A bill to amend the Internal Revenue Code of 1986 to provide a shorter recovery period for the depreciation of certain improvements to retail space.

Mr. President, our soldiers, sailors, airmen, and marines have performed valiantly in Iraq in the face of great adversity. The costs of this war have been great to them and our Nation. Over 3,300 brave American servicemembers have been killed in Iraq over 30 from my own State of Connecticut.

To date, over $500 billion has been approved by Congress for military operations in Iraq and Afghanistan, not including the $95.5 billion included in the conference agreement being debated today or the $141.7 billion in additional funding already requested by the administration for fiscal year 2008.

In addition, because of the war, our forces have been drained of critical combat gear and training time, adding another element to the costs of this war--our military's combat readiness. Two-thirds of the Army in the United States and 88 percent of our National Guard are reporting 'not ready' for duty, largely due to equipment and training shortfalls.

Now, as we have entered the fifth year of the Iraq war, it is long past time for a course correction. Rather than continue abetting the administration's efforts to escalate our entanglement in Iraq's civil war, it is time for Congress to assert itself and heed the American people's call for change.

The conference report before us today takes the first steps toward that change. While I wish it would have included stronger language to immediately begin withdrawing combat troops from Iraq and limiting the mission there to counterterrorism, training and equipping Iraqi troops and force protection for remaining U.S. personnel, it does for the first time set some new goals for this administration and the Iraqi Government that will mandate a change of course. For the first time it demands real accountability from the President to take action to restore our military's readiness which has been hollowed out as a result of his policies. And this bill finally provides critical resources for combat gear and protective equipment that the Bush- Cheney-Rumsfeld administration has consistently shortchanged in their budget proposals.

Regrettably, as my colleagues know, the President has already said that he will refuse to sign this legislation into law. He has announced his intention to veto this bill because after 4 years of a disastrous war policy, escalating combat deaths, and growing instability in the region, he insists that his is the only way. It is disheartening that President Bush does not see or will not admit that his policy in Iraq is a failure.

In plowing ahead on the current course in Iraq, the President has rejected the advice of experts from across the political spectrum, from the Baker-Hamilton Report, and from members of Congress, all of whom have urged him to change the course in Iraq, to diminish our military footprint there, and to start a surge of diplomacy in the region. Like all my colleagues, I want to see success in Iraq. I wish that the President's policies were working. I wish that U.S. combat forces were able to restore security to Baghdad and to other parts of Iraq. I wish that the President had not mismanaged this war from day one. I wish that we had deployed enough troops on the ground to secure the peace at the outset. I wish that Secretary Rumsfeld hadn't run the Coalition Provisional Authority like a staffing agency for Republican political operatives, displacing countless U.S. Foreign Service professionals in the beginning of the war. I wish we hadn't disbanded the Iraqi Army and that we hadn't allowed looting. And I wish that our surge of 30,000 more men and women in uniform into Iraq could be successful in stabilizing that country.

But now is not the time for wishful thinking. Now is the time to address the real facts on the ground. This conflict cannot be resolved by increased military action. It requires a coherent, broad-based strategy to promote the political reconciliation necessary to secure the future for Iraq.

The bill before us begins that process. If the President determines that the Iraqis are not making progress on key political, security, and economic benchmarks, then, under this legislation, the redeployment of American troops would begin this summer. If, on the other hand, the President determines that the Iraqis are complying with the benchmarks set forth in the legislation, then the redeployment of American forces would begin later in the fall of 2007. These reasonable and responsible timetables and benchmarks will force the President to change his strategy and will incentivize the Iraqi Government to take difficult but necessary steps toward reconciliation, power sharing, and security.

This bill also allows for a limited ongoing presence of U.S. forces in Iraq for the specific purposes of training and equipping reliable Iraqi security forces, carrying out counterterrorism operations within Iraq, and providing force protection, because we understand that these vital components will be necessary to ensure a stable and secure Iraq even after our combat troops have been redeployed. Iraqis will continue to need some limited American assistance, and it is in our and Iraq's national interests for that limited support to continue.

Exactly 1 day after President Bush disingenuously charged the Democratic Congress for causing what he called ``unacceptable'' delays in troops returning home, Secretary Gates announced that he was immediately extending the tour lengths of those units sent to Iraq to 15 months--3 months longer than before. In addition, 13,000 National Guard troops from Arkansas, Indiana, Oklahoma, and Ohio, as well as other States, were recently told to prepare to be deployed to Iraq.

As a result of 4 years of war in Iraq, our Army has been stretched to its breaking point.

It is time to say, ``enough is enough.'' And with this supplemental bill, Congress is taking a big step in that direction. This bill holds the President directly responsible for units being deployed who are not ``fully mission capable'', by requiring him to waive requirements that mandate that units fully restock their depleted equipment inventories and restore their mission readiness prior to deployment. It includes funding for critical equipment, including mine-resistant, ambush- protection vehicles which would dramatically lower the number of injuries and casualties sustained by our troops. And it includes billions of dollars for health care for our wounded veterans, many of

whom return home with debilitating and life-altering injuries. They have sacrificed everything for this Nation, and at the very least we owe them the best health care available.

Sadly, there is no magic formula for fixing the myriad problems in Iraq, as the Baker-Hamilton Commission rightly pointed out. But it is critical that Iraqis make progress on reconciliation and security and that the Government improves the living conditions of its citizens. Iraq's neighbors and regional leaders must also play a role in finding such a solution. The United States and Iraq's neighbors all have long- term interests in the region, and a broken Iraq does not advance those interests.

With this supplemental bill, Congress is offering the President an opportunity to change our course in Iraq, to listen and respond to the will of the American people, to support the men and women sacrificing their lives there, and to provide for a responsible change in strategy in Iraq.

It is also vital that we make America more resilient here at home. This bill begins to do just that, in providing $325 million to protect the millions of Americans who ride public transportation each day.

Our Nation's public transit systems are inadequately prepared to minimize the threat and impact of potential terrorist attacks. Since the terrorist attacks of September 11, 2001, the Federal Government has invested nearly $24 billion in aviation security--protecting the 1.8 million people who fly on an average day. At the same time, our National Government has invested only $386 million, before the 110th Congress began, in transit security to protect the 14 million people who ride transit on an average workday. Put another way, since 2001, our Nation has spent over $7.50 per passenger on aviation security but less than one penny per transit rider on transit security. I am not suggesting that we ought to be investing equally, but clearly this is not the appropriate balance.

As chairman of the Senate Banking, Housing, and Urban Affairs Committee, I have made improving our national security a top priority. The very first hearing that I held as chairman focused on increasing the security of our Nation's 14 million daily transit passengers. The very first legislation that the committee considered during my chairmanship was the Public Transportation Terrorism Prevention Act of 2007, which was reported by the Banking Committee unanimously on February 8. The legislation authorizes the distribution of $3.5 billion in security funds, over the next 3 fiscal years, on the basis of risk directly to transit agencies.

The Public Transportation Terrorism Prevention Act of 2007 was included as title XV of the 9/11 bill, which the Senate passed on March 13. Senator Shelby and I worked with Senator Byrd and Senator Cochran to include language in the legislation to allow for such sums as necessary to be appropriated in this fiscal year to address the critical needs of our Nation's transit systems. The $325 million included in this appropriations act is a significant investment toward our goal of better securing our Nation's rail and transit systems. This investment builds on the $175 million that was included in the fiscal year 2007 continuing resolution. I once again thank all of the members of the Banking and Appropriations Committees who have worked so hard to advance us to where we are today.

This bill also continues congressional efforts to help the citizens of Mississippi and Louisiana rebuild their lives after the catastrophic effects of Hurricane Katrina by including more than $1.3 billion to fund flood and storm damage reduction projects in affected areas.

