Internet Tax Freedom Act Amendments Act of 2007

Without objection, Mr. President, if I can respond to Senator Lott, I am happy to speak whenever the Senator feels he has made all the points he needs to make, at least in the current time frame. I wish to speak for 10 or 15 minutes or so on the amendment, and we can move from there. I know we have been allotted 2 hours, but I hope and I think we will not have to take all the time.

Mr. President, I suggest the absence of a quorum.

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I rise to speak on the amendment I offered last night. This is an amendment that addresses the most basic question of fiscal responsibility. ``Fiscal responsibility,'' ``fiscal responsibility''--we hear this phrase all the time from politicians, whether you are inside the beltway from Washington or outside the beltway. I am sure at times people listening to the debate turn the other way because they hear everyone using this particular phrase as it seams to mean something different to everyone. But I say it is a most basic question of responsibility. Because we are not talking about how high the tax burden should be, or even how much or how large the Federal budget should be; we are not talking about whether we should spend money in a particular area so much as we are asking how much we should subsidize a money-losing proposition; how much money should the taxpayers be asked to spend on a business that is losing money.

Amtrak is a business, and Amtrak is losing money. We are in a position to be able to look at different parts of that business and try to identify exactly how much money they are losing in particular areas, and ask that simple question: What is fair? What is right? How much Federal funding should be used to subsidize a passenger on a particular train in the Amtrak system?

I would like to think my colleagues are willing to stand up and say the amount of money we should subsidize a passenger on a long-distance train is less than $1 billion per passenger. I think we can get agreement on that. Sometimes I am not sure if we could get agreement on that, but I think we could get agreement we should not provide a subsidy of $1 billion per passenger on every long-distance train Amtrak runs. That is a good starting point.

I would like to think we could get agreement the subsidy for every passenger on every long-distance train Amtrak runs should not be $1 million per passenger. In fact, let's say for the sake of reasonable discussion we can at least--at least--agree the maximum subsidy should not be $1,000 for every single passenger.

This is a basic question of fiscal responsibility. How big should that subsidy be?

Well, let's look at, first, how big the subsidy is today. There are 15 long-distance routes. Mr. President, 15 percent of Amtrak ridership consumes 43 percent of the total Amtrak budget. That is well in excess of $1 billion. The revenue generated? Less than $400 million. By the Commerce Committee estimates, that means there is as much as $900 million in losses--losses--for these 15 routes. The average per- passenger subsidy is in excess of $200 for everyone riding these trains. Now, I say ``as much as $900 million'' because no one knows how much is being lost today.

We have heard about all the fiscal reforms in this package, and we hope they better enable us to understand how much money Amtrak is losing, but the last time any clear audit was done on these long- distance trains was in 2004 by the Inspector General. Let's look at what the Inspector General audit found in 2004.

At that time, the losses were $475 million. They have only gone up since then. On the 15 routes, of course, the losses vary. On some routes they are higher than others. I think the lowest was for the Auto Train that runs from Orlando to Washington, DC. The subsidy per passenger was about $26. Given the importance many place on having a national system, and recognizing we provide different types of subsidies to aviation service, and even to our highways in different ways--mass transit as well--a subsidy level of $15 or $20 or $25 may well be justified. But that is the lowest subsidy level on any of the routes. The highest subsidy levels? In some cases, the Sunset Limited, at $286 per passenger; the Southwest Chief, at $198 for every passenger running on that train; the California Zephyr, at $140 per passenger.

Where are we going to draw the line? Perhaps those who will support any of these long-distance trains no matter how much they are losing can stand up and say: Well, look, the good news is it is not $1 million per passenger. That is not good enough. It certainly is not good enough when we are taxing working families across America to provide these subsidies.

It begs the question whether you could buy airline tickets for the amount that gets lost on any one of these routes. I think in many cases you could pay the airfare. I had my staff look today at what they might pay for an air ticket for the route of the California Zephyr. It certainly is lower than the cost of the train ticket. It is even lower than the cost of the subsidy. As compared to the Southwest Chief, the air ticket is lower than the cost of the train service and even lower than the subsidy--the cost to taxpayers for every passenger running on this system--and so on down the line.

Now, I understand Amtrak has improvements they wish to make, that this bill has budget reforms and auditing reforms and costs management reforms that hopefully will improve these numbers. But we have to draw the line somewhere. All my amendment says is: draw the line at $200-- $200 per passenger--on any given train route. Next year, we lower that to $175; in the third year of the bill, $150. I think if you ask any American: ``Should we provide a subsidy of $150 per passenger,'' they would say: Of course not. That is ridiculous.

We all feel there is some real value in train service, that Amtrak has great potential--a potential to be more successful, more financially successful, and to attract a different ridership. This amendment would not affect any of the corridor routes that serve the southern part of the country, the central part of the country, the west coast of the country, the Northeast part of the country. It would not affect any of those corridor routes. The corridor service is 46 percent of the ridership in the country. This amendment would not affect the Northeast corridor. That is nearly 40 percent of the ridership in the country.

So the vast majority of people who enjoy or depend on service through Amtrak would not be affected. In fact, the vast majority of the riders on the long-distance routes would not be affected because today, at least according to the Inspector General's audit, there is only one route that is in excess of the $200 subsidy level. There are only two that are in excess of the $175 level.

So if there is a real belief this bill is going to address these concerns and this problem, even the strongest supporters of long- distance service should

be willing to support this amendment because, if nothing else, it will provide a real incentive, an honest incentive, to improve the performance of these routes.

You would like to think it can be done. I would like to think it is not impossible to run these routes without losing $150 and $200 per passenger. Maybe it is not. But if it is not possible, the American people should be told it is not possible today--not in 3 years or 5 years or 10 years.

All the amendment would do is ask for some basic level of fiscal responsibility, to set some threshold as to the amount we are not willing to spend on these per-passenger subsidies. I hope those who feel most strongly about this legislation and about Amtrak can recognize this can only provide incentives for their performance, improvements they argue they want so very much. I encourage my colleagues to vote for the amendment, for no other reason than because I think it is pretty hard to defend a vote against it when we have families across America who are working hard, paying taxes every day, who could certainly use the $200 in subsidy per passenger, or the $150, or the $100, to spend themselves. Those are taxes we don't need to collect if we are not running these routes at such incredible losses.

Thank you very much.

Mr. President, I reserve the remainder of the time we control.

Mr. President, do I control the time on our side, or do I need to request the time to be yielded?

How much time do I have remaining?

Thank you, Mr. President.

First, for any Senator who stands up and states that I believe there should only be service in the Northeast is wrong. It is wrong in substance, and I think it is wrong in the spirit of the debate on this floor because I certainly never suggested that. In fact, I suggested the opposite: No. 1, that this amendment doesn't affect the corridor services on the gulf coast, on the west coast, in the Northwestern part of the United States in any way, shape, or form; No. 2, that this only affects long-distance lines that lose more than $200 per passenger; and No. 3, that the goal of having a national service is a good one, provided that the level of cost and subsidy can be maintained.

The suggestion was made earlier that I want to get rid of long- distance trains. Again, no--only those losing more than $200 per passenger. In fact, to the point of the line that was mentioned previously in debate, the Empire Builder; according to the statistics of the Inspector General's review in 2004, it wouldn't be affected by this amendment either. The Empire Builder lost $94 per passenger in 2004. I hope the performance has been improved a little bit since then, but even if it hasn't, even if this is one part of our economy that has seen no improvements in productivity since 2004, no reduction in costs since 2004, no improvements in marketing and ridership since 2004, the Empire Builder wouldn't be affected because it lost less than $200 per passenger. In fact, the Empire Builder wouldn't be affected in the year 2009, when that subsidy threshold drops to $175. It wouldn't be affected in 2010, 2011 or 2012, because over the 5-year period, we only bring the cap down to $100, and the Empire Builder would still be below that figure in what it loses per passenger. In fact, in addition to the Auto Train, which I mentioned earlier, the Coast Starlite, the City of New Orleans, the Silver Service, all of those cost taxpayers less than $100 per passenger.

