spiral'' of decreasing volume and increasing rates that lead to further decreases in volume.

The Postal Service is the linchpin of a $900-billion mailing industry that employs 9 million Americans in fields as diverse as direct mailing, printing, catalog production, and paper manufacturing. The health of the Postal Service is essential to the vitality of thousands of companies and the millions that they employ.

First and foremost, my bill preserves the basic features of universal service--affordable rates, frequent delivery, and convenient community access to retail postal services. If the Postal Service were no longer to provide universal service and deliver mail to every customer, the affordable communication link upon which many Americans rely would be jeopardized.

This postal reform legislation grants the Postal Service Board of Governors the authority to set rates for competitive products like Express Mail and Parcel Post, as long as these prices do not result in cross subsidy from market-dominant products. It replaces the current lengthy and litigious rate-setting process with a rate cap-based structure for market-dominant products such as first-class mail, periodicals, and library mail. The bill also introduces new safeguards against unfair competition by the Postal Service in competitive markets.

The Postal Accountability and Enhancement Act will greatly improve the financial transparency of the Postal Service. The USPS would be required to file with the Postal Regulatory Commission certain Securities and Exchange Commission financial disclosure forms, along with detailed annual reports on the status of the Postal Service's pension and postretirement health obligations in order to ensure increased financial transparency.

The legislation repeals a provision of Public Law 108-18 which requires that money owed to the Postal Service due to an overpayment into the Civil Service Retirement System Fund be held in an escrow account, which would essentially ``free up'' $78 billion over a period of 60 years. These savings would be used to not only pay off debt to the U.S. Treasury and to fund health care liabilities, but also to mitigate rate increases. It also returns to the Department of the Treasury the responsibility for funding CSRS pension benefits relating to the military service of postal retirees--a responsibility that the Treasury Department bears for all executive branch departments and agencies.

The bill also converts workers' compensation benefits for total or partial disability to a retirement annuity when the affected employee reaches 65 years of age, and puts into place a 3-day waiting period before an employee is eligible to receive 45 days of continuation of pay. These changes will save the Postal Service approximately $50 million in workers' compensation costs over a 10-year period.

The Postal Service has reached a critical juncture. If we are to save and strengthen this vital service upon which so many Americans rely for communication and their livelihoods, the time to act is now.

I therefore ask the Senior Senator from New Hampshire and chairman of the Senate Budget Committee whether I can count on his assistance and support to help pass this legislation this Congress.

I thank my friend from New Hampshire and look forward to working with him on this important piece of legislation.

Mr. President, the entire world continues to wait for signs that the administration takes seriously its moral and legal responsibilities to eliminate torture and abuse. It is long past time for the administration to give the American people and the world an ironclad assurance that these shameful tactics are no longer being used in any prison or detention facility under American control and that we are not outsourcing our torture to regimes well known for using them.

I strongly support the legislation that Senator Leahy has introduced to deal with this urgent problem and to see that our Nation is not farming out abusive interrogations to other countries. The bill makes crystal clear that we can't torture by proxy.

Abhorrence to torture is a fundamental value. Our attitude toward torture speaks volumes about our national conscience, our dedication to the rule of law, and our essential ideals. 9/11 is no excuse for abandoning our ideals.

The line separating right from wrong must clearly exclude the reprehensible practice called extraordinary rendition, the ridiculous code word for torture by proxy. Article 3 of the Treaty Against Torture, which the United States has ratified, provides: ``No State Party shall expel, return, or extradite a person to another State where there are substantial grounds for believing he would be in danger of being subjected to torture.'' The secretive U.S. practice of rendition is a violation of international law because it involves detaining prisoners without a shred of due process and delivering them for interrogation into the hands of countries known to commit torture. As one commentator noted: ``In terms of bad behavior, it stands side by side with contract killings.''

Ask Maher Arar. In the fall of 2002, Arar, a Canadian citizen, was returning to Montreal from a family visit in Tunisia and he made a stopover at Kennedy Airport in New York City. Acting in part on flawed intelligence from Canadian officials, U.S. Immigration officials seized Mr. Arar at the airport. He was not charged with a crime, or given a chance to talk with a lawyer. Instead, he was held in Brooklyn and interrogated for days by U.S. law enforcement authorities.

When the interrogation failed to produce incriminating information, Mr. Arar was flown to Jordan and handed over to Jordanian authorities. He was chained, blindfolded, and beaten in a van that transported him to the Syrian border. In Syria, he was placed in a small, dark cell-- three feet by six feet, like a grave--and was held there for almost a year. He was slapped, beaten, and whipped on his palms, wrists, and back with an electric cable. He begged them to stop. He heard other prisoners screaming as they were tortured. He signed any confessions he was told to sign.

Mr. Arar was released in October 2003. Syrian officials told reporters that their investigators found no link between Mr. Arar and al-Qaida. His confession turned out to be worthless and his suffering was pointless. Mr. Arar is now home in Canada.

How can any of us stand idly by knowing that this country condoned and facilitated such brutality?

Tragically, Mr. Arar is not the only victim. On March 6, 60 Minutes aired a report on rendition. On the program, Michael Scheuer, a recently retired CIA official who created its rendition program, admitted that he would ``have to assume'' that suspects the U.S. sends to Egypt are tortured. ``It's very convenient,'' he said. ``It's finding someone else to do your dirty work.''

The Defense Department has attempted to justify this tactic. On June 25, 2003, Defense Department General Counsel William Haynes wrote to Senator Leahy, stating that whenever the U.S. transfers an individual to another country, ``United States policy is to obtain specific assurances from the receiving country that it will not torture the individual being transferred to that country. We can assure you that the United States would take steps to investigate credible allegations of torture and take appropriate action if there were reason to believe that those assurances were not being honored.''

Mr. Haynes' ``assurances,'' are difficult to accept. The State Department's annual human rights report, released last month, criticized numerous countries for a range of interrogation practices it labeled as torture. The State Department identified Syria, Egypt, and Saudi Arabia, among others, as countries practicing torture. Press reports make clear that since 9/11, the U.S. has flown 100-150 suspects to countries such as these. The State Department condemns Syria for torturing its prisoners, but Mr. Haynes blindly relies on Syria's promise that the prisoners we send there will be treated humanely.