Finally, I want to take a few brief moments to discuss the minimum wage increase provision included in this bill. It has been nearly 10 years since millions of hard-working men and women have seen their wages go up. During that time, inflation has eroded the purchasing power of families being paid the minimum wage. In fact, the real value of the minimum wage has declined $4 below what it was nearly 40 years ago, in 1968. It is currently at its lowest inflation-adjusted level in more than 50 years. During the past 10 years, while the minimum wage remained unchanged, the cost of housing, food, health care, education, transportation, and energy has increased.

We cannot reduce poverty if we don't tackle raising the minimum wage. It is simply outrageous that so many Americans live in poverty, and it is long overdue that we take action to reduce the inexcusable and unconscionably high levels of poverty in this country. The language of the Fair Minimum Wage Act, which is included in this bill, will provide a three-step increase in wages over 26 months from the current level of $5.15 per hour to $7.25 per hour. This additional $4,400 per year would allow a low-income family of three to buy 8 months of rent, 15 months of groceries, 19 months of utilities, 20 months of childcare, or more than 24 months of health insurance.

I urge the President to seize this opportunity to make America and Iraq stronger and safer. I sincerely hope he will reconsider his decision to veto this bill when it arrives on his desk. Such a veto would be an affirmation of the status quo in America, a status which this Nation can simply no longer afford.

Mr. President, I rise today to commemorate ``National Small Business Week, which President Bush designated for April 22-28, 2007. As ranking member of the Senate Committee on Small Business and Entrepreneurship, I simply cannot understate the vital role of small business in our Nation's economy. There was a time when ``what was good for General Motors was good for America.'' But the fact is what's truly good for this country--what built it, what sustains it, what drives it, and what represents its core--are the small businesses that each and every year create nearly three-quarters of all net new jobs. In my home State of Maine, small businesses comprise 97.5 percent of all businesses.

First, I would like to discuss the unfair and onerous tax and regulatory burdens that continue to impede the ability of our Nation's small businesses to compete in an ever-increasing global marketplace. According to the Small Business Administration's Office of Advocacy, small businesses spend an astounding 8 billion hours each year complying with government rules and regulations. Eighty percent of this time is spent on completing tax forms. Furthermore, businesses employing fewer than 20 employees spend nearly $1,304 per employee in tax compliance costs, nearly 67 percent more than the comparable cost to larger firms. Despite the fact that small businesses are the primary job-creators for our economy, the tax system is not working because small companies spend their money and time satisfying their tax obligations.

For that reason, I have introduced a package of proposals that will provide not only targeted, affordable tax relief to small business owners, but also simpler rules under the tax code. By simplifying the Tax Code, small business owners will be able to satisfy their tax obligation in a cheaper, more efficient manner, allowing them to be able to devote more time and resources to their business.

I have introduced legislation, S. 269, in response to the repeated requests from small businesses in Maine and from across the Nation to allow them to expense more of their investments, like the purchase of essential new equipment. My bill modifies the Internal Revenue Code by doubling the amount a small business can expense from $100,000 to $200,000, and make the provision permanent as President Bush proposed this change in his fiscal year 2007 tax proposals. With small businesses representing 99 percent of all employers, creating 75 percent of net new jobs and contributing 51 percent of private-sector output, their size is the only ``small'' aspect about them.

By doubling and making permanent the current expensing limit and indexing these amounts for inflation, this bill will achieve two important objectives. First, qualifying businesses will be able to write off more of the equipment purchases today, instead of waiting 5, 7, or more years to recover their costs through depreciation. That represents substantial savings both in dollars and in the time small businesses would otherwise have to spend complying with complex and confusing depreciation rules. Moreover, new equipment will contribute to continued productivity growth in the business community, which economic experts have repeatedly stressed is essential to the long-term vitality of our economy.

Second, as a result of this bill, more businesses will qualify for this benefit because the phase-out limit will be increased to $800,000 in new assets purchases. At the same time, small business capital investment will be pumping more money into the economy. This is a win- win for small business and the economy as a whole and I am please to have Senators Lott, Isakson, Chambliss, and Collins join me as cosponsors of this legislation.

Another proposal that I have introduced, with Senators Lincoln and Lott, the Small Business Tax Flexibility Act of 2007, S. 270, will permit start-up small business owners to use a taxable year other than the calendar year if they generally earn fewer than $5 million during the tax year. Specifically, the Small Business Tax Flexibility Act of 2007 will permit more taxpayers to use the taxable year most suitable to their business cycle. Until 1986, businesses could elect the taxable year-end that made the most economic sense for the business. In 1986, Congress passed legislation requiring partnerships and S corporations, many of which are small businesses, to adopt a December 31 year-end for tax purposes. The Tax Code does provide alternatives to the calendar year for small businesses, but the compliance costs and administrative burdens associated with these alternatives prove to be too high for most small businesses to utilize.

Meanwhile, C corporations, as large corporations often are, receive much more flexibility in their choice of taxable year. A so-called C corporation can adopt either a calendar year or any fiscal year for tax purposes, as along as it keeps its books on that basis. This creates the unfair result of allowing larger businesses with greater resources greater flexibility in choosing a taxable year than smaller firms with fewer resources. This simply does not make sense to me. My bill changes these existing rules so that more small businesses will be able to use the taxable year that best suits their business.

To provide relief and equity to our nation's 1.5 million retail establishments, most of which have less than five employees, I have introduced a bill, S. 271, with Senators Lincoln, Hutchison, and Kerry, that reduces from 39 to 15 years the depreciable life of improvements that are made to retail stores that are owned by the retailer. Under current law, only retailers that lease their property are allowed this accelerated depreciation, which means it excludes retailers that also own the property in which they operate. My bill simply seeks to provide equal treatment to all retailers.

Specifically, this bill will simply conform the tax codes to the realities that retailers on Main Street face. Studies conducted by the Treasury Department, Congressional Research Service and private economists have all found that the 39-year depreciation life for buildings is too long and that the 39-year depreciation life for building improvements is even worse. Retailers generally remodel their stores every five to seven years to reflect changes in customer base and compete with newer stores. Moreover, many improvements such as interior partitions, ceiling tiles, restroom accessories, and paint, may only last a few years before requiring replacement.

Finally, I joined Senator Bond in introducing S. 296 that will simplify the tax code by permitting small business owners to use the cash method of accounting for reporting their income if they generally earn fewer than $10 million during the tax year. Currently, only those taxpayers that earn less than $5 million per year are able to use the cash method. By increasing this threshold to $10 million, more small businesses will be relieved of the burdensome record keeping requirements that they currently must undertake in reporting their income under a different accounting method.

Earlier this year, I was very pleased when the Senate passed small business tax relief that included portions of my proposals on small business expensing, cash method accounting, and accelerated depreciation for improvements to retail-owned property. Sadly, I must report that on the very same week of ``National Small Business Week,'' cash method accounting and my proposal to bring depreciation equity for retailer-owned property were stripped from the small business tax relief package in conference negotiations between the House and Senate. This is extremely unfortunate especially when one considers that the Senate-passed package, which was fully offset, was both modest and fiscally responsible. In the coming months, I will continue to fight for these proposals and am hopeful that Congress will enact them into law.

This package of proposals are a tremendous opportunity to help small enterprises succeed by providing an incentive for reinvestment and leaving them more of their earnings to do just that. Notably, providing tax relief by passing these simplification measures will also help us reduce the tax gap by increasing compliance. I urge my colleagues to join me in supporting these proposals.

In addition to reforming the tax code, we in Congress should level the

regulatory playing field for small businesses. Over the past 20 years, the number and complexity of Federal regulations have multiplied at an alarming rate. For example, in 2004, the Federal Register contained 75,675 pages, an all-time record, and 4,101 rules. These rules and regulations impose a much more significant impact on small businesses than larger businesses.