Now, is a subsidy of $80 or $90 per passenger; a loss of $80 or $90 per passenger; good? Is it that easy to justify to a family as they pay their taxes on April 15? I would be hard-pressed to justify that to people in my State of New Hampshire. But regardless, those routes are unaffected by this amendment. In fact, there are many others--several others--whose cost per passenger is in the range of $100 to $125, according to the Inspector General's report in 2004. I would hope and I would think they can improve performance by the 10 percent or 12 percent or 15 percent necessary to get below that $100 cost per passenger as well. Maybe they can't. We can't forecast the future. But I think we can set an honest and a reasonable limit on what subsidies we are willing to provide.

Again, I can't state it plainly enough. This amendment doesn't affect 85 percent of the routes and ridership of Amtrak, the people who ride from all over the country--North, South, East, and West. It doesn't affect any of those long-distance routes, and there are probably close to half of them that have a subsidy level of less than $100 today. For any of those that meet the performance benchmarks, they would be unaffected as well. I hope my colleagues can support the amendment.

Mr. President, I yield time to the Senator from Alabama, whatever time he needs to consume.

We have no objection.

Mr. President, is it true that I have plenty of time left?

In New Hampshire, 11 minutes is plenty of time. I yield 2 minutes to the Senator from New Jersey to finish his remarks.

Mr. President, I wasn't aware this was a negotiation as opposed to an act of solidarity with my colleague on the other side of the aisle. I will be happy to reserve Senator Lautenberg's two minutes for the end.

Mr. President, I ask unanimous consent that we reserve two minutes on each side for the end of this debate. I have a couple of minutes of comments, and then if there are speakers on the other side, we may still have another couple of minutes to yield to them as well.

Excellent. I will be happy to reserve those two minutes for the other side.

Mr. President, let me use my portion of time to conclude my remarks. I wish to address some of the points Senator Lautenberg made in his presentation.

First, it was suggested that under 2007 data, four routes would have to be shut down if my amendment were made the law of the land. I find that surprising and maybe a little problematic for a couple of reasons. First, I am not aware of any Inspector General audit that was done for 2007, which would be required under the amendment. The only IG audit of which I am aware, the most recent one, was in 2004, and that indicated only one route did not meet this threshold. So, first, I don't think there is any data to make that assertion that four routes would be closed.

Second, if that were the fact today, that means the situation has gotten worse over the last three years; that it has gotten worse and that the costs are trending in the wrong direction, and that is something about which we should all be concerned and, in fact, alarmed.

Third, it was suggested that closing four routes, if that were the case, would be a sudden and massive reduction in the capacity of the system. In fact, even if four routes were affected, we are talking about 1 to 2 percent of ridership.

The phrase ``making people pay their own way'' was also used. It does nothing of the sort. As I indicated, I think there is an opportunity for providing some support or subsidy level, certainly in the medium term. This would by no means require anyone to pay their own way because it would still allow in the first year subsidies up to $200 per passenger and in the second year subsidies up to $175 per passenger. Only in Washington would a $200 subsidy be called ``paying your own way.'' That is just not right.

Finally, it was suggested that closing one of these routes would isolate parts of America. I think the idea that eliminating a long- distance train would isolate people in America in this day and age, given all the ways we have to travel, to communicate, and to reach out to one another, is ridiculous.

This is a common-sense amendment. This is not the grim reaper for national train service. This amendment only says if a route is losing more than $200 per passenger, we should not continue to operate that service. I suppose it is a little bit like hitting yourself in the head with a hammer: Maybe once you really get going, you are reluctant to stop because you think the next time you hit yourself in the head it might not feel quite as bad. At a certain point, we need to draw the line. I think $200 per passenger is a pretty reasonable line to draw. I encourage my colleagues to support the amendment.

I reserve the remainder of my time. I am happy to yield Senator Lott 2 minutes.

As the Senator may not be aware, we have a unanimous consent agreement, and having consumed all the time on the opponents' side, I offered to share an additional 2 minutes so that Senator Lott can conclude his remarks.

Mr. President, we are approaching 12:15, which is the time for the vote. I wish to conclude first by responding to some of the remarks and the observations made by the Senator from Mississippi.

First, there was mention of the Crescent, which is one of the 15 long-distance trains. Under the 2004 Inspector General's audit, the Crescent lost $114 per passenger in coach class. At that rate, they would not be affected in 2008 by this amendment. They would not be affected in 2009 by this amendment, or 2010 or 2011. They might be affected in 2012 if they have failed to improve any performance on the basis of cost over a 4-year period. I don't think that is Draconian. I don't think that is too much to ask. I hope the Senator from Mississippi and others will support that kind of improvement in performance, and I think it can be achieved.

To that point, the Senator from Mississippi said: We need to do better; we need to have a plan for doing better. From what I have heard, he and many others believe this bill is the plan to do better, and I think in many parts it is a plan to do better. I support that concept. I support a blueprint for improving financial reporting, standards of accounting, and cost performance.

What my amendment simply does is tell people honestly and directly: How much better do we expect you to do? What is the minimum we expect you to do? We expect ridership or routes not to lose $1 million per passenger, or $500,000, or $1,000, or $500 per passenger, and I think it is reasonable to say we expect you not to lose $200 per passenger. That is what we are asking. That is how much better we expect you to be for only those routes which are not meeting that standard today.

It is a reasonable standard. It is an understandable standard. Under the 2004 data, it would affect one of the 15 routes. It might affect more than one. It might affect two or three more routes 2 or 3 years from now if they have failed to improve. But when we are asking families across America to fill out their tax forms every April 15 to provide resources to our country to fulfill important obligations, I don't think we should be asking those families to subsidize passengers on Amtrak at $200 per person.

It is reasonable, and I hope my colleagues will support a commonsense amendment.

I yield back the remainder of my time.

I ask for the yeas and nays.

Mr. President, I recognize I did not prevail in that amendment, but I appreciate that debate and the managers allowing me time on the debate. I do have another amendment. I told them I would try to move my amendments, so I have another amendment I wish to offer.

Mr. President, what is the pending business?

Amendment No. 3454

I ask for the yeas and nays on that amendment.

I ask for the yeas and nays, Mr. President.

Mr. President, I have an amendment I send to the desk and ask for its immediate consideration.

I ask unanimous consent the pending amendment be set aside.

I would be pleased to describe the amendment prior to it being offered.

Mr. President, this is one of the two amendments I filed in committee, but did not offer on the bill, because I wanted to allow a vote and debate on the floor rather than delay us unnecessarily in committee.

This is an amendment that addresses the question of competing on different routes within the Amtrak system. Under this legislation that is before us today, there is an allowance to have two routes competitively bid each year.

The managers think that is a good idea. I think that is a good idea. But I do not see why there needs to be a legal restriction on the number of routes that could be bid or sent out to bid under competition. This does not mandate that bids be put out to competition, but it certainly would allow that.

That is what my amendment is intended to do. At this time, I yield to wait for the copies to be distributed in a timely way.

Mr. President, at this time I believe copies have been distributed.

Amendment No. 3456

(Purpose: To remove the limitation on the number of Amtrak routes

available for competitive bid)

Mr. President, I send an amendment to the desk, ask unanimous consent that any pending amendment be set aside, and ask for the immediate consideration of this amendment.

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

I do.

I have submitted the amendment to the bill manager and to the clerk and asked that it be considered.

Mr. President, I apologize again to the bill manager for not having a copy for him.

As was clear from the reading of the amendment, if nothing else was clear, it is a brief amendment. It strikes the line of the bill that would have placed a limit on the number of routes that could be allowed for a competitive bid.

That means it allows for an operator to offer to run that route at an effective cost with particular service goals in mind in order to provide service at or above the current quality of service at a lower cost. I think it would be a mistake to place an arbitrary restriction on the number of routes that could be competitively bid.

