Military Reservist and Veteran Small Business Reauthorization Act of 2007

Mr. President, I rise for the purpose of introducing a bill on health care reform. I know the Presiding Officer has immense interest in it, as do a number of other Senators. I have read his bill and incorporated many parts of that.

Health care reform is one of the biggest needs in this country. It is the fastest escalating price in this country. It is the biggest cost to companies and individuals in this country. We need to have a solution.

I have been working with Senator Kennedy, who is the chairman of the Health, Education, Labor and Pensions Committee. He has a very full plate with the Higher Education Act, the higher education reconciliation, information technology, and I could go on to mention about 53 bills we are working on in that committee. So I have had some latitude as ranking member to try to pull together some information-- some legislation that would deal with health care for this Nation. This is a work in progress. This is not a finished document.

I wish to thank Senator Kennedy for working with me and his staff and my staff to come up with some health care principles we wanted to follow. Of course, I appreciate the work Senator Nelson did with me in previous times and currently on small business health plans. I appreciate Senator Baucus's efforts on health care and how the tax

package goes together with that. We can see there are a lot of moving parts to anything we do with health. Senator Coburn has an outstanding and very comprehensive package on how we can solve many of the health care and health insurance problems in this Nation. Senator Lott, Senator DeMint, Senator McConnell; as I mentioned, the Presiding Officer, Senator Whitehouse; Senator Lincoln, Senator Carper, Senator Salazar, and Senator Durbin--these are all people who have come up with either a comprehensive plan or a piece of a plan that would work to make an important difference in health care in this country.

Congressman McCreary on the House side has been a real leader on this and, of course, the President and the administration have made contributions as well. The President, in his State of the Union speech, made some comments about how taxes would fit in with solving some of the uninsured problems in the country, and some of those provisions are in here as well.

Without the work of everyone on this, it can't be done. If it gets polarized, it can't be done. This is something which has to be done in a very bipartisan way. I hope we have a framework from which we can all operate, making changes, finding third ways.

I work on an 80-percent rule. I anticipate and from experience have found that usually everybody can agree on 80 percent of the issues, and among the 80 percent of the issues on which they agree, they can agree on 80 percent of any one of those issues. You never get a perfect bill around here. If you can get 80 percent, you can get a lot done. That is what we are trying to do on health care--make an 80-percent change for the people of America. Eighty percent would be a huge difference and will help out a lot of people.

So I rise today to talk about an issue that is literally a heartbeat away from devastating the lives of every American; that is, our current health care crisis. Undeniably, we have a problem. There are 46.1 million Americans, according to the last tabulation, who are uninsured. Now, we always talk about that figure and change it slightly differently because there are 7 million of those people who make over $80,000 a year and don't have insurance, so they must choose not to have insurance, but they are uninsured. People who are on Medicaid, they don't have to sign up for anything before they have an emergency. When they go to the hospital, they can sign up then. That is a significant number of the 46.1 million people as well. So I don't know whether to really say they don't have insurance, but at any rate, let's just use that figure of 46.1 million Americans who are uninsured and figure out a way to solve that, as well as to help people who also have insurance to perhaps be able to handle the situation even better.

Health care costs are outstripping inflation. They are increasing annually at three times the rate of the Consumer Price Index. It is little surprise that three out of every four Americans are concerned about health care--three out of four. I think probably, if you are talking to people, you would think the percentage was even higher than that.

Employer-provided health insurance is voluntary and in critical condition. Sixty percent of the country's employers offer insurance today, but that is down 9 percent from a few years ago. It is partly due to the fact that the cost of health insurance for companies has nearly doubled in the same amount of time. With employers expected to pay over $8,000 per employee versus $4,000 5 years ago, we have no choice but to stabilize the system and provide more options for businesses so they can continue to provide health care for their employees.

We must also provide real options--real options for those without employer-based health care. My own home State of Wyoming is hard-hit. On average, one in five Wyoming residents is uninsured, and more and more residents are losing the coverage they do have as the costs go up. It is largely due to the fact that much of Wyoming's economy is small business. Nearly 70 percent of Wyoming employers are small business. Actually, if you use the Federal definition of small business and you talk about companies headquartered in Wyoming, 100 percent of the companies are small business. We don't have a single one, according to the Federal definition, that is based in Wyoming. But nearly 70 percent of the employers find that it is nearly impossible to afford health care coverage for their employees.

Thankfully, I am not here today to talk about these problems; I am here to provide real solutions. Americans need and deserve real solutions to this crisis now, and they are counting on this body to work together to get that. The time has come to move beyond the rhetoric and principles to true comprehensive health care reform.

Congress could enact 10 major steps for health care reform. These 10 steps are the basis of the legislation I am introducing today, the Ten Steps to Transform Health Care in America, or simply ``Ten Steps.''

In putting together these 10 steps, I first wanted to understand the problem, and all the proposals others have been discussing help with that. I have studied those other proposals very carefully, and my colleagues will find that I have included many of the concepts of those other proposals in the 10 steps. I particularly wish to recognize again and thank Senator Baucus, Senator Kennedy, Senator Nelson, Senator Coburn, Senator Lott, Senator DeMint, Senator McConnell, Senator Whitehouse, Senator Lincoln, Senator Carper, Senator Salazar, Senator Durbin, Congressman McCreary, the President, the administration--all of them for their contributions, for their patience, and for their willingness to share their ideas.

However, to truly do this right, we have to move beyond the usual jurisdictional issues, beyond the usual reauthorizations of a single program at a time. We have to examine the whole health care system and together--together, we have to put forward a bold and comprehensive solution that addresses our health care crisis. That is what Ten Steps does. It is a comprehensive solution to a very big problem. It can be done in parts. It doesn't have to be done as one structure.

It needs to go through the committee process. I have pointed out several times that bills that don't go through the committee process usually don't make it through the process at all. They are good for making rhetoric, they are good for making points, they are sometimes good for advancing a principle, but they seldom ever make it to the President's desk for signature. So I know this will have to go through more than one committee. I know the jurisdictional issues between Health, Education, Labor and Pensions and the Finance Committees. I have no problem. We did the pensions bill last year, going through those same kinds of multiple committees and getting agreement from everybody, and that can be done on this issue as well--of course, as long as we don't polarize it.

So I want to reiterate again that this is not a final bill. One of the things we have done in the HELP Committee which has helped to move things along is to consider every bill a work in progress. At a lot of the committee meetings, when you have a markup, different amendments are presented and they are voted up or down, just like on the floor. Well, that doesn't result in a lot of compromise. So what we have done on the HELP Committee is use the markup process as an indication of problems and the level of intensity of those problems, and we have agreed to work through those problems even after the bill makes it through committee. As a result, it seldom makes it through committee unanimously, but it makes it through committee in a bipartisan way, and that encourages people to work together to find solutions. Sometimes it is one way or the other, but usually it is finding a third way to come up with a mechanism to do what we are trying to do. Once we can put away some of the old ``diving into the weeds'' things that have happened year after year, we are able to come up with something new and different that actually reaches the goal we have been trying to reach as we jumped into the weeds through the whole process.