To illustrate this conclusion, a recent report prepared for the SBA's Office of Advocacy that said that in 2004, the per-employee cost of Federal regulations for firms with fewer than 20 employees was $7,647. In contrast, the per-employee cost of federal regulations for firms with 500 or more workers was $5,282, which results in a 44 percent increase in burden for smaller businesses compared to their larger counterparts. Clearly, we must find ways to ease the regulatory burden for our nation's small businesses so that they may continue to create jobs and drive economic growth. All too often, small businesses do not maintain the staff, or possess the financial resources to comply with complex Federal rules and regulations. This puts them at a disadvantage compared to larger businesses, and reduces the effectiveness of the agency's regulations. If an agency can not describe how to comply with its regulation, how can we expect a small business to figure it out?

This is why I have offered bipartisan legislation, the Small Business Compliance Assistance Enhancement Act, S. 246, with Senators Kerry, Enzi, and Landrieu, which would clarify small business requirements that exist under Federal law. Our measure is drawn directly from recommendations put forth by the Government Accountability Office and is intended only to clarify an already existing requirement under the Small Business Regulatory Enforcement Fairness Act, SBREFA, which unanimously passed the Senate in 1996. Specifically, our bill clarifies when a small business compliance guide is required, how a guide shall be designated, how and when a guide shall be published, and that the agency make the guide available on the Internet. It would not create any new rules or requirements. This commonsense, good government reform would provide a major regulatory reform for small businesses at virtually no cost to the Federal Government.

It is clear that in order to ensure our small businesses are able to grow, thrive, and, most importantly, create jobs, we need to simplify the tax code and reduce the regulatory burden. Over the coming months, I will continue to fight to accomplish these commonsense objectives.

Mr. President, the pending emergency supplemental appropriations bill includes a number of items within the jurisdiction of the Finance Committee. I would have preferred that the Senate had considered these matters on legislation that the Finance Committee had reported. I believe in the committee process. In the future, I will try to minimize the occasions on which Finance Committee legislation travels on legislation reported by other committees.

But the House of Representatives included the minimum wage and small business tax provisions in the House-passed version of this supplemental appropriations bill. So it was only appropriate that the full Senate respond. The Senate Appropriations Committee added matters related to health care, so it was only appropriate that the conference committee on this supplemental appropriations bill address those issues, as well.

I appreciate that the conference committee on this supplemental appropriations bill deferred to members of the Finance Committee in the formulation of these Finance Committee tax and health matters in the conference report on this bill. I particularly thank Chairman Byrd for his assistance in this regard.

Some have been concerned that an increase in the minimum wage would burden small businesses. Small businesses are a vital source of job creation, economic opportunity, and technological innovation.

There are about 23 million small businesses in America. Businesses with fewer than 500 employees represent more than 99 percent of all businesses in America. They pay more than 45 percent of American private payroll. They have generated 60 to 80 percent of net new jobs annually over the last decade. They employ 41 percent of high-tech workers.

Small business is particularly important in my home State of Montana. Small businesses are the backbone of our communities.

We have the opportunity to help small businesses through tax incentives that stimulate their rates of formation and growth. That is why Chairman Rangel and I worked together to combine the House and Senate small business tax packages to achieve a comprehensive small business tax package.

This is a responsible package that will help small businesses in the context of an increase in the Federal minimum wage.

The nonpartisan Joint Committee on Taxation has made available to the public a technical explanation of the bill. The technical explanation expresses the committee's understanding and legislative intent behind this important legislation.

The small business tax package provided a more than 3-year extension of the work opportunity tax credit, or WOTC. WOTC allows employers a tax credit for wages that they pay to economically disadvantaged employees. The final small business tax package also expands WOTC to allow the credit for employers who hire disabled veterans, a proposal that was part of both the Senate and House packages. The package includes the Senate's proposed expansion to allow the credit for employers who hire employees in a county

that has suffered significant population loss.

The small business tax package also includes a 1-year extension of section 179 expensing. Section 179 allows small business owners to purchase and write off more equipment each year for use in their trade or business. Section 179 expensing was included in both the Senate and House small business tax packages. The final small business tax package also increases the amount allowed to be expensed in 2007 from $112,000 to $125,000, a proposal in the House version.

Enhancement of the tip credit, family business tax simplification, and waiver of limitations under the alternative minimum tax on WOTC and tip credits are three other House proposals included in the final small business tax package.

Enhancement of the tip credit for certain small businesses will prevent a decrease in the amount of business tax credit that restaurant and other service-oriented business owners may claim for the Social Security taxes that they pay on their employee's tips despite an increase in the Federal minimum wage.

The family business tax simplification proposal ensures that when a married couple jointly owns a small business, both spouses will receive credit for paying Social Security and Medicare taxes.

The waiver of individual and corporate AMT limitations on WOTC and tip credits would allow business owners to take the WOTC and tip credits under AMT.

The Senate's S corporation package is also included in the final small business tax package. The S corporation package includes several simplifications and modifications to rules governing community banks and other small businesses that operate as S corporations.

The small business tax package includes several tax incentives included in both the Senate and House small business tax packages to help recovery of small business and low-income housing in areas hit by Hurricanes Katrina, Rita, and Wilma.

The small business tax package is a responsible package that is completely offset. The package includes offsets that were included in both the Senate and the House small business tax packages, such as modification to the interest suspension rules for IRS and a proposal to discourage the practice of transferring investments to one's child for the purpose of avoiding higher tax rates.

The package also includes modifications to the collection due process for employment taxes, an expansion of preparer penalties, and a new penalty on erroneous refund claims. These offsets were part of the administration's fiscal year 2008 budget proposal to improve tax compliance.

The small business tax package does not include the Senate's 15-year depreciation proposal for improvements made to leaseholds, retailer- owned businesses, and restaurants. Nor does this final package include the Senate's proposal to expand availability of the cash method of accounting.

These proposals both have merit. They were included in the chairman's mark when the Finance Committee wrote the Senate's small business tax package. These proposals enjoy the support of many Senators, including Senators Kerry and Snowe. But there simply was not enough room in a $4.8 billion conference package to include the 15-year depreciation and cash method of accounting proposals, as they have a combined estimated pricetag of nearly $7.4 billion. But this will not be the last bill in which the Senate can address these important proposals.

If and when the President vetoes this bill, and it comes back again, we need to preserve the integrity of this balanced compromise. Congress should not litigate this tax package over again. I urge my colleagues to support this package.

This bill also accomplishes key urgent health priorities.

The bill includes emergency funding for the State Children's Health Insurance Program, or CHIP. This fiscal year, 14 States will run short in their Federal CHIP funds by a total of about $624 million. The Congressional Budget Office estimates that 700,000 children will lose CHIP coverage unless Congress acts.

This bill fills the gap in Federal CHIP funds. It ensures that all States can meet the demand for CHIP coverage for all those now eligible for coverage this year.

I thank Chairman Byrd and Chairman Harkin for their help on this provision. Keeping children from losing their health coverage is a critical national priority. I will work with my colleagues to ensure that the final supplemental bill includes this provision.

Another provision originally offered by Senator Durbin puts a 1-year hold on rulemaking relating to Medicaid payment rates for public hospitals and nursing homes. In January, the Secretary of Health and Human Services proposed a rule that would make sweeping changes to reimbursement rates for public facilities. The rule also proposed major changes to how States can define which governmental facilities can pay a State's Medicaid share.

The Nation's Governors have weighed in against the Medicaid rule, as have many hospitals and nursing homes. They are concerned that this rule would do immediate harm to our Nation's safety net by cutting Medicaid reimbursement for publicly owned facilities that serve our most vulnerable citizens.

I am concerned this rule goes too far in implementing new policy, making changes that are better made by Congress.

It is Congress's job to make major changes to the law. A 1-year moratorium will give the Finance Committee enough time to study this issue and determine the right approach in legislation to limit opportunities for fraud and abuse of Medicaid, while protecting the vulnerable individuals and vital safety net providers who rely on Medicaid payments.

Some have raised concerns about the original Durbin amendment moratorium. They said that it should not have been included in an appropriations bill and that it could undermine oversight of Medicaid at the Department of Health and Human Services. I agree that we should keep Finance Committee issues within the committee. In this case, however, the Department is poised to act before July of this year. We need to take action now, before it is too late.

