A bill to provide for judicial discretion regarding suspensions of student eligibility under section 484(r) of the Higher Education Act of 1965.

Mr. President, I thank my colleague Senator Kennedy for his courtesy in helping to make it possible for me to have some time.

Mr. President, last November, the American people sent an unmistakable and incredibly important message to their elected leaders. They didn't ask for it, they demanded a change of course in Iraq. The American people understand that the current strategy is not working. They have demanded that we honor the extraordinary effort of our troops by providing a strategy for Iraq that is actually worthy of their sacrifice. They don't consider more of the same--additional troops essentially doing what they have been doing before--they don't consider that anything other than an escalation of our military involvement, linked to the same mistakes and same illusions of the past. They don't consider that an acceptable strategy.

This new Congress comes here with a mandate, as well as a moral obligation, to find not just a new way forward in Iraq but the right way forward. That is what we owe the families; that is what we owe those fighting forces.

It is clear the administration's litany of mistakes has made an incredibly difficult task that much harder and has reduced what we can reasonably expect to accomplish. As the saying goes around here, we are where we are. The mistakes of the past do not change the fact that Congress bears some responsibility for getting us into this war and, therefore, must take responsibility for getting us out.

That responsibility starts by having a real bipartisan dialog on where we go from here. I believe we are finally at the point where that can happen. We all agree about the nobility of the service of our troops. We all agree about the incredible bravery of the men and women of our Armed Forces who put their lives on the line every single day in Iraq. We all want to see a stable Iraq. We all know Iraqis want to see it, too. We all agree on the need to preserve our vital national security interests in the region, and we all agree on the importance of preventing the violence in Iraq from spreading into a broader regional conflict. We all understand the need to prevent Iraq from becoming a safe haven for al-Qaida and like-minded terrorists. We all understand the potential of regional chaos and of failed states spreading one to the other.

In order to understand, however, where we go from here, we have to remind ourselves of the real nature of this conflict. It is not enough to sort of find some safe haven in rhetoric that points out all of the downsides but continues to pursue a policy that, in fact, increases those downsides, invites those downsides, actually makes matters worse.

The civil war we are in the middle of now didn't begin when we went there. It had been tamped down, quashed by a dictatorship and by history. Before I went back to visit the Middle East, I had the chance to read a book by Vali Nasr, called ``The Shia Revival,'' in which he traces the history of Shiaism and what is happening in the Middle East today. What we learned from that is instructive and critical to determining whether troops will make a difference on how we resolve what is happening in Iraq today.

When the Prophet Mohammed died, Ali, who was his cousin and stepson and virtual son, was passed over at that time to be the caliph. In fact, three people were chosen in between him. Ultimately, he did become the caliph, but that was the beginning of the difference of the separation, if you will, within Islam. That became far more pronounced about 1,300 years ago, around 680, when the grandson of Ali was slaughtered in the desert along with 72 of his followers--72, a number that comes back to haunt us today, because that was indeed an event in Karballah in 682 that defined martyrdom, which we see played to by the extreme religious efforts that are taking place today in the Middle East.

Why do I mention this today? Because that is where the great Shia- Sunni divide began. Ali and his followers were beheaded in the desert, their bodies left to rot in the sun. Their heads were posted, first in Najaf, and later in Damascus. That began to instill a depth of both anger and suppression that has gone on all of these centuries.

The fact is that we, through our invasion and our election, have given the Shia at the ballot box what they never could achieve all of those years, and the Sunni, who have continually been the dominant, more secular faction that managed the affairs of state, are suddenly finding themselves in the minority; many believe they were born to the right to rule and are determined to restore it. This is the civil conflict we have put ourselves in the middle of, with American troops who don't speak the language going door to door and house to house, attempting to somehow make sense of an alien environment they have been plunged into--from California, Kansas, Missouri, Massachusetts, and all of our States. We are doing precisely what Secretary Rumsfeld said we would not do--putting our troops in the middle of a civil war.

On my recent trip to the Middle East, I heard grave concerns expressed by Sunni leaders, Mubarak and others, about the Shia resurgence and Iran's growing influence in the region. Indeed, Iran's influence has grown, and we are partly responsible, if not significantly responsible, for that growth. We need to stand up for our allies in the region, our Sunni friends, yes. But we can and must do it in a way that doesn't exacerbate the Sunni-Shia rift in the region. That is why we have to ask more of our Sunni allies when it comes to pressuring the Sunnis in Iraq to accept that, with this turn of events called an election, they will no longer--absent a revolution, which some are planning on--be running the country, and that they must lay down their arms and join the political process.

We must make clear that countries such as Saudi Arabia can and must do more to crack down on support for those Sunni insurgents coming into Iraq from their country. We dare not forget that it is the Sunni insurgents who are killing many of our troops. Most of those troops have died in Anbar Province. We have a right to demand more from the Sunni neighbors to quell that insurgency. We must encourage those Sunni neighbors to step up in terms of providing debt relief and reconstruction assistance, and we must make clear that threatening to intervene in Iraq in a way that is perceived as being on behalf of the Sunni minority only serves to exacerbate the Sunni-Shia complexity, the tension that is causing so much of the violence today.

Now here in Washington, a combination of events on the ground and the November election results are beginning to produce a bipartisan resolve to genuinely change course. Many on both sides of the aisle now agree that the administration's plan to escalate the war in Iraq by sending in some 21,500 additional troops would represent a tragic mistake. It won't end the violence; it won't provide security; it won't turn back the clock and avoid the civil war that is in fact already underway; it won't deter terrorists who have a completely different agenda; it won't rein in the militias who are viewed as the protectors of the general population. It will simply postpone the political solution that is the only solution in Iraq, while further damaging our prestige and credibility in the region. Unfortunately, it will also expose our troops to unnecessary death and injury.

Our generals understand this. General Abizaid said clearly in his testimony before the Armed Services Committee that more U.S. troops will not

solve the security problem. In fact, he said they would only slow the process of getting Iraqi security forces to take more responsibility. The Joint Chiefs of Staff unanimously oppose this escalation. In fact, according to recent news reports, the Pentagon warned that any short- term mission may only set up the United States for bigger problems when it ends.

A short-term mission could give an enormous edge to virtually all the armed factions in Iraq, including al-Qaida's foreign fighters, Sunni insurgents and Sunni and Shiite militias, without giving an enduring boost to the U.S. military mission or the Iraqi Army. And it is not just the advice of his military commanders in Iraq the President is ignoring, it is the bipartisan counsel of the Iraq Study Group appointed for the very purpose of defining a new course.

Mr. President, what kind of arrogance so willfully kicks to the curb the work product of two former Secretaries of State, Republicans, a former Attorney General and Chief of Staff, Republican, a former Senator and member of the leadership, Republican, and a group of moderates, a former Secretary of Defense, and others respected for the moderation of their views on foreign policy and security issues? What kind of arrogance avoids almost all of those recommendations and moves in a different direction?

Rather than change course, this administration chose to ignore the generals. In fact, it chose to change the generals. The folly of this escalation is so clear that we have a bipartisan responsibility to do everything in our power to say no.

I ask my colleagues: Is there one colleague here who believes that 21,500 troops is going to pacify Iraq? Is there a colleague here who believes that 100,000 troops will pacify Iraq? It is not enough for Congress simply to go on record opposing the President's reckless plan. That is why I support the resolution submitted by my colleague, Senator Kennedy, that requires a new congressional authorization, which is appropriate because the prior authorization only applies to the weapons of mass destruction and to the threat that Iraq poses to us based on the presence of Saddam Hussein. This is a new Iraq, and it is an Iraq with a civil war, and the Congress of the United States has a responsibility and a moral obligation to make certain that if our troops from each of our States are going to fight and die, we stand up and be counted as to what the force structure is to be, as to what their mission should be because this administration has proven unwilling to get it right.

Stopping this escalation, however, is not enough. I believe Congress has to provide a responsible exit strategy that preserves our interests in the region, preserves our ability to continue to protect the security of the United States, and honors the sacrifice our troops have made. I believe those are tests we need to pass.

Six months ago in the Senate, we stood against appeals to politics and pride and demanded a date to bring our troops home, to make Iraqis stand up for Iraq and fight a more effective war on terror. But while we lost that rollcall, I still believe it was the right policy to put in place, to demand benchmarks, to demand accountability, and to leverage action.

That is why I will again introduce legislation, slightly different this time, in order to try to offer a comprehensive strategy for achieving a political solution. I believe the strategy I will set forth is the best way forward for America and for Iraq. We have to find a way to end this misguided war and bring our troops home, and the legislation, while protecting all the interests I described, I believe can do that.

I believe the Iraq Study Group's recommendations can form the basis for finding a bipartisan way forward. Many of those proposals, which are consistent with proposals that some in the Senate have long advocated, are incorporated in the legislation I will offer, including launching a major diplomatic initiative, enforcing a series of benchmarks for meeting key political objectives, shifting the military mission to training Iraqi security forces and conducting targeted counterterrorism operations, maintaining an over-the-horizon presence to protect our interests supported by a concerted effort to disarm, demobilize, and reintegrate the militias which must be undertaken by Iraqis.

This legislation includes an additional provision that is a critical component of the strategy. I know a lot of colleagues were nervous about setting a date. Fewer are as nervous today. But I believe there is a way to require the President to set that date, negotiate that exit, a way to do it constitutionally and also within the context of the reauthorization.

I think that is not an arbitrary deadline. In fact, the Iraq Study Group report effectively sets a goal of withdrawing U.S. combat forces from Iraq by the first quarter of 2008, or within approximately 1 year. This date was based on the timeframe for transferring responsibility to Iraqi security forces set forth by General Casey and on the schedule agreed upon with the Iraqi Government itself for achieving key political security objectives.

The President even said that under that new strategy, responsibility for security would be transferred to Iraqis before the end of this year. That is how unarbitrary it is. The President has said it, our generals have said it, the Iraq Study Group has said it.

I wish to repeat this because it is important because it is continually distorted. We all want success, but we have to examine the realities of the road to success. An effort that combines diplomacy with smart deployment of our troops is the only road to success.

