Veterans Health Care Budget Reform Act of 2008

Today I rise with Senator Tom Harkin of Iowa to introduce bipartisan legislation aimed at reducing disability in our Nation. As the Congress moves this week to ensure the strength of the landmark Americans with Disabilities Act, we must continue to work to ensure that every American has the means to overcome physical impairment. I am honored to be joined today by Senator Harkin--who has long championed the ADA--as well as Senators Daniel Inouye, and Russ Feingold--as we act to ensure that those with group health insurance are able to access needed prosthetic care in order to lead full and independent lives.

This year over 130,000 individuals will undergo amputation procedures, often as a complication of diabetes or other chronic disease. For such individuals an appropriate prosthetic limb reduces disability and allows them to maintain employment and lead more productive lives.

Today many amputees receive prosthetics through their coverage by the VA, Medicare, Medicaid, or S-CHIP. Yet too often individuals without such coverage find that their private plan requires copayments for a needed prosthetic which they simply cannot afford, or imposes a ``lifetime cap'' which prevents them from replacing an existing prosthetic when needed.

So with an estimated two million individuals living with limb differences or loss in the United States, the impact of severely- restricted prosthetic coverage can be devastating. This is even more so for the estimated 70,000 amputees under the age of 18. Sadly, we see those children particularly affected as their growth increases the frequency with which a prosthetic requires replacement. That can quickly exceed a parent's ability to meet copayment requirements--a coverage cap may deny access to a replacement prosthetic.

So it is easy to see why 11 States--including my own State of Maine-- have enacted legislation to assure reasonable coverage of prosthetics, and why more than half of the States are now examining parity for prosthetics. Studies in different States have reported that the imposition of parity can be expected to raise monthly health plan premiums by approximately 12 to 50 cents a month. That low cost helps keep amputees productive, and avoids shifting health costs to public programs--simply because the needed prosthetic could not be obtained, and the individual saw their function and productivity decline until they had to rely on public assistance.

That is so unnecessary and inappropriate. The legislation which we are introducing today--the Prosthetics Parity Act of 2008--will ensure that group health plans treat coverage of such prosthetic devices on par with other essential medical care covered by health insurance. It does not mandate coverage, but it does assure than when it is offered, it is not so restricted or capped that it does not assure an amputee of the prosthetic they require.

As we move forward to ensure greater opportunity and accommodation for Americans with disabilities, it is so timely that we ensure the appropriate access to prosthetics to help reduce disability. I call on my colleagues to join us in supporting this legislation to further the vision of greater opportunity for those with disabilities.

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

Mr. President, I rise today to offer legislation that will increase the trustworthiness of our Nation's mortgage security market by creating the Federal Board of Certification for mortgage securities.

The recent collapse of Lehman Brothers, and the Federal Reserve's bailout of American International Group, Fannie Mae, Freddie Mac and Bear Stearns, along the huge losses suffered throughout the financial industry, demonstrates a catastrophic failure to accurately assess the dangers of imprudently made subprime mortgages to the American public and our financial markets. In hindsight, it appears that it was the inability to gauge risk in mortgage-backed securities that caused much of this financial turmoil. For markets to operate properly, it is imperative that they have effective metrics for calculating the level of risk securities pose to investors.

The secondary mortgage market has been a largely unregulated playground where poorly underwritten, low-quality loans were sold as high-quality investment products. Although mortgage backed securities can be a positive market force, which increases the available pool of credit for borrowers, without an accurate picture of the risk involved in each mortgage security, buyers have no idea whether they are buying a high-risk investment or a safe, secure investment. My legislation would work to curb the excesses of the secondary market, combat future attempts at deception, and protect investors by making scrutinized mortgage investments more reliable and trust-worthy.