Recent press reports also suggest that the assurances of humane treatment sought by the CIA are worth very little. According to today's Washington Post, ``one government official who visited several foreign prisons where suspects were rendered by the CIA said . . . `It's widely understood that the interrogation practices that would be illegal in the U.S. are being used.' '' The official also said, ``they say they are not abusing them . . . but we all know they do.''

According to the Post, an Arab diplomat, whose country is actively engaged in counterterrorism alongside the CIA said it was unrealistic to believe the CIA really wants to follow up on assurances. He said: ``It would be stupid to keep track of them because then you would know what's going on.'' He said, ``it's like don't ask don't tell.''

So, it seems that we are not fooling anybody but the American public.

We are a Nation of laws, not hypocrites. Our country is strong and our constitutional system has endured because it permits us to do great things and still ensure that we treat people fairly and humanely. We are not supposed to ``disappear'' people here.

Yet, that is exactly what rendition and the related tactic of ``ghost detainees'' amounts to, making people vanish into a shadowy world of secret abuse. In his report on the abuses at Abu Ghraib prison, MG. Antonio Taguba

wrote that prisoners had not been registered as required by Army regulations and they were being moved around to avoid detection by the Red Cross. General Taguba called the practice ``deceptive, contrary to Army doctrine, and in

violation of international law.'' Last September, Army investigators told the Senate Armed Services Committee that as many as 100 detainees at Abu Ghraib had been hidden from the Red Cross at the CIA's direction.

Last month, the Associated Press reported that one of the ``ghost detainees'' held at Abu Ghraib, Manadel al-Jamadi, died in November 2003 under CIA interrogation. He had been suspended by his wrists, with his hands cuffed behind his back. According to an Army guard who was asked by the interrogator to adjust al-Jamadi's position, blood gushed from his mouth ``as if a faucet had been turned on'' after he was released from his shackles.

Behavior like that forces us all to ask, ``what has America become?''

The issue shows no signs of abating. Article 49 of the Fourth Geneva Convention states that transfers of detainees from occupied territory to any other country ``are prohibited, regardless of their motive.'' Violations of the Article constitute ``grave breaches'' of the Treaty and qualify as ``war crimes'' under Federal law. Nevertheless, a Justice Department memorandum in March, 2004 re-interpreted the Treaty to allow the CIA to remove prisoners from Iraq for the purpose of ``facilitating interrogation.'' According to press reports, the CIA used this ``Goldsmith Memorandum'' as justification to transport ``as many as a dozen detainees'' out of Iraq. The legal analysis in the memorandum is an embarrassment. Yet it appears to have provided the legal justification for the CIA to commit war crimes.

The New York Times recently reported that the U.S. plans to transfer as many as half the 550 detainees held at Guantanamo Bay to prisons in other countries. This week, a Federal judge blocked the government from transferring 13 citizens of Yemen until a hearing can be held on the propriety of the move. Lawyers for the detainees expressed concern that the prisoners would be delivered into the hands of torture.

Even worse, last week Attorney General Gonzales defended the practice of rendition, despite admitting that he ``can't fully control'' what other nations do and that he doesn't know whether countries have always complied with their promises.

Congress can't allow these shameful tactics to continue. Senator Leahy's bill is designed to prevent them. It states that no person in the custody or control of the United States can be sent to another country on the State Department list of countries that commit torture. Nor, may any person be sent to a country, even if it is not on the State Department list, where there are grounds to believe the person would be in danger of being tortured. The bill states that mere diplomatic assurances that detainees will be treated humanely are not sufficient to permit a detainee's transfer. Instead, in certain circumstances, the act permits delivery of the detainee where there is an actual mechanism to verify that the person will not be tortured, such as by allowing unfettered access to the detainee by humanitarian organizations.

The Bush administration's has clearly condoned the use of torture and abuse by our own government, as well as handing prisoners over to other countries for the same purpose. Officials have approved and used interrogation techniques that include feigning suffocation, feigning drowning, ``stress positions,'' sleep deprivation, and the use of unmuzzled dogs. According to one report, ``The methods employed by the CIA are so severe that senior officials of the Federal Bureau of Investigation have directed its agents to stay out of many of the interviews of the high-level detainees . . . ``because the FBI fears that the techniques could subject their agents to criminal lawsuits.

The anti-rendition bill offered today is a way to start addressing the problem. It deserves to pass as soon as possible. Torture and other abuses of prisoners in Iraq, Afghanistan, and Guantanamo have done immense damage to America's standing in the world and has clearly made the war on terrorism harder to win. We need to repair that damage and re-claim our national commitment to fairness and decency.

As Edmund Burke said, ``The only thing necessary for the triumph of evil is for good men to do nothing.'' We in Congress have it in our power to prevent the triumph of an evil practice. Knowing what we now know, the Senate cannot simply look away and do nothing. I urge my colleagues to support us in ending these despicable abuses.

Mr. President, today, Senator DeWine and I are introducing legislation to give the Food and Drug Administration broad authority to regulate tobacco products for the protection of the public health. We cannot in good conscience allow the fuderal agency most responsible for protecting the public health to remain powerless to deal with the enormous risks of tobacco, the most deadly of all consumer products.

Last year, a large bipartisan majority of the Senate voted to grant the FDA authority to regulate tobacco products. It was a major step forward in the long-term effort to enact this legislation, which health experts believe is the most important action Congress could take to protect children from this deadly addiction. Unfortunately, the legislation was blocked by a small group of House conferees.

We are reintroducing our bill today and we are hopeful that 2005 will be the year when Congress takes the final steps to enact this extraordinarily important health legislation. This bill has majority support in the Senate and strong support amongst rank and file members in the House. Now is the time to make it the law of the land.

The stakes are vast. Five thousand children have their first cigarette every day, and two thousand of them become daily smokers. Nearly a thousand of them will die prematurely from tobacco-induced diseases. Smoking is the number one preventable cause of death in the nation today. Cigarettes kill well over four hundred thousand Americans each year. That is more lives lost than from automobile accidents, alcohol abuse, illegal drugs, AIDS, murder, suicide, and fires combined. Our response to a public health problem of this magnitude must consist of more than half-way measures.

We must deal firmly with tobacco company marketing practices that target children and mislead the public. The Food and Drug Administration needs broad authority to regulate the sale, distribution, and advertising of cigarettes and smokeless tobacco.

The tobacco industry currently spends over eleven billion dollars a year to promote its products. Much of that money is spent in ways designed to tempt children to start smoking, before they are mature enough to appreciate the enormity of the health risk. The industry knows that more than 90 percent of smokers begin as children and are addicted by the time they reach adulthood.