I ask my colleagues: Where is the diplomacy? Many of us can remember, under a Republican President, Henry Kissinger shuttling back and forth day and night working to bring an end to the Vietnam war. Many of us can remember Jim Baker, at the beginning of the decade in the nineties, when he took 15 trips to Syria alone, and on the final trip got President Asad to actually agree to support what we were doing. That is diplomacy.

We don't have that kind of diplomacy. We lack even a special envoy there day to day, hour to hour, leveraging the Arab League, leveraging the United Nations, working with the U.N. Perm Five, working with the neighboring countries, doing the kinds of significant, heavy diplomatic lifting our sons and daughters who are dying deserve.

As our combat troop levels wind down, we can have sufficient forces to confront the Sunni insurgency. We can still continue to prosecute al-Qaida, but our core security interests--the security interests of preventing another terrorist attack on our country--those interests lie where our troops can still play a positive role in confronting Sunni insurgents and their al-Qaida allies. That will happen when we focus on Al Anbar Province, not Baghdad.

It is time for Iraqis to assume responsibility for their country, and that is not just a statement. It has been 4 years, 300,000 troops are trained. When I talk with the military people, they don't tell me training is the problem. They tell me motivation is the problem. Those 300,000 troops are not prepared to die for an Iraq yet, and they are mostly local militia and/or local tribe affiliated, which is their true allegiance at this point in time.

We need a timetable which forces Iraqi politicians to confront this reality. Americans should not be dying because Iraqi politicians refuse to compromise and come together. If they are not willing to do it today with thousands of people dying around them, with this kind of sectarian violence, what will make them more willing to do that in a year? They are using the security blanket of American presence in order to avoid making those compromises, and we need to understand that and get about the business of leveraging the compromise that is the only solution to what is happening in Iraq.

I believe a deadline will actually help provide the Iraqis with the motivation and the pressure to step up and take control. General Abizaid made it clear that is essential to our strategy. The key to providing the motivation is making sure they, in fact, begin to take control and begin to define their own future.

As we give the Iraqis more control over their own destiny, we also have to hold them accountable for the fundamentals of leading their country on the construction, as well as the basic resolution, the political differences within the oil revenues, the federalism

issue, which are the two great stumbling blocks fundamental to a resolution.

Why the President didn't make the condition of providing additional security and putting additional Americans online, why he didn't make their resolution of those issues a precondition is beyond me. But American forces are now going to be put at greater risk, more kids at harm, without the fundamentals that are essential and that are completely out of the power of any squad or company or battalion to be able to resolve.

When Prime Minister Maliki took power in May, General Casey and Ambassador Khalilzad said the new Government had 6 months to make the political compromises necessary to win public confidence and unify the country--6 months last May. They were right. And yet with no real deadline to force the Government's hand, that period passed without any meaningful action, and we are now seeing the disastrous results.

To ensure history does not repeat itself, we need to put those benchmarks in place, and we need to have those benchmarks agreed upon. That is the least, again, we can ask on behalf of our troops.

I, also, believe a deadline is essential to getting Iraq's neighbors to face up to the realities of the security needs of the region. If we are going to be concerned about Iran, it should not be surreptitiously based on them using us. It should be all of us together defining a new security arrangement for the region. General Zinni has talked about that many times. He is one of the most respected hands in that region.

In addition, our own intelligence agencies tell us that the war in Iraq is fanning the flames of jihad, and we have to stop serving as an al-Qaida recruitment tool. When are we going to take that seriously in the Senate? We spent a lot of time and energy to reorganize the intelligence community. We supposedly have the best intelligence now, and that intelligence in the conglomerate is telling us that this current policy is putting America at greater risk because we are creating more terrorists, fanning the flames of unrest in the region, and creating a recruitment tool for al-Qaida in that region.

We can see the results. Hamas is more powerful now. Hezbollah and Nasrallah are more powerful today. Iran is more powerful today. Syria is more than willing to play with Iran than care about what the concerns might be of the rest of the region.

We have gone backward because of this policy. How can this administration stand up and say to us that we have to fear the security interests of the future, when the security interests of the present are moving in the wrong direction?

Afghanistan, where the diversion of resources to Iraq has already allowed the Taliban to rise again, is increasing as a threat to those long-term security interests. Osama bin Laden roams free while a regenerated al-Qaida continues to plot attacks on American interests, and the flourishing opium trade has turned the country into a virtual narcostate, funding insurgents and warlords and threatening the viability of the Karzai Government.

Now our generals in Afghanistan are warning, in the darkest possible terms, that the Taliban is poised to launch a major new offensive in Afghanistan, and they have issued an urgent appeal for more U.S. troops to fight back. Instead of sending 20,000 troops over to Iraq, we ought to be listening to our military commanders and give them the few thousand more troops they desperately need to deal with the Taliban in Afghanistan.

On the broader regional front, we clearly need to come to grips with the need to engage Iran in a way that not only deters Iran from nuclear and other military adventurism, but does not create another disastrous war that is not in our national security interest. I want to take one moment before closing to speak to that point.

I am hardly the only one in the Senate who is concerned about a terrible byproduct of the administration's escalation plan for Iraq. That byproduct could be movement towards a calculated military conflict with Iran, which would further destabilize the Middle East, fan the flames of intra-Muslim and Muslim-Western violence. In fact, many Americans are increasingly concerned that the administration's rhetoric regarding Iran sounds eerily familiar.

Congress must make it absolutely certain that we do not make the same mistake we made in rushing to war with Iraq, starting by making it clear President Bush does not have the authority to engage Iran militarily, excepting, of course, an immediate attack on our troops or a definable and palpable emergency. He does not have the authority to engage them without express congressional authorization.

Looking at recent developments, it is not hard to see why people are concerned. In the President's speech introducing his new Iraq strategy, he issued a thinly veiled threat that sounded as though the administration was at least contemplating military operations on the Iranian side of the border. In the last few weeks we have arrested Iranian nationals in two separate incidents in Iraq. The initial operations against Shiite militias in Baghdad at a minimum are bound to exacerbate tensions with Iran even further, and we recently sent another aircraft carrier to the region, ratcheting up our aggressive posture.

Taken alone, individually, there is a certain logic to each of those actions. Taken on the whole, however, they have created an impression in the region, and as we all know impressions are what ultimately push leaders to make judgments about threat and to make determinations about their own actions. The impression in the region is that we have taken the side of the Sunnis in the conflict with Iraq. Whether that is true or not, we must never forget that in the Middle East especially, perception is reality. If we are seen to be favoring the Sunnis, we run the risk of alienating the Shiite majority that will ultimately be running Iraq--that is the reality--and inflaming extremism throughout the region. It is essential that we remain evenhanded in our own actions as well as our words in our efforts to bring stability to Iraq.

There is another reason, as the Iraqi Study Group suggested, we should engage Iran and Syria. Leadership means talking to countries who are not our friends. President Kennedy reminded us: Never fear to negotiate but never negotiate out of fear. We need to engage directly when our vital national security interests are at stake. We have done it all through our history. Richard Nixon sent Henry Kissinger to China. President Reagan went to meet with Miguel Gorbachev and came to an agreement on arms after defining the ``evil empire.'' The conversation that I had recently in the Middle East with Senator Dodd, when we traveled there together with President Asad of Syria, led us to believe that a dialog could, in fact, be constructed in working toward a goal that we share with Syria: creating a stable, secular, Arab Iraq. That is at least what President Asad said he would like. It seems to me, given the morass we are in, it is worth putting that to the test.

We cannot turn back the clock and reverse the decisions that brought us to this pass in Iraq and the Middle East. We cannot achieve the kind of clear and simple victory the administration promised the American people so often even as the conditions in Iraq grew worse and worse. But we can avoid an outright defeat. We can avoid creating the chaos we say we want to avoid. We can avoid a victory for our adversaries by identifying specifically what we can and cannot accomplish in Iraq.

With a new Congress comes a new responsibility: to get this policy right. That starts with preventing the President from going forward with this senseless escalation. And it has to end with finding an exit strategy that preserves our core interests in Iraq, in the region, and throughout the world.

I look forward to having a real debate. I hope we can find that way.

I might mention, when Senator Dodd and I were about to helicopter out of Baghdad, we were at Landing Zone Washington, which is right in the Green Zone. Many Senators are familiar with it. In the darkness of night, as we were leaving, a young man came up to us to talk to us and he identified himself as an officer in the Army. He was going home for leave and was hitching a ride on the helicopter to go home. He went home, visited his 14-

month-old daughter and, I think, his 4-year-old son, if I am correct. His name was Brian Freeman and he was intelligent and thoughtful and bright and he talked about his future and talked with us animatedly about what was going on in Iraq and how he disagreed with what he was being asked to do and how others did. He went home, and we just learned that this Friday he was killed. So he went back. He did his duty as so many have.

I know when I returned from war, almost 40 years ago now, I stood up and spoke from my heart and my gut about what I thought was wrong. To this day that has been controversial in some quarters, but I am proud that I told the truth. And that truth has been documented again and again from Army training manuals to books that have been written to the statements of our own Secretary of Defense at that time, Robert McNamara. But, before I finish, I want to make it clear that that is my motivation in talking about this war now and this predicament that so many of these soldiers find themselves in.

I asked the question in 1971: How do you ask a man to be the last man to die for a mistake? Although I knew going into public service I wanted to be in a place where I could have an impact should there be a choice of war in the future, but I never thought that I would be reliving the need to ask that question again.

We are there. Most of our colleagues understand this is a mistake. Most of our colleagues understand that 21,000 troops is not going to pacify Iraq. So all of us have a deep-rooted obligation, a deep moral obligation to ask ourselves what we can do to further the interests of our Nation and honor the sacrifices of those troops themselves. I think it is to get this policy right. I hope the President will truly listen to us in these next days because we want to work in good faith to do that.

Before I finish, I want to add a note, both personal and political. Two years ago I sought the Presidency to lead us on a different course. I am proud of the campaign we ran, proud of the fact that 3 years ago I said that Iraq was the wrong war, in the wrong place, at the wrong time; proud that we defined energy independence and made it, for the first time, part of the Presidential race; proud of a health care plan that we laid out that to this moment remains viable and waiting to be used in order to lower the health care costs for our fellow Americans.