The inability of major corporations to properly assess the risk of the mortgage securities they were trading is a problem whose effects have not been confined to Wall Street. To put it simply: when big banks sneeze, the rest of America gets a cold. By 2009, more than a trillion dollars of the subprime mortgages originated during the housing boom will reset to higher interest rates. Currently, according to the Mortgage Bankers Association, 43 percent of subprime adjustable rate mortgages are already in foreclosure. In my home State of Maine, we are struggling with falling home prices and a record number of foreclosures. Some Maine borrowers, with rising monthly payments, are unable to refinance out of their predatory loans. Small business owners, many already hurt by the economic downturn, are also finding credit tight. The bad economic climate caused by the subprime credit crunch is roiling the stock market causing Americans to loose billions in their IRAs and retirement funds.

We need to fix this crisis before it gets any worse and make sure it never happens again. Francis Bacon said that ``knowledge is power.'' My bill would give investors the knowledge to make intelligent calculations of risk and as a result, it would give them the power to decide how much risk they could collectively handle.

Turning to specifics, my bill creates the Federal Board of Certification, which would certify that the mortgages within a security instrument meet the underlying standards they claim in regards to documentation, loan to value ratios, debt service to income ratios, and borrowers' credit

standards. The purpose of the certification process is to increase the transparency, predictability, and reliability of securitized mortgage products. Certification would aid in creating settled investor expectations and increase transparency by ensuring that the mortgages within a mortgage security conform to the claims made by the mortgage product's sellers.

The proposed Federal Board of Certification would not override any current regulations and would not, in any way, stifle any attempts by private business to rate mortgage securities. This legislation would, however, create incentives for improving industry rating practices. Open publication of the Board's certification criteria would augment the efforts of private ratings agencies by providing incentives for increased transparency in the ratings process. The Board's certification would also serve as a check on the industry to ensure that ratings agencies carefully scrutinize the content of mortgage products before issuing evaluations of mortgage backed securities.

Significantly, the Federal Board of Certification would also be voluntary and funded by an excise tax. Users could choose to pay the costs for the Board to rate their security, or they could elect not to submit their product to the Board.

We must quickly restore confidence in the U.S. mortgage securities if we are to stabilize our housing markets and enable families to refinance their expensive loans. To do this, we must certify the quality and content of our mortgage securities and enable those markets working again to create liquidity and lending. This is why it is urgent to create the Federal Board of Certification for mortgage securities. This legislation would create a ``good housekeeping seal of approval'' for the mortgage security industry and certify that the mortgage products are in fact what they claim to be. Accordingly, I call on Congress to take up and pass this common-sense amendment as expeditiously as possible.

I encourage my colleagues to strongly support the creation of the Federal Board of Certification. This legislation will restore trust in U.S. financial markets and mortgage securities which will help American businesses and ultimately, most crucially, American families.

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

Mr. President, one of the credit crunch's most unfair-- but least-discussed--impacts is its severe curtailment of municipalities' ability to raise capital for critical infrastructure projects. Because municipalities did not engage in the financial ``innovation'' that led to this situation, they are merely innocent bystanders swept up in a national crisis. Congress must take swift action to mitigate the credit crunch's impact on U.S. municipalities. To do so, I rise today to introduce the Municipal Bond Market Support Act of 2008. By relaxing outdated restrictions that prevent banks from acquiring municipal debt, the Act will significantly enhance demand for municipal bonds, thus aiding municipalities across the Nation-- particularly those in small and rural communities--in financing essential infrastructure projects. I thank my friend from Idaho, Mr. Crapo, a colleague on the Finance Committee, for joining me in introducing this bipartisan legislation.

Federal policy has long recognized the critical role of municipal bonds in enabling communities to undertake critical investments. But the liquidity crisis has dried up available capital for bonds, both municipal and corporate, at a time when the municipal bond market is already reeling from other setbacks. The auction-rate security market's collapse, which forced municipal issuers to refinance or convert more than $80 billion of their total $166 billion in such securities, has already cost municipalities more than $1 billion, thus pushing new municipal bond issuance out of reach for many municipalities. Meanwhile, when the Nation's two largest bond insurers were downgraded earlier this year, the underlying municipal bonds saw a corresponding downgrade--a penalty for merely being ``wrapped'' in the downgraded firm's insurance.

