Captive Supply Reform Act

Mr. President, I see my friend and colleague, Senator Enzi. I will now make a comment about the pending legislation. I thought we did have some good discussion and debate on yesterday. A number of important issues were raised. I will try this morning at least to respond to some of those matters to clear up what I think are some questions we had. Obviously, we are interested in moving this process forward, considering amendments, and getting to the Senate's business.

Once again, I will mention two organizations that support our Public Safety Employee Cooperation Act: the International Association of Firefighters and the Union of Police Associations. We pointed out this week is set aside in our Nation, and has been set aside since 1962, to give special honor to our men and women in the police organizations who have lost their lives in the line of duty. It is a very special, solemn ceremony in which they participate. We are mindful of their service every day but especially this week. We are grateful for their strong support for this legislation. They have studied it, analyzed it, looked into it, and support it.

The National Association of Police Organizations and a great many other organizations have supported this legislation--our first responders. These are the organizations that speak for firefighters, speak for police officers, speak for the first responders.

Yesterday we had a good debate about the bill. I think we are off to a good start. I would like to take some time today to set the record straight as to what the bill does do and what the bill does not do. Fundamentally, this bill is about choice, who should make the choice whether public safety workers get a union--the Federal Government, State government, or the workers themselves.

Right now we have a system where the Government makes the choice--26 States give workers the ability to form a union if they want one; 24 States deny workers that option. These 24 State governments think they know better than the workers themselves what is best.

I disagree. Our public safety officers are on the front lines every day fighting fires, stopping crimes, saving lives. They know best how to protect the public. They know best how to keep safe on the job. They know best whether they need a union to represent their interests.

The Cooperation Act gives this choice to the workers. It says the States have to provide a path that workers can use if they decide they want a union. If the workers do not want a union, fine, they do not have to walk down that path. But the State has to make it available and let the workers choose, just as it is with the right to vote. Individuals do not have to vote, but they have the right to vote. This is the State making that judgment. We recognize that as a fundamental right there and here.

Under current law, States make the judgment decision. With the Alexander amendment it will allow the States to make the judgment and decision. Under the Corker amendment, that is it. Under our Cooperation Act it is the workers themselves who make the judgment--do they want it, don't they want it--and we abide by the outcome. That is a basic, fundamental difference.

It is not going to be hard for the States to build this path. All they have to do is provide for four core rights: No. 1, the right to form and join a union; No. 2, the right to sit down and

talk at the table; No. 3, the right to sign a contract if both parties agree; and, No. 4, the right to go to a neutral third party when they have disputes.

They can make the judgment whether they want arbitration, whether they want mediation, whether they want fact finding. There are no requirements. They can make those judgments; they can make those decisions. They make the judgments.

Apart from these four things, all other details of the collective bargaining system are left up to the States. States have the flexibility to decide whether to exempt small communities. They decide how workers can select a union--through card check, elections, or both. Do we understand? The States make those judgments and decisions.

States can decide how workers and employers should resolve disputes-- through arbitration, mediation, fact finding, or some other mechanism. If a State decides not to pass a law providing a framework for bargaining, or if the State law does not provide for the four core rights, the Federal labor relations authority will step in to ensure that workers have these rights. But that is only if the State refuses to act.

We heard a good deal of discussion about the role of this authority and how we do not understand what this is all about and how this is going to change federalism. It is very simple what this legislation does do and what it does not permit. Our first responders sacrifice so much for us each day, the least we owe them is the ability to choose for themselves whether they want a union. We owe them at least that much dignity and respect, and that is what the Cooperation Act provides.

I hope this explanation will ease the minds of many of my colleagues. I think there have been a lot of misconceptions about this bill floating around. I hope this explanation can alleviate some of those concerns. We heard a lot of talk yesterday about this bill imposing Washington's will on the States. Of course that is not true. I happen to think that unions are good for workers, but nothing in this bill imposes my opinion or the opinion of my colleagues on public safety officers. Under this bill, Congress does not make the decision whether public safety officers have a union. Instead, firefighters, police officers, have the choice. That is where the decision will be made.

Several amendments were filed yesterday that would give the State and local governments, the employers, the opportunity to opt out of the requirements of this bill. But these opt-out provisions actually block the rights of the first responders. They would allow the State and local governments to cut off public safety officers' rights. We should let police and firefighters decide whether they want to exercise their rights to have a union. That is what this bill would do.

Senator Alexander and Senator Enzi said people in their States are happy without unions. If that is true, then it is likely nothing will change. If those public safety officers believe their voices are being heard and their concerns are being addressed, then they will choose not to form unions. Nothing in this bill forces them to make a different choice.

Senator Alexander and Senator Enzi should put their assertions to the test and pass this legislation. If they are right, nothing will change. But if they are wrong, public safety officers in Tennessee and Wyoming will vote for unions and get a voice in the workplace.

We also heard that Washington was imposing a one-size-fits-all federal system on the States. This is another misconception. At every turn in drafting this legislation, Senator Gregg and I went out of our way to give States the flexibility to adopt a collective bargaining law that works for them. Under this bill, Congress will not tell Tennessee or Wyoming or any other State how to implement the law. States can choose how to comply.

As I mentioned, States only have to provide the most basic rights. Other than those basic rights, States have the flexibility to adopt the system that works best for them.

I would note that several of the amendments filed yesterday would take these basic choices away from the States and mandate a Federal rule on issues such as right to work or card check. That is not what this bill should be about. The flexibility for States is important as long as the core rights are there.

States also have the flexibility to completely control costs under this bill. This control means there is no risk of unfunded mandates. My colleagues across the aisle love to talk about charges of unfunded mandates, but it simply does not fit.

This bill comes with no--I repeat no--price tag. Nothing in this bill tells the State and local governments to spend any money. Nothing says they have to raise wages. Nothing says they have to improve benefits or shift money from local priorities into public safety. Governments are free to write their own contracts. At the bargaining table, State and local governments are free to offer bargaining proposals that are consistent with their local fiscal needs. They cannot be forced to agree to any terms they do not want or cannot afford.

In addition to being able to protect their interests at the bargaining table, State and local governments can also safeguard their financial interests through the legislative process. The bill explicitly allows State and local legislative bodies to retain the right to approve or disapprove funding for a contract by requiring an agreement be presented to a legislative body as part of the process for approving such contract or memorandum of understanding.

That simply means elected Representatives have the final say on spending. Do we understand that? The bill explicitly allows the State and local legislative bodies to retain the right to approve or disapprove funding for a contract by requiring an agreement ``be presented to a legislative body as part of the process for approving such contract or memoranda of understanding.'' Elected Representatives have the final say on spending.

Remember also that under this bill, public safety officers have no right to strike and no requirement of binding arbitration. That means no one can force a contract on a State and local government under this bill.

The other side's additional argument that there will be costs associated with just implementing any new State law is a red herring. The costs will be minimal. All State and local governments already have human resource departments in place. In addition, collective bargaining often creates new efficiencies that actually save money. In Miami, FL, the local firefighter union worked with the community to reconfigure EMS services and ended up saving taxpayers a great deal of money.

On top of all these safeguards for State and local governments, we have adopted an additional safeguard for the States' smallest communities. In addition to the protections I have just outlined, the bill allows State governments to exempt these smaller communities if they want. If a town has fewer than 5,000 residents or employs fewer than 25 workers, the State can say: Our law does not apply to you.

You can see this bill is a reasonable way to extend the choice of whether to have a union for our Nation's public safety officers. We have taken extensive steps to protect State and local flexibility to ensure they will not be burdened by these procedures.

A final argument that we have heard about States rights yesterday was that this bill violates States rights under the Constitution. This argument is simply false. The bill has been carefully crafted to comply with the current Supreme Court cases on the ability of Congress to regulate State governments. Throughout our history, our Federal Government has set core labor standards, such as minimum wage and overtime rules, that apply also to State workers. Do we understand that? Minimum wage, overtime apply to State workers. They apply to them in Massachusetts. They apply in Tennessee.

Bargaining rights are no different. I do not think anyone in this Chamber would argue that the State government should not have to comply with the basic standards prohibiting them from discriminating against workers based on race or gender. The same is true for collective bargaining rights. Bargaining rights are civil rights too.

Moreover, there is a strong Federal interest in the performance of State and local first responders. We have an

increasingly Federal approach to national security. We have created a Department of Homeland Security and appropriated $40 billion for that-- $40 billion, for homeland security.