So I want to remind everybody that it is a work in progress. We want more ideas. We want some of those third ways. But primarily, we want everybody to take a look at what is in here because it is a compilation of a number of people who have really taken a look at the situation.

So what does it do? These 10 steps--I will break them down into the actual 10 steps and go through each of them.

First, we eliminate unfair tax treatment of health insurance, which expands choices and coverage and gives all Americans more control over their health care.

Our current health insurance system is biased toward employer-based coverage--kind of due to a historical accident. The wage controls of World War II increased competition among employers for recruiting the best employees and incentivized employers to offer health benefits instead of what they couldn't do, which was increase wages. In 1954, Congress codified a provision declaring that such a contribution would not count as taxable income. This tax policy made it very favorable for individuals to get their health benefits through their employers and consequently has penalized individuals who get coverage through the individual market. So if you work for a big company--a tax break. If you don't--penalized.

The Joint Committee on Taxation estimated that moving this tax bias and a few related health care tax policies will save the Government $3.6 trillion over the next 10 years. Even around here, that is a lot of money. That is a lot of money which can and should be used to expand choices and access and give individuals more control over their health care. Ten Steps ensures that every American can benefit from this savings--whether they get their health care from their employer, from the individual insurance market or they decide they want to get off Medicaid and switch to private insurance.

Let me be clear. My goal is not to erode employer-based health insurance, given that the Ten Steps does not alter the way employers treat health insurance. Rather, I wish to provide more options for individuals who don't currently have insurance through their employer. Everyone should be treated equally.

Once the employee exclusion for health care insurance is eliminated, we must provide additional tax incentives for the purchase of health care insurance. Ten Steps is a hybrid approach, combining the standard deduction for health insurance with a tax subsidy for those who need it the most. That way, no particular population is adversely affected.

The second step of Ten Steps would increase affordable options for working families to purchase health insurance through a standard tax deduction. The national above-the-line standard deduction for health insurance will equal $15,000 for a family and $7,500 for an individual. I wish to also note the earned-income tax credit for taxpayers with qualifying children is held harmless--that is very important--so those receiving the earned-income tax credit will not be affected by these changes. Actually, they will be affected in a positive way.

For example, say Bob from Gillette, WY, has total compensation of $38,000, made up of $34,000 in wages and $4,000 in health insurance premiums paid by his employer. Because of the current unfair tax treatment of premiums, Bob's current taxable income is reduced to $34,000, which means he paid about $5,000 in taxes. To an accountant, this is all fascinating; for other people, I am not so sure.

Under the Ten Steps, which eliminates the exclusion of premiums from tax, Bob's total compensation and thus taxable income would be $38,000. By providing Bob with a $7,500 standard deduction for health insurance, his taxable income under this bill would be lowered to $30,500, which means he would pay about $4,000 in taxes. So Bob's total savings under this proposal is $1,000 a year.

The third step of Ten Steps is what makes this a hybrid approach. I couple the standard deduction with a refundable, advanceable, assignable tax-based subsidy. That is a mouthful, but it ensures that Americans receive this credit in a meaningful way that allows them to purchase real insurance coverage.

Given that everybody is not familiar with these terms, I will explain them. As a refundable credit, it benefits folks even if they don't have tax liability. They don't have to owe taxes in order to get it. This helps low-income individuals. Advanceable means the subsidy would be paid at the beginning of the year so individuals can use the funds to immediately purchase health insurance. If it wasn't advanceable, individuals would need to first pay for their health insurance and then get the money back at the end of the year to pay them back for that purchase. To encourage everyone to obtain health insurance right away, we should provide those funds upfront. Further, to ensure that the subsidy goes toward the purchase of health care insurance, it is also assignable--paid directly from the IRS to the insurance carrier that the individual chooses.

Ten Steps includes the tax subsidy equal to $5,000 for a family or $2,500 for an individual. The full subsidy amount is available to individuals at or below 100 percent of the Federal poverty level, which is $20,650 right now for a family of four. The subsidy is phased out between up to 300 percent of Federal poverty level, with individuals at 200 percent receiving half the subsidy and individuals at 301 percent receiving the standard deduction instead of the subsidy. I am sure everybody got that.

The fourth key step for health care reform is to provide market-based pooling to reduce growing health care costs and increase access not only for small businesses, unions and other kinds of organizations and their workers, members, and families. That is a change from anything I have done on pooling before, but it is a change that was requested by the other organizations and unions, as well as small business. Those of you who know me well recognize how central this would be to any health care reform proposal of mine.

While I have not yet introduced the small business health plan legislation from last year, I have not abandoned those key principles. Every day, emergency rooms treat more than 30,000 uninsured Americans who work for or depend on small businesses. That is at least 30,000 reasons why I will not abandon the concept. However, in the proposal I am introducing, I have addressed some of the criticisms of the bill, and I have offered what I believe are appropriate solutions.

For instance, while the earlier bill focused heavily on small businesses--and this one still does--it simply became clear that other organizations, including unions and churches, can benefit from better pooling options too. Therefore, under this bill, the umbrella of the pooling option has been expanded to include more kinds of organizations but with the same strong focus on consumer protections and State-based oversight.

Of course, a big elephant in the room was dealing with those who were misled to fear how the initial proposal dealt with insurance mandates. I hope those who were so vocal before will pause this time around. By incorporating what many have described as the Snowe amendment--which I am sure we would have passed at the time we were talking about that before--the legislation would require benefit mandate categories if a majority of the States required them. While I still have some concerns, I am comfortable with this compromise because the mandate requirement is coupled with something it needs to encourage pooling and that is a common definition of what that mandate means. We do it with the Federal insurance plan because definitions in all the States run a little bit different. If you are trying to do something comprehensively, it is pretty hard to figure out what each definition means, so there needs to be a way of streamlining it and coming up with a common definition for that mandate. I don't think people have a problem with that, especially since we do it with the Federal plan.

As I learned with the previous debate, mandates for many different services and items are not consistent from State to State. Thus, if we are to discuss requiring those, we should at least have a consistent definition of what those mandates require. We should not further complicate the pooling option with a multitude of definitions. We want to make insurance as simple as possible. I know that is kind of an oxymoron, I am sure, because I know nobody in America relishes having their insurance agent come over and spend an evening explaining the bill to them. But we want to have this little bit of streamlining so it is simpler and people will be able to understand it, to the degree that is possible with insurance.