We came close, certainly close enough, to be tempted to try again. There are powerful reasons to want to continue that fight now. But I have concluded this is not the time for me to mount a Presidential campaign. It is time to put my energy to work as part of the majority in the Senate to do all I can to end this war and strengthen our security and our ability to fight the real war on terror.

The people of Massachusetts have given me an incredible privilege to serve, and I intend to work here to change a policy in Iraq that threatens all that I have cared about and fought for since I came home from Vietnam.

The fact is, what happens here in the next 2 years may irrevocably shape or terribly distort the administration of whichever candidate is next elected President. Decisions are being taken and put into effect today and in the days to come that may leave to the next President a wider war, a war even more painful, more difficult, more prolonged than the war we already have.

Iraq, if we Senators force a change of course, may yet bring stability and an exit with American security intact or it may bring our efforts in the region to a failure that we will all recognize as a catastrophe.

I don't want the next President to find that he or she has inherited a nation still divided and a policy destined to end as Vietnam did, in a bitter or sad legacy. I intend to devote all my efforts and energies over the next 2 years, not to the race for the Presidency for myself but for doing whatever I can to ensure that the next President can take the oath with a reasonable prospect of success for him or her--for the United States. And I intend to speak the truth as I find it without regard for political correctness or partisan advantage, to advise my colleagues and my fellow citizens to the best of my ability and judgment, and to support every action the Senate may reasonably and constitutionally take to guide and direct the ship of state.

This mission, this responsibility, is something all of us must accept, and as someone who made the mistake of voting for the resolution that gave the President the authority to go to war, I feel the weight of a personal responsibility to act, to devote time and energy to the national dialog in an effort to limit this war and bring our participation to a conclusion.

Madam President, I rise to speak about amendment No. 187. I offer this amendment along with my colleagues Senators Snowe and Sununu to keep open our Nation's most experienced and successful women's business centers. These centers--including those in Boston and Worcester in my home State of Massachusetts, in Portsmouth, NH, and in Wiscasset, ME--provide business counseling and financial literacy training to women who want to start or grow a business. We need to pass this amendment so that the women's business centers have access to the Federal matching money that is necessary to raise private sector capital.

For several years now Senator Snowe and I have been working on a solution to keep open the most experienced centers. Last summer our committee passed a bill that would keep these centers open, though it did not become law. I want to thank Senator Snowe and her staff for their collaboration on this important issue, and I also want to thank Senator Sununu for working with us to incorporate changes into his original amendment that reflect our committee's work. I thank the very able and resourceful executive directors of the women's business centers for working with us all these years to keep their centers going, providing women with the tools they need to make their businesses succeed. In my home State, that includes our current leader, Ms. Donna Good, and her predecessor, Andrea Silbert, who started the Center for Women & Enterprise.

In my 21 years on the Committee on Small Business and Entrepreneurship, I have consistently promoted women entrepreneurs and fought for adequate funding for the women's business centers. As chairman of the committee in the 110th Congress, I will do the same and urge my colleagues on both sides of the aisle to support this amendment. This important legislation will allow established women's business centers to receive renewability grants after their initial grant cycle of matching funds has expired.

The concept of sustainability grants is something I originally introduced in 1999 with my Women's Business Center

Sustainability Pilot Program--a bill that garnered widespread bipartisan support and was instrumental in securing additional funding to allow successful and effective centers keep their doors open for women entrepreneurs in their community. And last Congress Senator Snowe and I introduced the Women's Small Business Ownership Programs Act, which allowed proven centers with a successful track record to receive additional 3-year renewal grants beyond an initial 4-year grant cycle.

The amendment we introduced today builds upon our previous legislative proposals by giving established women's business centers the ability to apply for 3-year grants on an ongoing basis. It would provide women's business centers with a permanent funding stream in the future.

By adopting this amendment today, we will ensure that successful and experienced centers are able to continue serving entrepreneurs by giving women-owned small businesses the tools they need to grow and flourish.

Madam President, I ask my colleagues to vote in favor of this amendment.

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

How much time is left and how is it divided?

Mr. President, I yield myself 5 minutes.

Mr. President, we are going to be voting on the minimum wage this morning. Hopefully, the Senate will vote for what I consider to be a clean bill--a clean bill being legislation that will increase the minimum wage to $7.25 over a 2-year period.

There will be another measure that will be voted on that Senator Gregg and Senator Conrad will address, which is a line-item veto. But the fundamental issue we have before the Senate is the issue of an increase in the minimum wage--an increase in the minimum wage which has not taken place over the period of the last 10 years, and which I am very hopeful we will get strong bipartisan support for.

If you look over the history of the minimum wage, the nine different times we have raised the minimum wage, we have had bipartisan support for that increase. It has only been in the very recent years that Republican leadership has led the fight against it. We now have new leadership in the

House and the Senate and the Democratic leadership that brought this matter forward. We offer an open hand to our Republican friends to support this program, which is so important to so many working families.

From our earliest days, we have been a nation of strong values-- particularly fairness and opportunity and concern for our fellow citizens. While we are a country of individualists, we have always recognized that America is strongest when we all prosper together. One of the earliest governing documents in our history, the Mayflower Compact, talked about laws that would support ``the general good.'' Later, in the preamble to our Constitution, we pledged that our Government would ``promote the general welfare.''

That is our proud history. Our Nation has thrived because we have made a commitment to shared prosperity. The vote we will cast today is a measure of our commitment to these values.

Minimum wage workers have been waiting for a raise for 10 long and difficult years. They have worked more than one job. They have saved every penny they can for the future of their children. They have decided each day what food they can afford and what bills they can pay.

Americans understand fairness, and they know this is unfair. They have called on us time and again to raise the minimum wage, but time and again--year after year--this Congress has turned its back on working families.

It is wrong that hard-working men and women cannot afford to put food on the table or heat their homes. It is wrong that our productivity soars, but our lowest paid workers fall further and further behind. And it would be wrong to demand a price of more and more tax breaks before these hard-working families get the raise they have earned.

Congress has voted itself a raise eight times over the past 10 years, while minimum wage workers have received nothing. Congress never demanded a price for increasing its wages. So why should we demand a price for giving minimum wage workers a raise? What is good enough for Congress surely is good enough for American workers. I say Congress should do unto others what it has done for itself. And we have not just been doing for ourselves. Over the last 10 years, we have done a whole lot for corporate America. We have given them $276 billion in corporate tax breaks. We have done a lot for the wealthiest Americans, who have seen their incomes skyrocket with generous tax giveaways. Why can't we do one thing for minimum wage workers? No strings attached, no giveaways for the powerful--why can't we do this one simple thing because it is the right thing to do?

Minimum wage workers are men and women of dignity. They do some of the most difficult back-breaking jobs in our society. They clean our offices. They serve our food. They take care of our children in preschools, and care for our elderly in nursing homes. They deserve a fair wage that respects the dignity of their work, and they should not have to live in poverty.

President Kennedy once said:

If a free society cannot help the many who are poor, it

cannot save the few who are rich.

We are a rich nation, but unless we do more to help the poorest Americans, we will not be able to save ourselves.

We have an opportunity today to take one bold step toward solving the problem of poverty in this great Nation. Today--right now--we can pass the House bill and send it to the President. We can raise the minimum wage and give 13 million hard-working people hope for a brighter future.

I hope my colleagues on the other side of the aisle will join me in voting for minimum wage workers today. This should not be a partisan issue. It is about standing behind our values. It is long past time to do the right thing and give minimum wage workers a raise.

Mr. President, I withhold the remainder of my time.

Mr. President, I understand we have 7\1/2\ minutes; is that correct?

I would like to wait. I yield to the Senator from North Dakota.

Mr. President, I thought it was about our debate on the minimum wage, but that is fine. I have 7\1/2\, and the Senator has how much?

Mr. President, I ask the Chair to let me know when I have a minute and a half.

We are at a very important moment for millions of working families in this country. It has been 10 long years since we have seen an increase in the minimum wage. During that period of time, I don't think anybody in this body could really understand the kind of pain and sacrifice these families have experienced and the kind of anxiety they have had every day, wondering if they are going to be able to provide for themselves and their families, and particularly for their children.

I welcome the fact that it was our Democratic leaders who have this now before the Senate. We had a majority in the Senate for an increase, but we had the opposition of Republican leadership in the Senate and also in the White House. But now we have had 80 Republicans in the House of Representatives voting for a stripped-down bill. That is a reflection of the bipartisanship we used to have.

We have seen historically where we had both Republican and Democratic Presidents who fought for an increase, including Presidents Roosevelt, Truman, Eisenhower, Kennedy, Johnson, Nixon, Carter, the first President Bush, and Bill Clinton. That is the roster of American Presidents in the postwar period. But we have had the strong opposition of this President and the Republicans. Its impact has been devastating on families.

If you look at what has happened to families, you will find out that the purchasing power of the minimum wage over the period of these recent years has just collapsed--almost to the lowest point it has ever been in terms of purchasing power. Look into the sixties, seventies, and the 1980s. With the Democrats in power, with the help of some Republicans, we helped keep it up. It was at the poverty level and it collapsed in recent years and we are trying to get it up to $7.25. That is still not adequate; nonetheless, it will make a big difference to working families, the 41 million Americans--28 percent--who work more than 40 hours a week. Nearly one in six workers work more than 50 hours a week. People are working longer and harder than ever before.

If you look at what is happening in the industrial nations, look at the United States, we have increased more than any other industrial nation in the world. What happened? The wages of the poorest of the poor who are out there working 40 hours a week have collapsed, and what happened? They have been working longer and harder than ever before.

What has been happening? They increased productivity for the American economy. Look at the past, where you had productivity and the minimum wage related year after year. But not now. We have seen the explosion of productivity, but do you think any of that has been passed on to hard-working people? Absolutely not. We are not going to let those who increased the productivity of the American economy share in it. That has not been the case.