The last time I looked at the map, all the States fell within that criterion, in terms of being protected. In our post- 9/11 world, this national response to terrorism increasingly depends on coordination with State and local public safety officers. It is more appropriate than ever for the Federal Government to ensure that public safety officers are working as efficiently and as effectively as possible. By encouraging strong partnerships between public safety officers and the cities and States they serve, this bill advances the Government's interests in improving homeland security.

Finally, my colleagues have tried to scare even those States that have good, solid collective bargaining laws into believing that their laws are on the line. In truth, more than half of the States in the country will not be affected by this bill.

As I described a minute ago, the bill does not require that State laws have specific provisions, only that they provide the basic protections I outlined. The Federal Labor Relations Authority, which will make those determinations, is not some secret society. It is a longstanding Federal agency staffed by dedicated career servants and Presidential appointees who are confirmed by the Senate--not greatly different from the National Labor Relations Board, for example.

In summary, you can see that this bill is not the aggressive intrusion into State government that was portrayed yesterday.

In addition, I wish to address some of the other individual concerns raised about the bill that are misleading and misplaced.

First, this bill will not encourage strikes. In fact, this bill provides additional safeguards to prevent strikes. It specifically says that a public safety officer may not engage in a strike, work slowdown, or any action that will measurably disrupt the delivery of emergency services. There is no room for interpretation. That is an ironclad ban on any action that will impair public safety. This language specifically says that a public safety officer may not engage in a strike, work slowdown, or any other action that will measurably disrupt the delivery of emergency services. More importantly, it creates a mechanism for public safety officers and their employers to communicate and build strong bipartisanship that enhances cooperation, decreasing the likelihood of strikes.

It is an insult--it is an insult to public safety officers to suggest that they will strike. It has been decades since there has been a police or firefighters strike in this country. Police and firefighters in most States already have the right to bargain, and there has been no problem with strikes. These brave men and women take their duty to serve the public very seriously, so seriously they are willing to die for it. The suggestion that they would shirk their duty in order to argue over a contract dishonors them and dishonors their sacrifices.

Next, I wish to underscore that this bill will not harm communities that rely on volunteer firefighters. This legislation expressly applies only to employees, which means volunteers are excluded. Any suggestion that cities and towns are going to be forced to bargain with and possibly pay their volunteer firefighters is wrong. What is more, we included language supported by the National Volunteer Firefighter Council to ensure that professional firefighters can continue to volunteer in their off-duty hours. This language outlaws contract provisions that would prohibit an employee from engaging in part-time employment or volunteer activities during off-duty hours. That includes part-time or volunteer firefighting. Senator Enzi says that is not clear, but it seems pretty clear to me.

My colleagues across the aisle also attacked this bill yesterday as hypocritical because it is inconsistent with how our Federal Government treats its own workers. Again, this criticism is untrue and misleading. Federal workers have bargaining rights. They also have a say in their wages. The law allows them to petition the Government each year.

Federal law enforcement offices are an example of how well collective bargaining rights and public safety go together. Whether Congress should give Federal public safety officers the right to directly bargain over wages is an issue for another day. We do not need to resolve that question in order to do the right thing for the State and local offices.

We also heard complaints about the process that brought us to this point. Listening to the debate, you might think this bill was a new idea never explored or never debated. That again is simply false. This bill has been around for a long time. It was introduced in 1999, almost 10 years ago, by Senator DeWine, and then by Senator Gregg. It has also had strong bipartisan support.

My colleagues across the aisle would have us go through more hearings and debate before we act. We do not need more hearings. We have already had a hearing in the HELP Committee. In fact, we have marked this bill up twice, once in 2001 and once in 2003. We even voted on this bill before in 2001. Our Nation's first responders have waited long enough for the basic rights in this bill. We should not make them wait any longer. They do not make us wait when we need them. We should not have them wait any longer.

I yield the floor

Mr. President, I am sure I will not object, but I would like to see the amendment. If the Senator will give us a moment to see the amendment, we have not seen it.

I object.

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

Mr. President, before the leader departs the floor, I wish to thank him again for his strong support for this legislation that is so important to our first responders, to our firefighters, and our police officers in this country.

We have seen this parliamentary gimmick that has taken place offered by the Republican leadership that is a slap in the face to every firefighter and police officer and first responder in the country.

We have bipartisan support for this legislation. We have four amendments that are now pending. We had some understanding that we would have an opportunity to address those amendments during the course of the day. They are all related to this legislation. But oh, no--oh, no--the games are going to be played, and we are saying to the firefighters of this Nation and to the police officers of this Nation and the first responders of this Nation: Your interests, the safety and security of our communities across this Nation,

should be put aside in favor of some political gimmick by the Republican leader in the Senate.

That is what this is about. Make no mistake about it. Every firefighter ought to understand that. We are here now at noontime, ready to do the public's business, ready to take a vote on these issues, but oh, no, the Republican side says: No, you can't do it. You can't do it.

Look, the underlying position the Republicans are talking about is help for our GI bill. Senator Webb has his proposal. I am all in support of what Senator Webb is doing. Why not have that done after this bill is over? Why not have it done after then? Why didn't the Republican leader come on up and speak to the Democratic leader and propose: Let's do that at the end of the week. Do it Friday, Saturday, Sunday, and Monday. Maybe Senator McCain will come back for it; maybe he won't. Do it after we finish this bill. But, no, we are going to insult--and this is an insult, make no mistake about it. I have been around here long enough to know when the insults are being played, and this is it. This is saying: Your interests are not as important as a political hit. That is what is happening. That is what is happening.

Who are these individuals? Forty billion dollars we spend on homeland security. Forty billion we are spending on homeland security. Who are the people who implement homeland security? They are our firefighters, our police officers, and first responders in all 50 States. They believe they have ways of doing it better than it is being done at the present time. I do too. So do Democrats and so do a few Republicans. We want to work through the political process to give the opportunity to have that done. But oh, no--oh, no--we are not going to do that. We are going to play games. It is Wednesday. It is noontime. We are just going to play some more games. We did it with you guys in the Senate last week on energy. We are going to do it here.

Listen, we are glad and willing to vote. I have been doing that for 45 years, and I am glad to do that now. But make no mistake about it who the target is--who the target is. The Republicans are saying: We will not take the time. We will not take the time to let the Senate work its will in terms of the firefighters and policemen of this country. That is outrageous. It is a gross insult to each and every one of them. It is a slap in the face to each and every one of them. Make no mistake about it, that is what is going on here. That is what is going on here.

Well, we are not giving up. We are not giving up on them. Maybe the other side wants to give up, but we are not giving up on them. We believe their service--their service--is too important to this country, their lives too important to this country. When are we going to be threatened again? Too important to this country.

Maybe the leadership on the other side can tell us whether Senator McCain approved this strategy. Maybe we can find that out. I think the police and firefighters of the country would like to know whether Senator McCain--we have Senator McCain's proposal here. It is difficult to believe an effort would be made to bring this up without his approval. I think firefighters and policemen ought to understand whether Senator McCain supports this proposal. You cannot get away without believing that he does and that he has been an architect. You don't just go around and get 16 Senators. You have to go around here and get all those. This thing has been in the cooking for a period of time. This just did not happen, although it looks--they duck in the cloakroom, and then they run out and do that--all that business.

This has been going on. This is a conscious act, and one will have to assume Senator McCain is absolutely against it. I hope he is able to talk to the firefighters and the police officers and the first responders. Why are you interrupting this bill--this bill--that is so essential to the security, homeland security? Why interrupt this bill when we are in the process--at least we thought so--that we were going to be moving ahead to get some votes on these particular measures? Why? No, no effort at all to try and talk to the leadership, certainly not to--I do not expect--although, for the first 20 years or so I was in this body, people used to do that. They used to talk to people and tell them what was going to come on up. But I do not expect that anymore. But you would have thought: At least talk to the leadership who has responsibility.

So I hope each and every one of the firefighters, police officers, first responders who have been working on this legislation for years--I wish to mention about how long they have been working on this. It was introduced on May 12, 1999. On July 25, 2000, we had a Health Committee hearing. On September 19, 2001, we had a committee markup and reported it out. On November 6, 2001, we had a Senate vote, No. 323. On November 24, we had a HELP Committee markup. On February 4, 2004, it was offered as an amendment to S. 1017. On November 13, 2007, it was offered as amendment No. 2419.

For 8\1/2\ years this has been before the Senate--8\1/2\ years. Two committees, one chaired by the Senator from New Hampshire, the HELP Committee, and the other one by myself, and we supported this bill out. We finally have a chance to debate this. We had a good debate yesterday, and we are prepared to deal with the amendments on a matter of vital national security for our country and for respect for those who are our first responders who have done so much. But the answer is, no.