While the next step is probably one of the most obvious ones, it is also one many have not yet discussed. Currently, HIPAA portability protections

are provided to group health plans. The protections provide assurances to consumers that insurers will deal with preexisting conditions fairly and provide coverage, even to small groups.

These protections have been a great help for individuals purchasing health care coverage in the group market. However, those consumer protections are not provided nearly as well to individuals who are purchasing in the individual market. Ten Steps blends the individual and group market to extend important HIPAA portability protections to the individual market so the insurance security can better move with you from job to job. It allows people to take that new opportunity and still be sure they will be covered, even if they have had some preexisting conditions.

The sixth step emphasizes preventive benefits and helps individuals with chronic diseases better manage their health. America should have health care, not sick care. Prevention, prevention, prevention. That makes a big difference in the cost.

We have all been discussing the need to do more to prevent disease, not just treat its symptoms. Even though I leave much to the markets to define some health insurance components, the one thing we must emphasize is the need for prevention. Any plan purchased with the tax subsidy must include basic preventive services and a medical self- management component.

This concept is modeled after a very successful program in Wyoming. In 2005, Wyoming EqualityCare, our Medicaid Program, began providing one-on-one case management for Medicaid participants with chronic illnesses, such as diabetes, asthma, depression or heart disease, to encourage better self-management of these conditions. The program provides educational information on self-management, as well as a nurse health coach who follows up with each patient to ensure they have what they need to take care of themselves.

In addition, EqualityCare provides a nursing hotline so all patients have a direct line to a health care provider when they are concerned about an illness. These programs targeting those with chronic illnesses were estimated to save nearly $13 million for the EqualityCare program in 2006. In a lot of States, that would not sound like a lot, but Wyoming is the least-populated of all of the States. We are hoping to get 500,000 people in the next census. When you talk about $13 million being saved in this EqualityCare Program dealing with Medicaid participants, it is a lot of money, proportionately, particularly because it cut down on inappropriate use of emergency room services.

Now, another key step of the Ten Steps for health care reform is to give individuals the choice to convert the value of their Medicaid and SCHIP program benefits into private health insurance, putting them in control of their health care, not the Federal Government. The rationale for this step is simple. If the market can provide better coverage at a lower price, why not allow Americans to access that care?

This gives low-income individuals more options about where they can receive their care and what care is available to them. Some providers don't see Medicaid and SCHIP patients. This provision will change that by letting the market forces work and give all patients more choices. It is time for people to start making decisions about their care. Let's get the Government out of the doctors office.

About 6,000 kids are enrolled in the Wyoming SCHIP program. An additional 6,000 kids are eligible for the program but are not enrolled. I wonder why that is. Maybe it is because folks in Wyoming are wary about accepting Government help, and they think there is a negative stigma associated with SCHIP and Medicaid. Well, under Ten Steps, they can use that money to purchase health care insurance through the private sector so that their family can attain the high quality care they need and deserve. This will cover more people.

The eighth step in Ten Steps is a bipartisan proposal which the HELP Committee approved last month--the ``Wired for Health Care Quality Act,'' which encouraged the adoption of cutting-edge information technologies in health care to improve patient care, reduce medical errors, and cut health care costs. Some of the most serious challenges facing health care today--medical errors, inconsistent quality, and rising costs--can be addressed through the effective application of available health information technology linking all elements of the health care system.

The widespread use of health IT can save lives. If somebody is traveling and gets in a car wreck or gets hurt in some other way, the emergency room doctor would be able to find out everything he or she needs to know to make the right treatment decisions, without the person having to fill out one of those little papers at the doctors office, which they may not be capable of doing if they have been in a requiem or have some other problem.

Better use of health IT would also allow medical data to move with people when they go to other locations. When someone goes to the doctor's office, they won't have to take the clipboard and a pencil and write down everything they can remember about their history. It will already be recorded and go with them. It will make a huge difference.

Beyond saving lives and saving time, more effective use of health information technology would save us a lot of money. A RAND study suggested that health IT has the potential to save--listen to this-- $162 billion a year. Even around here that is real money. In order for these savings to be realized, we have to create an infrastructure for interoperability.

All the different health providers and insurers and doctors have to be able to get the information electronically, but doctors, hospitals, health care advocates, the business community, including small businesses, are clamoring for Congress to take action and establish uniform health IT standards. That will cut down on the cost of the software.

Time is of the essence. If Congress does not act, our health care system will move forward in a highly inefficient, fragmented, and disjointed way. Among other things, this bill will eliminate duplicative tests and reduce medical errors. That is a lot of where that $162 billion a year in savings comes from.

Health care reform cannot simply expand health insurance coverage. It must also expand access to actual providers of care. There are growing shortages of health care providers nationally, with a shortage of up to 200,000 primary care physicians and 1 million nurses expected by 2020. Who is going to take care of us at the hospital if we don't have nurses? Who is going to help make a diagnosis if we don't have doctors?

That is why the ninth step of Ten Steps helps future providers and nurses pay for their education while encouraging them to serve in areas with great need with five key reforms.

This legislation provides competitive matching grants for States to encourage nurses to return to the profession after having left the workforce for 3 years or more while reaffirming the commitment to current programs targeting nurse educators and nurse education. So this will encourage people to come back into providing that excellent service. To deal with the shortage right now, this legislation will expand the number of nonimmigrant skilled workers visa slots for nurses serving in medically underserved areas.

To expand access to those most vulnerable, Ten Steps reaffirms the commitment to current programs that are working, such as the Community Health Centers program and the loan repayment programs at the National Health Service Corps. Working together, these two programs provide key support in underserved areas.

To allow for greater access to health care services, clarification will be made that convenient care clinics may accept and receive reimbursement from Medicaid and SCHIP patients. These convenient care clinics are small health care facilities located in retail outlets providing affordable and accessible nonemergency health care from nurses, physician assistants, and physicians. Often open 7 days a week, these clinics provide an option for those seeking routine and preventive care services in a more convenient setting--at the retail outlets--and with patients seen typically within 15 minutes.

Finally, building upon the successes of current rural health programs, Ten Steps will ensure appropriate development of rural health systems and access to care for residents in rural areas.

In providing access to health care, I believe it is important to envision where we want to provide that care. Community and home-based care is often much preferred, less costly, and proven to increase quality of life. To encourage innovative approaches to keeping long- term care in residential settings, competitive grants will be available to give seniors more options for receiving care in home or community- based settings. We just had a hearing on that subject in the HELP Committee. It was both very helpful and very convincing.