We also see the continued loss of workers. What has happened on the other side? Who has gotten the increase in the productivity. Imagine who: corporate profits grew 65 percent more over this period of time. They are the ones who have taken the benefit of the productivity. It used to be shared between the workers and corporations. Not anymore. They have been the ones who have opposed the increase in the minimum wage.

We have seen what happened, as I pointed out, when we had productivity related to the minimum wage. We saw that the minimum wage was at the poverty level, and now we have seen it virtually collapse. What has been the

impact on the American families? We have now seen that 4.1 million more American families have gone into poverty since 5 years ago. And, naturally, we have seen an increased number of children who have gone into poverty; 1.2 million more children have gone into poverty over the last 5 years, with no raise in the minimum wage.

Increased numbers of families are struggling and working hard, working longer and harder than in any other industrial nation in the world, and still they cannot get out of poverty. As a result, we find this extraordinary achievement in the United States of America, and we have the highest poverty rate of children of any industrialized nation in the world. The list goes on.

We can see this is reflected in the increased number of individuals who are suffering in terms of hunger in our country. You can go to food banks in my city of Boston--and we have food banks throughout Massachusetts and you hear the same thing. We are having to give more assistance to families who are working, and more and more of those are children living in poverty. It doesn't have to be this way. We are not going to answer all of the problems of poverty with this increase. We are telling hard-working Americans who work hard and take pride and produce that we in the Congress at this time are going to give you a very modest raise. They are entitled to it. It is saying to proud men and women who are doing a decent job that we recognize that and we believe in a society where people move along together.

This is going to make a difference to children in our society because so many children are the children of individuals who work hard and are working at minimum wage. It will make a difference to women because the great majority of people who benefit from the minimum wage are women. So it will benefit women, and it will benefit children, and those people who go into the entry level, men and women of color who are getting a job. This is a family issue, a values issue, an American issue, and it is a fairness issue.

That is why we want to have a strong vote here with the bare bill that sends a very clear message: $7.25 an hour for working families is not too much in the richest country in the world.

Madam President, what is the issue now that is before the Senate?

I yield myself 1 minute.

Madam President, we have the opportunity for the first time in 10 years to pass an increase in the minimum wage that will affect a million of our fellow citizens. The workers who work for the minimum wage are people of dignity. They take pride in their work. They work hard and try to do a job.

This is a women's issue because the great majority of those who work and receive the minimum wage are women. It is a children's issue because so many of those women have children. Therefore, it is a family issue, it is a value issue, and it is a civil rights issue, because so many of those who enter with the minimum wage are men and women of color. Most of all, it is a fairness issue. In the United States of America, we understand fairness. With the strongest economy in the world, for men and women who are going to play by the rules, work 40 hours a week, they should not live in poverty in the United States of America.

Vote yea on this amendment and we will make a downpayment in bringing children, women, and others out of poverty in this Nation.

Mr. President, would the Senator yield on that point?

If I could ask the Senator--I know we are on a short time and perhaps the Senator from West Virginia would yield us 3 more minutes? Would the Senator do that?

I thank, as always, my friend and colleague. But on this point the Senator from Maryland makes about the lowest paying jobs, the lowest paying jobs in America are predominantly filled by women is the point the Senator was making. We find 87 percent of maids are women; food servers, 66 percent; cashiers, 75 percent; and childcare, the point the Senator was making, is 93 percent.

The point the Senator has so eloquently made is that women have an interest in raising the minimum wage because of the enormous impact it has on women generally. I hope the Senator in her time will comment about the impact on the children of these women.

Mr. President, parliamentary inquiry.

Mr. President, I know my colleague has already been recognized. There is no time limitation, is there?

Mr. President, I ask unanimous consent that he may be able to speak for as long as he needs to.

Mr. President, I know how difficult of a decision this is for Senator Kerry to make. And today, I say to the people of the country how proud all of us in Massachusetts are of John Kerry, and his outstanding service in the United States Senate for our State and for our country. Throughout his career, he has been a true hero in every sense of the word.

He has been my colleague since 1984, and I have deeply valued the opportunity to work side-by-side with him, but most of all I'm proud to call him my friend. Over the years, Vicki and I have grown so close to John and his wonderful wife Teresa and his loving daughters Vanessa and Alexandra. They are a special family, and their friendship is one we cherish.

We heard just a few moments ago why he was able to galvanize the country, and earn such tremendous support, in the 2004 Presidential campaign. The eloquence, the passion, the insight, the knowledge of history, and awareness of public events--these qualities we saw on display just moments ago in this Chamber--these are the qualities that characterize and define the career of John Kerry.

Now John has decided to continue to devote his passion, his interest, and his energies toward bringing our troops home from Iraq safely, and how fortunate they are to know that he will devote all of his energies to that cause over the next months--hopefully not years. All of us in Massachusetts look forward to his continued service in the United States Senate for years to come and to his voice and his vote working here for the working people of Massachusetts, for their jobs, for their health care, for the education of their children, for the betterment of their environment, and for their hope for a better quality of life. He's been there for us in the past on so many of these critical concerns, and we take comfort in knowing he'll be there for all of us in the future as well.

I know this has been a difficult time for John. I congratulate him on an outstanding presentation this afternoon, and for his courage and determination. I congratulate him for continuing to want to make a very important difference on the overarching and overriding issue of our time, and that is how we can remedy this catastrophic mistake of Iraq and bring our servicemen home safely.

I'm grateful to be able to call John Kerry my colleague and friend, and look forward to working with him for years to come.

Mr. President, as I understand, there are two speakers. I would like to ask unanimous consent that following the two speakers, Senator Enzi identify the Senator from Colorado, Mr. Salazar, to be recognized.

Mr. President, if the Senator would be kind enough to permit me to ask unanimous consent that following the next two speakers, the Senator from Colorado, Mr. Salazar, be recognized.

I thank the Chair.

I suggest the absence of a quorum.

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

For the information of our Members, we will have a consent agreement offered in a short while. It is the intention of Senator Enzi and myself to have two votes, one on the Sununu-Kerry amendment on small business and one on Feingold, which is the ``Buy American'' amendment. We will have voice votes on those two items and then rollcall votes on an Allard amendment and a rollcall vote on a DeMint amendment in the range of 5 o'clock, for the benefit of our colleagues. We will offer a consent agreement shortly to that effect. But for the information of our colleagues, that is the intention. We are making good progress on other amendments as well.

I suggest the absence of a quorum.

Madam President, I ask unanimous consent that at 5:10 p.m. today the Senate proceed to a vote in relation to Allard amendment No. 116, and that the time until 5:10 p.m. be equally divided and controlled in the usual form, with no second-degree amendments in order to the amendment prior to the vote; further, that upon disposition of the Allard amendment, the Senate then resume Sununu amendment No. 112 and that Kerry amendment No. 187 to the Sununu amendment be considered and agreed to, the Sununu amendment, as amended, be agreed to, and the motion to reconsider be laid upon the table; provided, that the Senate then consider Feingold amendment No. 127 and that the amendment be modified with the language at the desk, and that it be agreed to, and the motion to reconsider be laid upon the table, all without intervening action or debate.

Mr. President, I ask unanimous consent to call up amendment No. 128 and ask that it be set aside.

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

I ask that the amendment be set aside.

Mr. President, just for the information of our colleagues, the Feingold amendment is an amendment that has been accepted by the Senate on a number of different occasions. It provides information-reporting on the buying of American goods. This is an effort to increase and support American workers. It has been accepted. We welcome that amendment.

The other amendment which my friend and colleague will speak to, Senators Kerry, Snowe, and Sununu, I strongly support. This deals with the women's business center amendment. Our friends on the Small Business Committee have worked long and hard on this. It is a very interesting, innovative, and creative program that has created thousands of jobs and millions of dollars in wages, and it deserves favorable consideration. My colleague will speak to that in just a few moments.

On the Allard amendment, Members should understand what the effect of the Allard amendment is, and that is effectively to repeal the minimum wage for any States among the 50 States. That effectively is what the Allard amendment does. It says:

Notwithstanding, any employer should not be required to pay

an employee the wage that is greater than the minimum wage

provided by law of the State in which the employee is

employed, and not less than the minimum wage in effect in

that State.

So effectively it eliminates the minimum wage.

It is true we have had the minimum wage at $5.15 an hour. The underlying bill raises it to $7.25, with a very modest tax offset. Hopefully we will have an opportunity to vote on that.

It is true that the existing minimum wage is $5.15 an hour and a number of States have gone above this, but the concept of the minimum wage was that it was going to be a minimum payment, a minimum standard. What was accepted at the time of the minimum wage is that in this country, we didn't want to accelerate a rush to the bottom so that we would have competition in the various States to pay the lowest possible wages--sweat labor--in order to try to attract industries into those particular States, but to provide a minimum standard. Hopefully it was going to be a living standard for workers who worked 40 hours a week, 52 weeks of the year.

I respect the Senator from Colorado, his view on this issue, but if we accepted the amendment of the Senator, it would effectively eliminate the minimum wage as we know it.

I think the reason for the minimum wage, as we have tried to point out during the course of this debate in discussion, was to establish a basic floor as a standard for payment for individuals who worked long and hard in some of the most difficult jobs in this country. We have eliminated child labor. We have established laws with regard to overtime. We have tried to be not only the strongest economy in the world but one that is going to respect workers and workers' rights and workers' interests and workers' families. The minimum wage does not do so at the present time, but many of us will continue to battle to try to make sure it does. The Allard amendment brings us all in the opposite direction.

If I have any time left, I will reserve it. I know the Senator from Colorado will use his time.

Mr. President, if there are no further speakers--

I am glad to yield a couple of minutes. I understand we have 3 or 4 minutes.

If the Senator will yield, I find that there is strong support. We are just having difficulty getting a final time to be able to slot it in at this particular time. I am very hopeful we will be able to have that sometime in the very near future, and I will keep in close touch with the Senator. I thank him for his cooperation. I hope we will be able to.

Amendment No. 158

I believe under the consent agreement we were going to act now on the Sununu amendment 112 and the Kerry amendment 187; is that correct?

Madam President, I call up amendment No. 187.