Documents obtained from tobacco companies prove, in the companies'

own words, the magnitude of the industry's efforts to trap children into dependency on their deadly product. Recent studies by the Institute of Medicine and the Centers for Disease Control show the substantial role of industry advertising in decisions by young people to use tobacco products.

If we are serious about reducing youth smoking, FDA must have the power to prevent industry advertising designed to appeal to children wherever it will be seen by children. This legislation will give FDA the ability to stop tobacco advertising which glamorizes smoking from appearing where it will be seen by significant numbers of children. It grants FDA full authority to regulate tobacco advertising ``consistent with and to the full extent permitted by the First Amendment.''

FDA authority must also extend to the sale of tobacco products. Nearly every state makes it illegal to sell cigarettes to children under 18, but surveys show that those laws are rarely enforced and frequently violated. FDA must have the power to limit the sale of cigarettes to face-to-face transactions in which the age of the purchaser can be verified by identification. This means an end to self- service displays and vending machine sales. There must also be serious enforcement efforts with real penalties for those caught selling tobacco products to children. This is the only way to ensure that children under 18 are not able to buy cigarettes.

The FDA conducted the longest rule-making proceeding in its history, studying which regulations would most effectively reduce the number of children who smoke. Seven hundred thousand public comments were received in the course of that rulemaking. At the conclusion of its proceeding, the Agency promulgated rules on the manner in which cigarettes are advertised and sold. Due to litigation, most of those regulations were never implemented. If we are serious about curbing youth smoking as much as possible, as soon as possible; it makes no sense to require FDA to reinvent the wheel by conducting a new multi- year rulemaking process on the same issues. This legislation will give the youth access and advertising restrictions already developed by FDA the immediate force of law, as if they had been issued under the new statute.

The legislation also provides for stronger warnings on all cigarette and smokeless tobacco packages, and in all print advertisements. These warnings will be more explicit in their description of the medical problems which can result from tobacco use. The FDA is given the authority to change the text of these warning labels periodically, to keep their impact strong.

Nicotine in cigarettes is highly addictive. Medical experts say that it is as addictive as heroin or cocaine. Yet for decades, tobacco companies have vehemently denied the addictiveness of their products. No one can forget the parade of tobacco executives who testified under oath before Congress that smoking cigarettes is not addictive. Overwhelming evidence in industry documents obtained through the discovery process proves that the companies not only knew of this addictiveness for decades, but actually relied on it as the basis for their marketing strategy. As we now know, cigarette manufacturers chemically manipulated the nicotine in their products to make it even more addictive.

The tobacco industry has a long, dishonorable history of providing misleading information about the health consequences of smoking. These companies have repeatedly sought to characterize their products as far less hazardous than they are. They made minor innovations in product design seem far more significant for the health of the user than they actually were. It is essential that FDA have clear and unambiguous authority to prevent such misrepresentations in the future. The largest disinformation campaign in the history of the corporate world must end.

Given the addictiveness of tobacco products, it is essential that the FDA regulate them for the protection of the public health. Over forty million Americans are currently addicted to cigarettes. No responsible public health official believes that cigarettes should be banned. A ban would leave forty million people without a way to satisfy their drug dependency. FDA should be able to take the necessary steps to help addicted smokers overcome their addiction, and to make the product less toxic for smokers who are unable or unwilling to stop. To do so, FDA must have the authority to reduce or remove hazardous ingredients from cigarettes, to the extent that it becomes scientifically feasible. The inherent risk in smoking should not be unnecessarily compounded.

Recent statements by several tobacco companies make clear that they plan to develop what they characterize as ``reduced risk'' cigarettes. This legislation will require manufacturers to submit such ``reduced risk'' products to the FDA for analysis before they can be marketed. No health-related claims will be permitted until they have been verified to the FDA's satisfaction. These safeguards are essential to prevent deceptive industry marketing campaigns, which could lull the public into a false sense of health safety.

Smoking is the number one preventable cause of death in America. Congress must vest FDA not only with the responsibility for regulating tobacco products, but with full authority to do the job effectively.

This legislation will give the FDA the legal authority it needs--to reduce youth smoking by preventing tobacco advertising which targets children--to prevent the sale of tobacco products to minors--to help smokers overcome their addiction--to make tobacco products less toxic for those who continue to use them--and to prevent the tobacco industry from misleading the public about the dangers of smoking.

Enacting this bill this year is the right thing to do for America's children.

Mr. President, I rise today to join my friend from Maine, Senator Collins, in introducing the Postal Accountability and Enhancement Act of 2005, legislation that makes the reforms necessary for the Postal Service to thrive in the 21st Century and to better serve the American people. This bill is almost identical to S. 2468, the version of the Postal Accountability and Enhancement Act that was unanimously reported out of the Governmental Affairs Committee last June on a 17-0 vote.

When I rose with Senator Collins to introduce S. 2468 last year, I noted that some of our colleagues may wonder why we need postal reform. Most of us probably receive few complaints from our constituents about the Postal Service. Most Americans like the Postal Service just the way it is and don't want to see it changed. We must keep in mind, however, that, despite the fact that the mailing industry, and the economy as a whole, have changed radically over the years, the Postal Service has, for the most part, remained unchanged for more than three decades now.

Senator Collins and I are re-introducing this bill today, then, because the Postal Service continues to operate under a business model created a generation ago.

In the early 1970s, Senator Stevens led the effort in the Senate to create the Postal Service out of the failing Post Office Department. At the time, the Post Office Department received about 20 percent of its revenue from taxpayer subsidies. Labor-management relations were at their worst, service was suffering and there was little hope the department would be able to muster the resources necessary to service a growing delivery network.

By all accounts, the product of Senator Stevens' labors, the Postal Reorganization Act signed into law by President Nixon in 1971, has been a phenomenal success. The Postal Service today receives virtually no taxpayer support. The service its hundreds of thousands of employees provide to every American, nearly every day is second to none. The Postal Service now delivers to 141 million addresses each day and is the anchor of a $900 billion mailing industry.

As we celebrate the success of the Postal Reorganization Act, however, we need to be thinking about what needs to be done to help the Postal Service continue to thrive in the years to come.