The final step to Ten Steps decreases the skyrocketing cost of health care by restoring reliability in our medical justice system through State-based solutions. The bill I have been discussing today includes the Fair and Reliable Medical Justice Act, which I just introduced with Senator Baucus, for States to encourage early disclosure of preventable health care errors, prompt and fair compensation for injured patients, and careful analysis on patterns of health care errors to prevent future injuries. By funding demonstration projects, States are enabled to experiment with and learn from ideas leading to long-term solutions tailored to the unique circumstances of each State.

No one--not patients or health care providers--is appropriately served by our current medical litigation procedures. Right now, many patients who are hurt by negligent actions receive no compensation for their loss. Those who do receive merely 40 cents of every premium dollar, given the high cost of legal fees and administrative costs. That is simply a waste of medical resources.

Furthermore, the likelihood and the outcomes of lawsuits and settlements bear little relation to whether the health care provider was at fault. Consequently, we are not learning from our mistakes. Rather, we are simply diverting our doctors. When someone has a medical emergency, they want to see a doctor in an operating room, not a courtroom.

The medical liability system is losing information that could be used to improve the practice of medicine. Although zero medical errors is an unattainable goal, the reduction of medical errors should be the ultimate goal in medical reform. The Institute of Medicine, in its landmark study called ``To Err is Human,'' estimated that preventable medical errors kill somewhere between 44,000 and 98,000 Americans each year. That study further emphasized that to improve our health care outcomes, we should no longer focus on individual situations but on the whole system of care that is failing American patients.

In the 8 years since that study, little progress has been made. Instead, the practice of medicine has become more specialized and complex while the tort system is more focused on individual blame than on a system safety.

I realize I have talked for quite a bit about Ten Steps, and given the current crisis, we should be talking a lot more about real solutions, not just problems. I also want everyone to know I believe the introduction of this bill today is simply the first step forward. I look forward to talking with others about their thoughts on how to improve this proposal, how to better refine it so it can better serve all Americans.

With all of that talk, I also want action, real action, to provide real coverage for Americans, not a large expansion of a government program with a huge pricetag that does little to impact those who are uninsured.

We have an opportunity, we have an obligation to take care of the people of this country, and they are demanding it. Let's work from a basis of some information and see where we can take it so that we get a solution and we get action now.

Mr. President, I rise today with my colleague Senator Hagel, the Senator from Nebraska, to introduce the Military Reservist and Veteran Small Business Reauthorization Act of 2007. There are currently 25 million veterans in America, including over one million who have left military service since September 11, 2001. As the conflicts in Iraq and Afghanistan continue, the number of veterans, including service disabled veterans, will increase and reservists will continue to carry more of the burden than ever before. As veterans and reservists reenter civilian life, the economic benefits and opportunities provided by the Federal Government will become even more critical, particularly in the field of entrepreneurship and business ownership. As the Chairman of the Senate Committee on Small Business and Entrepreneurship, I am serious about addressing the problems affecting veterans and reservists who wish or are already engaged in small business and this bill is another step forward in doing so.

As veterans, Senator Hagel and I believe that the government has an obligation to help deployed reservists avoid economic hardship because of their service and to help veterans, particularly the service- disabled, return to civilian life when they retire. There are more veterans returning each day because of the war on terror--800,000 veterans were discharged between 2002 and 2005--and ensuring that these individuals have a secure financial future is not just a matter of fairness but of national security. The treatment of our troops affects the Nation's ability to recruit and retain the best and brightest. Veterans have told me that they feel that they are being forgotten and that the government is simply not living up to its past promises of helping veteran entrepreneurs succeed. This bill is one step in ensuring that the government is doing all it can to help those who have served and sacrificed on our behalf.

The Military Reservist and Veteran Small Business Reauthorization Act of 2007 reauthorizes the veteran programs in the Small Business Administration. Specifically, this legislation increases the funding authorization for the Office of Veteran Business Development from $2 million today to $2.5 million in three years. In light of the large numbers of veterans returning from Iraq and Afghanistan and increased responsibilities placed on this office by Executive Order 13360, it is high time that the Office of Veteran Business Development receive the funding levels that it needs.

In addition, this bill permanently extends the SBA Advisory Committee on Veterans Business Affairs. The committee was created to serve as an independent source of advice and policy recommendations to the SBA, the Congress, and the President. The veteran small business owners who serve on this committee provide a unique perspective which is sorely needed at this challenging time. Unfortunately, continuing uncertainty about the Committee's future has, at times, distracted the committee from focusing on its core function. Therefore, I have called for its permanent extension. It is clear to me that more needs to be done to address the issues facing veterans and reservists, and the role this committee plays will continue to be important.

Additionally, I have taken a number of steps to better serve the reservists who are serving their country abroad while their businesses are suffering at home. Over the past decade, the Department of Defense has increased its reliance on the National Guard and reserves. This has intensified since September 11 and increased deployments are expected to continue. The effect of this increase on reservists and small businesses continues to remain of concern. A 2003 GAO report indicated that 41 percent of reservists lost income when mobilized. This had a higher effect on self-employed reservists, 55 percent of whom lost income.

In 1999, I created the Military Reservist Economic Injury Disaster Loan (MREIDL) program to provide loans to small businesses that incur economic injury as a result of an essential employee being called to active duty. However, since 2002, fewer than 300 of these loans have been approved by the SBA, despite record numbers of reservists being called to active duty. It is clear that changes need to be made, so that reservists are informed about the availability of the MREIDL program and that the program better meets their needs.

At a hearing of the Committee on Small Business and Entrepreneurship on January 31st, the first hearing we held in this Congress, we heard suggestions for a number of changes which would improve the Military Reservist Economic Injury Disaster Loan program, and I have included those changes in this bill. They include increasing the application deadline for such a loan from 90 days to one year following the date of discharge; creating a pre-deployment loan approval process; and improved outreach and technical assistance.

This bill also creates a non-collaterized loan program. Reservist families have already sacrificed enough when a family member goes away to serve their country and when their business is harmed as a result. This loan program would allow reservist dependent businesses to access the capital they need to stay afloat without having to sacrifice beyond the service of the key employees. In order to give reservists time to repay the loans, the non-collaterized loan created in this bill would not accumulate interest or require payments for one year or until after the deployment ends, whichever is longer.

In addition, because loans aren't the answer for every business-- additional debt could permanently cripple some businesses--I have also included a grant program for reservists. This program would allow up to $25,000 in grants for small businesses that can show economic injury because of deployment and prove that they have a viable business plan for the next three years. A grant program would help small businesses that cannot afford to take on a military reservist economic injury disaster loan or that were denied such a loan, but still are viable businesses and need assistance.

While addressing the funding needs of reservists is essential, I also want to make sure that reservists receive the technical and management assistance they need to succeed. For that reason, this bill also includes the establishment of the Reservists Enterprise Transition and Sustainability Task Force. This grant program would allow Small Business Development Centers, Women's Business Centers and veteran centers to compete for grants to create programs that help small businesses prepare for and cope with the mobilization of reservist- employees and owners.