Certainly decisions about putting routes out to bid, or which routes are put out to bid, how they are done, would still be in the hands of the management team at Amtrak. I think that is as it should be. I appreciate the opportunity to offer the amendment. I ask that my colleagues support it.

I yield the floor.

Mr. President, I ask for the regular order regarding my amendment No. 3456.

Mr. President, I send a modification of my amendment to the desk.

Mr. President, have I been recognized?

Mr. President, I submitted to the desk a small technical modification of the amendment I offered that would strike the prohibition on allowing multiple routes to be competitively bid under the Amtrak system. In the legislation, there is competitive bidding allowed but for only two routes. I don't think we need to have such an arbitrary restriction. The technical modification makes sure the right portions of the bill, the right lines of the bill are referenced in the amendment. It is not a substantive change.

Amendment No. 3452

Mr. President, I also wish to address my amendment that deals with Internet taxes. I offered this amendment last night, and I offered it on this legislation because we have been unable to get a vote anywhere in the Senate on Internet tax moratorium.

What an Internet tax moratorium does is prevents States, cities, and towns from placing taxes on the cost of Internet access, whether it is for consumers, small businesses, large businesses--it doesn't matter. The Internet is a national and global system for communications. It is a national system for commerce and for business, and it should be protected from multiple taxation, from local taxation for a number of reasons.

First, it is interstate commerce and, frankly, if there are going to be taxes levied, that interstate commerce and interstate communication should be the responsibility of Congress.

Second, because those taxes would only discourage broadband deployment, it would raise costs for consumers and certainly have an impact on businesses that rely on Internet access as part of doing business.

We were supposed to have a markup in the Commerce Committee. The bill was pulled from the markup. This is not something that just came up. We implemented a ban on Internet taxes in 1998 that lasted for 5 years. We extended it in 2003 for another 4 years. This is something that has received bipartisan support in the House and the Senate. Over 240 Members of the House of Representatives, Democrats and Republicans, support making this ban on Internet access taxes permanent.

Given that we have seen no action and that the prohibition expires on November 1, less than a week from today, I am sure a lot of people across the country are wondering why is Congress so dysfunctional. Why has Congress not acted on something that has such broad bipartisan support that is going to expire in less than a week?

I cannot answer that question, but I can try to do something about it, and that is why I offered an amendment to this bill that would make that ban on Internet access taxes permanent. The way it does that is by taking legislation that passed the House by a very strong bipartisan vote, 405 to 2, and making that 4-year proposal a permanent proposal. We take the same approach to technical definitions, the same approach to grandfathering that existed for some States that taxed the Internet in the past, and simply make that legislation permanent.

There is also a second-degree amendment that was offered to my amendment--an amendment to my amendment--that would say we should not make this ban permanent; we should only make it 4 years. I think that is a mistake. Given that we have already extended the ban on Internet access twice, given that it has bipartisan support, given that we have been able to see how this law works and has worked effectively over the last 9 years, I don't think we need to keep passing short-term extensions. And, frankly, short-term extensions, whether they are 1 year, 2 years, or 4 years, is something the American public looks at, and it is baffling why we cannot find it within ourselves the discipline, the will--whatever it takes--to make a good idea the permanent law of the land. It is high time we do that when it comes to banning Internet access taxes.

Senator Wyden spoke earlier about this issue and suggested that the technical language in the bill passed by the other body was not perfect. That should come as a surprise to no one. There is no such thing as absolutely perfect legislation. But it was certainly good enough to get all but two Members of 435, all but two Members to vote for the legislation. It was certainly good enough to offer the same language as an amendment to my bill.

To suggest that this language is fatally flawed is very much mistaken. But even if it were an issue that needed to be addressed, it will have to be addressed whether we pass a 4-year extension or a permanent extension. So to use that as an excuse to oppose making the Internet tax ban permanent, I think, is a mistake. It simply is wrong.

I would like to see the clearest possible language when it comes to service providers that are providing different kinds of Internet services but might not be providing Internet access as well. I even had an amendment ready to offer in committee to improve this language. As I indicated, Mr. President, we didn't have any amendments in committee because we didn't have any votes in committee because we didn't have any bill offered before the committee for a markup.

So that is where we find ourselves. We have a proposal in front of us in the way of an amendment to make permanent the ban on Internet access taxes using language that has been supported in a very strong bipartisan way in the House of Representatives, and we have an amendment to my proposal that would say: No, let's not make it permanent; let's do another short-term extension.

We have filed a cloture petition to bring debate on this particular issue to a close. That vote will happen tomorrow. And if cloture is invoked, we will have a vote on both amendments.

I have no problem voting on alternatives. And I have said this in different situations on different legislation in the past. What is most frustrating, as a Member of the Senate, is when there are procedural maneuverings used to prevent us from offering an amendment, having a vote on any given alternative. I do not mind voting on bills or legislation that I don't support. If you don't support something, you vote no and explain to people why you don't support it.

So we have both of these amendments before us, a cloture vote that will occur to bring debate to a close, and have the votes. And I certainly hope we vote cloture so we can have the votes and move forward on this very important issue.

I thank the Chair, and I yield the floor.

I yield to the Senator.

Mr. President, reclaiming my time, and I am happy to view the statement that was made in the form of a question so I can respond. That is what we will have if we invoke cloture tomorrow. We will have a vote on a 4-year extension and a vote on making the ban permanent. We can certainly have further discussions about the procedures and proposals off the Senate floor rather than negotiate a process or a procedure in a colloquy format, but I am sure the Senator from Delaware can appreciate the frustration that has put us in this position, given that no bill was offered in committee, no bill was offered in the Finance Committee, and in fact the legislation was pulled.

So I am pleased we are in a position now where tomorrow we will have exactly what the Senator from Delaware prescribes, and if there are other alternatives or proposals, I am certainly happy to listen to them.

I yield the floor.

Mr. President, I appreciate the interest of the Senator from Delaware in the issue, and I want to take the opportunity to respond to a couple of issues.

First, on the substantive issues: The Congress--the Federal Government--tells the States what they can or can't do on taxes all the time; not in every area, to be sure, and we shouldn't in every area. And if this permanent ban on Internet taxes passes, Internet-related businesses will still pay property taxes, payroll taxes, and business income taxes, but the network itself, access to the global network itself, will not be subject to taxes.

This is not that dissimilar from the fact that we prevent States from levying their own export taxes because it affects international trade and global commerce, and even interstate commerce. We don't allow States to arbitrarily tax flights from their State to other States or across the country for the same reason--because we view that as interstate commerce and an interstate transportation system. We even have restrictions on States' ability to impose tolls on interstate highways, all for the same reason.

So to suggest that we should never tell States how to handle matters of taxation is incorrect. We do it all the time. And we should do it on matters of interstate commerce, which is the responsibility--the constitutional responsibility--of the Congress.

Second, back to the issue of technology changing. Well, of course, technology changes things. And we may and do have to modify legislation from time to time with regard to evolving technology. Regulations or laws affecting the Federal Communications Commission--the FCC--laws regarding regulations of video, phone, Internet protocol services, we want to make sure they keep pace. But that doesn't mean every law we pass in these areas should be temporary, especially in matters of taxation, because the way we tax goods and services affects our entire economy.

Anyone who has worked in the area of technology is familiar with the R&D tax credit. The Congress continually passes 1- and 2-year extensions of the research and development tax credit, even though it passes almost unanimously in both Chambers every time. The American public looks at that and they wonder if our goal is to just make a little bit of extra work for lobbyists. It is wrong to deal with our Tax Code on such a short-term basis, whether it is the research and development tax credit or Internet access taxes.

Finally, a couple of points about process. How easy it is to stand up on the Senate floor and say: Well, let's do the collegial thing and just take care of this next week. We had the Internet tax moratorium on the floor a few years ago. It made the moratorium permanent. The opponents of making the Internet moratorium permanent said: We are not quite ready. Could we take care of this next week or maybe the week after? And in good faith that bill was taken from the floor. Then the opponents of making the ban permanent prevented us from bringing the bill to the floor for another 9 months. Maybe it was even longer.