Taken together, these forces have driven yields on benchmark, 30-year tax-exempt debt to their highest levels since July 2004. These high rates have dramatically increased costs for municipalities facing interest payments on outstanding floating-rate municipal bonds, while making it more costly for municipalities to issue new debt. In the first half of 2008, long-term municipal issuance dropped 4.1 percent over the prior year, and a further drop is predicted in the second half; for new issuances, the interest costs have vastly increased. Given the credit crunch's severity, full recovery is probably a long way off. The timing could not be less opportune--the financial slowdown will cause municipal budget deficits to balloon, just when the need for infrastructure enhancements could not be more apparent.

Our bill, which largely mirrors a companion already introduced in the House by Chairman Frank and Chairman Neal of the House Ways and Means Select Revenue Measures Subcommittee, would stimulate demand--and therefore lower borrowing costs for issuing municipalities--by relaxing restrictions on banks' ability to participate in the municipal bond market.

To understand the proposed changes, it is useful to briefly review the tax code's current rules regarding banks' holding of municipal debt. Prior to 1986, banks were generally permitted to deduct the full interest costs they incurred unless a borrowing was incurred or continued to purchase or hold such bonds. Consequently, banks made up a significant share of the demand for municipal debt. But the 1986 tax reform eliminated this deduction for banks by requiring a pro-rata interest expense disallowance, with a limited ``qualified small issuer'' exception that permits banks to deduct 80 percent of the cost of purchasing and carrying bonds of governmental entities that issue $10 million or less in municipal bonds in any calendar year. This exception was added because small issuers' infrequent and small borrowing amounts make it too costly for them to sell debt in the national capital markets, leaving private placements with local banks the most feasible and cost-effective alternative.

To increase demand for municipal debt, the bill makes two modifications to these limitations. First, it would raise the bank qualified limit for small issuers from $10 million to $30 million, and then index the new limit for inflation. Municipalities that issue between $10 million and $30 million will thus be able to raise capital through private placements. Because private placements generally carry no underwriting fees and require no offering document, the up-front issuing costs to municipalities are far lower than issuing debt on the public markets. More critically, interest payments are far lower: Interest on such ``bank qualified'' debt averages 40 basis points, 0.40 percent, less than interest on nonbank qualified debt.

Failing to raise the bank-qualified level from the amount set in 1986 has real consequences for American communities. For instance, many small hospitals and healthcare facilities, even in small population States, cannot take advantage of today's small-issuer exception because they borrow through statewide authorities that issue bonds on behalf of multiple institutions, thereby exceeding the $10 million limit. In my home state, the New Mexico Hospital Equipment Loan Council tells me that if the $10 million limit had instead been $30 million, then many hospitals in our state's rural communities would have been able to secure funding to acquire additional hospital equipment, among them, Sierra Vista Hospital in Truth or Consequences; the Prairie Meadows assisted living facility in Clovis; and the Las Cruces Mental Health Center in Las Cruces. For each of these entities, the prospective borrower was instead forced to seek alternative, higher-cost capital options--or could not secure funding to complete the transaction.

As another example, the City of Las Cruces would benefit from this bill. The city has had five debt issues in the last 5 years that exceeded $10 million. The financial advisor under contract to the City estimates that the difference in rates, with a higher limit on bank qualified debt, would be about 20 basis points--a savings that would be passed on to the taxpayers and rate payers in our community.

Second, as concerns municipalities that issue more than $30 million in debt annually, the bill would allow financial institutions to hold up to 2 percent of their total assets in such debt, without disallowing a proportional amount of their interest expense deduction. This change is intended to restore bank demand and provide some stability by bringing this group of institutional investors back into the municipal market. Nonfinancial companies already benefit from this safe harbor, so in this regard, the bill creates parity. Many larger municipal infrastructure projects have costs in excess of $30 million, and bank investment can only help these critical projects succeed.

Finally, it bears mentioning that this bill offers at least two collateral benefits. First, enabling local governments to undertake additional infrastructure investments will help to stimulate our challenged economy. Second, by enabling banks to acquire municipal bonds--the safest class of security--the bill will enhance the stability of banks at a time that they face considerable financial pressure.