I also agree that protecting against fraud and abuse in Medicaid is a priority. Not one taxpayer dollar should be misspent. That is why the revised version of this amendment clarifies that the moratorium has no affect on all other Medicaid integrity enforcement activity at the Department of Health and Human Services.

This final version also removes the increase in the Medicaid prescription drug rebate that was used to offset the cost and replaces it with other Medicaid policies that will save Federal dollars. The new version includes provisions that will lower the incidence of fraud in Medicaid drug prescribing and preserve access to affordable prescriptions for 100,000 seniors covered by Wisconsin's Pharmacy Plus program.

I think this is the right approach. It provides a shorter moratorium that allows the Finance Committee to act and preserves oversight on fraud and abuse at the Department of Health and Human Services.

I will work with Senator Durbin and members of the Appropriations Committee to ensure that this version stays in the final bill.

Once again, I thank Chairman Byrd for his help in reaching this good outcome. And I urge my colleagues to support this legislation.

Retail Improvements

Mr. President, I understand and share the concerns expressed by Senator Kerry and Senator Snowe. I agree that owners and renters should receive the same tax treatment for improvements.

There are many small businesses in Montana in which the owners would like to make improvements. And this provision would be extremely helpful.

Just this week, I received an e-mail message from Scott Brown, the owner of The Base Camp in Helena, MT. Scott told me how this provision would help him and other Montana retailers to be more competitive.

I will continue to work with my colleagues to find additional opportunities to address this important provision.

Mr. President, the title of this bill, ``The U.S. Troop Readiness, Veterans' Health, and Iraq Accountability Act,'' doesn't say much for the contents of this legislation because it has gone way beyond that with a lot of material that has nothing to do with the title. The Finance Committee matters definitely don't fit into this bill.

As the distinguished chairman of the Appropriations Committee, Senator Byrd has said on so many occasions the Founding Fathers vested the great power of the purse in the Congress. Likewise, the other great power, the power to raise taxes, is vested in Congress. The power of the purse, appropriations, is our power. We are directly accountable to our constituents for our spending actions. In that vein, I deeply respect the deep traditions of the Appropriations Committee.

As former chairman and now ranking member of the Finance Committee, I also deeply respect the division of power. The power to tax is our power as a committee, and we are directly accountable to our constituents for our taxing actions. We should mix the jurisdiction of the two great money committees--Finance and Appropriations--rarely, if at all. It should only occur if at all when the senior members of the tax writing and appropriations committees agree. Mixing tax writing and appropriations jurisdiction should not occur. As a leadership power play, those kinds of actions demean the committees.

Fortunately, the leadership respected this division of jurisdiction between the tax writers and appropriators over the last 6 years. Unfortunately, early on in the tenure of this new Democratic majority and their leadership, we have seen a dramatically different course of action for purely partisan reasons.

The Democratic leadership inserted into this sensitive supplemental appropriations bill two major matters that involve Finance Committee jurisdiction. So the first lesson we have learned is that the line between the tax writing committee jurisdiction and appropriations jurisdiction will not be observed. That will only undermine each committee and break down the committee process. The second lesson is the ``I told you so.'' Shortly after the Senate acted on the minimum wage and small business tax relief bill, I said I had learned something from the Democratic leadership, as they were in the minority over the last 6 years. It was a lesson the Democrats taught us while they were in the minority. That lesson is, get a preconference agreement. Put another way, if you are in the Senate minority, as we are now, don't agree to a conference unless you secure an agreement for fair treatment in advance. That is something that worked well for the Democrats while they were in the minority, something we ought to have learned, and we have learned.

Now let me say I appreciate all the consultation and courtesy that Chairman Baucus has given me. He worked with me and I worked with him to get the minimum wage, small business tax relief bill through the committee. But the composition of the final package that is before us is heavily weighted toward an extension and modification of the work opportunity tax credit--and I support that credit--and the benefits of that policy are delayed. Small businesses need tax relief to be in sync with the time of the minimum wage kicking in. Both of these outcomes do not reflect a proportionate agreement between the House and Senate bills. The arbitrary ceiling on the amount of tax relief was not a fair balance. This agreement confirms that a preconference process--learning that from the Democratic minority of the last 4 years--is necessary to ensure that a conference agreement will reflect the priorities of both bodies. I will reiterate my point to the Republican leadership again on that. This process proves that we need a preconference agreement before agreeing to go to conference in the first place.

Now I will return to the substance of the deal, Mr. President. I am hearing from a lot of small business folks who are going to be paying the minimum wage. They want to retain their current workforces, hey have to look to the bottome line. They are very disappointed that the arbitrary $5 billion limit meant that important tax relief measures were tossed out. I am referring to a simplification of the cash method of accounting. That proposal would cut down on a lot of paperwork small businesses currently have to do. I'm also referring to faster depreciation rules for new restaurant buildings, and I am referring to faster depreciation rules for retailers and owner-financed building improvements. All of these proposals would help with the coming cash crunch that these small businesses will be facing.

I am not hearing from a lot of the big business folks who were targeted by the loophole closers and antitax shelter measures. Because of House opposition and fealty to the $5 billion number, those reasonable revenue raisers were tossed out the window.

This was a missed opportunity. It was a missed opportunity for a Congress that started with a supposed reform mission to send a message to K Street in DC and Wall Street in New York City. That message would've been simple. Don't engage in tax shelters like the so-called ``SILO'' transactions. Don't move your company headquarters offshore to minimize your American tax responsibilities like the so-called ``inversion'' transactions. For high-paid CEOS, don't rely too much on non-qualified deferred compensation arrangements. Nope, you can kiss that opportunity goodbye.

When it came to the small business tax relief package, K Street and Wall Street big business won and Main Street small business lost. Not a good outcome. Hopefully, once this bill is vetoed and we return to the minimum wage/small business tax relief package, Main Street small business will come out on top.

Now I am going to turn to the other Finance Committee material in this time-sensitive appropriations bill. I am referring to Medicaid proposals in the conference agreement. There is a provision in the conference agreement that would prevent CMS from implementing the cost- limitation rule.

Certainly, a one-year moratorium is an improvement over the two-year moratorium that was in the bill as passed by the Senate, but the language in the bill still encourages states to push the envelope on payment schemes.

If CMS gets a waiver or state plan amendment that has authority to do with the rule, I don't think CMS has the authority to turn it down. Neither does CMS.

And after trying to work it out with the sponsors of the provision for the last couple of weeks, I don't think they want CMS to have any authority either.

Why? This is a provision written for the benefit of a special interests so they can avoid real scrutiny of their financing arrangements.

This provision will encourage states to offer payment schemes that CMS has previously disallowed as being inappropriate.

It will encourage litigation if CMS tries to assert that they do still maintain jurisdiction.

This is just bad public policy.

The inspector general has investigated and reported to congress on why there are problems in the areas the rule addresses.

We have not had the first hearing on why the rule doesn't work and must be stopped.

This is a tremendous mistake and should not be in the bill.

The way that this provision is paid for is equally noxious.

The extension of the Wisconsin pharmacy plus waiver is an unnecessary earmark. Every State but Wisconsin has changed their pharmacy assistance program as the MMA required.

But why hasn't Wisconsin? It's very simple. They want the Federal dollars that Medicaid provides and the rebates they get from drug companies.

That it is an earmark is bad. But the way the language is written is really offensive. The language is written in a way that games Medicaid's budget neutrality test. It's written to guarantee that it appears to save money.

The reality is that Wisconsin will be providing many poor seniors with less of a benefit than they could get through part d. Wisconsin charges greater cost-sharing than Medicare for low income seniors.

It truly is another missed opportunity. They could have paid for this with a provision we would have gladly supported.

But again, the special interest won out. We could have struck a provision that the House Rules Committee stuck in the tax bill in the middle of the night last December that creates an unfair advantage for certain private fee-for-service Medicare Advantage plans.