So it is easy to come and say we should take care of this next week, but the fact is that next week the moratorium expires. On November 1, the moratorium expires. Why can't we take care of it this week, with the votes that are currently pending, currently before us--not just for my amendment but for an alternative, an amendment to my proposal? I think that is more than fair.

Again, I will be happy to talk about alternatives. And since we were first scheduled to have a debate and markup on this legislation in the Commerce Committee, no one has come to me and proposed specific alternatives other than the amendment that has been offered to my proposal. And just now Senator Carper said: Well, maybe not 4 years, maybe 6 years. And I know he means that in good faith, but there are other leaders, on the Commerce Committee and others, who have an important role to play that will also have to be part of those discussions, and none of them have approached me directly with an alternative.

So I hope we can resolve this. I hope my colleagues will support making the Internet tax moratorium permanent and support me in voting for cloture tomorrow morning so we can have those votes.

Mr. President, I yield the floor.

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

Madam President, we will have a vote shortly on the second amendment I have offered. Senator Lautenberg just spoke a little bit about the amendment. I certainly want to clarify for the record what the intention of the amendment is and what its practical impact would be.

This is not a wholesale privatization of Amtrak--far from it. The provision in the legislation allows two routes under supervision, oversight as described by Senator Lautenberg, to be put out for competitive bid to see if there is another service provider that can run the trains on those routes, delivering better service at a better cost. That makes good sense--good sense for riders and taxpayers. It is not a wholesale privatization by any stretch, especially considering the supervision and oversight that would have to be in place for this competitive bidding process.

Senator Lautenberg used the phrase or description about this being a learning experience and you don't want to have people in a medical environment in a learning experience then suddenly asked to do major surgery. I think I understand what he was trying to suggest, but I listened to that phrase and it implies to a certain degree that the management team at Amtrak is a bunch of amateurs that can't be trusted. That is not the case at all. They understand these routes, the operation, the nature of the service they are providing. They are in the best position to help determine how routes should be put out for competitive bid. My amendment simply says there is no reason to limit the number to two. Why would we do that? Because we don't trust them? We don't think they will do a good job? We don't think they want to deliver good service at a competitive cost? Why would we limit them to two? My amendment would allow competition in more than two routes. It would not mandate it or require it. It wouldn't force anyone's hand. It simply would remove a very arbitrary limit on the number of routes that can be put out in a competitive bid to companies run more effectively and efficiently for riders and taxpayers. That is about as simple as you can get. It does make good sense. It doesn't destroy the system. It doesn't throw anyone out of work. It doesn't undermine the integrity of the reforms that are already in the bill by any stretch. I think it simply allows us to get an even better idea of whether those reforms have an impact.

Senator Lautenberg described a process where up to two routes, as allowed for in the bill, would be competitively bid. Then the managers at Amtrak would look to see how successful it was and be able to go from there. That isn't true. In fact, that is just what I am trying to deal with. They wouldn't be able to go from there because there is a limitation that they could only do two. So if they decided that this was very effective, they wouldn't be empowered to use this tool to even greater advantage without Congress coming back and changing the law and changing the statute. That is not going to happen anytime soon.

We have already seen how difficult it is to pass this bill as written. I encourage support for my amendment.

I yield back my time.

Mr. President, I yield 5 minutes to the Senator from Texas.

Mr. President, I thank the distinguished Senator from Texas. She has always been a supporter of a national passenger rail service. We appreciate the fact that we can work together on this project.

Among the routes that would be eliminated under a proposal that is in front of us would be the Crescent in the first year. The ridership there is not quite what it used to be because it originates in New Orleans and New Orleans is not a place where there is a lot of traffic. The Sunset Limited is the one--I am sorry--originates in New Orleans. In the third year, the Texas Eagle would be eliminated. Each one of them by themselves is not massive, but they are all part of a national network. When 9/11 came along and the aviation system was closed down, in many cases the only way to get more people to their destinations, home or otherwise, was through rail service. This would be a national security breach if we permitted this to be discontinued. There is no country in the world where there is rail service that doesn't have some subsidy contribution. We have to adjust ourselves to that. Neither would our aviation system work if we didn't make contributions to that; neither would our highway system be operating if we didn't, and we are deficient there.

We have to make sure that a national transportation infrastructure is in place. An integral part of that is national passenger rail service.

Surely.

In response, Mr. President, it would probably destroy the system. We can't escape the fact that the equipment is often moved around in different areas. We have to have this as a backup, as I said earlier, for security alone, but also, as we join the fight against pollution and greenhouse gases, the railroads are the best, most efficient use for transportation in those cases.

So I think the wholeness of Amtrak's system is essential. We want to work together and make sure we include this as one of the targets for improving our transportation efficiency in the country. We are, unfortunately, way behind--whether it is in aviation or on the highways; and, certainly, Amtrak has not gotten its share of support. So we are looking forward to doing that.

I yield the floor.

I am pleased to yield 3 minutes to the Senator from North Dakota.

Mr. President, can I ask a moment of the Senator's time without him losing his right to the floor? I have a unanimous consent request.

Mr. President, we are planning to hold the vote at 12:15. I want other Members who are interested to know that.

I ask unanimous consent that at 12:15 today the Senate proceed to vote in relation to the Sununu amendment and the time until 12:15 be equally divided and all provisions under the previous order remain in effect. I assume Senator Sununu has agreed to this.

I yield 7 minutes to the Senator from Delaware.

Mr. President, we understand that Senator Sununu comes with a background in business and comprehension of what balance sheets and financial statements are like. We recognize that the State of New Hampshire does have some Amtrak service. But the State of New Hampshire is also one of the beneficiaries of something called Essential Air Service, where the country takes great pains to make certain that communities are not so isolated that you have difficulty in traveling from there and to there. It costs the Federal Government about $50 million a year for Essential Air Service. We are all in the same boat. It is our country, these are our communities, and they have to be part of the functioning of our society.

So when I look at the amendment proposed by the Senator from New Hampshire, this amendment would destroy our national passenger rail system. Based on 2007 data, the Sununu amendment would immediately cut passenger rail service to the entire Southwestern United States. Four of Amtrak's longest train routes would be gone. It is easy to see on this chart the lines that crisscross our country. You are saying that almost everything, in about a 5-year period, would be pretty much not in existence. We start off with four of Amtrak's longest train routes, most of them in the Southwest. Next year, five more trains would be eliminated, including the Silver Star, which is New York to Miami; Silver Meteor; the Cardinal; the Coast Starlight, Seattle, WA, to L.A., CA; and the Lakeshore Limited, Chicago to New York. These comprise something over a million travelers a year. Within 5 years--likely sooner--the entire national network of long-distance trains would be gone because corporate overhead costs would be shared among the remaining routes, increasing their costs.

These long-distance trains provide essential transportation services to millions of Americans, and their ridership and revenue has been growing.

Last year, ridership increased on Amtrak's long-distance trains 2.5 percent and revenue went up 5 percent. For instance, if we look at Amtrak's Palmetto train, which is New York to Miami, its route extends south from the Northeast corridor and serves South Carolina, Georgia, Florida, North Carolina, and Virginia. It had 7.5 percent more riders than the year before, a total of 157,000 riders.

The States want Amtrak service, and they want to expand it as well.

One Governor--I have a letter written in 1996--wrote to Amtrak claiming:

Many of us believe that Amtrak finances and operations are

a matter for the Federal Government. The Federal Government

created Amtrak.

This is the letter from the then-Governor of Texas, George W. Bush, in 1996. He attributes responsibility to the Federal Government.

To connect our rural areas with our urban commercial centers, the Federal Government subsidizes all modes of transportation. We have essential air service, which I mentioned. We have Federal subsidies for intercity bus transportation. And since the Federal Government took over passenger rail service, we have funded it as well.