I am pleased that this bill has been endorsed by a number of organizations, including the National League of Cities; U.S. Conference of Mayors; National Association of Counties; Government Finance Officers Association; International City/County Management Association; National Association of State Auditors, Comptrollers and Treasurers; National Association of State Treasurers; Council of Infrastructure Financing Authorities; Education Finance Council; and National Association of Health and Educational Facilities Finance Authorities.

I hope my colleagues will join with Senator Crapo and me in working to enhance liquidity in the municipal bond market. Our bill will go a long way toward ensuring that our cities, towns, counties, utility districts, and school districts can secure affordable financing to undertake the infrastructure projects that our communities sorely need.

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

Mr. President, when I was home over the August recess, I traveled over 6,000 miles across Wyoming. I visited dozens of different cities in my home State, all of which have a variety of concerns and needs. I found, however, one common theme throughout every town and in every meeting I took. That theme was the need to do something about the high cost of energy.

High energy prices are hurting everyone, but they are especially impacting the people of Wyoming. People in Wyoming are often forced to commute long distances to get to work. Some have to drive miles for groceries and general services that are common in larger cities. We need to do something to make America energy sufficient and today I am introducing my plan to make that happen.

My bill is titled Eight Steps to Energy Sufficiency, and it follows a similar model I have used before. It breaks down the deficiencies in our Nation's energy policy into eight separate areas and provides a solution for those eight areas. It is a comprehensive approach, but it is broken down in a way that any one of the steps can be passed on its own merits.

First step--use less energy. The problem that we are facing today is a supply and demand issue. We have too much demand for energy and not enough energy supply. My bill takes the approach that we can use less by aiding in the development of technology that will make vehicles more efficient.

Second step--find more American energy. Traditional energy sources make up 85 percent of our energy portfolio today, and there is no way we can transition to renewable energy over night. Because that is the case, we should be focusing our efforts on developing as much American energy as we can so that we can stop sending money to countries that are not necessarily friendly to the U.S. My bill does this by opening up the Outer Continental Shelf to energy development and ending the senseless ban on oil shale development. These two actions will go a long way toward making America more energy sufficient.

Third step--speed up the process. We can't get refineries built in the U.S., even though we need them and so my bill includes a provision to help streamline the permitting process for refineries. In addition to that, it takes a look at the NEPA process in an effort to see how we can limit senseless litigation that is slowing the production of energy on already leased lands.

Fourth step--innovation. I am a huge believer in American ingenuity. Every year, I hold an inventor's conference because I believe our community of inventors will be key in solving our energy crisis. My bill recognizes this and helps move forward the development of hydrogen technologies. It also studies cellulosic ethanol to determine if we are doing all that we can to help move non-corn based ethanol forward.

The fifth step of my plan deals with incentives. We need to incentivize the production of energy and we need to let people know that the Federal Government is in it for the long haul by providing incentives that last for more than a year. My plan would reauthorize the wind production tax credit for 5 years and it would renew the solar production tax credit for 8 years. It would repeal the Federal Government's theft of States' fair share of mineral royalties so that States would be encouraged to allow for production on their lands. It is important that we help people who are doing their part, and making these important credits available is one way to do just that.

The sixth step of my plan to strengthen America's energy supply deals with our nation's most abundant energy source: coal. Wyoming is the Nation's largest coal producer, and any realistic effort to make America's energy supply more robust has to recognize that coal will play a major role in making that happen. My bill provides funding for research and development to help develop and deploy carbon capture and sequestration technologies. It promotes using coal to make diesel fuel and allows the Air Force to enter into long term fuels contracts so that our military has a secure source of jet fuel.

Nuclear energy must also play a role in making America energy sufficient, and the seventh step of my plan encourages the development of nuclear energy. The bill recognizes the important role Yucca Mountain could play, and it offers up tax credits to help build new nuclear reactors. Wyoming is the Nation's largest producer of uranium, and because nuclear is a clean and efficient energy source, we should be doing all that we can to move it forward.