Madam President, I support this amendment offered by Senators Kerry, Snowe and Sununu. This amendment provides essential ongoing support to Women Business Centers and has received bipartisan support in the small business committee and I urge my colleagues to support it.

Women small business entrepreneurs are making gains in today's economy and have grown dramatically over the last few decades. In my State of Massachusetts women-owned small businesses have grown by 13 percent since 1997. But they still account for only one-third of all small businesses in the State. Nationally, they make up only 28 percent of all small businesses.

Women Business Centers provide essential training and support to women of all incomes, and of all races to help them start and grow their small business. These centers even the playing field for women entrepreneurs who still face significant obstacles in the world of business.

The Center for Women and Enterprise in Massachusetts, has served over 12,000 women who created 16,000 new jobs and generated more than $470 million in wages since 1995.

We must make this program permanent and make sure that women can participate in small business that is so vital to our national economic growth.

Women entrepreneurs are precious national assets that employ millions of workers and generate billions in wages. We should not limit their potential.

I urge my colleagues to support this amendment to support our women entrepreneurs.

Madam President, I send to the desk the modified Feingold amendment numbered 127.

Madam President, for the benefit of the Members, we have today disposed of six amendments. We have 18 other amendments pending. The staffs will work over the evening. Some look like we can move along early tomorrow. We are planning a full day tomorrow. We have had a total of over 90 amendments that have actually been filed. We thank all of our colleagues for their cooperation. We are expecting a full day, with a number of votes tomorrow. We are looking forward in the near future to getting final action on an increase in the minimum wage.

I yield the floor.

If the Senator desires to speak as in morning business, I don't think there would be any objection.

Mr. President, I rise today to speak against the line- item veto. This misguided proposal will hurt the communities we are here to represent. It will strip them of the voice they have today in Congress through each of us, and it will hand even more legislative power to the executive branch.

As I saw in my own experiences, both here in the Senate and in the Washington State Legislature, a line-item veto is subject to abuse, pressure and horse-trading, and it violates the delicate balance of power that the Founders so carefully designed.

Now I recognize that the idea sounds attractive. It suggests that we could cut spending and control the deficit without having to make any tough choices. Well, like a lot of ideas that sound good at first, once you look into it, the painful impact becomes clear.

More importantly, I think all of us need to do the hard work of crafting responsible budgets. We need to legislate and govern and take the needs of the country and our States into consideration. We need to make the tough decisions--not pass the buck to the White House.

I oppose the line-item veto today for the same reasons I opposed it in the 1990s. I voted against this gimmick when Congress handed that power to a Democratic President. And today I fight another attempt to hand that same power to a Republican President.

For me, it is not about the party of the Chief Executive; it is about making sure that the constituents I represent have a voice in the budget decisions that affect their lives. The line-item veto is the wrong approach for three reasons.

First, it would cede a tremendous amount of power from Congress to the executive branch. The Constitution is very clear that Congress has the power of the purse. The Framers of our Constitution carefully divided the powers of our Government between the three branches.

When Congress tried this before, it was ruled unconstitutional. This time around, the sponsors have tweaked the bill to try to address those concerns, but the underlying problem still remains. We should not be handing our legislative power over to the executive branch. I made that argument in 1995--and it is even truer today. We have seen the Bush administration aggressively try to expand Presidential power and limit congressional input and oversight. We should stand our ground as the Founders intended--not surrender our constitutional authority to the executive branch.

Second, the line item veto would hurt the constituents we represent. They rely on us to fight for their needs and priorities. Through the budget and appropriations process, we work to meet the needs in our local communities--needs that the administration would ignore. If we give up our ability to fight for our communities, our constituents will lose their voice because I can tell you, the communities we represent will not get fair consideration from a budget official sitting in Washington, DC.

Last week, a group of constituents came to see me about a local road that needs to be improved. The changes they are seeking will improve safety, support economic development, and provide access to critically needed housing. I represent that community, so I know firsthand those improvements are needed. That community has me fighting for them and pushing for their needs. The administration is not going to do that. They are not going to send someone from Washington, DC to check out the road and see that it is unsafe. In fact, these constituents had just come from a meeting with an administration official who basically told them that, in regard to the continuing resolution, ``Good luck, we will be making the decisions this year.''

That is just wrong. If we hand this power to the administration, we will surrender our voices, and our constituents will lose their voices in advocating for their communities. The families I represent know that if they have a problem, they can come and talk to me. But if you tell them that they have to track down someone at OMB and convince them to care about their local needs, our communities will suffer.

I came to the Senate to represent the people of my home State of Washington. They elected me to be their voice on a wide array of issues affecting everything from their safety to their health, education, and economic well-being. I am not going to transfer my ability to fight for the people of Washington State to this or any other President. That is what this bill proposal would do, and I strongly oppose it.

Third, experience has shown that the line-item veto is subject to abuse and may be applied unfairly by an administration. I have experience with line-item veto authority. I served in my State legislature and saw firsthand the kind of horse-trading that can occur when the Executive has this power.

When President Clinton exercised the line-item veto in 1997, we saw serious problems in the way it was applied. The White House put forward standards for deciding which projects would be targeted. But then it attacked projects that actually met the standards. In 1997, I stood here on the Senate floor and detailed the mistakes the Clinton administration made in unfairly targeting projects for elimination. I don't want to see a repeat of those mistakes.

Mr. President, crafting a responsible budget takes hard work. It requires tough choices. There is no gimmick or trick that will make the hard decisions go away. Handing our power and our constituents' power over to the White House certainly won't do it. So I say, rather than spending our time on a distraction, let's work on a real budget and on the real and difficult choices that are before us.

Let's do the job that voters sent us here to do--without gimmicks and without trampling the Constitution.

Mr. President, I ask unanimous consent that the Senator from Louisiana be allocated 10 minutes; that following the Senator from Louisiana, I be allocated 10 minutes; and following my comments the Senator from Massachusetts, Mr. Kerry, be allocated 20 minutes.

Mr. President, America's workers deserve a raise, and that is why I rise in strong support of S. 2, the Fair Minimum Wage Act of 2007. America's workers have helped our country make tremendous gains in productivity and economic growth, and they deserve to share in the prosperity they have created. I am very proud to represent a State that has a high minimum wage, and I want to share some of the lessons we have learned about providing a living wage in the State of Washington.

We need to do the right thing and pass a clean minimum wage bill now, without any of the antiworker amendments that may be offered on the other side. As we have heard, it has been almost 10 years since this Congress last raised the minimum wage. During that time, the real value of that wage has fallen by more than 21 percent. At the same time, the costs of health care, energy, and housing have all gone up significantly. As a result, many of our middle-class workers have been squeezed. I can only imagine the challenges minimum wage workers face every day while trying to maintain their families and their dignity on $10,000 a year. We can be proud that America's businesses have prospered over the last decade, thanks to a 31-percent increase in worker productivity and a huge 47-percent increase in profits. Now it is time for the least paid of America's workers to share in those gains.

During this debate, we have heard the usual claims that raising the minimum wage hurts businesses. In my State, that has not been the experience. Washington State, in fact, has the highest minimum wage in the country. We are living proof that a livable minimum wage is good for our State economy, good for small businesses, and it is good for our citizens. In 2006, our State's average unemployment rate was 4.9 percent, the lowest since 1999. We created 79,000 new jobs. Our poverty rate is 11.9 percent, which is lower than the national average. And our median household income stands at $49,000, much higher than the national average.

Our State minimum wage, which is indexed to inflation, has helped make for good labor productivity and a healthy economy. We have heard from my esteemed colleague, Senator Kennedy, chairman of the HELP Committee, that States with higher minimum wages create more small businesses and more jobs. Last year, the Fiscal Policy Institute reported that States with a higher minimum wage created nearly 10 percent more jobs and 5 percent more small businesses. A May 2006 Gallup Poll found that 86 percent of small business owners thought that raising the minimum wage did not affect their businesses. I could cite statistics like that all day, but I think the best evidence is really what continues to happen in my State compared with a neighboring State that has a much lower minimum wage.

Washington State's minimum wage is $7.39 an hour. Right next door to us, Idaho has a minimum wage at the Federal level of $5.15 per hour. Since 1998, when our voters in Washington State passed our minimum wage law, Washington employers have been flooded with job applicants from Idaho. Now Washington companies can pick the best qualified workers from the entire region. On January 11, the New York Times reported that Washington State businesses have seen great benefits, while Idaho businesses have not.

I ask unanimous consent to print this New York Times article by Timothy Egan in the Record at the conclusion of my remarks.

This article quotes Don Brunell, president of the Association of Washington Business. He says that raising the Federal minimum wage is ``almost a no-brainer.'' Washington's strong economy is proof that even with the highest minimum wage in the United States, as Mr. Brunell put it--and he is president of the Association of Washington Business--``Washington is a great place to do business.''

Some people predicted that small businesses would be hurt in my State. But instead, as the article notes, they have prospered beyond their expectations. So we have a lot of opportunity to do good here, not just for our workers but for our businesses and for our economy. But to do the most good, we have to pass a clean bill, one that is free from unrelated tax provisions and one that rejects antiworker amendments.

Historically, Congress has not found it necessary to pair a minimum wage increase with a package of tax giveaways. In fact, since 1936, Congress has raised the minimum wage nine times. But only once has such an increase been paired with a tax rollback. We should pass a clean bill that gives workers the raise they are long overdue.

In addition, we should not let this bill be used to weaken the rights of American workers. As the chairman of the HELP Subcommittee on Employment and Workplace Safety, I am troubled by a number of the amendments being floated now by our Republican colleagues, proposals to attack the 40-hour workweek, to take away workers' overtime, and to force a pay cut on workers who earn their living from tips. There is also a deeply flawed proposal that would change the treatment of professional employer organizations under the Tax Code.

This week, while we try to raise the wages of one group of workers, we have to fend off the Republican attacks on working families and their right to earn overtime. We all know how the demands of work and family pull two-career parents away from their loved ones all too often. For parents getting their kids to and from school and to afterschool activity is not easy, especially when you are forced to work uncertain hours. The uncertainty of having to work, say, 50 to 60 hours this week and then 20 or 30 hours next week will put incredible strains on many of our overburdened families.