The Postal Service is clearly in need of modernization once again. Back in the early 1970s, none of the Postal Service's customers had access to fax machines, cell phones or pagers. Nobody imagined that we would ever enjoy conveniences like e-mail and electronic bill pay that could replace a First Class letter. That, of course, is no longer the case. Most of the mall I receive from my constituents these days arrives via fax and e-mail instead of hard copy mail, a marked change from my days in the House and even from my more recent days as Governor of Delaware.

This continuing electronic diversion of mail, coupled with a slow economy and the threat of terrorism, has made for some rough going at the Postal Service of late. In 2001, as Postmaster General Potter came onboard, the Postal Service was projecting its third consecutive year of deficits. They lost $199 million in 2000 and $1.68 billion in 2001. They were projecting losses of up to $4 billion in fiscal year 2002. Mail volume was falling, revenues were below projections and the Postal Service was estimating that it needed to spend $4 billion on security enhancements in order to prevent a repeat of the tragic anthrax attacks that took several lives. The Postal Service was also perilously close to its $15 billion debt ceiling and had been forced to raise rates three times in less than two years in order to pay for its operations.

A number of positive steps have been taken since 2001. General Potter has led a commendable effort to improve productivity and make the Postal Service more efficient. Billions of dollars in costs have been taken out of the system--some $4.3 billion since 2002--according to the Postal Service's most recent annual report. Thousands of positions have been eliminated through attrition and successful automation programs have yielded great benefits, resulting in the smallest workforce seen at the Postal Service since the early 1980s.

Perhaps most dramatically, the Postal Service learned in 2002 that an unfunded pension liability they once believed was as high as $32 billion was actually significantly lower. Senator Collins and I responded with legislation, the Postal Civil Service Retirement System Funding Reform Act, which cut the amount the Postal Service must pay into the Civil Service Retirement System each year by nearly $3 billion. This has freed up money for debt reduction and prevented the need for further rate increases until at least next year. The Postal Service's debt to the Treasury now stands at about $1.8 billion--the lowest it's been in more than 20 years--and rates have remained stable since the passage of the pension bill.

Aggressive cost cutting and a lower pension payment, then, have put off the postal emergency we thought was right around the corner just a few years ago. But cost cutting can only go so far and will not solve the Postal Service's long-term challenges. These long-term challenges were laid out in stark detail last year when Postmaster General Potter and then-Postal Board of Governors Chairman David Fineman testified before the House Government Reform Committee's Special Panel on Postal Reform. Mr. Fineman pointed out in his testimony that the total volume of mail delivered by the Postal Service has declined by more than 5 billion pieces since 2000. Over the same period, the number of homes and businesses the Postal Service delivers to have increased by more than 5 million. First Class mail, the largest contributor to the Postal Service's bottom line, is leading the decline in volume. Some of those disappearing First Class letters are being replaced by advertising mail, which earns significantly less. Many First Class letters have likely been lost for good to fax machines, e-mail and electronic bill pay.

Despite electronic diversion, the Postal Service continues to add between 1.6 million and 1.9 million new delivery points each year, creating the need for thousands of new routes and thousands of new letter carriers to work them. In addition, faster-growing parts of the country will need new or expanded postal facilities in the coming years. As more and more customers turn to electronic forms of communication, however, letter carriers are bringing fewer pieces of mail to each address they serve. The rate increases that will be needed to maintain the Postal Service's current infrastructure, finance retirement obligations to its current employees, pay for new letter carriers and build facilities in growing parts of the country will only erode mail volume further.

The Postal Service has been trying to modernize on its own. General Potter and his management team are making progress, but there is only so much they can do without legislative change. Even if the Postal Service begins to see volume and revenues pick up, we will still need to make fundamental changes in the way the Postal Service operates in order to make them as successful in the 21st Century as they were in the 20th Century.

This is where the Postal Accountability and Enhancement Act comes in. First, our bill begins the process of developing a modern rate system for pricing Postal Service products. The new system, to be developed by a strengthened Postal Rate Commission, re-named the Postal Regulatory Commission, would allow retained earnings, provide the Postal Service significantly more flexibility in setting prices and streamline today's burdensome rate making process. To provide stability, predictability and fairness for the Postal Service's customers, rates would remain within a cap to be set each year by the Regulatory Commission.

The second major provision in the Postal Accountability and Enhancement Act requires the Postal Service to set strong service standards for its Market Dominant products, a category made up mostly of those products, like First Class mail, that are part of the postal monopoly. The new standards will improve service and will be used by the Postal Service to establish performance goals, rationalize its physical infrastructure and streamline its workforce.

Third, the Postal Accountability and Enhancement Act ensures that the Postal Service competes fairly. The bill prohibits the Postal Service from issuing anti-competitive regulations. It also subjects the Postal Service to state zoning, planning and land use laws, requires them to pay an assumed Federal income tax on products like packages and Express Mail that private firms also offer and requires that these products as a whole pay their share of the Postal Service's institutional costs. The Federal Trade Commission will further study any additional legal benefits the Postal Service enjoys that

its private sector competitors do not. The Regulatory Commission will then find a way to use the rate system to level the playing field.

Fourth, the Postal Accountability and Enhancement Act improves Postal Service accountability, mostly by strengthening oversight. Qualifications for membership on the Regulatory Commission would be stronger than those for the Rate Commission so that Commissioners would have a background in finance or economics. Commissioners would also have the power to demand information from the Postal Service, including by subpoena, and have the power to punish the Postal Service for violating rate and service regulations. In addition, the Regulatory Commission will make an annual determination as to whether the Postal Service is in compliance with existing rate regulations and service standards and will have the power to punish them for any transgressions.

Fifth, the Postal Accountability and Enhancement Act revises two provisions from the ``Postal Civil Service Retirement System Funding Reform Act in an effort to shore up the Postal Service's finances in the years to come. As our colleagues may be aware, that bill required the Postal Service, beginning in 2006, to deposit any savings it enjoys by virtue of lower pension payments into an escrow account. In this bill, we eliminate that requirement in order to allow the Postal Service to spend the money that would have gone into escrow to begin pre-funding on a current basis its $50 billion retiree health obligation. Leftover savings would be used to continue paying down debt to the Treasury and to maintain rate stability.

The bill Senator Collins and I are introducing today also reverses the provision in the Postal Civil Service Retirement System Funding Reform Act that made the Postal Service the only Federal agency shouldered with the burden of paying the additional pension benefits owed to their employees by virtue of past military service.