Would the Senator withhold that request?

As I understand what the majority leader is saying, he is prepared to see the Senate vote on the McCain amendment as well as have a vote on the Webb amendment, and do it in a timely way. Is that what I am gathering here?

The majority leader has indicated they are prepared to go for a time limit on the McCain amendment, a time limit on the Webb amendment, and then have a vote so Members can do it here, and do it in a prompt way. I also understand that we would be able to continue the consideration of this matter but, as I understand, we are not getting any cooperation from the other side.

Madam President, I move to reconsider the vote.

Madam President, I suggest the absence of a quorum.

Madam President, may we have order? The Senator is entitled to be heard.

I ask unanimous consent that further proceedings under the quorum call be suspended.

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

Madam President, I ask unanimous consent that the next hour be evenly divided between the two parties for the purposes of debate only and at the end of that time, a quorum call be in order.

I so modify, with the understanding that following the Senator from New Hampshire, the Senator from Virginia be recognized.

I just want to say in terms of the voting that we are prepared to vote on our side on the underlying amendments, but we were notified by the other side that we would not be permitted to vote. There was objection from the Republican side to voting on a Democratic amendment, and we insist on getting that worked out so we can move ahead.

Hopefully, we can put aside the games and get moving on this underlying legislation, which is so important. Madam President, I ask unanimous consent further that after Senator Webb, the speakers be rotated from side to side and the time, as mentioned earlier, be evenly divided.

How much time remains, Madam President?

Madam President, I will be glad to yield 10 minutes----

Madam President, I ask for additional time. I ask unanimous consent for an additional 15 minutes for the Senator from Wyoming.

And I ask unanimous consent that we will have 10 minutes on our side.

I understand we have 22 minutes remaining; is that right?

I ask unanimous consent for 10 additional minutes on our side and for 15 additional minutes on the other side--or 20 minutes on the other side.

Madam President, we have had a very interesting exchange with both Senators from Virginia and the Senator from Nebraska on a matter of enormous importance and consequence, and that is our support for a GI bill that is worthy of the bravery, courage, and valor of those who are serving in the Armed Forces.

The stated legislative purpose of the Senator from Virginia, Mr. Webb, who is the architect of this program--and I welcome the chance to be a cosponsor--is to try and do for those who are in the service of our country at this time a similar kind of support in education that those who had served in the colors in World War II received. He has explained it in great detail.

I look forward to supporting that proposal when it comes up on the floor of the Senate, probably the early part of next week. I commend the strong bipartisan support that it has been able to receive. I commend my former chairman, Senator Warner, who led the Armed Services Committee so brilliantly for so many years and has made such an extraordinary contribution to the security of this Nation, both as a serviceman and also as a policy leader, and to Senator Hagel whom I think for all of us has demonstrated enormous courage in service and outside guiding national security policy.

We are going to, after our next couple of speakers, be moving toward consideration of the farm bill conference report. That is a privileged matter, and it displaces the underlying legislation we have been debating, the Cooperation Act, public service legislation we have been considering both yesterday and today. I expect we will continue through the evening on the farm conference report. Further action on our legislation will be deferred until tomorrow.

In conclusion for this afternoon, on the floor we are considering the service of extraordinary Americans: On the one hand, as Senator Webb pointed out, those who serve in the armed services of our country, and on the other hand, we are talking about the 659,000 police officers, 262,000 firefighters, who are in the service of our country trying to provide for our national security.

We are mindful that we spend $40 billion a year on homeland security. What this legislation at its heart is all about is to make sure those service men and women, those police officers, those firefighters, those EMTs, are going to be safe and secure; that they are going to have the best in terms of equipment, and that we are going to listen to those individuals who have dedicated their lives to protecting our fellow citizens all across America. We are going to listen to their recommendations and suggestions on how we can improve their safety and the safety of the American people. We give them a mechanism to be able to do that. That is the framework which is the underlying aspect of the legislation we have before us.

People can talk about unfunded mandates and problems of strikes and all these other items, but nonetheless we cannot and should not and will not get away from the fundamental thrust of this legislation and its importance. We have an extraordinary opportunity to make America safer and more secure--here on the floor of the Senate. Who wants to have that challenge? It is the police officers and the firefighters and the first responders who are prepared to accept that responsibility. All they are asking is to have a voice at the table when judgments and decisions are being made by maybe well-intentioned policymakers, well- intentioned bureaucrats. But we want to make sure those out there on the front lines are at least going to have a voice in these policy judgments and decisions. That is what this legislation is about. That is why it is so important.

We are prepared to deal with the various amendments that come up. We look forward to it. We have gotten off track over the course of the day. With all due respect to others, we find that with the exception of the amendment that was being offered by the Senator from Vermont, Senator Leahy, on bulletproof vests--about which we don't know there is any substantive objection--all the other amendments have been on the other side; not from our side, from their side. We have not tried to interfere with the order those have been offered.

Senator Alexander has been down here and has spoken eloquently. Many Senators have spoken about their amendments. Senator Hatch was down and spent time talking about his amendment.

We are prepared to move ahead. If there is need for further debate, we will have further debate; if not, we are prepared to move ahead and have the judgment made here in the Senate.

This legislation is extremely important. As I have mentioned, it has been around for some 9 years. It was introduced initially by a Republican. It has strong Republican--has strong bipartisan support. I listened to my friend Senator Warner talk about the strong bipartisan support there is for the GI bill. There is strong bipartisan support for this legislation as well, as indeed there should be, and as we have attempted to achieve. We will continue to work in that area.

We look forward, I expect, to have further consideration on this tomorrow. I am very appreciative, as always, of my friend and colleague from Wyoming, Senator Enzi. We have a remarkable area of agreement in some public policy areas, but we have sharp areas of differences. This happens to be one of those. This legislation happens to be one of those. But it does not take away the great respect and affection I have for him as a legislator and as a friend.

We look forward to continuing this debate and hopefully a resolution on some of these matters tomorrow.

I yield the floor.

Would the Senator yield for a unanimous consent request?

How much time do I have remaining?

I am going to yield 15 minutes--10 minutes to Senator Klobuchar and 10 minutes to the Senator from Washington, Mrs. Murray, at an appropriate time.

Mr. President, we did have a brief time yesterday to begin exploring the multiple flaws and deception in this legislation. I believe it would be useful today to begin by touching on a few of those flaws.

I have taken the suggestion of my colleague and friend from Massachusetts, Senator Kennedy, and looked very carefully at the Record of yesterday's proceedings, and here are a few things worth noting.

In response to my remarks and those of Senator Alexander, we were repeatedly told yesterday that it was perfectly all right to federalize the programs of State and local labor relations of States like mine and Senator Alexander's and at least 20 others to, in effect, tell those States that the Democratic decisions of their sovereign governments and their citizens simply did not count, that the Federal Government knows best, that the Federal Government will tell those States what their law must be and how they must conduct their labor relations with their own employees. In essence, the citizens and legislators of a near majority of States are being told by the proponents of this bill that they know better what will work for those States.

As Senator Alexander put it so well yesterday, this bill is really about States like Massachusetts or New Jersey telling States like mine or his, and at least 20 others, how best to deal with their employees and how to fashion their own State laws in the total absence of any need to do so. Now, I completely reject that. However, for those who support it, they owe it to themselves to at least be consistent in their approach. They are not. While they would deny a near majority of States the right to determine what they believe to be the best approach to public sector labor relations within their States, they staunchly defend the right of a small minority of States to deny public employees the most fundamental democratic rights in the workplace.

Five States--New York, New Jersey, Illinois, New Hampshire, and Massachusetts--all home to the sponsors of this bill, have card check laws for their public workers. Those States have decided this is the way they intend to conduct the labor relations among their employees. I respectfully disagree. I believe that approach to be antidemocratic, and it is certainly contrary to the Federal labor policy which preserves for workers in the private sector the right to a democratic secret ballot in deciding the question of unionization.

However, we are told by the proponents of this bill that this fundamental workplace issue is a matter of State choice, while at the same time being told that any State's choice to elect a different system of labor law than that imposed by H.R. 980 is not. Denying workers a secret ballot election on unionization is somehow a matter of local choice, but deciding to utilize and meet and confer on a system of labor management relations or to decide the issue by local option is not.

The inconsistency and hypocrisy of that position is nothing short of stunning. It is utterly indefensible.