Senator Baucus and I thought this was terrible policy, we said so on the floor, and have wanted to change it. Plans based in Illinois and Nevada are among the plans it advantages most. So for some reason, striking the provision didn't make it into the bill. It's a corporate giveaway that should be eliminated.

Legislating to prevent CMS from cleaning up intergovernmental transfers scams on this appropriation bill sets a bad precedent. That is clear. It's legislation on Medicaid and, that is a basic part of the jurisdiction of the Finance Committee.

If the Senate proceeds in this manner, then nothing then would prevent the Senate legislating changes on other Medicaid and Medicare issues on appropriation bills without the benefit of hearings or committee action on those subjects.

Invading the Medicaid and Medicare jurisdiction of the Finance Committee is a mistake.

It is almost impossible to cope with Medicaid and Medicare legislation on appropriation bills. These are complex issues that are best dealt with by the committee of jurisdiction.

This bill is going to be vetoed. The Appropriations Committee will return to its work to fund the troops in the field. We ought to focus on that. On minimum wage/small business tax relief, we need to go to regular order. Let's arrive at a pre-conference agreement on the House and Senate bills and go to conference and hash it out with a real conference. Unlike this situation, the chairmen and ranking members of both tax writing committees should be conferees. In that setting, we can arrive at a bipartisan agreement that passes the House, Senate, and be signed by the President. On the Medicaid provision, it ought to be crafted by the committees of jurisdiction and incorporated in a vehicle controlled by those committees.

After the veto, let's get this right. I would ask the leadership to get out of the way of the tax writing committees and let us do our work on our schedule in line with our committees' objectives.

I yield the floor.

Mr. President, we are now in our fifth year of this conflict in Iraq, and throughout that time I have met with commanders of our Armed Forces, listened to their experiences and recommendations, and after much consideration I have come to the conclusion that we are not on the right path. While some of my colleagues believe that we should support President George W. Bush, who continues to make decisions that place our men and women in the Armed Forces in harm's way, I disagree.

The past few months have been among the deadliest for our military personnel. We have seen 79 U.S. soldiers killed in February, 82 in March, and 85 so far this month. To the more than 3,300 U.S. soldiers that have been killed and the over 24,000 wounded since the conflict began, to our men and women in the Armed Forces and their families who are valiantly serving our country and to the American people, I say to all of you, we must change our course.

To stay the course is to welcome disaster. Iraq lies like the proverbial clay pot broken in shards on the ground. It is shattered into the fragments of warring factions, clans, and religious groups. Afghanistan, still the center of the war on al-Qaida, is becoming progressively more dangerous as our attention remains focused on Iraq. Al-Qaida and the Taliban are rebuilding their forces and terrorists have extended their attacks to North Africa and Western Europe. We are facing, as our military leaders tells us again and again, a ``thinking enemy,'' one that learns and adapts. Should we not also learn and adapt? Can anyone doubt that our strategy needs to change?

Some have painted this conflict as simply a war against al-Qaida in Iraq. Let us not make the mistake of fooling ourselves. Al-Qaida is stoking the flames but it is the internal divisions among the Iraqis themselves which has made it the bonfire it is today. If the Iraqis unite, they can defeat al-Qaida as they have demonstrated in some provinces already. But as everyone, including the President and our military leaders, have observed, the Iraqis themselves must form a reconciliation government. American soldiers are not a thread that can permanently stitch together the broken parts of Iraq. The Iraqis themselves are the masters of their own fate.

The legislation before us today is a call for a new strategy. It requires that we change our present course. It makes clear that the war in Iraq can only be won by Iraqis. It is their will and their will alone that must determine the fate of their country. Americans cannot do the fighting for them. A democratic Iraq will not be established unless the Iraqis do it for themselves. We cannot put the shattered pieces of Iraq together. Only the Iraqis can do that.

Today, with the Senate passage of H.R. 1591, the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007, we will be providing $100 billion for the Department of Defense, primarily for continued military operations in Iraq and Afghanistan. It also

includes a $1 billion increase for the National Guard and Reserve equipment and $1.1 billion for military housing. Mr. President, $1.789 billion would be provided for the Department of Veterans Affairs to specifically target treatment for veterans of Operation Iraqi Freedom and Operation Enduring Freedom, reduce the backlog of benefit claims, and ensure that facilities are maintained at the highest level. In addition, $6.9 billion would be appropriated for the victims of Hurricane Katrina and Hurricane Rita, $650 million would be provided for the State Children's Health Insurance Program, $2.25 billion in homeland security investments, including funds for port security and mass transit security, and $3.5 billion to help relieve pressures that farmers and ranchers experienced due to severe drought and agricultural disasters.

In addition to funding these important efforts, the legislation includes an important step in setting the proper course in Iraq for our military servicemembers and their families by providing them with a road map to success. By outlining the benchmarks that must be met by the Iraqi government and clarifies our military involvement in Iraq. It defines our mission in Iraq by steering our military away from policing a civil war to training and equipping Iraqi security forces, protecting U.S. forces, and conducting targeted counterterror operations. A phased redeployment of our troops would begin no later than October 1, 2007, with a goal of removing all combat forces by April 1, 2008, except for those carrying out security, training, and counterterror operations. This bill holds the Iraqi government accountable by setting benchmarks that must be met for security, political reconciliation, and improving the lives of the Iraqi people. It is no longer acceptable for this Administration to set arbitrary benchmarks that have no consequences attached to it. It is time for the Iraqi government and regional leaders to work together to promote democracy in Iraq. It is time for the United States to take the necessary steps that illustrates our willingness to relinquish control and allow the Iraqi government and the Iraqi people to control their own destiny. And it is time for the Iraqi people to set their own path to victory and democracy.

The American people and more importantly, our servicemembers and their families, deserve to have the administration define our mission in Iraq. The President must also give a clear directive to the Iraqi government that it must demonstrate the will to overcome the civil unrest that is taking control of their country. Unfortunately, the President has indicated that he will veto this important legislation. By vetoing this legislation, this administration is sending the wrong message. It is preventing our troops from receiving the funds they need to continue their mission in Iraq and Afghanistan. It is preventing victims of Hurricane Katrina and Hurricane Rita from rebuilding their lives and farmers and ranchers from receiving relief due to severe drought and agricultural disasters. Moreover, it is preventing our veterans from receiving the health care and benefits that they deserve.

It is time for this administration, this President, to lead us out of the morass in Iraq. This legislation sends the right message to our servicemembers, to the Iraqi government and its people, and to the American people. I urge the President to do the right thing and enact H.R. 1591, the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007.

Mr. Salazar. Mr. President, today I will vote for the Iraq- Afghanistan emergency supplemental bill. I believe that this bill supports our troops, our veterans and their families, and should be signed by the President.

But first I would like to say that as we continue the debate on this legislation and on the best way forward in Iraq, I come to the floor today with two key principles in mind.

One, we should honor the bravery and courage of our troops. America's finest men and women have done an extraordinary job--too often without the needed equipment and support. But honoring our troops means more than just singing their praise. It means making sure that every American in Iraq is adequately trained and equipped; it means guaranteeing every veteran access to all available benefits and services; and it means setting a policy that is as wise as our soldiers are brave.

And two, we should work to heal the deep divisions which this war has caused at home. Not since Vietnam has the American public been so divided. I am concerned that the bitterness and the harshness of the debate clouds good judgment on the future direction in Iraq.

It is important for us to remember that, no matter how contentious this debate may become, every Senator shares the same goal: peace and stability in the Middle East and a safe return home for our troops. While we may disagree on the best path to that end, we must continue to work together for a constructive change in our policy. It is important to remember what binds us together--so that we will not be torn too far apart.

I would now like to comment on the bill before us today.