Finally, and most importantly, the Postal Accountability and Enhancement Act preserves universal service and the postal monopoly and forces the Postal Service to concentrate solely on what it does best-- processing and delivering the mail to all Americans. Our bill limits the Postal 'Service, for the first time, to providing ``postal services,'' meaning they would be prohibited from engaging in other lines of business, such as e-commerce, that draw time and resources away from letter and package delivery. It also explicitly preserves the requirement that the Postal Service ``bind the Nation together through the mail'' and serve all parts of the country, urban, suburban and rural, in a non-discriminatory fashion. Any service standards established by the Postal Service will continue to ensure delivery to every address, every day. In addition, the bill maintains the prohibition on closing post offices solely because they operate at a deficit, ensuring that rural and urban customers continue to enjoy full access to retail postal services.

As I mentioned at the beginning of my remarks, this bill that Senator Collins and I are introducing today is almost identical to the version of the Postal Accountability and Enhancement Act that was unanimously reported out of the Governmental Affairs Committee last June on a 17-0 vote. A similar bill was unanimously reported out of the House Government Reform Committee last year as well. Neither bill was considered on the floor of the Senate or the House, however, due--I'm told--to objections raised by the administration.

I was deeply disappointed that we were unable to complete action on postal reform last year. However, Senator Collins and I, our staffs and our colleagues in the House have had a series of discussions with administration officials since the 108th Congress adjourned last year and have narrowed our differences with them on these issues significantly. I'm pleased to report that this bill contains a handful of new provisions drafted to address specific concerns raised by the Administration.

First, we demand even greater financial transparency from the Postal Service. The Postal Accountability and Enhancement Act gives the Postal Service more room to operate like a private business. For quite some time, however, it's been clear that the financial reporting required of the Postal Service has been lacking. It's difficult to look at the Postal Service's financial reports and learn as much as we'd like to learn about its current condition and its future liabilities. For this reason, our bill requires the Postal Service to begin filing the very same quarterly and annual Securities and Exchange Commission disclosure forms that private sector firms must file.

Second, we add language drafted at the request of the Treasury Department that would ensure that the Postal Service does its banking and investing with the Federal Financing Bank. Our original bill would have given the Postal Service almost total freedom to invest any revenue earned by its competitive products in the market as if they were a private business. Treasury feared this could have a negative impact on the markets and the issuance of federal debt.

Third, we give the Postal Board of Governors the ability to better reward top Postal Service executives for their performance and recruit top talent. We accomplish this by raising the cap on executive pay at the Postal Service to the level of compensation given to the Vice President. This will allow the Board to reward high-performing managers. It should also make it easier to recruit and retain qualified managers.

Fourth, we ensure that the rate cap to be developed by the Postal Regulatory Commission is truly workable by requiring that the cap be based on the Consumer Price Index. A CPI-based cap should guarantee that the Postal Service has the room to operate each year without breaking the cap or turning to the Treasury for assistance while still giving mailers the predictability they need.

This is significant progress but we still have our work cut out for us. I look forward to working in the coming weeks with Chairman Collins, my colleagues on the Homeland Security and Governmental Affairs Committee, our House counterparts and the administration to work out any remaining differences we have. It's vitally important that we succeed.

The Postal Board of Governors voted last month to go forward with a rate increase. If approved by the Postal Rate Commission, this increase will go into effect sometime next year. Thanks to increased productivity, this is expected to be a lower increase than many observers feared. Without postal reform, however, especially the language freeing the Postal Service from the escrow requirement and the military pension obligation, future rate increases will be higher. Probably much higher. This will only speed the flight from hard copy mail to electronic forms of communication. The impact of this flight will be significant, not just at the Postal Service but throughout the entire economy.

A recent study conducted by the Envelope Manufacturers Association Foundation's Institute for Postal Studies found that, if mail volume were to decline by 10 percent more than 780,000 mail-related jobs will be at risk across the country. More than 2,000 of those jobs are in Delaware. If mail volume were to decline by 20 percent more than 1,500,000 mailing industry jobs will be at risk across the country. More than 4,000 of those jobs are in Delaware. We need to act soon to prevent this from happening.

In closing, I'd like to point out how amazing it is to me to think that the Postal Service, something Senator Stevens was literally able to put together at his kitchen table at the very beginning of his career, could have lasted so long and had such an enduring impact on every American. I'm hopeful that the model Senator Collins and I have set out in this bill today can last at least that long and have just as positive an impact on our nation and our economy as the Postal Service has had over the past 35 years.

collins and gregg colloquy on postal reform

Mr. President, I rise today to introduce a piece of legislation, along with Mr. Graham, that I believe is needed to solve our long-term energy need. It is imperative that our Nation implements a roadmap to achieving our goal of creating a hydrogen fuel-cell economy. I believe this measure is the best way to diversify our energy portfolio and protect our national security interests.

This legislation would invest $7.9 billion over 10 years in hydrogen fuel cell research and deployment. Additionally, the measure would change the current direction of the hydrogen program, allowing each program related to developing hydrogen to build off of each other. Similar to what has been recommended by the National Academies, it realizes a more conscious systems approach to program design.

You see, currently the hydrogen program is like a series of small block grants. We send money to the Department of Energy, DOE, and simply tell them to come up with a program. Under this scenario, with little accountability or direction, the program has not moved as swiftly as we would like.

Changing the structure of the hydrogen program will ensure that the long-term goal is reached and the benefits are reaped. What this legislation does is compartmentalize each program at DoE related to hydrogen development. Instead of sending a chunk of money, the funds will now be targeted to programs that will be the foundation for building and commercializing a hydrogen fuel-cell economy.

Additionally, this measure uses the successful ``learning demonstration'' technique of building institutional relationships among key industries and with the Government that has strong support from both the fuels industry and the auto sector, and applies this as a program design to all large scale systems demonstrations. These demonstrations are then linked to refining the R&D tasks again after the demonstrations complete their early phases, so that concrete learning is integrated directly into a final round of more focused R&D.

This bill enables a more strategic approach to program planning in the formation of a hydrogen economy. It also includes more interaction between R&D and demonstrations--with emphasis on development--that is the key to accelerating commercialization and movement to market.

This measure does not reinvent the wheel. Instead, it takes what we have learned thus far and focuses our efforts for the future. Providing developmental targets and accountability will also allow us to adjust our priorities appropriately.