I wish to make note of the fact that despite the fact that our airlines are for-profit companies, we insist that we have to help them function and we give them about $3 billion a year in subsidies. These are for-profit companies. We want them to keep flying. There has been about $20 billion put into the aviation system since 9/11.

I remind our colleagues, there is no passenger rail service in the world that earns a profit. Countries pay for rail service because of the benefits, and if you eliminate these trains, it would mean millions of additional cars on the highways and even longer lines at the airport, adding to our country's congestion problems.

In addition, terminating these routes destroys Amtrak's interconnected system, isolating different parts of the country from one another and reducing the utility and the value of all of Amtrak's services.

This bill, our bill, already cuts Amtrak's operating subsidy by 40 percent. And rather than micromanaging Amtrak, our bill mandates that this performance standard is the one the company must meet. We also require Amtrak to tell us how they plan to meet this standard. They need to set up specific improvement goals and plans for each individual train route. If the plans are not followed or if they don't work, funding for that train route can then be terminated.

Senator Lott and I, along with Senator Carper and others, put a lot of thought into this bill. It will make major improvements to rail service in our country. The Sununu amendment does exactly the opposite. It will destroy America's national passenger rail network. Ironically, it won't even save money because a sudden and massive reduction of trains that this amendment would force would leave Amtrak with huge labor costs for displaced employees.

This is not a new subject we are airing today. In some ways, it would be nice to be able to agree with Senator Sununu on this issue and say, OK, it would be nice if they could pay their own way, but they can't do it. When you are operating on schedules that, in many cases, pay lots of attention to the key peak work hours and then don't have the traffic after that----

How much time do we have left?

That is good. We have no time left. We had, I thought, a minute or two before the vote.

I thank the Senator. May I take that at the end of the Senator's presentation?

I am touched by the generosity of the Senator from New Hampshire.

I am concerned, Senator Lott wanted to say a couple of words.

That is a satisfactory arrangement, and I consider it to be very fair.

Mr. President, I move to reconsider the vote.

Objection.

We object.

Mr. President, we look forward to a full discussion of this amendment. We do provide in the bill an opportunity for a competitive review on two lines.

Whether it should be expanded is something we will want to talk about. We think that two lines each and every year can be competed for and reviewed by Amtrak. We have to examine it here. But our inclination is to oppose this. But we will have a discussion about it at such a time as we go to a vote.

I suggest the absence of a quorum.

Madam President, I have listened with interest to our colleague from Colorado. Since I have a son and two grandchildren who live in Colorado, they talk about how nice it would be for train service to run from Denver to Glenwood Springs and provide that kind of service. It would ease up the traffic on the highways in Colorado, Route 70, and others.

It would be nice if it was possible to reduce the subsidies, but the problem is, the world has proven in country after country that you cannot operate passenger rail service at a profit. You cannot carry the obligations that are required with a passenger rail system. My colleague will excuse me when I say this: It is kind of fallacious to even believe that it is possible. We tried it.

In 1997, our reauthorization bill said we should try to eliminate subsidies. We couldn't eliminate them. But I will tell my colleagues what did happen. Ridership has gone way up. That proves one thing; that is, that the railroads have to be there. We just had a vote on an amendment calling for the elimination of routes across the country which lost substantially. The fact is, the country desperately needs rail service. Our airlines are busy beyond capacity. Highways are busy beyond capacity. We are stuck in traffic all over. The railroad is finally beginning to find its way out.

What we have in our bill, for the edification of our friend from Colorado, is a goal to reduce operating subsidies by 40 percent in 6 years. That is a start.

I urge my colleague to let this take place. Let it happen. Let's see what goes on there. We have made all kinds of conditions of reform for the railroad, not ignoring the fact that there have been large subsidies but also recognizing that passenger rail service requires subsidy.

In the UK, for example, the Government decided to go private with its rail system. They found out that things deteriorated rapidly. They weren't safe, and they weren't efficient. We are now beginning to see that Amtrak is attracting ridership as we have not seen it before, as 26 million people rode Amtrak last year. But so many burdens were placed on Amtrak: insufficient funding for capital in the first place, substantial outstanding indebtedness.

How did Amtrak get to be a national corporation? It got there in the early 1970s because the private sector couldn't handle it. There is no money to be made there, when you consider that freight railroads are making money and freight railroads often are an impediment to passenger rail service operating efficiently.

We are going through a review of what Amtrak ought to be. We know our equipment is not up to date. We know our trackage is not up to date. We know our signage is not up to date.

I had the opportunity to ride in the engine of a train from Paris to Brussels going to a NATO meeting. We cruised along at 300 kilometers, 180 miles an hour, and rode 200 miles in an hour and 20 minutes. It is that kind of service that could be offered if we could invest in bringing Amtrak up to date, and perhaps we could begin to see the results that would attract that kind of support.

Revenue increases have been taking place, so we are on a good track to make Amtrak more efficient, less costly, and more conscious of their operating expenses. But we have to be able to continue in that vein. If we said we demand there be a point in time when there are no more subsidies, we would not be being realistic. It can happen.

I hope if this comes to a vote, we will defeat it soundly. I think we have the votes to do that. I hope we can put this aside for now and give us a chance to go further on the debate and the review of the Amtrak bill as it is.

Mr. President, I note the absence of a quorum.

Mr. President, I ask unanimous consent that at 3:15 today, the Senate proceed to vote in relation to the Sununu amendment No. 3446, with no amendment in order to the amendment prior to the vote; and that the 4 minutes immediately prior to the vote be divided as follows: 1 minute each for Senator Lautenberg, myself, and Senator Lott, or our designees, and 2 minutes for Senator Sununu.

Madam President, we are examining an amendment offered by Senator Sununu. As we have just heard, we have been through this somewhat before. The amendment would open to privatization all of Amtrak's long-distance and corridor train routes and give Federal funding to private companies to do what Amtrak does with no additional contract oversight. We saw something with the British experience--that there is potential for disaster when you fully privatize a national railroad. In the UK, wholesale privatization of their rail line did not work. In the end, safety was compromised for profits, and several died in horrific train derailments.

Our bill does not allow a complete selloff of our entire national railroad. It does, however, provide a controlled procedure for competitive bidding on a limited number of routes. This competition will be allowed only under strong supervision by Federal regulators. The Federal Railroad Administration, which also overseas rail safety, will start by accepting bids from other railroads interested in running passenger trains for one to two train routes. This is an experiment to see if the Government can save any money by letting someone other than Amtrak try to run passenger train service.

Railroading in America is a complex operation. Most railroads currently in service can trace their roots back 150 years. There are comprehensive safety standards that must be met. There are laws that apply only to the railroad industry. You have to share limited infrastructure with other railroads. Wholesale privatization of Amtrak is not in our country's best interest. The traveling public relies on the expertise of American railroads for safe and efficient service.

Under our bill, a limited experiment can be attempted for competitive bidding with proper oversight. Expanding it by including the Sununu amendment, frankly, could be disastrous. It is hard to imagine that we would permit residents in a hospital or medical learning experience to go ahead and start doing surgery. Say take a couple of cases, we will examine them, and then we will go on to full-time operation with your skills. Meanwhile, you don't just throw the whole thing together and take a chance that you are right. We have included an opportunity for two of these competitive bids to take place in a year and see what the results are and then decide whether we go further, instead of throwing the whole works in there at one time.

For obvious reasons, I oppose this amendment. I urge my colleagues to vote against it. We are just now doing a whole reform of Amtrak. We are reducing operating costs as a requisite and doing much more to improve rail service. It is obvious that rail service is and has to be an essential part of our transportation infrastructure.

I oppose this amendment. I hope my colleagues will stand up and say: No, we are going to give Amtrak a chance to operate because we desperately need it.

I yield the floor and suggest the absence of a quorum.