Veterans possess great technical skills and valuable leadership experience, but they require financial resources to turn that potential into a viable enterprise. A recent report by the Small Business Administration stated that 22 percent of veterans plan to start or are starting a business when they leave the military. For service-disabled veterans, this number rises to 28 percent. So the legislation I introduce today will create a new program, administered by the Small Business

Administration, to provide very-low-interest loans, up to $100,000, to help veterans start new small businesses.

Lastly, this bill calls for two reports from the Government Accountability Office. One report will look at the needs of service- disabled veterans who are interested in becoming entrepreneurs. As a result of the war on terror and improved medicine, we are seeing more service-disabled veterans than we have seen in decades. For some service-disabled veterans, entrepreneurship is the best or only way of achieving economic independence. Therefore, it is essential that we understand and take steps to address the needs of the service-disabled veteran entrepreneur or small business owner.

I am also calling for a study to investigate allegations that the changes the Department of Defense has made in regard to the use of reservists is harming the ability of reservists to find jobs and the ability of small business owners to continue hiring reservists. At the Committee's hearing on veteran small business issues, witnesses testified about reservists being turned down or not considered for jobs because they are reservists. I have heard reservists talk about being pressured to leave the reserves if they would like to continue to advance at work. I have also heard the concerns of small business owners who want to support servicemembers; however, they cannot do so if it means the survival of their business. Understanding more about this issue is important and essential to making sure that policymakers can continue to support citizen soldiers and the small businesses that employ them across the Nation.

One of the issues I am not addressing in my legislation today is Federal procurement. I heard clearly the concerns from veterans that they are not being treated fairly when it comes to selling goods and services to the Federal Government, and I am committed to making changes. However, to make real changes, changes that can pass the Senate and the House and become law, these changes must be part of a bigger package. Legislation that addresses not just the concerns of service-disabled veteran small business owners, but the concerns of all small business owners who want their fair share of Federal contracts. I am committed to taking the difficult steps necessary to address these issues and will do so.

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

Mr. President, today I am introducing legislation that will clarify which dividends are eligible for a lower rate of 15 percent for upper-income taxpayers or a 5 percent rate for lower-income taxpayers. I am concerned that some foreign companies have a tax advantage over their American competitors.

Since dividend rates were lowered in 2003, some banks have promoted hybrid debt instruments from foreign corporations that may qualify for the lower rate. These hybrid arrangements are treated as debt in the host foreign country and the entity takes a deduction. In the United States, these instruments are classified as equity and thus treated as dividends eligible for the lower rate.

This was not the intention of Congress, and this abuse needs to stop. There should not be preferences in our tax code which make it easier for foreign corporations to raise capital at the expense of American companies. I believe that changes need to be made to our tax system to ensure that U.S companies can compete fairly in a global market place.

The legislation that I am introducing today is the same legislation introduced by Ways and Means Subcommittee on Select Revenue Chairman Neal. This legislation amends Section 1 of the Internal Revenue Code to disallow the preferential dividends rate for payments from foreign entities not subject to tax in the foreign country, for payments that are deductible in the foreign country, or payments with respect to an instrument not treated as stock in the foreign country. In addition, the bill does not allow dividends from an entity not subject to or exempt from corporate tax in a foreign country to be eligible for the lower rate. If the entity is a passive foreign investment company (PFIC), the dividend would not be eligible for the lower rate even if the entity is also classified as a controlled foreign corporation.

This legislation builds upon a bill that Senator Baucus and I introduced last Congress, S. 1363, which prevents dividends received from corporations in a tax haven from receiving the lower rate. This legislation was introduced in the 109th Congress out of concern that the definition of qualifying foreign corporations is overly broad and includes companies in tax haven countries with little or no tax system.

The legislation that I am introducing today includes the provisions of S. 1363 which require that only dividends from foreign companies which are located in countries with a comprehensive income tax and are traded on a U.S. stock exchange may qualify for the preferential rate. In total, this legislation carries out the intent of the 2003 rate deduction on dividends.

The initial proposal to address dividends taxation was designed to eliminate the double taxation of corporate earnings. Eventually, this proposal was modified to lower the tax rate on dividends. I believe that it was never the original intent of Congress to provide the lower rates to dividends which are not subject to double taxation.

I urge my colleagues to support these common sense changes. I ask for unanimous consent that the text of the legislation be printed in the Record.

Mr. President, I rise today to speak on the No Child Left Behind Act of 2007, which I am pleased to introduce with my colleague Senator Gregg of New Hampshire. It has been an honor for my office to work with Senator Gregg, one of the ``Big 4'' architects of the original No Child Left Behind legislation that passed Congress with overwhelmingly bipartisan support and that was signed into law by President Bush in January 2002.

The No Child Left Behind Act of 2007 is the first comprehensive reauthorization legislation to be introduced in either the Senate or the House of Representatives. I hope our introduction today will kick- start the legislative process and get the Senate and the House on the path to a swift reauthorization of NCLB, the most sweeping and important federal K-12 education legislation passed since the original Elementary and Secondary Education Act was passed in 1965.

If ever there were a Federal law that needed to be reauthorized on time, it is No Child Left Behind. As the headline to Ron Brownstein's article in yesterday's Los Angeles Times read: ``Don't leave this law behind: Progress is slow

under Bush's 2001 education reform, but No Child Left Behind is worth improving.'' To be sure there has been lots of gnashing of teeth and grimacing in the K-12 field since NCLB was passed. But as many of us in Congress and across the country recognized when NCLB was passed in 2001, the point of No Child Left Behind wasn't, in the words of Kati Haycock of the Education Trust, ``to make people happy.''

If we had wanted to make the adult stakeholders in K-12 happy, we could have done nothing and just kept the status quo. However, in 2001 this Congress and a number of dedicated individuals and groups across this Nation decided the status quo for our children was not acceptable and that the time had come to eradicate, as President Bush called it, the ``soft bigotry of low expectations.'' Together with strong bipartisanship, this Congress with the passage of No Child Left Behind stated to all the adult stakeholders that we can and will close the achievement gap and to all of America's children that, regardless of background, socio-economics, race, ethnicity, or disability, you can and will learn and you can and will achieve.

We must not turn away from what we began when we passed the original No Child Left Behind legislation. The stakes are too high both for our children and the Nation as a whole. In the ever competitive global economy, all our children, not just some and not just the lucky or the fortunate, must be equipped with the academic skills to succeed. We cannot afford to return to the status quo of days past. The time is now to reauthorize No Child Left Behind and to reassert to all of America's children that this Congress will not give up on them and will not stop this endeavor until the too-long-standing achievement gap is closed once and for all and until all children have the academic skills they need to succeed in both postsecondary education and the workforce.