Finally, the eighth step in my plan involves opening up a small area of Alaska's coastal plain to energy production. By opening up a portion of the Arctic National Wildlife Refuge that is roughly the size of the Natrona County International Airport in Casper, Wyoming, we can produce about a million barrels of American oil each day. The Energy Information Administration recently sent a letter suggesting that the addition of 1 million barrels of oil a day to the market could drop the price as much as $20 dollars per barrel, and we should act on this matter expeditiously.

My bill is an eight step plan. I broke down my ideas for energy sufficiency into eight separate steps with the hope that each piece can be passed by Congress as stand-alone legislation. In Washington, bills that are smaller and more specific are much easier to pass than huge pieces of ``comprehensive'' legislation because those big bills can often gain opposition very quickly, and before you know it they will not pass. Whenever we try to push through big energy packages, nearly every Senator objects to some aspect of it, and that means we are not able get enough people in support of the bill to pass it. By breaking down my plan into sections, we have eight sensible solutions for Congress to consider, and if enacted, any one of them would ease the burden of high prices faced by consumers.

I hope my colleagues will take a look at my package and will work with me to move forward with this important legislation. All summer, I heard about the importance of moving forward with energy legislation, and I believe my approach is the best way to make America energy sufficient.

Mr. President, I come to the floor today to introduce the Idaho Efficient Vehicle Demonstration Act of 2008. I am pleased that my colleague, Senator Crapo, is fully supportive and an original cosponsor of this bill, and that an identical bill will be introduced today in the House of Representatives by our colleagues, Representatives Mike Simpson and Bill Sali.

This is a bill that is very important to the State of Idaho. It is a bill that will improve the efficiency of freight movement within the State, provide significant economic benefits to a variety of local natural resource-based industries, and establish a record attesting to the safety of heavier, more efficient vehicles.

The State of Idaho has long recognized the need to provide a more productive means of freight transport. In light of that, the Idaho State Legislature created a pilot project in 2003 to allow vehicle combinations weighing up to 129,000 pounds on designated routes within the State highway system. As a result of this pilot project, Idaho has realized significant economic benefits and has established a strong record of safety while utilizing more efficient vehicles.

Idaho's sugar beet, potato, grain, dairy and phosphate industries reported that participation in the pilot project resulted in reduced fuel consumption and equipment maintenance and increased productivity based on estimates of five to eight percent savings in freight costs. Amalgamated Sugar Company reported 30,000 fewer truck trips, resulting in an estimated savings of just under $300,000.

This pilot project has been in effect for 5 years and no safety concerns have been raised by the participants or by the Idaho Transportation Department in their initial report last year. In fact, survey responses from pilot project participants found that safety was the same or greater due to the reduced numbers of trucks on the road. Similarly, the pilot project has not been found to create a significant change in pavement conditions when compared to previous years.

In light of this 5-year record, I believe it is appropriate and necessary to make a very small, targeted expansion of this project by adding limited stretches of Federal highway to the existing State pilot project to help connect our State and Federal roads so that the movement of goods can proceed more efficiently in the future.

This small expansion is necessary for several reasons. Idaho's neighboring States of Montana, Nevada, Utah and Wyoming do not have such stringent limits on their Federal highways due to grandfathered rights. This puts Idaho at a distinct competitive disadvantage and slows the free flow of freight between neighboring States. This bill would help to even that disparity in weight restrictions among our neighbors. It will also provide valuable data and information to the U.S. Department of Transportation as to the net beneficial effects to our infrastructure by requiring that road, bridge and accident information is gathered and reported.

This bill has the strong support of Idaho Governor Butch Otter, the Idaho Transportation Department, and the business community, including both shippers and motor carriers. The Idaho Trucking Association has specifically endorsed this proposal as have numerous shipper companies that are based in my home State.

I recognize that there are significant challenges facing the freight industry and, by association, our natural resource-based industries that rely heavily on trucks to move their freight. Changes in truck emission requirements, a seemingly perpetual driver shortage, sustained high fuel costs, and increasing insurance premiums are only a few of the challenges that face truck companies and struggling industries in Idaho. With that said, this is one step that can be taken to relieve some of the burden on our freight industry, and do so in a safe, economic and environmentally friendly fashion.