Madam President, we ought to crawl before we walk, to use the old adage. We have to learn it firsthand without putting the whole thing at risk.

I ask for the yeas and nays.

Very briefly, I join Senator Lott in telling our colleagues to come on down if they have something they want to put into this bill. We are on the edge of progress, and we ought to move ahead.

Amendments Nos. 3457, as Modified, and 3459, as Modified

Mr. President, I ask unanimous consent that the pending amendment be set aside, and I call up en bloc the Murray amendments Nos. 3457 and 3459 and ask unanimous consent that the amendments be modified with the changes at the desk; that the amendments, as modified, be considered and agreed to and the motions to reconsider be laid upon the table en bloc.

Mr. President, I do not want us to have only those speaking who are opposed to the amendment. I know the sponsor, Senator Sununu, is here and will probably want to speak momentarily in support of his amendment.

Let me say, to his credit, unlike some of our colleagues, he has been involved in this issue for years. As a member of the Commerce Committee, and when we were trying to get it up for consideration last year, he did not just try to block it from coming to the floor, he had some amendments, and we

agreed those amendments should be considered. That is the way to do this.

One of the things I said last night, and I want to expand on a little bit, is this bill may not be perfect, that we can perhaps have more improvements. But here is a case where the people I hear from say this is not a good bill because it does not do enough--not that they are opposed to most of what is in it, or what is in it; they just want to do more. But then you say: ``All right, what do you want?'' and they go silent.

So I think it is a major step in the right direction. If we can find more things that would improve the service, more reforms that would be helpful, I think we ought to consider that.

Mr. President, I ask Senator Sununu, would you like to speak now? I would be glad to defer and let you explain more about your amendment, and then I would follow you, if you prefer, or I can go ahead.

Mr. President, in the interest of fairness, usually we go back and forth. We have had a couple people speaking against the amendment--Senator Hutchison a few moments ago. I say to the Senator, if you wish to speak now, I encourage you to do so, and then we will have speakers on the other side after that.

Mr. President, the Senator from New Hampshire is yielding me 2 minutes out of the time of the proponents of the amendment? I don't want to mislead anybody here.

Mr. President, that is typical generosity of the Senator from New Hampshire. He is engaged, thinking about this issue and trying to do the right thing.

I also think this is a classic chicken-and-egg deal. We tell Amtrak we want them to do better, but yet we don't offer any reforms, challenges, responsibilities to do better. We throw rocks and say: Why aren't you providing better service at cheaper rates?

I think you need a plan to move toward actually what the Senator from New Hampshire is trying to achieve. The bill before us, S. 294, already requires Amtrak to reduce its total Federal operating subsidy by 40 percent over the life of the bill. The bill gives Amtrak management the flexibility to achieve this goal through cost savings, route changes, revenue growth, or expanded service rather than through mandated route cuts. Additionally, the bill requires improvement plans for each long- distance route that will focus on strategies to increase revenues, ridership, efficiencies, and service quality. These plans must be implemented and achieved in order for them to continue to get Federal routes.

I think some of these routes are going to eventually need to be terminated, but if we do what this amendment would do, it would basically, cold turkey, start eliminating routes very soon, including, to be perfectly honest, the Crescent, which is the train that comes down through the heart of the South, through Meridian, MS, Hattiesburg, down to New Orleans. We need that service.

Also, this would force cuts at a time when we need more rail service, not less. We have ever-increasing air and highway congestion and environmental concerns. The Federal Government provides operating subsidies in all these other areas, but we are saying we want to terminate these long-distance routes. If we want a national rail passenger system, we are going to have to keep some of these routes going at least until we make an effort to make them more cost efficient.

The following Senator is necessarily absent: the Senator from Arizona (Mr. McCain).

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Mr. President, reserving the right to object, first, I thank the Senator for his comments about our efforts on the Amtrak legislation. This is the Amtrak legislation, and I do not think it is the place to have this debate he is proposing. He acknowledges such. In view of that, I would object.

Madam President, first, if I could clarify the agreement that was just enumerated here, at 3:15 then we will move to a vote on the pending Sununu amendment, and prior to that, it will give us a chance on both sides of the issue to make some brief remarks, and Senator Sununu will be back momentarily to make some comments and an explanation of his amendment.

The amendment would modify the bill's competition pilot program to allow an unlimited number of existing Amtrak routes to be open to competition from freight rails that seek to operate passenger trains in exchange for Amtrak's current subsidy.

We have worked on this issue before. Senator Sununu had this amendment the last time this bill came up. We worked out a compromise that is in the bill which is to have a pilot program. Philosophically, I am attracted to this amendment. I do think we ought to have competition. I think it makes sense maybe for the freight lines to provide this passenger service. But this is a major change in what is currently done. So rather than just leaping into this in an uncertain and an unknown way in terms of its impact, results, what would happen to Amtrak, how it would impact the service, the alternative is to go with what we worked out a couple years ago, and that is a competitive pilot program that would allow two routes a year--not two total; it is two a year--to get into this competitive pilot program area, see how it works, find out the details, assess the good and the bad and the costly which could come out of it. That is the preferred way to go. We do say we will have this for the life of the bill, which is a number of years, so it could be up to 10 or 12 routes that may be involved eventually.

This is a new concept, and we believe what we have outlined in the provisions of S. 294 will prescribe it in such a way that it won't cause problems and we can see if it works. It may work. I emphasize, this is something I may want to move toward in the future. But I want us to have a national rail passenger system, No. 1. I want us to quit starving Amtrak and then blasting them because they don't do better even though we know they don't have the money to do the job. I want us to give them clear instructions for reform and to evaluate routes and have better governance. We have put this in the bill. This will be a major plus for Amtrak, to give them more authority.

Some of these routes could be shut down. We had the earlier Sununu amendment that we think could have led to a pretty precipitous shutting down of six or eight of these long-distance routes in other parts of the country. That would have been a mistake. But I do think that, more than likely, over a period of 2 or 3 years, you can't defend an individual subsidy per passenger of $500 or $600.

More and more, as we make this a more attractive entity, deal with the capital needs, improve the trackage that is available for them to use, get better governance, then it will be more attractive for competition to come into play. Maybe States will have more operations, as well as the freight lines.

I understand the goal of Senator Sununu. I appreciate the fact that he is not one who has just been critical. He is engaged. He is thinking about it. He has some ideas. But I urge defeat of this amendment. Let's see how the pilot program works and then, in 4 or 5 years, evaluate what we have seen and perhaps do something more.

I yield the floor.

Madam President, have the yeas and nays been ordered?

Madam President, I yield back my time.

The following Senators are necessarily absent: the Senator from New Hampshire (Mr. Gregg) and the Senator from Arizona (Mr. McCain).

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

Mr. President, Senator Lautenberg is here, chairman of the subcommittee. He is working with Senator Murray on a couple amendments. We have a couple amendments by Senator DeMint that we have cleared. We are hoping we will have a chance to visit with Senator DeMint or some of his representatives momentarily and maybe clear some other amendments. I thank Senator DeMint for coming over. He actually came over with a block of nine amendments, and we are working through those. Some of them we can certainly accept. We will work through the rest.

Senator Reid was very generous yesterday in agreeing that we wouldn't complete this bill until Senators had a chance to review it and come up with amendments, even as late as Tuesday morning, provided they were germane; otherwise, we could finish this bill this evening.

We have another issue that has been interjected; that is, the Internet tax issue. I know Members on both sides and the leadership are working out when and how we would get to vote on that important issue because next Thursday, if we don't come up with something, the Internet moratorium on taxes will expire November 1. We have to deal with the issue.

I call on my colleagues, if you have amendments of any kind on the Amtrak legislation, come over and offer

them. We will work through them this afternoon. I don't know what the leadership is going to decide with regard to votes later on this evening or tomorrow, but there will not be any votes on Monday, as previously announced by the leadership. So we will have to either deal with these amendments that might come up this afternoon or tomorrow or Tuesday.