The No Child Left Behind Act of 2007 that Senator Gregg and I are introducing today does not abandon the basic tenets of No Child Left Behind. To be sure there is still a great deal of work to do to reach our Nation's goal of having all children proficient in reading and math by 2013-2014. Nevertheless, we are seeing historic increases in student achievement. Since the passage of NCLB, the United States has witnessed a greater increase in student achievement in the last five years than in the 30 previous years combined, as well as a significant narrowing in the achievement gap between African-American and Hispanic students and their Caucasian peers. The No Child Left Behind Act of 2007 builds on the original cornerstone laid by Congress in 2001 of holding schools accountable for the academic achievement of all their students and of empowering parents to make better choices for their child's education.

In particular, the No Child Left Behind Act of 2007 preserves the foundational principles of NCLB. It maintains the goal that all children will reach grade-level proficiency in reading in math by 2013- 2014; keeps in place annual testing in grades 3-8 and at the high school level; and keeps in place an accountability system rooted in State standards and State assessments. Further, our bill does not water down accountability with the addition of multiple measures; rather, it keeps a laser-like focus on grade-level achievement in math and reading.

While maintaining the fundamentals of NCLB, the No Child Left Behind Act of 2007 rightly responds to legitimate concerns parents, teachers, and principals, have raised regarding the original legislation. In response to concerns raised about impracticable accountability timeframes, the No Child Left Behind Act of 2007 streamlines the accountability timeline to make it easier for schools to develop and implement plans to improve student achievement and to focus on what matters most teaching and learning. Additionally, recognizing that schools and their needs vary, the No Child Left Behind Act of 2007 allows for differentiated interventions for schools in restructuring to allow districts and schools to target resources to students and schools most in need of assistance. Further, in response to calls for the use of a growth model to measure individual student progress and to positively recognize schools and educators who are making tremendous strides in improving the achievement of all children, the bill expands the Department's seven State growth model demonstration to all 50 States.

The No Child Left Behind Act of 2007 also responds to legitimate concerns regarding the special populations of limited English proficient, LEP, students and students with disabilities, by providing greater flexibility, focus, and resources to help schools educate these students to high standards. Notably, the bill grants new flexibility for LEP students who are new to the country and codifies in statute recent flexibility granted by the Department of Education for special education students, which permits the use of alternate academic achievement standards for students with the most significant cognitive disabilities and modified academic achievement standards for students who have disabilities that preclude them from achieving grade-level proficiency. Finally, the bill targets Federal assessment dollars to develop and administer valid and reliable assessments for special education and LEP students and targets professional development dollars to empower teachers with better tools and information for teaching LEP and special education children.

The No Child Left Behind Act of 2007 reasserts that high-quality teachers are the most important factor to improved student academic achievement. The bill authorizes programs to ensure that all students are taught by a highly qualified teacher and to ensure that low-income and minority students are not taught by unqualified and inexperienced teachers at higher rates than their more affluent peers. The No Child Left Behind Act of 2007 maintains the current definition of highly qualified teacher; emphasizes alternative certification, incentive, differential, and performance and merit pay; and has States and districts conduct needs assessments to determine which districts and schools have the most acute teacher quality and staffing needs in order to better target resources to those schools and districts. Further, the bill gives greater authority to local school districts to renegotiate restrictions in collective bargaining agreements that contribute to the least experienced and qualified teachers teaching in the schools with students most in need of a highly qualified teacher.

Finally, the No Child Left Behind Act of 2007 focuses on improving the Nation's high school graduation rate. Included in the legislation is the Graduate for a Better Future Act, which I introduced earlier this year in response to the high school dropout crisis in the United States. The high school graduation rate for the class of 2003 was only 70 percent nationwide. Thus, almost one-third of American students who enter high school in ninth grade drop out of school and never receive a high school diploma. Large disparities exist in the high school graduation rates among various subgroups of students. Although the high school graduation rate for white students was 78 percent in 2003, the rate for African American students was only 55 percent, and the rate for Hispanic students was only 53 percent.

To remain competitive in the world economy, it is critical for America's youth to graduate from high school and to have access to the postsecondary education needed to succeed in the 21st century job market. Funds under the Graduate for a Better Future Act will be used to create models of excellence for academically rigorous high schools to prepare all students for college and the 21st century workplace; to implement accelerated academic catch-up programs for students who enter high school behind; to implement an early warning system to quickly identify students at risk of dropping out of high school; to implement comprehensive college guidance programs; and to implement programs that offer students opportunities for job-shadowing, internships, and community service so that students are able to make the connection between what they are learning in school and how that applies and is used in the workplace.

Additionally, the No Child Left Behind Act of 2007 requires states to get serious and to get accurate in their calculation of graduation rates. The Nation's dropout crisis will not go away

by fudging on the numbers. The graduation rate in the No Child Left Behind Act of 2007 builds on the work of all 50 states through the National Governors Association, which has signed the Graduation Counts Compact, an effort started in 2005 to find a common method for calculating each state's high school graduation rate.

As I stated at the beginning of my remarks, continuing our endeavor begun in 2001, the time is now to reauthorize No Child Left Behind. For the future of our Nation, our children, we must not turn back. Once again let us stand together and State to the American public that we can and will close the achievement gap. And once again let us say to every child, regardless of background, you can achieve.

Mr. President, a few months ago, I introduced the Military Reservist and Veteran Small Business Reauthorization and Opportunity Act. As the chairman of the Senate Committee on Small Business and Entrepreneurship, I was gratified that I was able to work with Ranking Member Senator Snowe on behalf of this Nation's veterans. I was also pleased that this bill was added by unanimous consent as an amendment to the Department of Defense Authorization, although disappointed when the final House-Senate negotiated compromise did not make it as part of the final bill.

In November, Senator Snowe and I sought to pass this bill in the Senate only to meet with objections from my respected colleague from Oklahoma. I am pleased to say that Senator Coburn has worked with me in good faith and that we have reached an agreement that addresses his concerns. We have sought to protect the language that the House and Senate agreed upon and done our utmost to improve the resources that are available to our Nation's veterans. Although this bill is not perfect or exactly as I may have envisioned, it is an important step forward in supporting the American dream of business ownership for veterans and reservists.

Passing these provisions into law has been one of my highest priorities since becoming chairman of the Committee on Small Business and Entrepreneurship in January. My first hearing as chairman was devoted to veteran small business issues, and this bill arises directly from the complaints that we heard there. America's veterans and reservists have sacrificed enough in fighting for our country; they shouldn't have to sacrifice their jobs and their livelihoods when they come home.