At least that issue is addressed by Senator Hatch's amendments. That amendment will at least end that hypocrisy by expressly overturning antidemocratic card check laws for public sector employees in New York, New Jersey, New Hampshire, Illinois, and Massachusetts. While we should not impose Federal law on States at all, if we ought to do it, we ought to do it consistently.

Now, lastly, I want to note that yesterday my colleague and great friend from Massachusetts indicated that if the bill were half as bad-- he reiterated it again today--half as bad as I had indicated in my remarks, he would be against it as well. I take my friend at his word but do not ask that he take me at mine.

Late yesterday, the leaders received a letter from Michael Bloomberg, the mayor of New York, regarding H.R. 980.

I wish to remind everyone that New York has a full collective bargaining statute covering public safety officers. I also wish to remind everyone that we are told by all of the proponents of this bill that because of this, New York would not be affected by this law.

Here is what Mayor Bloomberg had to say in his letter to Leaders Reid and McConnell:

I am writing to express my serious concerns about

legislation before the Senate which would alter the current

state of collective bargaining between the City of New York

and a number of its unions. The legislation has the potential

to harm both New York City and New York State labor

relations.

As you are aware, the Public Safety Employer-Employee

Cooperation Act of 2007 is a bill that would significantly

expand the jurisdiction of the Federal Labor Relations

Authority, FLRA, into the labor relations between State and

local governments and their public safety officers.

Though the bill may be well intentioned, its fundamental

problem from the point of view of New York is that it does

not clearly distinguish States like New York that have long

provided collective bargaining rights to their employees from

States that have not.

Under the bill, States with long histories of collective

bargaining face the risk of having their labor relations with

public safety officers Federalized to the detriment of long-

established public policies.

For over 40 years, the New York City Collective Bargaining

Law and the New York State Public Employees Fair Employment

Act, also referred to as the Taylor Act, have provided a

legal framework for public sector collective bargaining in

the City of New York. There has been extensive administrative

and judicial review of virtually every aspect of this legal

framework. The bill has the potential to undermine this long-

established framework.

One problem is the bill's treatment of the ability of

public safety employees to strike. The New York State Taylor

Law currently contains a clear and unequivocal prohibition on

all strikes by public sector employees and explicit

penalties, such as substantial fines against the individual

members for violations of the no-strike provision.

The language in the proposed language before the Senate is

less clear. The City is very concerned that section 6 of this

bill can be read to prohibit only a strike that would

measurably disrupt the delivery of emergency services.

This language, while it may not be intended to limit the

prohibition in this way, is an invitation to

misinterpretation and litigation. In addition, the same

section could encourage employees to refuse to carry out

services that many believe are not required under the

mandatory terms and conditions of employment in situations

where the public safety might be immediately affected by such

a refusal.

The mayor of New York goes on to say:

Another serious problem with the bill is that it gives FLRA

the authority to decide what must be collectively bargained.

New York has longstanding legal precedent regarding what are

mandatory, permissive and prohibited subjects for collective

bargaining. Under section 4 of the bill, such long-

established legal precedent could be overturned by the FLRA.

A notable example is that disciplinary procedures for

police officers and firefighters, including due process, are

provided for in the New York City Charter and administrative

code and are prohibited subjects of bargaining. The New York

Court of Appeals confirmed as recently as 2006 that these

procedures may not be subject to bargaining, but the bill

would give the FLRA the authority to decide otherwise.

I think that is a point we made yesterday.

A decision by the police commissioner, for example, as to

whether or not discipline should be brought against a police

officer involved in a shooting incident is something for

which he remains fully accountable to the public. It is of

grave concern to the City that it could be forced to bargain

over such procedures as a result of an improper finding by

the FLRA, and such public accountability would thereby be

lost.

Even if the FLRA does not interfere with precedent that

restricts bargaining in sensitive areas like discipline, the

bill at a minimum would provide an additional means for such

precedent to be challenged repeatedly in Federal court,

resulting in an extended period of uncertainty.

In the final analysis, the bill could significantly affect

the ability of the City of New York to ensure the safety of

the public in the integrity of essential government services,

and is likely, at a minimum, to involve the city in costly

and disruptive litigation in Federal court.

Any remedy of these concerns should be achieved in

statutory language, not merely in legislative history. Given

the serious concerns the proposed bill raises for the City of

New York, I oppose the bill in its current form.

Sincerely, Michael R. Bloomberg, Mayor.

As I showed yesterday, there are more than 20 States that will have their laws overturned by this, and 12 more whose laws could be challenged in court.

They recognize that. Calls we are getting, letters we are having shared with us indicate that is a concern of those out there who have to deal with these kinds of problems and the gaps the bill language leaves and the new authority of this Federal Labor Relations Authority which hardly anybody has had to deal with in the past. It is not even equipped to handle what is in the bill.

This is an ill-conceived and badly drafted bill that would not only overturn the law in a near majority of States and disregard the democratic will of the legislatures and people in other States, it would plainly disrupt the law and labor relations policies of every State. This is the price that is paid when the proponents of a bill pander to special interests and circumvent the regular order of this body in an attempt to advance fundamentally flawed legislation. The sad truth is, I do not believe this bill can be fixed. I certainly do not believe it can be fixed on the floor of the Senate. It should have been addressed in committee, but we are left with no choice. So we will continue today to take up the floor time of the Senate trying to fix an irretrievably broken, totally unnecessary piece of special interest legislation. Is it any wonder the American public holds Congress in such low disregard?

I haven't had a chance yet to even talk specifically on the employee bill of rights amendment and the unfunded mandate option. I will take that opportunity at this point in time. Yesterday, the Senator from Utah, Mr. Hatch, offered a public employee bill of rights amendment. Many of my colleagues have spoken about the tremendous service America's public safety employees give to the public. I believe 100 Senators believe that and want to help, in every way possible, the public safety employees do their job. I am a little concerned that occasionally we think that only through collective bargaining will anybody listen to a suggestion of a public service employee. I have never seen that happen. I am not saying it couldn't happen somewhere in America, but if they are suggesting something for safety, I think people will listen.

A lot of times we don't think of things for safety until after a tragedy such as Charleston. Then we think about what could have been done, and it is shared with the Nation. A lot of that is put into place, not through collective bargaining, through common sense. You want to protect the lives of the people who work for you; that is, the people who work for the people of the United States, work for the people in the communities. The toughest job in America is being a mayor because you are right there with the people. They can grab you by the shirt collar--you usually don't have any kind of security--and explain in no uncertain terms what they are thinking. Usually, they have a pretty good idea, not just a complaint but a complaint coupled with a suggestion.

I know, on any given day, one of these officers could be asked to put his or her life on the line, and they do so courageously. I agree with my colleagues that individuals who choose these careers deserve respect, gratitude, and special treatment. But the underlying amendment would actually

result in diminishing the rights of public safety employees who are not currently unionized. Once a workforce is unionized, even employees who do not wish to be a part of the union will have pay deducted from their paychecks and spent in a manner outside their control. They will have little ability to question or alter the legal representation established with or without their support. The Hatch amendment merely balances that diminution of self-determination by establishing a public bill of rights. The amendment will do three things. It guarantees the right to vote by a secret ballot. It guarantees to limit the right of public unions' dues collection authority to nonpolitical uses. It guarantees that financial transparency will be there. By ensuring that public safety employees in all States have the right to vote on whether they unionize by secret ballot, the Hatch amendment guarantees for public safety employees the same right private employees now have in many States. In a democratic society, nothing is more sacred than the right to vote. It is undeniable that nothing ensures truly free choice more than the use of a private ballot.

The possibility of coercive or threatening behavior toward employees who may not wish to form a union is even more concerning in the context of public safety employees who rely on coworkers to reduce the deadly risks they face routinely in the course of their work. The amendment would also limit the right of public unions' dues collection authority to nonpolitical uses. Those who choose public service often accept lower pay than they might make in the private sector because they are dedicated to public service. Let's not insult that choice by allowing labor bosses to take money from paychecks and spend it on purely political causes the employee does not support. I believe public employees should have the same protections from fraud and abuse as private employees. This amendment would empower public employees by allowing them to observe how their dues are being spent and the other financial dealings of their unions. It does this by bringing public unions under the requirements of the Labor Management Reporting and Disclosure Act. That is a 1959 law enacted with bipartisan support, including then-Senator John F. Kennedy. Public employees who pay union dues, especially those who are compelled to do so against their wishes, are no less entitled to financial transparency and fraud protections than private sector employees covered under the law today.