Specifically, the bill includes: More than $100 billion for our troops on the ground in Iraq and Afghanistan; more than $5 billion to help ensure that our veterans and their families can receive the health care they need and deserve when they return home; nearly $7 billion to rebuild the gulf coast and help the victims of Hurricanes Katrina and Rita so that they can finally rebuild their homes, communities and livelihoods; and $3.5 billion in disaster assistance to help our farmers and ranchers across the Nation recover from 7 years of drought capped by this winter's devastating blizzards.

The bill sends a direct message to the Iraqis that our military commitment is not open-ended. We hold the Iraqi government accountable through measurable and achievable benchmarks for security, political reconciliation and improving the lives of ordinary Iraqis.

The bill also launches a new diplomatic, economic and political offensive and takes steps to begin to rebuild our military.

Finally, it sets an April, 1, 2008, goal of redeploying U.S. troops not engaged in carrying out security, training and counterterror operations in Iraq.

I support this new direction for Iraq. This new direction recognizes the reality that success in Iraq is contingent upon a strategy of military, political and diplomatic progress.

I am disappointed that the President has said he intends to veto this legislation. But I remain hopeful. I believe that we must continue to seek a new course in Iraq. I believe we can and should do that by achieving a bipartisan consensus on the best path to success.

I know most of my Republican colleagues do not support this bill. But I believe they sincerely want to join in finding a solution to the difficult problem that confronts us in Iraq. The Iraq Study Group provides a model for how we can work in good faith, across party lines. And I believe that the group's recommendations can and should be our blueprint for a compromise that can gain broad support here in the Senate.

So next week, I will be back on the floor to discuss with my colleagues how we can implement those recommendations, working with the President.

Mr. President, today millions of taxpayers, many owners of small businesses, will file their income tax returns while some States in the Northeast, including my home State of Maine, have rightfully been given an additional 48 hours to file due to the devastating storms resulting in disastrous flooding, wind damage, and power outages.

As citizens file their taxes this week, I am very happy to say that a wide majority of Mainers and Americans alike will be fully compliant in reporting the appropriate amount of income, with the Internal Revenue Service estimating 84 percent of taxpayers are compliant. The unfortunate flip side to that statistic is that 16 percent of taxpayers either fail to report income or underreport income and thus fail to pay all the taxes owed. This misreporting of income has resulted in a $345 billion gross tax gap, which is the difference between taxes owed and paid.

Unquestionably, we must ensure that taxes owed are taxes paid. While the Congressional Budget Office, CBO, projects a deficit of around $200 billion this fiscal year without any abatement through 2011, the fact remains that narrowing the tax gap would help reduce the deficit--plain and simple.

Not only does the tax gap prevent us from balancing the budget, equally disturbing is how noncompliance breeds disrespect for the tax system and can lead to the further shirking of obligations. The result could be that, to fill the gap, law-abiding taxpayers would have to pay higher taxes. Consider the following: According to preliminary IRS data, for 2005, taxpayers filed 134.5 million individual income tax returns. If we were to shrink the tax gap, each of those returns would have to be assessed additional tax in the amount of $2,566. I would not want to be in position to ask my constituents for more of their hard- earned money, especially to cover those who are not paying their fair share.

Last year, the Treasury Department issued ``A Comprehensive Strategy for Reducing the Tax Gap.'' This document astutely points out, the Tax Code's complexity is itself a significant source of noncompliance. The current Tax Code costs the Government revenue since even those who try their best to follow the rules, often end up underpaying tax because the rules are too complicated and difficult to decipher. Therefore, any solution to the tax gap must also require simplifying the Tax Code.

A top priority I hear from small businesses across Maine and this country is the need for tax relief. Despite the fact that small businesses are the real job-creators for Maine's and our Nation's economy, the current tax system is placing an entirely unreasonable burden on them when trying to satisfy their tax obligations. The current Tax Code imposes a large, and expensive, burden on all taxpayers in terms of satisfying their reporting and record-keeping obligations. The problem, though, is that small companies are disadvantaged most in terms of the money and time spent in satisfying their tax obligation.

For example, according to the Small Business Administration's Office of Advocacy, small businesses spend an astounding 8 billion hours each year complying with Government reports. They also spend more than 80 percent of this time on completing tax forms. What's even more troubling is that companies that employ fewer than 20 employees spend nearly $1,304 per employee in tax compliance costs, an amount that is nearly 67 percent more than larger firms. A recent survey by the National Federation of Independent Businesses found that 88 percent of small-employer taxpayers used a tax professional and the two reasons small-employer taxpayers most frequently cite for using tax professionals are to assure compliance and the complexity of the law.

For that reason, I have introduced a package of proposals that will provide not only targeted, affordable tax relief to small business owners, but also simpler rules under the Tax Code. By simplifying the Tax Code, small business owners will be able to satisfy their tax obligation in a cheaper, more efficient manner, allowing them to be able to devote more time and resources to their business.

I have introduced legislation, S. 269, in response to the repeated requests from small businesses in Maine and from across the Nation to allow them to expense more of their investments, like the purchase of essential new equipment. My bill modifies the Internal Revenue Code by doubling the amount a small business can expense

from $100,000 to $200,000, and make the provision permanent, as President Bush proposed this change in his fiscal year 2007 tax proposals. With small businesses representing 99 percent of all employers, creating 75 percent of net new jobs and contributing 51 percent of private-sector output, their size is the only ``small'' aspect about them.

By doubling and making permanent the current expensing limit and indexing these amounts for inflation, this bill will achieve two important objectives. First, qualifying businesses will be able to write off more of the equipment purchases today, instead of waiting 5, 7 or more years to recover their costs through depreciation. That represents substantial savings both in dollars and in the time small businesses would otherwise have to spend complying with complex and confusing depreciation rules. Moreover, new equipment will contribute to continued productivity growth in the business community, which economic experts have repeatedly stressed is essential to the long-term vitality of our economy.

Second, as a result of this bill, more businesses will qualify for this benefit because the phase-out limit will be increased to $800,000 in new assets purchases. At the same time, small business capital investment will be pumping more money into the economy. This is a win- win for small business and the economy as a whole and I am pleased to have Senators Lott, Isakson, Chambliss and Collins join me as cosponsors of this legislation.

Another proposal that I have introduced with Senators Lincoln and Lott, the Small Business Tax Flexibility Act of 2007, S. 270, will permit start-up small business owners to use a taxable year other than the calendar year if they generally earn fewer than $5 million during the tax year.

Specifically, the Small Business Tax Flexibility Act of 2007 will permit more taxpayers to use the taxable year most suitable to their business cycle. Until 1986, businesses could elect the taxable year-end that made the most economic sense for the business. In 1986, Congress passed legislation requiring partnerships and S corporations, many of which are small businesses, to adopt a December 31 year-end. The Tax Code does provide alternatives to the calendar year for small businesses, but the compliance costs and administrative burdens associated with these alternatives prove to be too high for most small businesses to utilize.

Meanwhile, C corporations, as large corporations often are, receive much more flexibility in their choice of taxable year. A C corporation can adopt either a calendar year or any fiscal year for tax purposes, as long as it keeps its books on that basis. This creates the unfair result of allowing larger businesses with greater resources greater flexibility in choosing a taxable year than smaller firms with fewer resources. This simply does not make sense to me. My bill changes these existing rules so that more small businesses will be able to use the taxable year that best suits their business.

To provide relief and equity to our Nation's 1.5 million retail establishments, most of which have less than five employees, I have introduced a bill, S. 271, with Senators Lincoln, Hutchison, and Kerry that reduces from 39 to 15 years the depreciable life of improvements that are made to retail stores that are owned by the retailer. Under current law, only retailers that lease their property are allowed this accelerated depreciation, which means it excludes retailers that also own the property in which they operate. My bill simply seeks to provide equal treatment to all retailers.