Taking away their workplace rights and their ability to collect overtime would be a cruel and unwarranted double hit on America's working families. The Senate should, once again, reject the Republican comp time and 40-hour work week proposals, because they would force a pay cut on millions of middle-class workers. We know, for those workers who are eligible, overtime can amount to as much as 25 percent of their yearly income. We should not undermine the ability of working parents to balance their lives and share in the American dream.

The Republican comp time proposal would force our workers to take comp time instead of pay. On top of that pay cut, workers would be at the mercy of their employer when it came to asking to use that accumulated comp time. We all know that comp time often disappears under employer pressures of deadlines and other productivity needs.

I believe it is important that this Congress protect the rights of these hard-working families from an erosion of their quality of life and their ability to spend time with their families. We have to stop these attacks on working families and start moving in the right direction, like expanding the Family and Medical Leave Act.

I hope we also work to protect our workers who rely on tips. As we have heard from my female colleagues on this floor already, nearly two- thirds of

our minimum wage workers in this country are women. Many of them are single parents. Raising the minimum wage can give them a small measure of economic security and the ability to better support their families. Many of these low-wage workers are service workers, people such as hairdressers, maids, and waitresses. Many in Washington State rely on tips as a significant part of their livelihood. We should not support amendments that would undermine the tips our workers rely on. In my State of Washington, that would mean a pay cut of some $12,000 annually for over 120,000 of our tipped workers.

Finally, I want to say I am very concerned about the proposed tax changes for professional employer organizations. I fear that this change could undermine the fiscal stability of our State unemployment insurance and worker compensation fund. It would also put more burdens on our employers who are already playing by the rules.

Further, it would reduce worker health and safety protections by undermining incentives for companies to maintain safe and healthy workplaces. By the way, it could also provide an opening for those seeking to change the well-established rules of the employer-employee relationship under the Fair Labor Standards Act. I believe there should be serious thought and debate in the Congress before we make such fundamental changes in our labor laws.

In conclusion, we can do this right by passing a clean bill that finally gives American workers the raise they have earned. Over the last 8 years, Washington State has proven that a minimum wage increase is good for our State's economy and helps our economic development. It increases small business ownership and, of course, it helps our workers maintain their quality of life.

I join my colleagues to urge a vote in favor of this bill to increase the minimum wage so that we can finally, and importantly, give our low- income workers the raise they so richly deserve.

I yield the floor.

Exhibit 1

[From the New York Times, Jan. 11, 2007]

For $7.93 an Hour, It's Worth a Trip Across a State Line

(By Timothy Egan)

Liberty Lake, Wa. Jan. 9.--Just eight miles separate this

town on the Washington side of the state border from Post

Falls on the Idaho side. But the towns are nearly $3 an hour

apart in the required minimum wage. Washington pays the

highest in the nation, just under $8 an hour, and Idaho has

among the lowest, matching 21 states that have not raised the

hourly wage beyond the federal minimum of $5.15.

Nearly a decade ago, when voters in Washington approved a

measure that would give the state's lowest-paid workers a

raise nearly every year, many business leaders predicted that

small towns on this side of the state line would suffer.

But instead of shriveling up, small-business owners in

Washington say they have prospered far beyond their

expectations. In fact, as a significant increase in the

national minimum wage heads toward law, businesses here at

the dividing line between two economies--a real-life

laboratory for the debate--have found that raising prices to

compensate for higher wages does not necessarily lead to

losses in jobs and profits.

Idaho teenagers cross the state line to work in fast-food

restaurants in Washington, where the minimum wage is 54

percent higher. That has forced businesses in Idaho to raise

their wages to compete.

Business owners say they have had to increase prices

somewhat to keep up. But both states are among the nation's

leaders in the growth of jobs and personal income, suggesting

that an increase in the minimum wage has not hurt the overall

economy.

``We're paying the highest wage we've ever had to pay, and

our business is still up more than 11 percent over last

year,'' said Tom Singleton, who manages a Papa Murphy's

takeout pizza store here, with 13 employees.

His store is flooded with job applicants from Idaho, Mr.

Singleton said. Like other business managers in Washington,

he said he had less turnover because the jobs paid more.

By contrast, an Idaho restaurant owner, Rob Elder, said he

paid more than the minimum wage because he could not find

anyone to work for the Idaho minimum at his Post Falls

restaurant, the Hot Rod Cafe.

``At $5.15 an hour, I get zero applicants--or maybe a guy

with one leg who wouldn't pass a drug test and wouldn't show

up on Saturday night because he wants to get drunk with his

buddies,'' Mr. Elder said.

For years, economists have debated the effect that raising

the minimum wage would have on business. While the federal

minimum wage has not gone up for 10 years, 29 states have

raised their wage beyond the federal minimum.

These increases, according to critics like Brendan Flanagan

of the National Restaurant Association, are a burden on the

small, mostly family-run businesses in fast food and

agriculture that employ workers at the lowest end of the pay

scale.

``We see the political momentum for this,'' said Mr.

Flanagan, a vice president at the association, ``but we

cannot ignore what our members are telling us, which is that

it will lead to job losses.''

But the state's major business lobby, the Association of

Washington Business, is no longer fighting the minimum-wage

law, which is adjusted every year in line with the consumer

price index.

``You don't see us screaming out loud about this,'' said

Don Brunell, president of the trade group, which represents

6,300 members.

``It's almost a no-brainer,'' Mr. Brunell said, that the

federal minimum should go higher. Association officials say

they would like to see some flexibility for rural and small-

town businesses, however.

Washington's robust economy, which added nearly 90,000 jobs

last year, is proof that even with the country's highest

minimum wage, ``this is a great place to do business,'' Mr.

Brunell said.

During a recession five years ago, the same group had

argued that Washington's high minimum wage law would send

businesses fleeing to Idaho. The group sent out a news

release with a criticism of the law from John Fazzari, who

owns a family-run pizza business in Clarkston, Wash., just

minutes from the Idaho town of Lewiston.

But now Mr. Fazzari says business has never been better,

and he has no desire to move to Idaho.

``To tell you the truth, my business is fantastic,'' he

said in an interview. ``I've never done as much business in

my life.''

Mr. Fazzari employs 42 people at his pizza parlor. New

workers make the Washington minimum, $7.93 an hour, but

veteran employees make more. To compensate for the required

annual increase in the minimum wage, Mr. Fazzari said he

raises prices slightly. But he said most customers barely

notice.

He sells more pizza, he said, because he has a better

product, and because his customers are loyal.

``If you look 10 years down the road, we will probably have

no minimum wage jobs on this side of the border, and lots of

higher-income jobs,'' Mr. Fazzari said.

Job figures from both states tend to support his point.

While Idaho leads the nation in new job growth, it has a far

higher percentage of minimum-wage jobs than Washington.

Minimum-wage positions make up just 2.4 percent of the jobs

in Washington, while about 13 percent of the jobs in Idaho

pay at or less than the proposed federal minimum wage,

according to a study done for the state last year.

Part of the difference could be accounted for by a lower

cost of living in Idaho and the higher percentage of

technology, manufacturing and government jobs in Washington,

economists say. Still, it is hard to find a teenager in Idaho

who lives anywhere near Washington who is willing to work for

$5.15 an hour.

``Are you kidding? There are so many jobs nearby that pay

way more than minimum wage,'' said Jennifer Stadtfeldt, who

is 17 and lives in Coeur d'Alene, which is just a few minutes

from Washington. She pointed out that Taco Bell, McDonald's

and other fast-food outlets in her town were posting signs

trying to entice entry-level workers with a starting pay of

$7 an hour.

The House today passed a bill increasing the minimum wage,

and about 13 million workers would see a pay raise if the

Senate and President Bush approve it. Mr. Bush has said he

would approve the wage increase so long as concerns of small-

business owners were taken into account; the Senate has not

yet taken up the bill.

Several studies have concluded that modest changes in the

minimum wage have little effect on employment. A study two

months ago by an economist at Washington State University

seemed to back the experience of Clarkston and other border

towns in Washington. The economist, David Holland, said job

loss was minimal when higher wages were forced on all

businesses. About 97 percent of all minimum-wage workers were

better off when wages went up, he wrote.

But other business groups argue that an increase would hurt

consumers and workers at the low end.

In a survey released on the eve of the November elections--

in which voters in six states considered raising their

minimum wages--the National Restaurant Association said

restaurants expected to raise their prices and eliminate some

jobs if the voters approved the measures. The initiatives all

passed.

Here on this border, business owners have found small ways

to raise their prices, and customers say they have barely

noticed.

``We used to have a coupon, $3 off on any family-size

pizza, and we changed that to $2 off,'' said Mr. Singleton,

of Papa Murphy's. ``I haven't heard a single complaint.''

Mr. President, I, too, would like to speak on the line- item veto amendment. This body has made a lot of progress in being much more transparent in how we spend America's money. We can see, if we look back over the last couple of weeks, that America appreciates what we have tried to do to take these earmarks or these pet projects or designated spending, whatever we call it, and make it available for every American to see. We could tell from our e-mails and letters and the reports in the media that this was something which made Congress look as if we were genuinely trying to be much more open and honest about how we spend America's money. The amendment before us now, what we refer to as the line-item veto or line-item rescission, would actually make this whole process much more accountable.

I was interested in hearing my colleague make his point that the President could take one good item and put it with a really bad item and send it over to us and force us to make a decision. But let's think about what the President's options are now. We can send thousands of earmarks over in a bill to the President, and he only has two choices-- to take it or leave it, to take the whole thing or veto the whole thing--and work that has been done here and in the House for months either has to be accepted in total or thrown out in total. That doesn't make any sense.

I will use the exact argument my colleague did. We should not be able to package all this good with all this bad and try to force it down the President's throat without the ability to have the checks and balances, the discussions that are needed so the American people can see we have thoroughly vetted these ideas and we are spending their money wisely.