There are 25 million veterans in this country. In the last 4 years, alone, nearly 600,000 veterans have returned from serving in Iraq and Afghanistan. Roughly 56 percent are reserve and National Guard members, who continue to serve this Nation at unprecedented levels. This is taking a toll not just on their families, but on their businesses as well. We are in an era where employers do not want to hire reservists because they know they will be called up for lengthy deployments. At a Small Business Committee hearing on veterans' issues earlier this year, one of the witnesses raised concerns about a lack of employer support for reservists due to the new policy that allows reservists to be called up for a second tour of 24 months.

I am also deeply concerned that recently discharged veterans have a higher unemployment rate--double that of their civilian counterparts. In addition, the number of service disabled veterans is increasing-- 167,000 discharged between 2002 and 2005-- and their self-employment rate is lower than the national average.

This bill is a first step in addressing these concerns and it builds on important lessons we learned from Vietnam, not to leave another generation of veterans behind.

The Military Reservists and Veteran Small Business Reauthorization and Opportunity Act of 2007 takes a number of steps to improve the Government's role in supporting our veterans. Specifically, it reauthorizes the veteran programs in the Small Business Administration. This legislation increases the funding authorization for the Office of Veteran Business Development from

$2 million today to $2.3 million over 2 years. In light of the large numbers of veterans returning from Iraq and Afghanistan and increased responsibilities placed on this office by Executive Order 13360, it is high time that the Office of Veteran Business Development receive the funding levels that it needs.

The bill also creates an Interagency Task Force to improve coordination between agencies in administrating veteran small business programs. One of the biggest complaints that our committee heard at the ``Assessing Federal Small Business Assistance Programs for Veterans and Reservists'' hearing held on January 31 was that Federal agencies do not work together in reaching out to veterans and informing them about small business programs. This task force is an attempt to improve that. The task force will focus on increasing veterans' small business success, including procurement and franchising opportunities, access to capital, and other types of business development assistance.

This bill also permanently extends the SBA Advisory Committee on Veterans Business Affairs. The committee was created to serve as an independent source of advice and policy recommendations to the SBA, the Congress, and the President. The veteran small business owners who serve on this committee provide a unique perspective which is sorely needed at this challenging time. Unfortunately, continuing uncertainty about the committee's future has, at times, distracted the committee from focusing on its core function. Therefore, I have called for its permanent extension. It is clear to me that more needs to be done to address the issues facing veterans and reservists, and the role this committee plays will continue to be important.

Additionally, I have taken a number of steps to better serve the reservists who are serving their country abroad while their businesses are suffering at home. Over the past decade, the Department of Defense has increased its reliance on the National Guard and reserves. This has intensified since September 11 and increased deployments are expected to continue. The effect of this increase on reservists and small businesses continues to remain of concern. A 2003 GAO report indicated that 41 percent of reservists lost income when mobilized. This had a higher effect on self-employed reservists, 55 percent of whom lost income.

In 1999, I created the Military Reservist Economic Injury Disaster Loan, MREIDL, program to provide loans to small businesses that incur economic injury as a result of an essential employee being called to active duty. However, since 2002, fewer than 300 of these loans have been approved by the SBA, despite record numbers of reservists being called to active duty. It is clear that changes need to be made, so that reservists are informed about the availability of the MREIDL program and that the program better meets their needs. At the hearing on January 31, we heard suggestions for a number of changes which would improve the Military Reservist Economic Injury Disaster Loan program, and I have included those changes in this bill. They include increasing the application deadline for such a loan from 90 days to 1 year following the date of discharge; creating a predeployment loan approval process; and improved outreach and technical assistance.

This bill also increases to $50,000 the amount SBA can disburse without requiring collateral under the MREIDL program. Reservist families have already sacrificed enough when a family member goes away to serve their country and when their business is harmed as a result. This loan program would allow reservist dependent businesses to access the capital they need to stay afloat without having to sacrifice beyond the service of the key employees. In order to give reservists time to repay the loans, the non-collaterized loan created in this bill would not accumulate interest or require payments for one year or until after the deployment ends, whichever is longer.

There are two more provisions which will help this Nation's service members. One section of the bill will require the SBA to give priority to MREIDL loans during loan processing. Another provision will give activated servicemembers an extension of any SBA time limitations equal to the time spent on active duty. This will make it easier for service members to serve their country while continuing to meet their obligations at home.

Lastly, this bill calls for two reports. One report will look at the needs of service-disabled veterans who are interested in becoming entrepreneurs. As a result of the war on terror and improved medicine, we are seeing more service-disabled veterans than we have seen in decades. For some service-disabled veterans, entrepreneurship is the best or only way of achieving economic independence. Therefore, it is essential that we understand and take steps to address the needs of the service-disabled veteran entrepreneur or small business owner.

This bill also calls for a study to investigate how to improve relations between reservists and their employers. In January, the committee heard that recent changes by the Department of Defense to policies regulating the length and frequency of reservist deployments is harming the ability of reservists to find jobs and the ability of small business owners to continue hiring them. Understanding more about this issue is important and essential to making sure that policymakers can continue to support citizen soldiers and the small businesses that employ them.

The bill also includes a number of other important provisions that were added by the House. For instance, this bill includes language directing the Office of Veterans Business Develop to increase the number of Veterans Business Outreach Centers and requires them to improve their participation in the Transition Assistance Program. This bill also creates a program reducing 7(a) loan fees for veterans, improves Small Business Development Centers outreach to the veteran community and instructs the Associate Administrator of the Office of Veterans Business Development to create and disseminate information aimed at informing women veterans about the resources available to them. I am pleased that the House and Senate were able to come to an agreement on these provisions.

Veterans possess great technical skills and valuable leadership experience, but they require financial resources and small business training to turn that potential into a viable enterprise. A recent report by the Small Business Administration stated that 22 percent of veterans plan to start or are starting a business when they leave the military. For service-disabled veterans, this number rises to 28 percent.

We owe veterans and reservists more than a simple thank you for their service. The least we can do is provide critical resources to help them start and grow small business and to hold Federal agencies accountable. That is what our bill does.

Mr. President, Wyoming's late, great country music star Chris LeDoux has a song Some Things Never Change. I wish that were the case for Wyoming's hardworking livestock producers. As production agriculture has evolved and improved in the United States, producers in Wyoming continue to be held hostage to a regulatory nightmare and bound by the chains of unfair and manipulative marketing contracts. It is this regulatory nightmare that must be addressed. That is why I am reintroducing legislation today to break the chains and require livestock contracts to contain a fixed base price and be traded in open, public markets.