Introduction of this measure could not come at a more critical time. Today, oil prices are at an all time high of $57.00 a barrel. This increase has directly hit consumers where it hurts most--in their wallets. Today in the State of North Dakota, consumers will spend $330,000 more for gasoline than they did this time last year. This is nothing more than an additional tax on hard working families who have to drive around during the course of their daily lives. It is no longer a question of whether you can afford to sign your children up for extra curricular activities like baseball or ballet; it is now a question of whether you can afford to even take them to these activities.

It shouldn't be this way, especially in America. However, we continue to be beholden to the same generational argument: Where can we dig and drill next? We need to jump over this debate and I believe this measure does that.

Let me describe why I think we ought to do this and why focusing our attention and resources is important. I will harken back to the Apollo program. On May 25, 1961, President John F. Kennedy announced our Nation was establishing a goal of sending a man to the Moon and having a safe return by the end of the decade.

The Apollo project was an enormous undertaking. The NASA annual budget increased from $500 million in 1960 to $5.2 billion in 1965. It represented 5.3 percent of the Federal budget in 1965. Think about that. In today's terms, that would be over $115 billion. NASA engaged private industry, university research, and academia in a massive way and contractor employees increased by a factor of 10, to 376,000 people, in 1965.

When President Kennedy said in 1961 it was his vision to have a man walk on the Moon by the end of the decade, there was no technological capability to do so at that moment and no guarantee it could even be done. During the height of the cold war, the Soviets had an advantage in space flight and that advantage was of great concern to us. They had put up a satellite called Sputnik and the technological barriers facing the U.S. in catching up were very significant. The expense and resolve were daunting, but yet, on July 20, 1969, Neil Armstrong and Buzz Aldrin stood on the surface of the Moon and pantomimed a golf game. In a single decade, the President and the country set and reached an unthinkable goal.

Now let's talk about another goal, another big idea, one that we ought to establish now for this country and for its future. That is the goal of deciding, as President Bush has suggested, that we move toward a hydrogen economy and fuel-cells for our vehicles. I will describe why I think this is important.

America's energy security is threatened by our dependence on foreign oil. Oil prices are at record highs and America now imports 62 percent of the oil it consumes. Our import level is expected to grow to 68 percent by 2025. Nearly all of our cars and trucks run on gasoline, and they are the main reason America imports so much oil. Two-thirds of the oil Americans use each day is used for transportation; fuel-cell vehicles offer the best hope of dramatically reducing our long-term dependence on foreign oil and protecting our national security interests.

The American economy is and will be held hostage by our ability to find and import oil from outside of our country's borders. Should this cause all of us great concern? Yes. This is a very serious problem. If we wake up tomorrow morning, God forbid, and terrorists have interrupted the supply of oil to this country--and, yes, that could happen--this country's economy will be flat on its back. It will be flat on its back because we rely on oil from sources outside this country, much of it from very troubled parts of the world. And our dependence is only expected to increase.

Whenever we discuss oil, the debate centers around two issues-- drilling in ANWR and CAFE standards. If it is only those two issues, we lose. We need to move beyond these issues. Yes, we can address them, but it seems to me if these are our only options, every few years we will debate exactly the same issues: Where do we drill next? and, How much more efficient can we make a carburetor, through which we run gasoline?

If our energy strategy for this country's future is simply digging and drilling, then it is a strategy I call `yesterday forever,' which means it doesn't really change very much. Every few years we can debate the issue of how dependent we are on oil imports and how dangerous it is for us. I think we should have a different debate, one that breaks our normal cycle.

That does not mean we should not dig and drill. We will, we can, and we should. We will always use fossil fuels. But these resources must be used in a sustainable and efficient manner. We will continue to dig and drill, but that cannot be all we do. If it is, we really

have not moved the ball forward at all. So what else can we do? I believe we should chart a different course.

First of all, using fuel-cells and hydrogen is twice as efficient in getting power to a wheel as using the internal combustion engine. Second, when we use hydrogen fuel-cells in automobiles or vehicles, we are sending water vapor out the tailpipe. What a wonderful thing for our environment and our economy. We double the efficiency of the energy source, while at the same time eliminating the pollution out of the tailpipe. That makes great sense to me.

In the past I have introduced legislation saying let's move to a different kind of technology, a different kind of energy economy; let's move to a hydrogen economy using fuel-cells. This bill is different from my previous bills because it would not only authorize higher funding levels, but just as importantly, it would change the way the program works.

My point is simple. We need accountability and targets and timetables in all the programs developing hydrogen. While this measure specifically states that we should set a target of 100,000 vehicles on the road by 2010 and 2.5 million by 2020, it also includes developmental milestones within each program, essentially giving us a roadmap of where we need to go and how to get there. If we do not set this out, we will not get there. If we do not have the same resolve towards establishing a hydrogen fuel-cell economy as President Kennedy had in putting a man on the Moon then we are not going to get there. Not without the focus and commitment needed.

Are there issues that need to be resolved? Sure there are, but we will never resolve them unless we implement a plan to do so. That is why I feel this legislation is the best approach. We focus on what is needed, while building on what we have. Instead of having two or more projects moving in different directions, with no connection, we set out a more focused approach where we can see exactly the progress we are making.

This commitment is what is needed and this direction is supported throughout the hydrogen industry. We cannot let this opportunity pass us by. If we sit and do nothing when the price of oil is at its highest, then I fear we will never do anything. This type of commitment and resolve is needed for our economic future, as well as to ensure our national security interests.

If we start now, I have no doubt that hydrogen fueled vehicles will be to our grandchildren what gasoline was to our grandparents.

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

Mr. President, today Senators Hagel, Brownback, Johnson and many of our colleagues are re-introducing the New Homestead Act that will help address one of the most serious threats to the future of America's Heartland--the loss of its residents and Main Street businesses.

Over the past several years, we have described for our colleagues-- and the American people--the economic devastation that population loss has had on America's Heartland. Hundreds of thousands of people have left small towns in rural areas throughout the Great Plains in search of opportunities elsewhere.

In North Dakota, we have experienced greater than 10 percent net out- migration in nearly 90 percent of our counties over the past two decades. My home county, Hettinger, saw its population dwindle from 4,257 in 1980 to just 2,715 in 2000. Its population is projected to drop to just 1,877 by 2020.