In regard to the Alexander amendment, I don't think there is any doubt that the bill's mandates would increase costs for States and localities that are either now unionized or do not allow bargaining to the extent required under the law and will, therefore, be subject to new rules. We have heard the argument that this has to be approved by a legislative body. There is also the clause in there about what the Federal Labor Relations Authority can do with any agreements that come up. I assume that would be if they didn't think they were tough enough. The costs I am concerned about go far beyond any increased pay or work scheduling costs.

The bill's most burdensome mandate falls on small towns that will have to assemble collective bargaining resources and capability on short notice. We keep looking at the 5,000 figure like it is magic. Five thousand is a very small town, and many of them already have difficulty complying with current Federal unfunded mandates. But we are going to impose one more on them. I don't want people to think the small town exemption is really just set at 5,000 population. The bill says 5,000 population or 25 employees. Towns have to hire a lot of people to run the facilities that we take for granted. We expect to turn on our faucet and have the water there. We expect to flush the toilet and have it disappear. We expect to set our garbage out and have somebody pick it up. We expect the streets to be in good condition so they are safe. A lot of places we expect sidewalks to be there so pedestrians don't have to be on the street. We even have in some municipalities the provision of electricity.

Gillette, WY, was so isolated and had so few people at one time that nobody wanted to provide electricity. So the city provided it. That has been a growing entity with employees. But it always required quite a few employees for doing the pole work and the meter work and the electrical work that was necessary. So 25 employees is a pretty easy threshold to get to in a small town. So 5,000 population or 25 employees, don't forget the 25 employees part.

The costs I am concerned about go beyond increased pay and work scheduling costs. This bill will also require them to assemble collective bargaining resources and capability, and on very short notice. I think that means that since the union will be able to bring in a negotiator, the city, the town--in Wyoming, 5,000 is a first-class city--will have to bring in different legal and bargaining experts to help with the negotiations, at least to train them to know how to negotiate. That will happen on both sides.

So this requires actions such as hiring labor law experts and establishing contracts with arbitrators, all resources that may be in short supply since small towns all across the country will be facing the same mandate at the same time.

As the former mayor of Gillette, I know what it is like to balance a municipal budget. When the Federal Government imposes costly new mandates and provides no funds to pay for them, it is frustrating for the mayor and the council and anybody who works for the city. When I became mayor, it was a boom town. The town had recognized the need to have better sewer treatment facilities. We had applied to the Federal Government. We had received a grant. Just as I took office, this new sewer treatment facility went on line. The inspector showed up and said: Your town has grown so much, you are violating the capacity of your sewer system. Since we provided the money for it, we are going to fine you.

So I needed a new sewer treatment facility. I needed several million dollars' worth of new sewer treatment facility. So I went back to the source. The Federal Government said: That one wasn't adequate because of the growth you have had. They said: Sorry, you already got one grant. You wind up at the bottom of the list now. So thousands of communities across the United States, probably rightfully, got to be ahead of my community. But that didn't stop the fines. Fortunately, I got a judge who said:. Yes, we have to fine you, but we are going to make you pay that money into a fund to build a new sewer treatment plant. That helped a little bit because we still had the money to do something, but we were still being put under this Federal mandate, which is a good idea. You need to do adequate sewer treatment. That is very important. But how do these small towns afford that? There are thousands of them, and they are all going to be put under that law at the same time. There aren't enough people trained to help them do this. So the burden falls on the taxpayers. The taxpayers elect local officials who will pursue their priorities and collect taxes at a level to cover the cost of those priorities. That is partly right. You don't always have the right to increase taxes. There are State limits in many of the States that say how much a municipality can tax. So that option may be closed down. This bill upsets the democratic order by imposing Federal priorities on local taxpayers with no way to pay for them. Local governments don't have ``funny money'' gimmicks like the Federal Government. Increased costs have to result in increased taxes, such as sales tax, property tax or decreased services. So which of those 25 employees are we going to get rid of in order to meet the costs of this bill? You can say it is not a Federal mandate because we have some definitions that explain what a true Federal mandate is, but I think the towns will consider it to be a Federal mandate. So will the people who are taxed or lose services or who are taxed and lose their jobs.

This is a choice I believe we should leave to local government. The Alexander amendment would leave it up to them by allowing localities to opt out of the bill's requirements, if they determine it will increase local property taxes, compromise public safety or constitute an unfunded mandate.

I yield the floor.

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

Mr. President, I ask unanimous consent to set aside the quorum call so that I can answer some of the questions that have been asked on the other side.

Madam President, we had one speaker from my side and then a colloquy with some people from my side who were involved with the Senator from Virginia, but I don't think that can hardly be charged to my side.

I thought I was in charge of half of the time, and I didn't allocate that time. I can see how the rules go here.

Reserving the right to object, until I get 5 minutes to rebut a little bit of what the leader said about the collective bargaining bill. I do not need much time, but I was cut out of the process earlier today and I deserve the opportunity.

Ten will be plenty. I appreciate it.

That would be part of the unanimous consent? Do I understand that under the unanimous consent I would get my 10 minutes before the farm bill.

Mr. President, I appreciate the leader's kind remarks. I have been diligently working on the collective bargaining bill. It is an important part of the process to get the full debate out. We are being precluded from that process now.

We have had three amendments brought up. None of those were mine. I have five amendments that I would like to have debated that address what

I see as serious flaws in the bill, but I am being precluded from even bringing up one of those. I was given the offer, take it or leave it, that there could be two Republican amendments, period, and I could decide from among my own and others which would be the two.

As I pointed out at the very beginning of this bill, this bill is flawed. It did not go to committee. This happens every time a bill does not go to committee. We have a process with bills before the committee where people can sit down and look at amendments and revise the amendments until there is agreement between the two sides. That is the only reason that a committee such as Health, Education, Labor and Pensions can get bills done.

We often take a look at all of the amendments when they are in committee and decide that we will work on those before they go to the floor. Otherwise, as contentious a committee as we have, which handles the volume of work it does, we would get nothing done. But we get a lot done. In fact, last week when we were at the signing with the President of one of the bills we passed, the President said: You know, you are the only committee sending us any bills. It is because we go through the whole process.

Usually Senator Kennedy and I sit down, we list our principles, we agree on the principles, we plug in some details, and then we talk with the stakeholders. That is everybody with an interest in it. Usually at that point there is someone who says: No, we have one provision we have worked on for 12 years, and we never have gotten that provision. And until we get that provision, we don't care about the rest of the bill. Whoever's constituent it is, Senator Kennedy or I, we take the lead on it and say: You know, you have been asking for it for 12 years and you got nothing. How would you like to get the other 80 percent that you also claim you like? That is the way we do bills. It is working to get common ground, which is a third way.

There are so many issues around here that have been polarized, so the second they come up people jump into the weeds. They talk about a little glitch here or there that irritated people in the past and that gets us nowhere. So we have been able to elevate that to coming up with a third way to achieve the same thing, the same principles we agreed on.

This bill didn't go through any of that process. We just slammed right over here to the floor of the Senate and then they are surprised at the result, that we want to do a few amendments. I saw the House bill, and then I saw the negotiations with some of the Senate people from our side on some amendments that they thought were critical. A lot of those didn't get in at all, even though I think a few of them thought they were in there. They are not in there. That is what I am bringing up--what were good ideas that ought to be contained in this kind of a bill so the rhetoric we have had so far actually winds up meeting what is in the bill.

That is our job. It is really supposed to come out doing what we said it would do. This bill does not do what the chairman said it would do. This bill doesn't say what the Republican cosponsors said it would do. It could be clarified. It is not easy to clarify it when we are out on the Senate floor. It is difficult to do out here because it is more of a take it or leave it. In fact, that is what I was offered: take it or leave it on getting two amendments. What kind of a choice is that? I have five germane amendments and many other germane amendments have also been filed and offered. But, of course, I will have to get unanimous consent to bring up my amendments later if at all. Unanimous consent is not the easiest thing to get around here, particularly when it starts getting into this little friction area.

I want to comment on the 71 filibusters. I suspect the two motions that were just filed count as two more filibusters. What they are is two more attempts to protect the rights of the minority. We have a right, just as that side did when they were in the minority, to bring up amendments. They protected their right, and we are protecting our right.

You heard one of the cosponsors of the collective bargaining bill make those same comments earlier today when the big discussion happened on the amendment that was put on the other side of the tree. He voted not to table that because he respects the rights of the minority. That is what has always had to happen around here.