From Kaycee to Kansas City, captive supply is destroying the health of our family ranches. Many of these small businesses have operated for generations. Unfortunately, a handshake and an honest day's labor cannot compete with deceptive business practices. Captive supply is a business practice not well known to those outside of the industry, but a practice that has had a tremendous impact on the ranchers of the West.

I go back to Wyoming almost every weekend. Because Wyoming is such a large State, my travels take me to a different section of the State on each trip. Throughout Wyoming I hear the same concerns from my constituents. They are all clamoring for attention and relief so they can continue the work that so many in their families have done for so many years. These concerns are not unique to Wyoming. Captive supply is an industry-wide problem.

So what is captive supply--and how is it harming our Nation's ranchers to such an extent? Simply put, captive supply refers to the ownership by meat packers of cattle or the contracts they issue to purchase livestock. It is done to ensure that packers will always have a consistent supply of livestock on the kill floor which keeps slaughterhouses in perpetual operation.

The original goal of captive supply makes good business sense. All businesses want to maintain a steady supply of animals to ensure a constant stream of production and control costs.

But captive supply allows packers to go beyond good organization and business performance--to market manipulation--and this is where the problem lies.

The packing industry is highly concentrated. Using captive supply and the market power of concentration, packers can purposefully drive down the prices by refusing to buy in the open market. This deflates all livestock prices and limits the market access of producers that have not aligned with specific packers.

We made an attempt to address the problem of captive supply on the Senate floor during the 2002 Farm Bill debate, but the amendment to ban packer ownership of livestock more than 14 days before slaughter did not survive the conference committee deliberation. I look forward to working with my colleagues on the reauthorization of the Farm Bill this year. I will press this issue during the drafting of the Competition Title of the Farm Bill with my congressional colleagues.

The problems caused by captive supply are alive and well, just as Wyoming producers have testified to me in the phone calls, letters, faxes and emails I receive from them. Although I supported the packer ban and have cosponsored it again this Congress, I do not think that banning packer ownership of livestock will solve the entire captive supply problem. Packers are using numerous methods beyond direct ownership to control cattle and other livestock.

Currently, packers maintain captive supply through various means including direct ownership, forward contracts, and marketing agreements. The difference between the three is subtle, so let me take a moment to describe how they differ. Direct ownership refers to livestock owned by the packer. In forward contracts, producers agree to the delivery of cattle one week or more before slaughter with the price determined before slaughter. Forward contracts are typically fixed, meaning the base price is set.

As with forward contracts, marketing agreements also call for the delivery of livestock more than one week before slaughter, but the price is determined at or after slaughter. A formula pricing method is commonly used for cattle sold under marketing agreements. In formula pricing, instead of a fixed base price, an external reference price, such as the average price paid for cattle at a certain packing plant during one week, is used to determine the base price of the cattle. I find this very disturbing because the packer has the ability to manipulate the weekly average at a packing plant by refusing to buy in the open market. Unfortunately, marketing agreements and formula pricing are much more common than forward contracts.

Livestock producers have the same questions when they lose to the market pressures applied by captive supply. Captive supply gives packers the ability to discriminate against some producers. And those producers pay for it with their bottom line. At the same time, packers use contracts and marketing agreements to give privileged access and premiums to other producers regardless of the quality of their product. These uses of captive supply should be illegal. In fact, they are.

Section 202 of the Packers and Stockyards Act states in (3) (a) and (b):

``It shall be unlawful for any packer with respect to livestock . . . to:

``(a) Engage in or use any unfair, unjustly discriminatory, or deceptive practice or device; or

``(b) Make or give any undue or unreasonable preference or advantage to any particular person or locality in any respect, or subject any particular person or locality to any undue or unreasonable prejudice or disadvantage in any respect.''

Packers that practice price discrimination toward some producers and provide undue preferences to other producers are clearly in violation of the

law. But this law is not being enforced. So what we are left with are unenforced laws or no laws at all to protect the independent producer. The Packers and Stockyards Act is not being enforced and the cost of enforcing the law on a case-by-case basis in the courts is expensive and time-consuming.

A law is not worth the paper it is printed on if it is not enforced. The posted speed limit is not a suggestion. Our law enforcement officers enforce the law when motorists fail to heed the posted sign. This section of the Packers and Stockyards Act is like a sign on the road of commerce that no one is paying attention to because the police are busy doing something else. The bill I am introducing today is not just another sign on the road. It is a speed bump. It does not just warn cars to go slower; it makes it much more difficult for them to speed.

My bill does two things to create the speed bump. It requires that livestock producers have a fixed base price in their contracts. It also puts these contracts up for bid in the open market where they belong.

Under this bill, forward contracts and marketing agreements must contain a fixed base price on the day the contract is signed. This prevents packers from manipulating the base price after the point of sale. You may hear allegations that this bill ends quality-driven production, but it does not prevent adjustments to the base price after slaughter for quality, grade or other factors outside packer control. It prevents packers from changing the base price based on factors that they do control. Contracts that are based on the futures market are also exempted from the bill's requirements.

In an open market, buyers and sellers would have the opportunity to bid against each other for contracts and could witness bids that are made and accepted. Whether they take the opportunity to bid or not is their choice, the key here is that they have access to do so.

My bill also limits the size of contracts to the rough equivalent of a load of livestock, meaning 40 cattle or 30 swine. It does not limit the number of contracts that can be offered by an individual. This key portion prevents small and medium-sized livestock producers, like those found in Wyoming, from being shut out of deals that contain thousands of livestock per contract.

Requiring a firm base price and an open and transparent market ends the potential for price discrimination, price manipulation and undue preferences. These are not the only benefits of my bill. It also preserves the very useful risk management tool that contracts provide to livestock producers. Contracts help producers plan and prepare for the future. My bill makes contracts and marketing agreements an even better risk management tool because it solidifies the base price for the producer. Once the agreement is made, a producer can have confidence on shipping day in his ability to feed his family during the next year because he will know in advance how much he can expect to receive for his livestock.

This bill also encourages electronic trading. An open and public market would function much like the stock market, where insider trading is prohibited. The stock market provides a solid example of how electronic livestock trading can work to the benefit of everyone involved. For example, price discovery in an open and electronic market is automatic.

Captive supply is still weighing on the minds and hurting the pocketbooks of ranchers in Wyoming and across the United States. Wyoming ranchers encourage me to keep up the good fight on this issue on every trip I make to my home state. The economic soul of Wyoming is built on the foundation of small towns and small businesses. All livestock producers, even small and medium-sized ones, should have a fair chance to compete that allows them to get the best price possible for their product. We must do everything we can to keep our small producers in business.

My bill removes one of the largest obstructions preventing livestock producers from competing--formula-priced contracts. I ask my colleagues to assist me in giving their constituents and mine the chance to perform on a level playing field.

While Some Things Never Change, it is time for a sea change in the area of captive supply.