This line-item rescission package I support because this Congress needs the interaction with the President and the working relationship that would be caused by this particular bill. It allows the President, no more than four times a year, to go through our spending bills and to send those things back which he thinks are not national priorities. This is not real complicated. He does not veto what we send him; he just gets a recommendation in the process. And since his agencies in the executive branch are charged with carrying this out and spending this money, the President needs to be engaged in the process in more than a take-it-or-leave-it type of relationship. So no more than four times a year, the President can put together those things which he thinks are not national priorities and send them to the Congress. And all this bill does is guarantee that they get a vote.

If the President tries to use this against individual Members, I know this body well enough to know that we are not going to pass his request.

Any President that tries to do that for political purposes will find his rescission package, or that his recommendations to Congress will be dispensed with very quickly.

This is important not only for this President but for many Presidents in the future. We know as Senators and Congressmen that over the next several decades this country is going to be faced with incredible fiscal crises. We have no idea how we are going to pay for Medicare and Medicaid in the future or Social Security. It is going to become more important every year that we cut wasteful spending and that we work with the President and with the House to do everything we can to cut those things that are not necessary.

In many bills--and we know it happens--many items, earmarks, are voted on for political reasons, and it is a good idea to allow the President to package those things and send them back to us so that we can vote on them and move them out if they are not national priorities.

This is not dissimilar at all to the BRAC process we created to eliminate unnecessary military bases. We found that Congressmen and Senators were not going to vote on an individual basis to eliminate a base in one State because we knew that then the Congressmen or Senators could vote to eliminate one in our State. It was a political dilemma that caused us for years to leave bases open that should have been closed.

It is the same with Federal programs and spending year after year. One project might be in my State and one in another Senator's State. None of us are willing to step up and eliminate projects one at a time. We cannot vote on them that way. This line-item rescission opportunity is for the President to take those things that we know are not national priorities, put them in a package, and send them back over for us to vote on. We should not lose this opportunity.

We need the President working with the Congress to eliminate wasteful spending--not this year or next year but for decades to come. This may be our only opportunity in a long time to make it happen. We have made tremendous progress on identifying the problems with corruption, wasteful spending, identifying earmarks, and all this

does is allow us to take it a step further and make sure we have the checks and balances from Congress and the executive branch to eliminate those things we know should not be in there and the President knows should not be in there.

Mr. President, before I engage in my business, I also would like to say to Senator Kerry that I, too, am honored to serve with you, and I appreciate the remarks that have been made about you today.

Amendments Nos. 155, 156, 157, 158, 159, 160, 161, and 162, en bloc, to

Amendment No. 100

Mr. President, I ask unanimous consent that the pending amendment be temporarily set aside and that I be permitted to offer amendments Nos. 155 through 162, en bloc.

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

Mr. President, I thank my colleagues here on the floor for allowing me to offer these amendments. I know the leadership on the other side is anxious to end debate on this bill and move on to other things, so I will keep any remarks as brief as possible. I would be happy to work with the managers of the bill, the Senators from Massachusetts and Wyoming, to work out additional time for debate if that is necessary.

The minimum wage is a debate about fairness. Many Americans see a minimum wage as a fundamental right and something that should be increased to keep up with rising costs. Many economists see it differently. They understand it is only an entry wage and that with on- the-job training, most people do not stay at the minimum wage for very long. Economists also understand that very few people in America actually earn the minimum wage which is currently at $5.15 per hour. Those who do are mostly teenagers, part-time workers, second earners in a home, or workers with very limited skills.

Nevertheless, this debate has become a measure of how much we care for workers, and that is what this debate should be about. If we are going to be serious about helping Americans earn higher wages and helping them keep more of what they earn, we must consider additional measures to ensure American prosperity.

That is why I am offering these amendments today. They will not only ensure fairness for workers, they will also help protect small businesses that employ them. Americans realize that if we pass laws here in Washington that are aimed at helping workers but end up eliminating their jobs, we have done more harm than good.

My first amendment, No. 158, would raise the effective minimum wage in each State by $2.10 per hour. Now, I know most people listening believe that is what this amendment does, but far from it. Without this amendment, the underlying legislation will partially exempt minimum wage workers in high-cost States that already have State minimum wage rates greater than $5.15 per hour, and it will completely exempt minimum wage workers in the highest cost States that have State minimum wage rates greater than $7.25. Many States--actually, 29 States--have already recognized that their cost of living is much higher than other States, and these States have passed their own minimum wage increases. So the cost of living all around the country is quite different.

If you look at some high-cost cities and States, such as Boston, MA, for instance--35 percent higher cost of living than the national average--and contrast that with Alabama, Mobile, AL--it is minus 11 percent of the national average--you have a large swing in the cost of living. Effectively, what we have is while Massachusetts now has a minimum wage of $7.50 an hour, that does not do a worker as much good in Massachusetts as $5.15 does for a worker in Alabama; the cost of living is significantly different.

As we look around the country, we see the highest cost States are Massachusetts and Connecticut and Vermont and New York. You can go over to Illinois at 17 percent. We get down in the Southern States, and we see minus 10 percent of the national average in Texas or minus 11 in Arkansas or minus 12 in Oklahoma. The States and the cost of living across our country are very different. Thankfully, a number of States-- 29 of them--have recognized that and raised their minimum wage.

But if we are going to make a promise to American workers that we are going to raise their salary, particularly minimum wage workers, then I believe we should do it for all workers. We should look at how this underlying bill is really going to affect workers. The blue States here are States that get a small increase or less than 10 cents from this $2.10 we are talking about.

A few minutes ago, the Senator from Washington State was giving a passionate plea that minimum wage workers get an increase, but Washington State minimum wage workers will get no increase from this bill. The same for Oregon and California. Our dear colleague from Massachusetts, Senator Kennedy, is one of the most passionate advocates of increasing the minimum wage. Yet this bill we are going to pass today will not give one minimum wage worker in Massachusetts an increase. They get nothing. All of the blue States, the high-cost States where an increase is the most important--Vermont, Massachusetts, Connecticut, Rhode Island--they get no increase. Illinois gets less than 10 cents from the $2.10 increase. So the blue States where workers really could use an additional increase, particularly minimum wage workers, get little or nothing.

When we look at the white States, these are the States which don't get the whole $2.10 increase. The red States are the only States where the whole $2.10 increase will actually go to minimum wage workers.

So in effect, we are making a lot of false promises here today. A lot of the debate, the most passionate debate, is coming from Senators who represent States which will get little or nothing from this minimum wage increase.

I believe we should do what the States do and recognize that the cost of living is different. My amendment is very simple. It says: Let's make all of the States the same color. Let's make them red or blue. But every minimum wage worker in this country should get a $2.10 increase, and that is what my amendment would do. It would be fair to all workers.

That first amendment was actually my first and second amendment. We have two versions of that, Nos. 158 and 159.

My third amendment, No. 155, would expand access to affordable health care to millions of Americans. It would do three things. And we do need to keep in mind that one of the biggest costs for workers, particularly those working at the minimum wage level, is health care. Very few have health insurance. Many are part-time workers. This amendment would do three things:

First, it would allow workers to purchase less expensive coverage anywhere in the country. It would also allow them to use the funds in their health savings accounts to pay for their health insurance policy, and it would allow them to roll over, or keep, $500 in unspent benefits in their flexible spending accounts. Many Federal employees now have flexible spending accounts, and they are starting to realize that even though it is their own money, the way this law is set up, if they don't spend it all, they lose what is left at the end of the year. This amendment would fix that.

If Congress is serious about helping American workers, it must do something to address the rising costs of health care. By allowing Americans to purchase health coverage across State lines, they would gain access to less expensive health plans.

My fourth amendment would pick up on part of the other amendment and focus specifically on flexible spending accounts, allowing workers to keep up the $500 that is unspent in those accounts at the end of the year so they do not have to spend it on something they do not need or actually lose it. Again, it is their money. We should not take it from them.

My fifth amendment is tax deferment for high-growth small business companies. Most of the jobs in this country are actually created by small companies that are growing at a 10-percent rate or higher. We have identified--and this is something we have been working on for years--what is called a capital funding gap that prevents a lot of small businesses from getting the capital they need to continue their growth. Actually, if you go back to the 107th Congress, I worked on this when I was on the House side with Senator Kerry and Senator Snowe who introduced this same legislation to help small businesses keep some of their cash in order to grow their business. It simply allows them to defer Federal taxes if they are plowing it into the growth of their companies. This is very relevant to low-income workers because many low-income workers, even minimum wage workers, work for small businesses that are growing.

This would help those companies grow by deferring taxes. They have to pay all this money back with interest, but it allows them to continue to grow, using their own cash flow.

My sixth amendment, No. 159, is an important amendment for a lot of hourly workers who are union members. It prevents labor unions from using members' union dues to lobby Congress without prior separate and written consent of that member. Union dues, like taxes, are compulsory for union workers. This is the same amendment I offered to the lobby reform legislation, but since it was not given consideration, I am offering it again. This is not only an ethics and lobbying issue but a fairness issue for millions of union members in America. If they were not forced to pay for things they do not support, they could save a lot of money with lower union dues.

My seventh amendment is updating the small business minimum wage exemption. The last time this exemption was raised, the minimum wage was $3.35. This simply allows small companies not to pay the minimum wage, particularly those offering other benefits--tips or health benefits--and gives an exemption. Right now, it is only $500,000 a year. We raise that to $1 million with this amendment, allowing the small businesses some flexibility in hiring teenagers and other workers at the trainee level.

The last amendment, my eighth amendment, and the final amendment, repeals flextime benefits for Federal employees after 1 year if comparable benefits are not extended to private sector workers. A lot of people who are opposed to this flextime idea don't point out in the Senate that all Federal workers have this flextime benefit. Most will say it is truly a benefit. So it gets back to an issue of fairness. This amendment simply says if we do not apply this same benefit to all American workers in the private sector, we should not grant it to Federal workers. Americans are tired of us giving special benefits to Federal workers that are not offered in the private sector.

In conclusion, I thank the managers of this bill, again, for allowing me to offer these amendments. I am happy to work out other items and debate them individually, if that is necessary.

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

I understand we just have a few minutes. A few minutes ago, we thought we would be voting on one of the DeMint amendments, and we are still not sure if that is going to happen.

Mr. President, I will take a couple of moments to reexplain the amendment just in case we get to vote on it tonight or early in the morning.