I have to tell you, on filibusters, one of the reasons we get filibusters is because there is still a Presidential campaign going on on one side of the aisle, and that means two of our Members are not here except in unusual circumstances. So the way it has to happen is, on Monday when we come in we vote on a cloture motion. It is not legislation that necessarily needs a cloture motion because a lot of those have been passed 98 to 0, 96 to 0, maybe 95 to 1. That is nowhere near a filibuster. But that allows us--that forces us into a situation where, for the next 30 hours, we debate whether to debate. That way, by Wednesday the candidates can show up so there is enough of a vote to agree to some of the amendments that go on there. So part of it is a tactical procedure being used by the majority, who still has a primary going on in their Presidential race, to assure they will have the votes there when the time comes.

You can see this is 51 to 49, so if two people don't show up on that side, it is 49 to 49 and that gives the Vice President a chance to vote. So far he has always voted with me. So that gives the minority a win, and I understand that.

But I do not stand for being blamed for all of those cloture motions that have been put out here. Some of those have been to protect the majority as a majority. They need to take credit for those instead of blaming us for it.

This is a kind of do-nothing Congress. If it were not for bills coming out of this committee there wouldn't be a lot of bills passing out here, but a lot of the failed bills come from skipping the process and coming right to the floor, like the immigration bill. The way to get things done is take them through committee and then we don't need to do as many amendments on the Senate floor.

In fact, if you check back on the bills Senator Kennedy and I worked on, it is very unusual for us to have an amendment on the floor. And they usually pass unanimously here and in the House. That is how they get to the President. There is not a conference committee involved in it. We have already preconferenced with the House and found out what their potential objections were with the House and worked it out. But not on this bill. On this bill what we said--not we said; they said-- you know, the policemen and the firemen are going to be in DC for this big memorial event this week. We ought to time it so we can really put the crush on the Republicans.

I have to give you congratulations for that. It would not be enough just to recognize the tremendous sacrifices these people make and the difficult jobs they have. No, we can make some points against the Republicans because they may want to make sure Government still works when we are done with the process.

There are a lot of people commenting that there are some problems with this bill. The mayor of New York City--that is a State that requires collective bargaining--sent us a letter that said: Don't pass this bill. This will affect the way that we do business. It is not a one-sided thing, but I tell you, when it gets one-sided, nothing happens and that is kind of the process we are in.

I am going to be asking people to vote with me against the cloture motion because I have not been able to bring up my amendments. I haven't been able to get votes on the other side.

That has an interesting little twist to it too. We have four amendments: three that are germane--those are the three the Republicans put in, which means they relate to the bill--and one offered by Senator Leahy that is actually a reauthorization bill on some grant money. It doesn't relate to this bill, but I am willing to have votes on all four of them. I am willing to accept the Leahy amendment and get it done. But there will be objections to that because he chairs the committee that handles judges, and we were promised three circuit court judges before Memorial Day. As I understand it, tomorrow morning there is a markup around here that does not have a single circuit court judge on it, which means that deadline cannot be met.

So, again, protecting minority rights, there are some people on the

Republican side who are saying if they are not going to follow their word, we are not going to follow--The Senator from Vermont then says: If they are not going to take my amendment, then I am not going to allow the other three to be voted on. That happened earlier today.

There is plenty of blame to go around. But to stick it on any one party is the wrong thing to do. And to proclaim that we really want to have this bill done without taking it through the regular process is a misnomer--and I need to have my rights--and I appreciate this time to speak. The majority leader was very kind in that. I appreciate the way he let us at least work for a day, an interrupted day and a partial day at that, before the cloture motion went into effect.

I thank the Chair and yield the floor.

Mr. President, I thought things were too good to be true, that we would have a debate on a bipartisan bill. There are a lot of things we could do to bring the Presidential politics into what is going on here on the floor. I think this is untoward.

This is a bill that has been worked on for a long time. Senator Kennedy and Senator Gregg have worked in good faith to bring this up to help firemen and police officers. I had a group of police officers in my office today. They were so excited about this bill because we are doing something to help them.

We have been through this before. I told Mike Enzi last Friday, through staff, that I would not fill the tree on this. I wanted to see if we could work in good faith for once without the Republicans playing their petty politics. But, obviously, we cannot do that.

Now, is it any wonder--I ask: Is it any wonder--that the Republicans have lost three special elections for House seats? It is no wonder. The American people understand what this Republican-led Congress has done, led by this man in the White House.

Now, is it any wonder that in a poll yesterday in the Washington Post, the Democrats have a 21-percent lead on the Republicans on being better able to handle the problems of this country? It is no wonder because this is what we have. They are not serious about anything.

We have had 71 filibusters that have been filed this Congress we have tried to break--we have had to break them--71 filibusters.

So I tell my friend, Chairman Kennedy, and Ranking Member Enzi, it is obvious we cannot complete this legislation. It is obvious that games are being played.

Now, can you imagine on this bill dealing with people who are first responders--on 9/11, who were the people rushing into that building to die? Firefighters and police officers. They have asked for some help from us. For example, in Nevada, we have a situation where the State legislature said local law enforcement officers can bargain collectively. But isn't it interesting, the State cannot. Highway patrol officers cannot, those people who are capital policemen in Nevada cannot.

That is what this legislation would do. It would direct attention to some of the problems law enforcement has in this country, and we are not going to be able to do it because we are working now and are going to have to vote on whether there should be a holiday on gas prices. I talked to a woman in Pahrump, NV, yesterday, 50 miles out of Las Vegas. She moved to Pahrump because it would be cheaper to live. She works in Las Vegas. Well, that was a bad bet she made because she has a diesel vehicle. Yesterday, it cost almost $130 to fill it with diesel fuel, and she has to fill it once a week.

So we have a situation here where now we are going to start debating the energy policies of this country. We are happy to enter into that debate because we know the energy policy in this country has been set by Dick Cheney. He met with oil companies. It was all secret. They protected themselves, even through the Supreme Court, that we would not know whom they met with and what they met with. But it is obvious the policies they came up with have been a real big boon to the energy companies, making more money than any companies in the history of the world.

So if my Republican colleagues want to debate energy, we are happy to do it. What we wanted to work on is something to help police and fire. I am very disappointed. We on this side wanted to finish this legislation. But we have a cloture motion filed on the McCain proposal, and I am forced to acknowledge that probably he is trying to do anything he can. He is a flawed candidate, and he is wrong on the war, and he is wrong on the economy. But it is too bad he is still interfering with what we are trying to do here to start doing some serious legislating, ``he,'' meaning John McCain.

Mr. President, all except the 9--10 new Senators we have remember the time that I lived on the Senate floor. For 6 years I was here from the time we came in session until we left, with no exceptions. I tried at that time to be as fair to the Republicans as the Democrats. If someone asked for more time on our side, with the Republicans not being here, they automatically got that time.

That is what took place today--I want Senator Kennedy to hear this. I want Senator Kennedy to hear this. Here this morning I congratulated you and the ranking member, Senator Enzi, because we were having a good debate and we were going to be working from the idea that we would try to improve this bill. I said specifically that Senator Enzi said he wished he had more time to do some committee work, and he wanted to do some work out here.

More power to him. That is what he should be able to do. I complimented everyone for the way this bill was being handled. Do you know the sad part about it, I say to my friends. Senator McConnell was standing right there. We had a conversation walking out the door. Shouldn't he have said to me: Well, maybe you shouldn't feel that way; I am going to file cloture on the McCain amendment to get the tax holiday on gas.

But I am so surprised. I never try to avoid a phone call from my Republican counterpart. I always try to be available. I would say this: I would never do to him what he did to me this morning. It is untoward.

I suggest the absence of a quorum.

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

Because we had so much notice on this, I thought it was the McCain tax holiday amendment. But, no, it is the McCain effort to change the Jim Webb bipartisan GI bill of rights because it is too generous. So this idea is about the same as the gas tax holiday. He doesn't like the GI bill of rights because it is too generous. Now I am wondering if we want to debate Iraq on this bill because we are happy to do it. We are happy to debate an intractable civil war that is costing the American people $5,000 a second every day of the week, every week of the month, every month of the year, $5,000 a second. No weekends off, no holidays, $5,000 a second of borrowed money.

Do we want to debate the Iraq war? Is that what we want to do on this bill that was set aside to deal with firefighters, police officers, and first responders?

Those people came to my office today, some in uniform, some in plain clothes, because that is what they do. Some of them wear their uniform to work every day. Some do other work so they can't wear the uniform. They are

undercover. But no--I apologize to everyone. I thought we were on the McCain tax holiday. But, no, we are now on the GI bill of rights McCain effort because it is too generous.