However, this out-migration problem isn't limited to North Dakota. Nearly all of America's Heartland is facing population losses of epic proportions. Seventy percent of the rural counties in the Great Plains have seen their population shrink by at least one-third.

If you are a business owner, mayor, school board member, minister or resident of one of these rural communities, you know firsthand about this problem. People who are from these areas know that you simply can't grow or run a business in an environment where the overall economy is shrinking, current and potential customers are leaving, and public and private investment is falling. Too many communities in North Dakota and other rural States lack the critical mass of people and resources it takes to keep a community alive and growing.

The New Homestead Act of2005 that we are introducing today will help stem the problem of chronic rural out-migration and allow many rural areas to grow and prosper again. This one-of-a kind bill is virtually identical to the bill we introduced in the last Congress. The New Homestead Act gives people who are willing to commit to live and work in high out-migration areas for 5 years added incentives to buy a home, pay for college, build a nest egg, and start a business--or just plain get ahead in life. These incentives include repaying a portion of college loans, offering a tax credit for the purchase of a new home, protecting home values by allowing losses in home value to be deducted from Federal income taxes, and establishing Individual Homestead Accounts that will help people build savings and have access to credit.

This legislation also would establish a new venture capital fund with state and local governments as partners to ensure that entrepreneurs and companies in these areas get the capital they need to start and grow their businesses.

Our rural areas have been fighting for their very survival for years, yet until recently, most Amen:s didn't even know about this struggle. Today, however, general awareness about the problem of chronic rural out-migration is growing. This issue has been the subject of national symposiums, forums, town hall meetings and congressional hearings.

Last year, the U.S. Senate acted on some provisions from the New Homestead Act that offer state and local governments much-needed tools to encourage businesses to locate or stay in rural areas that are suffering from high out-migration. With the help of the leaders of the tax-writing Senate Finance Committee, Chairman Chuck Grassley of Iowa and Ranking Democrat Max Baucus of Montana, the Senate passed two key investment tax credit measures in the New Homestead Act as part of a major corporate tax bill considered last year. These investment tax credits would have been used to encourage businesses to move to or expand their operations in high out-migration rural counties. Together, these rural investment tax provisions would have made an estimated $641 million in tax credits available for business over the next decade.

Regrettably, these tax provisions were dropped from the final tax bill sent to the President. But the Senate's action sent a message of hope and opportunity to many rural communities: Federal policymakers do understand that rural out-migration is a serious threat to the economic well-being of the Nation's Heartland and that the New Homestead Act is a serious proposal for addressing it.

I think our colleagues would agree that our Nation's rural areas are great places to live and raise a family. Most rural communities have good schools, low crime rates, and a level of civic involvement that would make any public official proud. But unfortunately it has been a constant struggle for many rural communities in North Dakota and the Great Plains to survive. This shouldn't be the case.

I look forward to working with all of my Senate colleagues to try to reverse the trend of population loss and grow the economies of rural areas in North Dakota, Nebraska, Iowa, Kansas and the rest of America's Heartland. Enacting the policy changes recommended in the New Homestead Act is a very good place to start.

I urge my colleagues to support the New Homestead Act in the 109th Congress by cosponsoring it and helping us move this important bill forward, once again, in the legislative process.

Mr. President, I am pleased to join Senator Hatch and Senator Brownback in introducing legislation to advance the use of umbilical cord blood for clinical applications and research. I first became aware of the potential therapeutic benefits of cord blood when my first daughter was born three and a half years ago. At that time, our doctor informed me and my wife that preserving a small amount of blood from the umbilical cord could prove enormously beneficial later in her life. Should she become ill with a disease requiring bone marrow reconstitution, such as leukemia, her own cord blood stem cells could be used. This would eliminate the need to find a suitable bone marrow donor.

The bill that we are introducing today will begin a new national commitment to the development of this technology--which has the potential to reduce pain and suffering and save the lives of so many Americans afflicted with some of the most debilitating illnesses. Cord blood has already been used successfully in treating a number of diseases, including sickle cell anemia and certain childhood cancers. However, the use of cord blood is still fledgling. Recent developments have suggested that the stem cells derived from cord blood may be useful in treating a much wider range of diseases, such as Parkinson's disease, diabetes, and heart disease.

Like many Americans, I had never heard of cord blood before the birth of my daughter. It is not widely used--at least in this country. Approximately 95 percent of all bone marrow reconstitutions were done using a bone marrow transplant. Only five percent used cord blood. This figure is surprising when we consider the potential benefits of cord blood relative to bone marrow.

First, it can be very difficult to find a suitable bone marrow donor. According to a General Accounting Office (GAO) report, of the 15,231 individuals needing bone marrow transplants between 1997 and 2000 who conducted a preliminary search of the National Bone Marrow Donor Registry (NBMDR), only 4,056 received a transplant--a 27 percent success rate. This number is even lower for minorities. Cord blood would not only produce an additional source of donation; it also does not require as exact a match as bone marrow.

In addition, cord blood is readily available. While it can take months between finding a bone marrow match and actually receiving a transplant, a unit of cord blood can be utilized in a matter of days or weeks. Cord blood also lowers the risk of complications for both the donor and the recipient. The need to extract bone marrow from the donor is eliminated, and the risk of infection or rejection by the recipient is significantly reduced. Finally, research has suggested that cord blood might produce better outcomes than bone marrow in children.

Why then, given all of these benefits, has the use of cord blood not become much more prevalent in the United States? In Japan, where the use of cord blood in clinical setting is more advanced, nearly half of all transplants now use cord blood rather than bone marrow.

The relatively infrequent use of cord blood in our country is at least partly attributable to the lack of a national infrastructure for the matching and distribution of cord blood units. There are a handful of cord blood banks around the country doing excellent work, but there is a much more developed infrastructure for bone marrow. This is thanks to legislation passed by Congress in 1986 that established a National Registry for bone marrow. By the way, that legislation is due to be reauthorized--and I would like to voice my strong support for that reauthorization.

Our bill would create a similar infrastructure for cord blood. Specifically, it would direct the Secretary of Health and Human Services (HHS), acting through the Administrator of the Health Resources and Services Administration (HRSA), to establish a National Cord Blood Stem Cell Bank Network, as well as a registry of available cord blood units. The network and registry would be required to collect a minimum of 150,000 units, which should be sufficient to provide a suitable match for 90 percent of the U.S. population.

