Energy Market Manipulation Prevention Act

I ask unanimous consent that the order for the quorum call be rescinded.

I ask unanimous consent to speak as in morning business.

Mr. President, there is a disturbing pattern emerging in Washington, DC, which I don't think is being lost on the American people. We have seen, since the beginning of this year, with the new administration coming into power, the new Congress taking control of the leadership in both the House and Senate, an enormous amount, an unprecedented amount of spending, borrowing, and taxing. To bear that out--this information has been used before--if you actually look at the numbers, you have to go back a long ways in American history, go back to the foundation of our country, go back to 1789, and you take it up to today, 2009, 220 years of American history, the total amount of debt that has been accumulated over that period of time, literally since the Presidency of George Washington through the Presidency of George Bush will be equaled in the next 5 years.

We will double the amount of Federal debt, public debt in this country in the next 5 years. We will triple it in 10 years. We are borrowing and spending money around here on a spree that literally is without precedent in American history.

It should be of concern to all Americans for the obvious reason. They have a share of that debt. In fact, according to USA Today, if you just take the amount of debt that has been accumulated since the beginning of this year, with the passage of the stimulus bill, with the new appropriations bill that passed, an 8.3-percent increase over the previous year, which was twice the rate of inflation, and all the other spending that is going on with the various bailout programs and whatnot, the average family's share of the debt this year alone is $55,000. The average family's share of the Federal debt is $55,000 per family in debt accumulated just since the beginning of this calendar year.

The amount of borrowing is without precedent. The amount of spending that is being done is without precedent. All under the guise of this is an emergency, and we have to react this way. But I think as more of this spending and more of this debt accumulates, the American people have become more convinced that the spending isn't solving the problem it was supposed to solve, which was we were going to create jobs, get the economy growing and expanding again. We haven't seen any of those effects.

What we have seen, of course, is more debt, more interest, and a bill that we will hand to future generations that is not fair to them because we should not be penalizing future generations and pushing them because we haven't been able to live within our means.

The most recent response to that by the administration was yesterday. They came out and announced they are going to implement pay-go. So we are going to have pay-go regulations or pay-go policies now in place with respect to the Federal budget and the way we operate in Congress. Incidentally, even when pay-go was in effect, it was not very effective because much of the budget, much of the spending that occurs in Washington is outside the realm or outside the net of pay-go.

In fact, if you look at what pay-go does in terms of its design, it exempts all discretionary spending, would allow all current entitlement programs, such as Social Security, Medicare, and Medicaid, to continue to grow on autopilot. It affects only new entitlements or tax cuts that may be created in the future. Pay-go also allows expiring entitlement programs to be extended without offsets but not expiring tax cuts.

So it is clearly biased in favor of higher spending and higher taxes. In fact, if it does not apply to discretionary spending and if, in fact, it does not in a meaningful way apply to entitlement reform--in other words, it simply puts sort of a cap on how much entitlements can grow, but it doesn't get at the fundamental issue that these programs continue to grow unabated--it is simply one thing: a statutory excuse to raise taxes. That is essentially what pay-go is.

The new administration came out with the news bulletin yesterday that this is somehow a bold, new step and that they are going to attack and take on this deficit and this debt we have. Of course, what they didn't tell us is--sort of the expression we use in my part of the country--it is like closing the barn door after the horse is already out of the barn because we have already got all this spending this year that wasn't covered by pay-go. The stimulus bill, which was $800 billion in new borrowing, was outside of pay-go. In fact, over the past several years now that the Democrats have been in power in the Congress, they have consistently violated the pay-go standard, about 15 times, to the tune of about $882 billion in all this new spending that was done outside of pay-go.

So now it is like all of a sudden coming to the conclusion and realization that now we are going to get serious about deficits, now we are going to get serious about spending, now we are going to somehow clamp down on all these new programs that are out there. Somehow, at least rhetorically, subscribing to pay-go as a concept is going to be the solution and the answer to that.

I think we all know better than that. As I mentioned, pay-go has been routinely sort of ignored in the past. Even if it were to apply, as I mentioned earlier, it does not capture much of the spending that goes on here in Washington. It is simply nothing more than a statutory excuse to raise taxes.

Having said that, I mentioned before much of the spending that has already occurred here in Washington. Yet the big-ticket items are still looming out there on the horizon in the future. By that I mean health care reform, which is a big priority of the administration. We are starting to see more details, get a little bit of a glimpse of what that might entail.

We know, for one thing, based upon the statements that have been made by the President and by the Democratic leaders in the Congress, they want it to include a government plan, purely and simply. They want a government plan, which means one thing; that is, that the government takes over health care in this country. Because you cannot maintain a private insurance program, you cannot maintain a private-sector delivery system, a market-based health care system in this country if you are going to have a government plan.