After we dispose of the Internet tax, everybody needs to know that this bill can and should and will be finished before sundown Tuesday. That is what the leader, Senator Reid, wants. That is what Senator McConnell wishes to accommodate. It is my intent to work with Senator Lautenberg to drive this bill to conclusion. It is not controversial. What is in here is broadly supported. We had 93 votes last time. We may get more this time. Of the amendments that have been offered, the most an amendment has received was 27 votes. We are going to continue to look for ways to do even more that is positive for Amtrak. But we need to go ahead and be done with this next Tuesday.

I yield the floor to hear any remarks the chairman has.

Mr. President, on behalf of Senator DeMint, I ask unanimous consent that the pending amendment be set aside, and I call up amendments Nos. 3460 and 3461.

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

Mr. President, these amendments have been cleared on both sides. I, therefore, ask unanimous consent that the amendments be agreed to.

Mr. President, we do have two more amendments by Senator DeMint that I think have been cleared, but we are waiting to have a chance to discuss with Senator DeMint some of the other amendments. We are trying to get sort of an equal amount agreed to as we go forward. But we are trying to clear the deck of some of these amendments, and we are going to continue to work on that. Hopefully, we can dispose of another four or five amendments this afternoon even.

I yield the floor and suggest the absence of a quorum.

Mr. President, what is the pending business?

Mr. President, I ask unanimous consent to set aside the pending amendment and call up amendment 3455, the Allard amendment.

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

My amendment is very straightforward. Right now there is a provision in law saying that Amtrak is supposed to be financially self-sufficient. To be clear, the provision does not even apply to Amtrak as a whole. It only requires Amtrak to be operationally self- sufficient, presuming, of course, that the Federal Government will continue to provide capital subsidies.

I was surprised and even disheartened to learn that S. 294 would repeal this provision in law requiring Amtrak to become operationally self-sufficient. I strongly believe that this goal should be maintained.

My amendment would strike the provision in the bill that repeals the self-sufficiency goal.

I am quite puzzled that the Commerce Committee report noted:

This repeal is technical in nature and not meant to

indicate that Amtrak should not strive to reduce its

dependency on Federal funds or improve the efficiency of how

it spends Federal funds as elaborated through this bill.

This statement makes no sense. If we repeal a provision calling on Amtrak to become self-sufficient, we are saying they have no need to reduce their dependency on the taxpayers. There is no other way to interpret it. We need to be crystal clear that we expect them to reduce their dependency on Federal funds, and the only way to do it is to maintain this provision in current law.

To be clear, even with the provision in law, Amtrak has made little progress toward becoming operationally self-sufficient. According to the Department of Transportation Office of Inspector General, Amtrak continues to incur substantial operating losses, and over the last 5 years, annual cash losses, excluding interest and depreciation, have fallen only modestly, a little more than 3 percent a year. But modest progress is not a reason to eliminate the operational self-sufficiency provisions. Failure to meet a goal is not reason to lower the bar sufficiently to redefine success. Rather, it simply means that more work must go toward meeting their original goal.

The Office of Inspector General went on to say:

The problem with the current model exists beyond funding.

There are inadequate incentives for Amtrak to provide cost-

effective service. Amtrak, as the sole provider of intercity

passenger rail service, has few incentives, other than the

threat of budget cuts or elimination, for cost control or

delivery of service in a cost-effective way. Amtrak has not

achieved significant cost savings since its last

reauthorization.

That is what the Inspector General had to say in his report. The question I have is, given that we have so few incentives for cost controls, why would we eliminate one of the few provisions in law calling on Amtrak to control their costs? While passenger rail has a role in an efficient, modern transportation infrastructure, I am concerned about how Amtrak has performed in providing that service. As my colleagues may know, I am a strong proponent of results and outcomes. Amtrak and other government-funded entities should not be judged based on how much they receive in Federal funding but the results they can demonstrate with those taxpayer dollars or the fees they charge passengers who ride their trains. In the case of Amtrak, I am afraid these results are not very impressive. In the administration's PART assessment, their tool for evaluating the effectiveness of programs, Amtrak was rated as ineffective. In fact, it was the only program in the entire Department of Transportation to receive an ``ineffective'' rating.

I want to be clear on what this rating means. From the administration's description ineffective, programs receiving this rating are not using taxpayer dollars effectively or the fees they are charging the passengers to use their services. That seems pretty clear to me, and I hope Members of this body will agree with me on that fact. If Amtrak is not being effective with the money they spend, it would make sense to reduce the money we spend there. Instead, we are talking about increasing their subsidies and eliminating provisions calling on Amtrak to be more careful in how they spend tax dollars. Again, that makes no sense. Right now Amtrak's Federal subsidy is nearly equal to its total ticket revenue per year. To put it a different way, for every dollar spent on a ticket, the rail passenger receives another dollar from the taxpayers.

Given the subsidies on some routes, taxpayers would save money by actually paying passengers to take another mode of transportation such as flying. Calling on Amtrak to become operationally self-sufficient is not about being antirail. It is about being for taxpayers and for those riders who use that service to hold down their costs. It is for efficiency and for common sense.

Even if Amtrak were to become operationally self-sufficient, it would continue to receive sufficient Federal subsidies under my amendment. According to the U.S. Department of Transportation, Amtrak is by far the most heavily subsidized mode of travel in the United States, even though it carries less than 1 percent of the intercity passenger market. Amtrak costs $210.31 per passenger, per thousand miles, compared to $4.66 for intercity buses and $6.18 for commercial airlines. Because motorists pay far more in Federal user fees than they get back in Federal transportation spending, the U.S. Department of Transportation estimates that the Federal Government earns a profit of $1.79 per passenger, per thousand miles from automobiles.

This bill proposes to spend $11.3 billion on Amtrak. It is entirely reasonable for Congress and the American taxpayer and their passengers to tell Amtrak that they should work to reduce those subsidies. If we are too timid to even tell Amtrak to reduce their need for operational subsidies--remember, this is operational subsidies, not capital investment--how can we expect that they will ever do it? Many of us are parents and have worked to raise our children to become independent, self-sufficient people. When my daughters graduated from college, my wife and I expected them to get jobs to support themselves. If we had simply paid their rent, bought their groceries, paid their utilities, and given them spending money without any conditions or expectations of independence, why would they want to work and make the tough choices necessary for change? It is the same with Amtrak. Unless we are clear that we expect them to change and become operationally independent of the Federal Government, things will never change.

It is critical that we keep this goal in place for Amtrak. They must hear loudly and clearly from Congress and from America that they need to make the tough choices necessary to get out on their own. My amendment will ensure they hear this message.

I yield the floor.

My amendment is actually very simple. I will ask the clerk to read the amendment, if she will.

If I may address the Senator through the Chair.

The section I am repealing puts in some guidelines, and it is not date specific but it says that the goal of Amtrak should be to become self-sufficient; in other words, work toward less subsidies from the Federal Government. For some reason or other that was taken out by the committee staff. It is appropriate we continue to keep that in law instead of repealing it. Since they are not driven by competitiveness within the fixed rail system, I encourage them to note that the Congress expects them to work for efficiency and to repeal it. I recall in Boston, for example, we had a situation where Amtrak runs through Boston and is part of their mass transit system. So a committee chair looked at a contract they let out for the Boston fixed rail. It was the most expensive contract, providing the least service to the passengers. This kind of provision is an incentive. It gives Members of Congress a way of expressing to Amtrak that we hope that they work for an efficient, effective system. I don't think it is particularly Draconian; at least I do not view it that way.

Madam President, I wish to respond for a moment, if I might, to clarify. No. 1, I am a strong proponent of fixed rail. As chairman of the Housing and Transportation Subcommittee in Banking, I worked hard for mass transit and, obviously, fixed rail. So I agree that rail needs to be a vital part of our transportation system.