Donor banks would also be required to educate the general public about the potential benefits of cord blood, and encourage an ethnically diverse population of cord blood donors. Given the untapped potential of cord blood, at least ten percent of the available units must also be made available for research. Finally, the legislation authorizes an appropriation of $15 million for fiscal year 2006, and such sums as may be necessary for fiscal years 2007 through 2010.

Before finishing today I would like to make it clear that I strongly support the continuation of the excellent work done by the National Marrow Donor Program (NMDP). Cord blood should act as a complement to-- not a replacement for--bone marrow. In many cases, a bone marrow transplant is still the preferred therapy. Physicians should have the ability to decide on a case by case basis which is best for their patient.

In the coming weeks, the Institute of Medicine (IOM) will release a report with recommendations about the appropriate structure for a cord blood registry. I look forward to reviewing those recommendations and, if necessary, making the appropriate changes to our legislation.

I firmly believe that the creation of a national infrastructure for cord blood will, in time, save the lives of thousands of gravely ill Americans. We have a responsibility to encourage use of cord blood where appropriate today, and invest in research to fully tap the potential of this technology. I urge my colleagues to support this legislation.

Mr. President, I rise today to introduce the Social Investment and Economic Development Fund

for the Americas Act of 2005. This legislation would authorize critical assistance to fight poverty and increase economic opportunity in the countries of the Western Hemisphere.

In January, my colleagues Senator Bill Nelson, Senator Lincoln Chafee and I visited Venezuela, Paraguay, Argentina, Peru and Ecuador. Our trip and discussions with political and economic leaders throughout the region underscored to me the danger that poverty and economic inequality continue to pose to regional stability, the rule of law, and to the continuation of market reforms.

One third of the population in Latin America currently lives in poverty. 128 million people survive on less than two dollars a day, and 50 million people on less than one dollar a day. In Haiti, the poorest country in the Western Hemisphere, 65 percent of the population lives below the poverty line. Despite economic growth throughout the 1990s, moreover, unemployment in Latin America actually increased. And as we all know such factors have the potential to increase instability and undermine democratic reforms and the rule of law. Indeed, individuals living in poverty are often forced by circumstances to engage in illicit activity, including narco-trafficking and even supporting terrorist related activities.

But there is not only tremendous poverty. Income inequality in Latin America is the highest in the world. To illustrate that fact, consider that the richest one-tenth of all Latin Americans earn 48 percent of the total national income, whereas the bottom one tenth earns only 1.6 percent. By contrast, in developed countries, the top ten percent earns 29.1 percent, and the bottom 10 percent earns 2.5 percent. Is it any wonder that economic inequality in Uruguay, the most equal country in Latin America, is still greater than in the most unequal country in Eastern Europe?

Poverty and inequality are not simply social injustices. They threaten the political stability of Latin America and the national interests of the United States. Indeed, according to a 2004 report by the United Nations Development Program, progress in extending elective democracy across Latin America is threatened by ongoing social and economic turmoil. Most troubling, the report suggests that over 50 percent of the population of Latin America would be willing to sacrifice democratic government for real progress on the economic and social fronts. That is a frightening statistic. And it should make crystal clear the urgency of this situation. Two decades of progress in our hemisphere is at risk.

The Social Investment and Economic Development Fund for the Americas Act of 2005 would seek to address these issues by investing in the peoples of the Americas. This important legislation would make it United States policy to promote market-based principles, economic integration, social development, and inter-American trade. To that end, it would authorize $250 million annually in bilateral economic assistance to the hemisphere through fiscal year 2010. It would also authorize multilateral assistance, directed through the Inter-American Development Bank, of no more than $250 million per year and $1.25 billion in total.

Certainly, strong trade relations remain a key to creating healthy economies both here in the United States and throughout the region. But trade alone cannot address the myriad challenges facing Latin America, when millions of citizens in the hemisphere remain marginalized by economic insecurity and social dislocation. That is another reason why this bill is so critical.

To confront these challenges, we have to start at the grass roots. We have to start with the people. And the Social Investment and Economic Development Fund for the Americas would do that by supporting public- private partnerships and micro-enterprise developments. It would give honest, hardworking families the chance to become entrepreneurial and to create a broad based ownership society in their countries. We promote these values here at home, and we should do so abroad.

Investing in people also means investing in human capital. And there is clearly a need. According to the World Bank large portions of the population do not receive adequate services such as education and health care. Education, in particular, is identified as critical to development. Yet the quality of education varies significantly based on social status and income distribution. In Mexico, for example, the average individual in the bottom 20 percent income bracket has only 3.5 years of schooling, whereas an individual in the top 20 percent income bracket has 11.6 years. My legislation would address these inequities by targeting assistance at projects which would invest in education. It would also build human capital by investing in basic needs such as health care, disease prevention, nutrition, and housing.

To move forward, we also have to help the people invest in good governance. Public corruption remains an especially persistent and pernicious problem in this hemisphere. Both Transparency International and the World Economic Forum report high levels of corruption throughout the region. Moreover, while full citizen participation in government is a key to strengthening democracy and ensuring that civil services work, many Latin American citizens do not express confidence in their political institutions. This Act would attempt to overcome these barriers to progress by enhancing efficiency and transparency in government services as well as increasing civil society participation in government.

Lastly, marginalized populations, including indigenous groups, people of African descent, women, and people with disabilities, are particularly affected by problems of poverty and income inequality. This act would target funds to reduce poverty and decrease social dislocation among these populations.

The funds authorized by this act would be distributed on the basis of competitive bidding and inter-American cooperation. To do so, this legislation would establish technical review committees which will partner with consultative committees in each country to make determinations on funding requests.

Finally, the historic Summits of the Americas made it clear that economic and social integration are the responsibilities of all nations in the Western Hemisphere. Through this act, the United States would send a strong signal to others in the region that we take these responsibilities seriously. And it will challenge the other countries in the hemisphere to collectively match our efforts.

We stand today at a moment of great opportunity and great risk in this hemisphere. The past two decades have witnessed the rise of democratic governments in nations that long languished under dictatorship. Yet this progress is endangered. Economic and social conditions for millions of men and women continue to lag dangerously far behind. It is in our moral and strategic interests to provide the necessary economic assistance to fight the scourges of poverty and social dislocation in this hemisphere. The Social Investment and Economic Development Fund for the Americas Act of 2005 is a vital first step to achieving this goal. I ask my colleagues to join me in supporting this important legislation.

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