Specifically, this bill will simply conform the Tax Codes to the realities that retailers on Main Street face. Studies conducted by the Treasury Department, Congressional Research Service and private economists have all found that the 39-year depreciation life for buildings is too long and that the 39-year depreciation life for building improvements is even worse. Retailers generally remodel their stores every 5 to 7 years to reflect changes in customer base and compete with newer stores. Moreover, many improvements such as interior partitions, ceiling tiles, restroom accessories, and paint, may only last a few years before requiring replacement.

Finally, I joined Senator Bond in introducing S. 296 that will simplify the Tax Code by permitting small business owners to use the cash method of accounting for reporting their income if they generally earn fewer than $10 million during the tax year. Currently, only those taxpayers that earn less than $5 million per year are able to use the cash method. By increasing this threshold to $10 million, more small businesses will be relieved of the burdensome recordkeeping requirements that they currently must undertake in reporting their income under a different accounting method.

This package of proposals are a tremendous opportunity to help small enterprises succeed by providing an incentive for reinvestment and leaving them more of their earnings to do just that. Notably, providing tax relief by passing these simplification measures will also help us reduce the tax gap by increasing compliance. I urge my colleagues to join me in supporting these proposals.

Mr. President, I rise today to join with my colleagues, Senators Specter and Ensign, in reintroducing the Animal Fighting Prohibition Enforcement Act of 2007. This legislation has won the unanimous approval of the Senate several times, but unfortunately has not yet reached the finish line. I look forward to working with my colleagues to see this important bill finally become the law of the land.

There is no doubt, animal fighting is terribly cruel. Dogs and roosters are drugged to make them hyper-aggressive and forced to keep fighting even after suffering severe injuries such as punctured eyes and pierced lungs.

It's all done for ``entertainment'' and illegal gambling. Children are sometimes brought to these spectacles, and the fights are frequently accompanied by illegal drug trafficking and acts of human violence. In 2006, nine murders related to animal fighting occurred across the country.

Some dogfighters steal pets to use as bait for training their dogs, while others allow trained fighting dogs to roam neighborhoods and endanger the public.

The Animal Fighting Prohibition Enforcement Act will strengthen current law by making the interstate transport of animals for the purpose of fighting a felony and increase the punishment to three years of jail time. This is necessary because the current misdemeanor penalty has proven ineffective--considered a ``cost of doing business'' by those in the animal fighting industry which continues unabated nationwide. These enterprises depend on interstate commerce, as I evidenced by the animal fighting magazines that advertise and promote them.

Our bill also makes it a felony to move cockfighting implements in interstate or foreign commerce. These are razor-sharp knives known as ``slashers'' and ice pick-like gaffs designed exclusively for cockfights and attached to the birds' legs for fighting. Cockfighting magazines I and websites contain hundreds of advertisements for mail- order knives and gaffs, revealing a thriving interstate market for the weapons used in cockfights.

This is long overdue legislation. Both the Senate and House approved felony animal fighting provisions in their Farm Bills in 2001, but they were stripped out in conference. The Senate included felony animal fighting provisions in the 2003 Health Forest Bill, but they were again dropped in conference. In September 2004, the Animal Fighting Prohibition Enforcement Act was approved by the House Judiciary Committee, but did not reach the floor. In April 2005, the Senate passed a bill nearly identical to the one we are introducing today, when it unanimously approved S. 382. In May 2006, the House Crime, Terrorism and Homeland Security Subcommittee held a comprehensive hearing on the House companion bill, H.R. 817, which garnered 324 cosponsors but was not considered on the House floor. The legislative history of this animal fighting felony legislation shows it has broad bipartisan support of more than half the Senate, and it has won unanimous approval on the floor time and time again.

It's time to get this felony animal fighting language enacted. With the bird flu threat looming, we can't afford to wait any longer. The economic consequences are staggering--the World Bank projects worldwide losses of $1.5 to $2 trillion. We must be able to say we did all we could to prevent such a pandemic, and this is an obvious, easy and necessary step.

Interstate and international transport of birds for cockfighting is known to have contributed to the spread of avian influenza in Asia and poses a threat to poultry and public health in the United States. According to the World Health Organization and local news reports, at least nine confirmed human fatalities from avian influenza in Thailand and Vietnam may have been contracted through cockfighting activity since the beginning of 2004. Several children are among those who are reported to have died from avian influenza as a result of exposure through cockfighting, including 4-year-old, 6-year-old, and 18-year-old boys in Thailand and a 6-year-old girl in Vietnam.

There have been many news stories focusing on the connection between bird flu and cockfighting. For example, an MSNBC report headlined, ``Cock-fights blamed for Thailand bird flu spread.'' A World Health Organization Asia regional spokesperson interviewed recently on the CBS Evening News described the risk of spreading disease through cockfighting with infected animals as a ``total disaster waiting to happen.''

Because human handling of fighting roosters is a regular occurrence, the opportunity of disease transmission from fighting birds to people is substantial. Fighting-bird handlers come into frequent, sustained contact with their birds during training and during organized fights. It is common practice for handlers to suck saliva and blood from roosters' beaks to help clear their airways and enable them to keep fighting.

Cockfighters frequently move birds across State and foreign borders, bringing them to fight in different locations and risking the spread of infectious diseases. Communications in national

cockfighting magazines and websites have shown that U.S. cockfighters regularly transport their birds to and from other parts of the world, including Asia.

The U.S. Department of Agriculture (USDA), in endorsing the Animal Fighting Prohibition Enforcement Act, noted that strengthening current Federal law on the inhumane practice of animal fighting would enhance the agency's ability to safeguard the health of U.S. poultry against deadly diseases such as avian influenza and exotic Newcastle disease (END). The USDA has stated that cockfighting was implicated in an outbreak of END that spread through California and the Southwest in 2002 and 2003. That outbreak cost U.S. taxpayers nearly $200 million to eradicate and cost the U.S. poultry industry many millions more in lost export markets. The costs of an avian influenza outbreak in this country could be much higher--with the Congressional Budget Office estimating losses between 1.5 and 5 percent of GDP ($185 billion to $618 billion).

The National Chicken Council, which represents 95 percent of all U.S. poultry producers and processors, has also endorsed the Animal Fighting Prohibition Enforcement Act, expressing concern that avian influenza and other diseases can be spread by the movement of game birds and that the commercial chicken industry remains under considerable threat because it operates amidst a national network of game bird operations.

Avian influenza has not yet crossed the species barrier in this country, as it has in Asia. But we must do all we can to minimize this risk. Establishing a more meaningful deterrent to illegal interstate and foreign movement of animals for fighting purposes is an obvious step we can take to reduce this risk.

Besides those associated with the poultry industry, this legislation has been endorsed by a number of other organization including the Humane Society of the United States, the American Veterinary Medical Association, the National Coalition Against Gambling Expansion, the League of United Latin American Citizens, the National Sheriffs' Association, and more than 400 individual sheriffs and police departments covering every State in the country. Those law enforcement agencies recognize that animal fighting often involves the movement of animals across State and foreign borders, so they can't do the job on their own. They need the Federal Government to do its part to help curb this dangerous activity.

Our legislation does not expand the federal government's reach into a new area, but simply aims to make current law more effective. It is explicitly limited to interstate and foreign commerce, so it protects States' rights in the two States where cockfighting is still allowed, and it protects States' rights the other 48 States--and all 50, for dogfighting--where weak Federal law is compromising their ability to keep animal fighting outside their borders.

The bill we introduce today is identical to S. 382, which passed the Senate unanimously in the last Congress, except for one change. The new bill provides for up to three years' jail time, compared to two in S. 382, in order to bring this more in line with penalties for other federal animal cruelty-related felonies. For example, in 1999, Congress authorized imprisonment of up to 5 years for interstate commerce in videos depicting animal cruelty, including animal fighting, P.L. 106- 152, and mandatory jail time of up to 10 years for willfully harming or killing a federal police dog or horse (P.L. 106-254).