All this amendment does is put in law a goal we want self-sufficiency for--not capital investments. So as to the signage the Senator talks about, the rails on the ground that need to be laid, buying the new transportation, it does not apply to that. It applies to operational costs. It is not a hard line. We have been going for several years without meeting this goal.

I think we have done some work in that direction, but as far as I am concerned, the amount of efficiency has been pretty minimal. I think we can do more. Even if it is minimal, at least we can keep it in there so it continues to

encourage them to be more efficient and review processes and procedures they use in the operation of Amtrak. That is not capital investment. That is operational, things they can do to bring efficiency to their services, which I think is to the advantage of the rider, as well as to the taxpayers of this country.

I wanted to clarify that for the Senator from New Jersey.

Thank you, Madam President.

I suggest the absence of a quorum.

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

Mr. President, I ask unanimous consent to speak as in morning business.

Mr. President, I suggest the absence of a quorum.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 3678) to amend the Internet Tax Freedom Act to extend the moratorium on certain taxes relating to the Internet and to electronic commerce, as amended.

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days to revise and extend their remarks and include extraneous material on the bill under consideration.

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

H.R. 3678 is an excellent example of what can occur when we work together on both sides of the aisle to deal with highly complex issues, and I am evidently not alone in this observation.

This bipartisan legislation is supported by industry groups such as the Don't Tax Our Web Coalition, government organizations such as the National Governors Association, the Federal Tax Administration, the National Conference of Mayors and the National Conference of State Legislatures, and supported by a wide range of labor and union groups.

In sum, H.R. 3678 temporarily bans State and local taxes on Internet access, while minimizing the effect on State and local government ability to raise needed revenue and treat businesses fairly. The bill is pro-consumer, pro-innovation and pro-technology. It amends the Internet Tax Freedom Act in four key respects.

First, it extends the moratorium on State and local taxes on Internet access for 4 years until November 1, 2011. The 4-year time frame will allow Congress to make any adjustments to the moratorium, if necessary, in light of development in the States or in technology, as Congress has done each time it has extended the original moratorium in 2001, in 2004, and in this bill. It will also allow sufficient time for business planning, while ensuring that everyone continues to have the benefit of access to the Internet tax free.

Second, the bill extends for 4 years the grandfather provisions to preserve the legality of taxes imposed prior to the 1998 act, consistent with passed extensions. The bill also phases out new grandfathers that some States claim were created in the 2004 extension, while allowing States that issued public rulings before July 1, 2007, that are inconsistent with the foregoing rules to be held harmless until November 1, 2007.

Third, the bill clarifies the treatment of gross receipts taxes which certain States have enacted in recent years in lieu of or as a supplement to general corporate income taxes. Like the general corporate income tax, these gross receipt taxes apply to nearly all large businesses, not just to Internet access providers. The bill clarifies that this form of general business tax is treated in the same fashion as a corporate income tax and is not covered by the moratorium as long as it is broadly imposed on businesses and is not discriminatory in its application to providers of communication services, Internet access, or telecommunications.

Finally, in response to a number of concerns regarding the definition of Internet access in the current law, the bill clarifies the term to mean a service that enables a user to connect to the Internet. This new definition will not only prevent all tax-exempt content bundling but will also include closely related Internet communication services, such as e-mail and instant messaging. In addition, the bill amends the definition of ``telecommunications'' to include unregulated, nonutility telecommunications, such as cable service.

I want to particularly thank Judiciary Committee Chairman Conyers, Ranking Member Smith, as well as Subcommittee Chairperson Sanchez and Ranking Member Cannon for their cooperative efforts in helping us get to this point in the process.

H.R. 3678 is a good, strong bill that provides much-needed clarity to the communications and Internet industries, and strikes the right balance in addressing the needs of States and local governments, while helping keep Internet access affordable.

I urge my colleagues on both sides of the aisle to join me in supporting this bill.

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

Mr. Speaker, I am pleased to yield such time as she may consume to the gentlewoman from California (Ms. Zoe Lofgren) who is the Chair of the Subcommittee on Immigration, Citizenship, Refugees, Border Security, and International Law, but has been an invaluable participant in the discussions that have led to this bill.

Mr. Speaker, I yield the gentlewoman from California 2 minutes.

Mr. Speaker, I yield myself such time as I may consume to close the debate and to address some of the issues that have been raised. I hope my colleagues will stay around, since they want to know the rationale for the 4-year extension versus the permanent extension, and listen to the rationale, because there is both ``practical rationale'' and there is ``substantive rationale.''

Let me deal with the practical reasons first. This moratorium that currently exists will expire the last day of this month if we do not act. The Senate has not done anything yet, and in many ways has made it clear that a permanent moratorium would be ``dead on arrival'' in the Senate. If the Senate is not going to act on a permanent moratorium, for the House to pass a permanent moratorium, send it to the Senate, have the Senate reject that permanent moratorium, runs the risk that time will run out before the month's end and the moratorium will run out before the month's end.

Mr. Speaker, I have heard the argument that we ought to make this permanent because this is stifling innovation. That strikes me as being like the argument that we ought to not tax anything because people are going to quit making money because there are taxes on the money that they make. I don't know anybody who, over all these years of threats that people have said to me people are going to quit making money if you don't quit taxing their money, I don't know anybody who has fallen prey to that kind of shortsighted attitude. I don't know anybody in the technology industry or in the innovation industry who has fallen prey to this notion that we are going to stop innovating just because there is a temporary moratorium on Internet access taxation as opposed to a permanent moratorium.

The last time I checked, the definition of ``politics'' was that politics is the art of compromise. We are doing what is necessary to move a bill. We can stand here and rail against the idea of a good bill on the idea that we want a perfect bill, or we can pass this bill, which I presume all these people who are railing against it not being permanent are planning to vote against the temporary extension when we get to a vote on it.

Mr. Speaker, I have heard this referred to as partisan politics. This is not partisan politics. We heard two Democrats get up and say they support a permanent moratorium. You have heard a number of Republicans say they support a permanent moratorium. There are people who don't support a permanent moratorium. A bunch of them are over there on the Senate side, and they have already made it clear if we deliver a bill over there, it's not coming back over here. So this is not partisan politics; it is practical politics. Understand the difference between partisan politics and practical politics.

Now, I have told you the political reasons why this is a temporary moratorium. Let me tell you the substantive reasons that this is a temporary moratorium. I just want to go back and read what I said in my opening statement. Every time we have extended this moratorium, we have revised this moratorium. The last time we did it, we had left out a whole bunch of people in the telecommunications world who thought that they should have been included in the definition of the moratorium. If we had made it permanent, perhaps we would have just left it as faulty, not corrected it. The fact that this is not a permanent moratorium doesn't mean that we can't go back 2 years from now, 4 years from now, 1 year from now, next month, and do something different.

Mr. Speaker, this is really not the end of the world that this is a temporary moratorium. This is the beginning of the world. We changed the moratorium in 2001, in 2004, and we will probably change it again, because every time we think we know the outer limits of the Internet, somebody comes along with something else that they can do on the Internet.

If we made this permanent, as if we had all the answers about what the moratorium, what the Internet's capacity is going to be, presumably that would be the end of the discussion, because we would have made this permanent, gone on to other issues, and not

been thinking about revisiting this and addressing whatever shortcomings we might have 4 years from now, as opposed to sometime in infinity out in the future.

Mr. Speaker, I, for one, am not on the permanent moratorium bill. I stand here with integrity telling you that I think it would be a serious mistake to make this a permanent moratorium on Internet taxation, because we don't have a clue standing here today what the capacity of the Internet is. Four years from now everything in life may be being done on the Internet. We might have a virtual world out there and then we may not be able to tax anything under the moratorium. So we need to continue to look at this on a regular, systematic basis.

This is not a cavalier decision that we have made. It is a practical, substantive, smart decision that we have made. I would request that my colleagues get off of this kind of ``letting the perfect be the enemy of the good'' notion, support this bill, and let's move on and extend this moratorium for 4 additional years. It is a good bill.

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