If enacted, this bill will improve safety by reducing the number of trucks on Idaho roads. It will have a positive environmental impact by reducing diesel consumption and emissions. It will provide an economic boost to the State by reducing wear and tear on Idaho highways and improving the competitiveness of our natural resource industries.

In light of the enormous task of reauthorizing our Nation's surface transportation policy next year, it is important that proposals of this nature be allowed time to be discussed and vetted at length. Ultimately, it is my hope that we might be able to make some targeted changes to Federal weight restrictions in order to achieve significant environmental and economic gains while still keeping the highest regard for safety.

I look forward to working with my colleagues in the Senate to move forward this important issue.

Mr. President, since September 11, 2001, our Nation has taken significant steps to improve our national security. However, to improve our ability to prevent and respond to a future terrorist attack we need to fundamentally change the working relationship between our Federal, State, local, and tribal law enforcement agencies. The Homeland Security and Law

Enforcement Improvements Act of 2008 will do this by making State, local, and tribal law enforcement agencies full partners with Federal agencies in homeland security policymaking and by ensuring that these agencies have the resources they need to prevent and respond to terrorist attacks or other major incidents.

As chairman of the Judiciary Subcommittee on Crime and Drugs, I regularly talk to police chiefs and sheriffs throughout this country. These men and women are on the front lines of protecting our communities from a host of dangers in these difficult times. They know where our vulnerabilities are and what it will take to keep our families and neighborhoods safe, but, to put it simply, we haven't been listening. Policymakers haven't been listening to the people on the ground, leaving a critical gap in homeland security prevention, preparation, and incident response capabilities.

The Homeland Security and Law Enforcement Improvements Act of 2008 makes a number of important improvements to this situation that I believe will strengthen our ability to prevent and, if necessary, effectively respond to a major terrorist incident.

First, the act will ensure that state and local law enforcement agencies are full partners in both crime fighting and homeland security by giving the Assistant Secretary for State and Local Law Enforcement the appropriate budget and program management authority.

Second, the act will ensure that state and local law enforcement agencies have the resources needed to prevent and respond to terrorist acts by fully funding the Law Enforcement Terrorism Prevention Program, LETP, as a separate initiative. The LETPP is the only funding resource in the Department of Homeland Security dedicated solely to meeting the unique needs of law enforcement as they try to protect our communities from terrorism.

Third, the act ensures that first responders in local law enforcement have the resources they need to effectively react to a terrorist incident by establishing the Commercial Equipment Direct Assistance Program, CEDAP, as an authorized program. The CEDAP provides funding that allows law enforcement first responders to identify and select specialized equipment and technology that can help them protect the communities they serve.

Fourth, the act will ensure that we have a swift and coordinated response in the event of a major incident by establishing Law Enforcement Deployment Teams that can react immediately to major incidents throughout the country.

Fifth, the act will create an Information Sharing Resource Center to facilitate information sharing between Federal, State, local, and tribal law enforcement agencies, intelligence officials, and Federal agencies so that every stakeholder has the information necessary to protect our country from terrorist attacks.

Finally, the Act strengthens our ability to prevent and disrupt plans for attacks against America hatched overseas by establishing a Foreign Liaison Officers Against Terrorism, FLOAT, program. FLOAT will allow American state and local law enforcement officers to serve outside the U.S. as liaison officers--working closely with their foreign law enforcement counterparts to share information and gain a better understanding of how terrorists work abroad.

Each of these initiatives: the LETPP, CEDAP, the Law Enforcement Deployment Teams, the Information Sharing Resource Center, and FLOAT will be under the direction and control of the Assistant Secretary, who will report directly to the Secretary of the Department of Homeland Security.

I am honored to introduce this legislation with the support of the U.S. Conference of Mayors, the National Association of Police Organizations, the National Sheriffs Association and other law enforcement groups throughout this country who toil daily to keep us safe from crime and terrorism.

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