With every week, there are new reports of animal fighting busts, as local and state law enforcement struggle to rein in this thriving industry. In my own State of Washington, police arrested 5 people on Christmas Day at a cockfight in Brewster, and about 50 people ran off, according to recent news accounts. Three days later, six more were arrested in Okanogan for promoting cockfighting. And nine people were arrested in Tacoma last spring, where investigators seized methamphetamines, marijuana, weapons, thousands of dollars, and fighting roosters.

It's time for Congress to strengthen the federal law so that it can provide as a meaningful deterrent against animal fighting. State and local law enforcement will have a tough law on the books necessary to help them crack down on this interstate industry. I thank my colleagues for their support, and look forward to working with them to finally enacting this common-sense measure into law.

Mr. President, today I rise to speak on a question that continues to weigh rather heavily on my heart. I am reluctant to ask it since such a question would never have been asked, or even contemplated, by previous generations of Americans. But it is a question that now must be asked since it is central to our future: Do we, as Americans, have the resolve to see our commitments through? It is a question we must confront in a number of policy arenas that will directly affect the way we, our children, and our grandchildren will live in this new century. Do we have the resolve and the courage to meet our commitments and confront the looming crisis of Social Security?

Do we have the resolve to balance our Nation's budget? Do we have the resolve to endow our children with a proper education so they can master and push the limits of science, thereby providing our Nation the means to compete in an increasingly competitive world economy?

However, at this point in our Nation's history, the crucial question concerning our resolve as a nation does not relate to matters of domestic policy. It relates to our commitments beyond our borders. It is the central and critical component in determining who will prevail in the global war on terrorism. Will we, our coalition allies, the people of Iraq and their elected Government, emerge victorious? Or will we renounce and abdicate our commitments and responsibilities to the Iraqi people--leaving them to a fate controlled by terrorists and leaving our future security as a nation in peril?

Generations ago that, unto itself, would be a stain on the honor of this country; but these are different times.

Turning our back now will only provide our enemies with a new base of operations, and unlike Afghanistan, this base contains vast oil wealth. Imagine al-Qaida with billions of dollars to do with as Osama bin Laden wishes. I wonder what they will buy with all that money. Remember, shortly after the liberation of Kabul, there were numerous media reports that al-Qaida was working on chemical weapons.

So, with that in mind, I again ask: Do we have the resolve to see our commitments through?

As we seek to answer this question, I am reminded of events that occurred during the summer of 1940. The Nazi armies, seemingly invincible, had conquered Western Europe. France, the Netherlands, Poland, Denmark, Norway, and Belgium had all fallen.

The British Army, after its rescue from Dunkirk, no longer possessed sufficient numbers of artillery and tanks to defend against the blitzkrieg. All that stood between Hitler and complete victory was the English Channel and 650 fighters of the Royal Air Force.

Then Hitler offered a deal. In exchange for a ``free hand in Europe,'' the Nazis would provide ``guarantees'' that they would not invade Great Britain.

Despite the fact that the British Army lacked sufficient equipment to effectively repulse an invasion, Prime Minister Churchill resolved to keep his nation's commitment to the people of Europe. He would not abandon them.

His words, which I will paraphrase, still echo today:

The Battle of France is over . . . the Battle of Britain is

about to begin. Upon this battle depends the survival of . .

. Western civilization. . . .The whole fury and might of the

enemy must very soon be turned on us. Hitler knows that he

will have to break us . . . or lose the war. If we can stand

up to him, all Europe may be free. . . . But if we fail, then

the whole world, including the United States . . . and all

that we have known and cared for, will sink into the abyss of

a new Dark Age made more sinister, and perhaps

more protracted, by the lights of perverted science. Let

us, therefore, brace ourselves to our duties and so bear

ourselves that . . . men will say--This Was Their Finest

Hour.

This is the lesson that history teaches us: that resolution to see your commitments through is what great statesmen and nations are made of--that peace and justice can only be restored through bold action.

So what do my colleagues on the other side of the aisle offer, knowing full well this lesson of history? In a word: defeat. In his own words, the Democratic leader said on the floor of the Senate, on April 19, the ``war is lost.'' To be fair, the leader did attempt to temper his words by saying:

As long as we follow the President's path, the war is lost.

But there is still a chance to change course and we must

change course. No one wants us to succeed in the Middle East

more than I do. But there must be a change of course.

So what plan, or new course, does the Democratic leader or other Democrats offer? How can we, in his words, ``succeed in the Middle East''?

His answer can be found in the conference report to this bill. But I warn anyone who attempts to read this legislation, first you must wade through billions in spending allocated to projects and programs that have nothing to do with the war before you learn how our Democratic colleagues plan to ``succeed in the Middle East.''

What is their plan for victory? Well, their legislation states that no matter what happens, the bulk of our forces will begin to withdraw after July 1, or if the President makes certain certifications, after October 1.

So what is their strategy? I believe Winston Churchill would have characterized the Democratic strategy as: guaranteed defeat.

Is this resolve?

Is this determination to see our commitments through?

No.

This is the worst case of capitulation to appeasement since Neville Chamberlain spoke the words ``peace in our time.''

What is needed now is leadership. Now, at this critical moment in history, great nations need to follow Churchill's advice, yet the Democrats offer us only Chamberlain's.

The Democratic leaders previously stated, in 2005:

[A]s far as setting a timeline . . . that's not a wise

decision because it only empowers those who don't want us

there, and it doesn't work well to do it.

Wise and sound words. That was real leadership. Unfortunately, that was when the polls supported their position to stand firm. Now the Democratic leaders have reversed themselves because the polls have told them that is what they should do.

Two days ago, during an interview on CNN, the Senator from Nevada was asked if he would believe the words of our new commander General Petraeus ``that there is progress going on in Iraq, that the so-called surge is working. Will you believe him when he says that?''

What was his response? ``No, I don't believe him, because it's not happening.''

Now, I find this to be an incredible remark. Less than 3 months ago, the majority leader had joined a unanimous Senate and voted in favor of General Petraeus. But this was more than just another confirmation vote. The major subject of his confirmation hearing and the subsequent debate on the Senate floor was the new strategy the general had outlined.

So what is the new strategy? Simply put, General Petraeus is executing one of the tenets of a classic counterinsurgency strategy by providing and maintaining security to the local population and neighborhoods in Baghdad. Only when this is achieved will the Iraqi Government be able to continually offer basic services such as clean water and electricity, which are the backbone of any modern society.

This, in turn, creates conditions where the Iraqi people can begin to develop a growing economy and where families feel safe to send their kids to school. As these goals are achieved, more and more of the population will desire even greater stability and will support and work toward creating Iraqi Government institutions and security services that maintain and enhance this new, secure environment.

How is this different from the past? Previously, U.S. forces would clear an area of insurgents, but, unfortunately, soon thereafter, our forces would leave and the insurgents would return. Now, under General Petraeus's plan, American and Iraqi security forces will

maintain security in the cleared neighborhoods of Baghdad. To date, over 50 security force units, based in what are called garrisons, can be found in the neighborhoods of the city, and even more are planned.

That is why the additional forces that we are sending to Iraq are vital. It is not more for more's sake, but to maintain a secure environment for the Iraqi people and to help them stand up for themselves.

Based upon the briefing that the Senate received yesterday from General Petraeus, and information I have examined as a member of the Senate Intelligence Committee, I can report that we are seeing signs of progress.

Frankly, I believe the changes that have been made in the last 3 months are remarkable and need our full support, and it is readily apparent we do not yet have all the promised forces deployed and in Iraq.

So let us return to the question that I asked when I began my remarks: Do we, as Americans, have the resolve to see our commitments through? Or will we falter?

That is what the vote on this conference report will demonstrate. Will we stand with firm resolve behind our commitments and see our new strategy through? Or do we adopt a policy of appeasement and hope that al-Qaida, and those who wish us harm and seek to destroy the values that we hold so dear, do not follow us home to our country?

What side of history do you wish to be on? Based on America's history and our resolve that has seen us through so many difficulties in the past, I believe the American people do not want retreat, they want success and security.