We just heard Senator Allard talk about the need for State flexibility because of the different costs of living, the different economies, the different situations. In the United States today, we have 29 States that have set a minimum wage higher than the Federal minimum wage. That action really reflects the cost of living in different parts of our country.

Does the Senator yield?

We will talk until the next vote, how about that? What time is the next vote?

Two minutes.

Senator Allard has made a good case for the need for States to have flexibility to adapt the minimum wage to their particular State's cost of living. That is one option.

The amendment I have is quite different. It recognizes that we do have very different costs of living, such as in Massachusetts, Boston is 35 percent above the national average cost of living. If you go south to Mobile, AL, it is 11 percent less than the average cost of living. So the current $5.15 minimum wage which is in Alabama actually has more buying power than the $7.50 minimum wage which is now in effect in Massachusetts.

We are proposing that we be fair with this Federal minimum wage increase. The Senator from Massachusetts knows that, despite his passion for low-income workers and raising the minimum wage for workers, workers in 29 States will not get the full benefit. In fact, workers in Massachusetts will get no raise at all. Workers in Washington, Oregon, or California will get no raise, as will the minimum wage workers in Vermont or Connecticut or Rhode Island. All the States here in blue, the highest cost of living States in our country, will get either no increase or less than a 10-cent increase from this $2.10. The States in the white get some increase but, again, not the full increase. Really, most of the States that would get the full $2.10 increase are low-cost-of-living States around our country, again where the cost of living is more in tune with the $5.15 minimum wage.

Frankly, I would like every worker to be making a lot more money, and there are a lot of other things we can do to make that happen. But if we are going to have a Federal minimum wage, let it reflect the cost of living in every State. Let's give every minimum wage worker in this country a raise when we pass this bill.

I yield the floor.

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

Madam President, since the Fair Labor Standards Act of 1938, Congress has required employers to pay a minimum wage. Congress enacted the current general minimum wage of $5.15 an hour in 1996. That works out to be about $10,712 a year. Currently, about 2 million workers get paid the Federal minimum wage or less.

A decade has passed since the last increase. That marks the longest period in history without an adjustment to the minimum wage. During that time, a majority of States have enacted minimum wages higher than the current Federal level. This includes my home State of Montana.

Montanans recognized that the minimum wage must be increased. I am proud that in November our State voted to raise that State's minimum wage from $5.15 an hour to $6.15 an hour. It was a step in the right direction.

An increase in the minimum wage would affect millions more than those who earn minimum wage because many workers earn slightly more than minimum wage and may also see an increase.

Some worry that an increase in the minimum wage will burden small businesses. Small businesses create jobs, economic opportunity, and technological innovation.

Smaller businesses employ a disproportionate share of workers earning the minimum wage. Representatives of small businesses have, therefore, argued that any increase should be accompanied by tax incentives targeted for small businesses in order to lower their costs.

There are about 23 million small businesses in our country. Businesses with fewer than 500 employees represent more than 99.9 percent of all American businesses. They pay nearly half the total American private payroll. They have generated 60 to 80 percent of the new jobs annually over the last decade, and they employ 41 percent of high-tech workers.

Small business is particularly important in rural States such as Montana. Rural communities generally do not have large employers. Rural families rely on small businesses for jobs.

The Finance Committee has jurisdiction over taxes. The committee held a hearing on January 10 of this year entitled ``Tax Incentives for Businesses in Response to a Minimum Wage Increase.'' The committee heard from a variety of witnesses, including labor economists, small business owners, and tax experts.

Following that hearing, the committee held a markup on January 17. The committee considered an original bill called the Small Business and Work Opportunity Act of 2007. That bill is a revenue-neutral bill containing a number of tax incentives for small businesses and businesses that hire minimum wage workers. The committee favorably reported that bill by unanimous voice vote, and the majority leader included that bill in its entirety in his amendment to the bill before us today.

The substitute would help business owners to afford new equipment and property for their businesses by extending section 179 expensing for another year.

In order to carry out day-to-day activities, small business owners are often required to invest significant amounts of money in depreciable property, such as machinery. While these large purchases are necessary to operate a business, they generally require depreciation across a number of years. But depreciation requires additional bookkeeping. Section 179 expensing allows for immediate 100 percent deduction of the cost of most personal property purchased for use in a business. In

2007, small business owners could deduct up to $112,000 of equipment expenses.

When small business owners are able to expense equipment, they no longer have to keep depreciation records on that equipment. So extending section 179 expensing would ease small business bookkeeping burdens.

The substitute would allow small business owners to quickly recover the cost of improvements to their establishments through extension and expansion of the 15-year straight line appreciation period for leaseholds and restaurant improvements.

Allowing retailers and restaurants to use a 15-year straight line depreciation period means that when an entrepreneur opens a business and remodels the property, that investment could be recovered over a period of time more closely reflecting wear and tear. It used to be 39 years.

In 2004, the American Jobs Creation Act shortened the cost recovery of certain leasehold improvements and restaurant property for 39 years to 15 years for the remainder of 2004 and 2005. The Tax Relief and Health Care Act of 2006 extended this provision to the end of 2007.

At the Finance Committee minimum wage hearing held January 10, small business owners testified that a shorter 15-year recovery period for restaurant and building leasehold property reflects the true economic life of the improvements. And they testified that businesses put more money into their operations if they know they can recover their improvement costs over 15 years instead of 39.

The substitute would extend the 15-year recovery period for leasehold and restaurant improvements and would also broaden the provision to allow retail owners and new restaurants to take advantage of this shortened depreciation period.

These are changes that Senator Conrad, Senator Kerry, Senator Snowe, and Senator Kyl have championed.

The substitute would simplify the way that small businesses keep records for tax purposes. The cash method of accounting is often the easiest method of accounting. Allowing small business to use the cash method reduces the administrative and tax compliance burden of these businesses. The substitute would let more businesses take advantage of this method. Businesses with gross receipts up to $10 million would be able to use the cash method.

The substitute would also help businesses provide jobs for workers who have experienced barriers to entering the workforce by extending and expanding the work opportunity tax credit.

WOTC, otherwise known as the work opportunity tax credit, encourages business to hire workers who might not otherwise find work. These employers teach workers new skills and how to be a good employee. The workers serve our food, sell us goods, paint our houses, and provide care to our sick and elderly.

WOTC, the work opportunity tax credit, has been remarkably successful. By reducing expenditures on public assistance, WOTC is highly cost effective. The business community is highly supportive of these credits. Especially industries such as retail and restaurants that hire many low-skilled workers find it useful.

The substitute would extend WOTC for 5 years, and the substitute would expand the credit to make it available to employers who hire veterans disabled after 9/11, something I think is very important for us to do.

As of July 2006, nearly 20,000 members of our Armed Forces were wounded in action in Operation Iraqi Freedom and Operation Enduring Freedom. Many of these soldiers are now permanently disabled and do not know what they are going to do once they return home. We need to help these young men and women, and a modest tax incentive to get them back in the workforce is a good place to start.

This is an issue the Senator from Colorado, Mr. Salazar, championed.

I think we should make WOTC permanent. Senator Snowe and I introduced a bill to do just that. But to accommodate other Senators' priorities, the committee agreed to a 5-year extension in the bill that is now included in the substitute.

The substitute helps small businesses by modifying S corporation rules. These modifications reduce the effect of what some call the sting tax; that is, these modifications improve the viability of community banks.

These are changes that Senator Lincoln and Senator Hatch have championed.

These are all important ways to help small businesses succeed. These provisions will spur investment and, thus, create jobs. They will provide greater opportunity for workers looking for a job. They all enjoy strong support.

Senator Grassley, members of the Finance Committee, and I have worked to develop a balanced package, and I believe we have done just that.

The language included in the substitute is a responsible package that will ensure the continued growth and success of small businesses. And we have also paid for it. Most of the offsets are proposals the Senate has supported several times before. The offsets include a proposal to end future tax benefits for abusive sale-in-lease-out tax shelters, known as SILOs. These deals are foreign tax-exempt entities to generate sham tax deductions.

Even after Congress shut these deals down in 2004, some taxpayers continue to take excessive, unwarranted depreciation deductions on German sewer systems and the like. The Internal Revenue Service says it has 1,500 of these deals under audit involving billions--yes, billions--of dollars. At a minimum, it is time to shut these foreign deals down. There are domestic deals, too, but this provision only affects foreign deals.

Another offset doubles fines, penalties, and interest on taxes owed as a result of using certain abusive offshore financial arrangements to avoid paying taxes. Taxpayers will hide their money from the IRS through offshore credit cards and other shady financial arrangements need to get the message that this Congress is serious about ending these abuses.

The substitute closes a corporate loophole used by companies that reinvented themselves as foreign corporations to avoid paying taxes in our country. In March 2002, Senator Grassley and I made it clear to those who put profits ahead of patriotism did so at their own peril. The substitute would treat those who moved offshore after that date like a U.S. company, and the substitute would make those companies pay U.S. taxes.

Further, under the substitute, companies that paid to settle Government investigations or that paid punitive damages ordered by the courts will be prohibited from taking tax deductions for those payments.

Deducting these amounts can reduce the true cost of these settling by as much as a third. Deducting these amounts would effectively shift the tax burden onto the backs of other taxpayers who pay what they rightfully owe. Those deductions should, therefore, be prohibited.

The hard-working American taxpayers we are trying to help in this substitute should not have to pay more taxes because some taxpayers are abusing the tax system through tax shelters. They also should not have to bear the burden of civil settlements and punitive damages paid by companies that engage in questionable behavior.

Another offset would limit the annual amount of nonqualified deferred compensation for corporate executives. Rank-and-file workers generally have to pay taxes on their compensation when they earn it. The exception is deferred compensation provided through qualified retirement plans with statutory limits on contributions and benefits. A 401(k) is the best example.

Management, on the other hand, has no limit on the amount that can be deferred to nonqualified arrangements--no limit. The substitute sets the annual limit at the lesser of 100 percent of taxable compensation or $1 million.

These are sound changes. I urge my colleagues to support the substitute.

I yield the floor.