The bipartisan bill of Jim Webb that he wrote himself, bipartisan in nature, is too generous according to John McCain. We are happy to debate that. If that is what this body needs to do is to start the supplemental debate a week early, we can do that too.

I note the absence of a quorum.

Yes.

Yes. We are going to do it next week anyway. Do you want to do it a week early? Fine.

I say to my friend not only was an amendment filed, but untoward cloture was filed at the same time on that amendment. Now, what would happen if on every piece of legislation around here, when you offer an amendment, a person walks in and files a cloture motion at the same time? That is a little funny way to do it. But maybe the Republicans love this filibustering so much--they broke the record, the filibuster record, in 10 months. Maybe they really want to in effect break Hank Aaron's record big in the way of filibusters. It is not enough to break it in 10 months, they want to really break it big, so now they are going to start filing cloture motions on their own amendments.

So I think what we need to do is just relax a little bit. We are going to suggest the absence of a quorum in just a second, and we will talk a little bit to see if there is a way out of this. I hope there is a way out of it for the benefit of the police and firefighters and first responders of this country. They are in town this week because there is going to be a memorial for those who were killed this year, police officers who were killed this year in service to their counties, their cities, and their States. They are here. Part of the reason they are here and the reason we scheduled this at this time is because they were going to be here.

So I suggest the absence of a quorum.

I yield for a question without losing the right to the floor.

As I said, Mr. President, we are going to go into a quorum call and huddle down here and find out if there is a way out of this.

I say to my friend, and he is my friend, we are not going to have any more discussion on this piece of legislation until we figure out a way to help the police and firefighters. The decision was made by the Republican leader to debate the GI bill of rights, OK? That is where we are now.

I suggest the absence of a quorum.

I object.

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

Mr. President, I appreciate the patience of all Senators. I am going to, in a couple minutes, move to table the Graham first-degree amendment. That vote will take place shortly. Following that, I have asked Senators Kennedy and Enzi to sit down and see if there is a way we can finish this important legislation. We have other things to do this week. We have the farm bill that will be here within the hour from the House. We have the budget conferees we have to appoint. Senator Dorgan is pushing hard on the media cross-ownership. That is something we need to complete this week. I want all Senators to see what they can do to exert influence on their friends to finish this bill. I have talked to the head of the firefighters. He is tremendously troubled that we ran into this roadblock. The underlying bill is very important. I would hope everyone understands that. We have all next week to do whatever needs to be done on the supplemental appropriations bill. We will get into a lot of discussion on the war in Iraq and what is going to happen to returning veterans.

In the meantime, it is my understanding the matter before the Senate is the Graham first-degree amendment. I move to table Graham amendment No. 4763 and ask for the yeas and nays.

Mr. President, we have tried very hard. I was here a few hours ago when the Senate opened, congratulating the Senate for moving forward on a very important bill for firefighters and police. I guess my expectations were far too high. I thought we were going to legislate and finish this bill. It is a bill that is so important.

I had the opportunity after the log had been thrown in the road to speak with the head of the firefighters union. I don't run from organized labor. I think it is important that we recognize the good they do in the country, and no one can dispute the work that firefighters do. I talked with Mr. Schneeberger and told him I don't know if we can do this bill; it appears Republicans don't want to do it. They have offered a mini GI bill of rights. Of course, we have been delayed. That is very unfortunate.

I hope Senator Kennedy and Senator Enzi can work something out to complete the bill in a very short period of time. We have done about the best we can.

I spoke with Senator Enzi last night--I don't know what time it was-- 4:30, 5 o'clock. I asked if he wanted votes last night. He said no because he didn't get the work done in committee that he wanted and he had some work to get done on this bill. I accepted that. I said fine.

I was hoping we would do more today. We tried to get a vote on an amendment and could not get agreement to get a vote on an amendment. So at this stage, we are going to see if we can invoke cloture on this bill. If it doesn't work, it is just another bill the Republicans brought down.

Mr. President, I said this morning, is it any wonder that three special elections held for House seats have gone to Democrats in districts where no one expected a Democrat to win? The reason is because the American people are seeing what is going on here. They see what is going on at 16th and Pennsylvania Avenue, and it is down here now

where we cannot do anything, nothing. Mr. President, 71 or 72 filibusters. I don't know how many we are at. We are moving up the road. Is it any wonder that a poll came out yesterday in the Washington Post saying that the American people believe Democrats in Congress are 21 percent better able to handle the problems of this country than Republicans? It is no wonder.

In spite of that, in spite of 7 years and almost 5 months for President Bush, I still would like to work for the next 7 months with him to try to get things done. I would hope he would pick up the phone sometime and call down here and maybe help us get Federal aviation reauthorization done, just as an example. That is fresh in my mind because that was legislatively killed last week.

Cloture Motion

I send a cloture motion to the desk.

Mr. President, I send another cloture motion to the desk.

Mr. President, I want to shift gears now and express my appreciation to lots of different people.

I mentioned briefly this morning my congratulations to Senator Harkin, Senator Chambliss, Senator Baucus, and Senator Grassley, but there are other team members who worked so hard to get this most important bill done, the most important bill being the farm bill.

We only do a farm bill every 5 years. There are some who say it took us 5 years to get this bill done. That is really not the case, but we worked on it for a long time, worked very hard.

I mentioned in my caucus yesterday that this was an example of how we should legislate because we had conferences. We have been kind of getting out of the habit of having a public conference where Democrats and Republicans are appointed and sit down and try to work out the differences on a bill. That is what they did here. I think it was exemplary legislative work.

Was there any side that was more right than the other side? No. But they worked together to come up with a fine piece of legislation.

Mr. President, I ask unanimous consent the Senate now proceed to the conference report to accompany H.R. 2419, the farm bill, and during today's session there be 5 hours of debate--remember, this farm bill deals with food, it deals with energy, and it deals with security--with the time equally divided and controlled between the leaders or their designees; and when the Senate resumes the conference report tomorrow there be an additional 90 minutes of debate divided in the same manner; further, that if any motions to waive are made in response to points of order, then these votes occur in the order in which they were made prior to the vote on adoption of the conference report on Thursday; that on Thursday, upon the yielding back of time, the Senate proceed to vote on adoption of the conference report.

Mr. President, my friend can have all the time he wants--10 minutes?

How about doing this then? We will go ahead and have this approved, and you do 10 minutes or however much time you want?

You would get it as soon as the consent is granted--right now.

Mr. President, before my friend starts, I have said publicly, I have told him privately--we do not have a Senator, Democrat or Republican, who is easier to get along with and who is a better legislator than Mike Enzi. He is a very fine man, and I am sorry he was cut off.

There will also be no more votes today as a result of this unanimous- consent agreement.

Madam President, I thank the Presiding Officer and I thank my colleague, Senator Graham, and I really do thank my colleagues from both sides of the aisle who have come to the floor and talked about the GI bill and the fact that we were asleep for a number of years from the standpoint of making changes in the law that reflect the cost of education.

But what I want my colleagues to understand and the public to understand is that the Department of Defense used what we call education kickers to provide retention tools for our Active-Duty troops. Throughout this whole period, as they saw promising service men and women and they wanted them to stay in the military, they used what we call education kickers. They upped the amount of their education benefit if they would re-up for a period of time--3 years, 5 years, 6 years.

So to say that $1,100 was the ceiling, that is not accurate. The fact is, we have reached a point in time when we need to change the number in the law, what the base amount is that is the promise this country is making to our service men and women when they serve. I think it is appropriate, given we have gone through a decade--and I am sure most Americans would not find this hard to believe--where the highest area of inflation in America over the last 10 years has not been health care. It has been higher education. For any parent who is going through higher education with a child today, they know exactly what that means--that it costs a whole lot to go there.

Senator Webb deserves a lot of credit because for 18 months he has talked about changing our financial level of commitment. I have to say that has been healthy for the men and women who are serving. It has been healthy for this Senate to begin the debate on it. I do not want anybody to leave this debate and feel we are not both headed in the same direction. It is just that I have some fundamental disagreements with the way he structured it.

I believe there is a way to fulfill the promise, that if you serve, then we are going to commit to you, we are going to provide you with a quality education. When my dad came back from the Second World War, he had most of his education paid for before he left, but this is not something he went out and shopped. This is not something where he said: Gee, there is a benefit. Let me find the most expensive place I can go, and let me exercise it there. He focused on what he wanted to be and where the tools were that were available to him.

Sometimes we have to stop for a minute and reflect: What are the unintended consequences of what we do in this body? Well, one thing with the Webb bill is we disregard the fact that part of higher education comes out of the Department of Education today. It is called Pell grants. For those service men and women who qualify for them, that goes toward their education. The way this bill is written, we pay for their education, and the Pell grant, if they qualify--which most would--is then available for them after their education to pocket as cash. I am not sure that is the promise we made. I am not sure it is the promise the American people are committed to fulfill. I am not sure it is what our service men and women expect. They want an education.

What we have done is we have structured an alternative, the Grahamm- Burr-McCain bill, that provides exactly that. It is targeted at the average of the cost of public education in America. Now, fundamentally, I do not believe a student who picks an art and design school in the State of Michigan should be entitled to $13,000 for that school. Yet if he chooses the University of North Carolina at Chapel Hill, then he is only going to get $5,300.

Why is there a discrepancy in those two schools? Because States subsidize higher education at a different level because it is a State decision. It is State money that is used to subsidize higher education. In North Carolina, we choose to subsidize higher education to the tune of 70 percent. We do not expect every State to choose to subsidize it at that level.

But by the same token, why would we create a program that disenfranchises North Carolina, that says to North Carolina: Oh, boy, you are going to be cheated because you subsidize higher education so that more of your kids can have an affordable option. And because now the Federal Government

would have paid everything, you are going to lose money because you subsidize higher education. Unintended consequence: We are going to chase States out of the business of subsidizing higher education.

What is the net effect? Every kid in America who does not serve 3 years Active Duty, cumulative, is going to pay more because States are not going to subsidize. I am not sure that is what we are after. I surely do not suggest that is the intent of Senator Webb's legislation. It is what will happen if, in fact, we pass the legislation.

So Senator Graham and I and Senator McCain looked for: How do we take the existing system--not create a new one; this is not a wheel that is broken; it works, but let's fund it at today's funding needs.

Now, Senator Graham covered a lot of things that are in the bill. For an Active-Duty servicemember who serves 3 years Active Duty, we are going to provide $1,500 in living expense and tuition every month as a benefit. We are going to provide $1,000 for books and fees a year. For that individual who stays in the military over 6 years, 50 percent of the education benefit they accrue is transferable to a family member: a spouse or child. If a servicemember chooses to serve for 12 years or more, 100 percent of their GI education benefit is now transferable to a spouse or a child.

I think it is safe to say that for most who make a career out of the military, they have numerous opportunities to enhance their academic achievements on Active Duty. So the likelihood is a 20-year veteran of our services probably has all the education they need, and they have a huge education benefit. I cannot think of a better reward to people who have served their country than to say: Let's make this benefit available so you can educate your children. Let them choose the States that highly subsidize so they get more bang for their buck.

Senator Graham covered the fact that we put the responsibility for private schools to fill the gap on the private schools. We say to an institution: Do you know what. You are willing to retire debt for low- income Americans today. Well, let's see what type of commitment you are going to make for veterans, people who are part of the GI program.

Senator Webb's bill says to the school, Harvard, Yale, Duke, schools that have $35,000 tuitions: Do you know what. We are only paying $5,000 in North Carolina, so, Duke, if you get one of these, that $20,000-some difference--$25,000, $30,000 difference--for every dollar you put in, the Federal Government is going to put in.

What I say, in the legislation, to Duke is: All right. We are putting $14,400 in the pot for that GI. The difference is indebtedness at the end of his career. If you are willing to retire 25 percent of it, then we are going to put an extra $1,000 in the pot. If you are willing to retire 50 percent, we are putting $2,000 in the pot. If you are willing to retire 100 percent of the debt, we are going to put more money into the pot. We are not going dollar for dollar because I do not think that is our responsibility. There has to be a side of the academic institutions that is willing to also recognize the service of our men and women in uniform.

We were denied the opportunity to have a vote on a piece of legislation earlier today. It is a rule of the Senate that you can offer a motion to table an amendment. What does tabling an amendment mean? It means we were denied the opportunity to vote on a real education package for our service men and women.

What is the reason somebody would do that? Well, fear that we were going to win. Fear that enough Members would look at it and vote for it on the merits of the legislation, that we would win. What is the likelihood we are going to have an opportunity to offer our amendment? Probably none. Because the Webb amendment is going to be masked in an emergency supplemental that is going to be made up of war funding, funding that most Members--this one has no idea what other earmarked programs Members of the Senate are going to stick in it or the House of Representatives.

I would say to my colleagues, we ought to vote against the entire package, except for war funding. We ought to come to the floor. We ought to have a side by side: the Webb bill, the Graham bill. We ought to debate it on the merits, but we ought to take into account the needs of our military. To ignore retention, to ignore the tools the military needs to make sure our Nation is secure and strong, is absolutely ignorant. Now, it may be before it is over we are able to influence the authors of the other legislation to put transferability in theirs. But I have to say to my colleagues that the structure is fundamentally flawed.

I am the ranking member of the Veterans Affairs' Committee. Currently, the GI bill is administered partly out of DOD, partly out of the Department of Education, partly out of the Veterans' Administration. We have a Veterans' Administration today that is challenged to process the amount of disability claims, the appeals to disability claims, the appeals to medical services that are delivered. Now we are saying let's create a big new program and let's dump it in the Veterans' Administration and let's ask them to run it. How incredibly insensitive to the work that is currently going on but how insensitive to the needs of our veterans who are injured--those who come back from Iraq and Afghanistan, those who transition out of Active Duty to veteran status who need a Veterans' Administration that is 100 percent focused on the delivery of health care, the processing of disability claims, and making sure every veteran is matched with a check that they need for their livelihood.

Now we are going to say: But we want you to now run education. We want to take the Department of Education out of it. We want to take DOD out of it. We want the Veterans' Administration to be responsible.

Millions and millions, hundreds of millions of dollars is going to be needed to administer this program, hundreds of millions of dollars. Forget the fact that to write the regulations out of a new agency is probably going to take well over a year. That is why the Webb bill is not proposed to start for some time after this body passes it.

I am sure we are going to have ample time to talk about the education benefit for our military members. I am not sure we are going to have an opportunity to have a choice. I am convinced people asked me to come here and serve to represent North Carolina to make sure we have a choice, and that it wasn't a choice between something and nothing, but that it was a choice between something and something. Every Member of the Senate--100 Members--should have the opportunity to come to this floor and to offer what they think is the solution to a problem. Not on this. We tried to do it because we didn't think we would get an opportunity, and instead of getting an up-or-down vote on a very important piece of legislation that provides and extends and revamps the GI education benefit for our military, it was decided that we were all going to have the opportunity to table consideration. I am not sure that is why we were all elected to be here. I think to some degree it shows what is worse about the institution that we are not willing to tackle.

This is the institution of great debate, and when we have big issues, we run from the debate, hoping that the American people aren't looking, hoping that nobody will read about what we have done, that nobody will see the missed opportunity. I will tell my colleagues, our service men and women aren't going to miss this one. It is not going to be over with a simple tabling vote. This is something that will continue to educate the American people and, more importantly, the men and women who put on a uniform and never ask why but go exactly where our Commander in Chief asks them to go.

I urge my colleagues to pay very special attention as we go through the debate on this legislation. Ask yourself not only is it right, ask yourself are the consequences of what we do the consequences that we would want to have happen. If there are unintended consequences to this, the general public of young people who are looking at higher education as an absolute necessity of their livelihood in the future are disenfranchised in some way by this. If servicemembers aren't allowed to extend an education benefit to their children or to their spouse, and it just goes away, have we really done our job? I think the answer is going to be no.

So I encourage the leadership in the majority to give us an opportunity to

have a fair up-or-down vote. Give us the opportunity to compare two pieces of legislation. Nobody should be scared to do that. Let America decide based upon their representatives in the Senate which one better fulfills the promise we have made to the men and women who serve but, more importantly, what upholds the structure of higher education in this country and doesn't disenfranchise or disadvantage any student now or in the future.

I am convinced we can only achieve that if we recognize a benefit that is uniform and equal across the board, not one that is determined by where you choose to go to school, not a benefit that is determined by where you choose to live, but a benefit that fulfills every promise that we are going to provide an education and put some degree of individual responsibility on how that is exercised. I am convinced that for those who may choose a community college versus a 4-year university, the savings they have should be savings they extend to their children and to their spouse.

That would not happen under the current Webb bill; it will just go away. They will miss out on that opportunity. They will never know that unless we are willing to have a debate on this floor. They are never going to know it unless we are provided the opportunity to present them with a choice between something and something versus something and nothing.

I thank the Chair for the time extended to me.

At this time I yield the floor and suggest the absence of a quorum.

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.