The government plan is where everybody, according to studies that have been done, eventually would end up going. They would gravitate there. More and more small businesses either would be forced to pay fines, if they did not have insurance themselves or offer insurance. The suggestion is--and I think it is a fair one based upon the analysis that has been done by a lot of the independent outside groups--you will see more and more small businesses giving up their health care coverage and having their employees move and transition into the government plan. The government plan will become the repository for all the employees who are currently covered in employer-provided health care plans in this country.

So the government component of this will continue to grow, and eventually you will have a system that very much models or is very similar to what we see in other places around the world. Some people talk about Canada, some people talk about Europe and all these great systems. But the reality is, a lot of the people in those countries come to the United States. The reason they come here is because we have the highest quality care and because they can get access to it.

The one thing that happens when the government runs health care is the government decides what procedures are covered. The government decides what treatments are going to be part of the coverage. The government will decide how soon you can get access to those treatments. What you find in other countries around the world are long lines, long waits, and that is fairly typical of the countries I mentioned.

The thing that makes the American system so unique in all the world is its dependence upon and its foundation upon a market-based system. It has led to incredible innovation. It has led to incredible research and development, new treatments, new therapies, and has provided all kinds of opportunities for people of this country to receive health care, and, frankly, as I mentioned before, for people from other countries who come here to get their health care.

So why we would want to throw out that part of our health care system that is so good and replace it with a government-run system--which, frankly, again, the government is going to get in the middle of the decision between the consumer of health care or the patient and their provider, the physician, and make those decisions. It seems to me that is not a model we want to emulate in the United States.

As I said, we have a system that needs reform. We have flaws in the way our current system works. But the fact is, it is the very best health care system in the world, and I think it would be a big mistake for us to go down a path that shifts and moves more and more people into a government-run, government-controlled system, where the government decides what procedures are going to be covered and how soon you are going to have access to them.

I think it does one thing: It obviously would lead to a rationing of health care. By that I mean, simply again, that the government would have to try the clamp down on costs, limit the access of people to have certain types of therapies, certain types of treatments, and I think you would find less and less choice available in health care in this country. That is what I think a government-run system would give you in the end.

Most of us on this side have laid out a number of proposals, alternatives to a government-run system. Everybody says: Well, come up with a plan of your own. We have a number of them out there. We have a Coburn-Burr plan that has been introduced. Senator Gregg from New Hampshire has a plan that has been introduced. There is a Bennett-Wyden bill, which is a bipartisan bill, that has been introduced out there. But there are a number of alternatives that have been put forward by Republicans.

To date, we have only seen little sort of generalities about the Democrat plan. All we simply know is they are going to insist upon a government-run component to that. Again, it simply is nothing more and nothing less than a government takeover of health care, which is going to lead to all kinds of outcomes that I do not think most people in this country are prepared for and, frankly, if they had the opportunity, would not support.

But they have entrusted us with the responsibility to look for ways to make health care more affordable in this country. There are lots of good suggestions which, as I said before, Republicans are putting forward. But it is going to be very difficult if the bright red line that is put forward by the Democrats in the Senate and in the House of Representatives is a government-run program, a government-run plan or else. I certainly am not going to subscribe to that sort of a solution for America's health care system. Nor do I think it is going to be in the best interests of patients and consumers around this country or providers, for that matter, to do that.

So health care debate is one debate that is out there. The reason I raised that issue is because it ties back into my point earlier that the amount of spending and borrowing and taxing that is going on here is--if you look back at what has already been done, it is enormous, it is enormous by any comparative standard in American history. But the big-ticket items are still out there because the health care plan, as we understand it--again, it has only been conceptual. We have not seen the details emerge from any of the Democrats' ideas. They are starting to roll more of it out. But one thing is clear: It is going to have a huge price tag. We are talking about anywhere from $1 trillion to $1.5 trillion to $2 trillion. Of course, if they are going to adhere to the newly announced pay-go standard, that means this new entitlement program has to be paid for.

So where does that $1.5 trillion or $2 trillion come from? Well, obviously, it is going to come from some revenues raised from some part of our economy. That means a lot of hard-working Americans are going to see their taxes go up to finance this new government takeover of health care, which is going to give them fewer options, and get in the way of the patient-doctor relationship and cost them a lot more in the form of higher taxes.

I think even though much of the spending I have already referred to is in our rearview mirror--all that is left is to pay the bill for that. We still have to pay the bill. We are borrowing, which means somebody is going to pay the bill. We are going to hand off the bill to the next generation of Americans because, obviously, when you borrow $1 trillion, someday it has to be paid back. In the meantime, when you continue to rack up that kind of borrowing and when you continue to do all the other things we are doing in our economy in terms of interventions, whether it is with regard to financial institutions or auto manufacturers--you can kind of go down the list--insurance companies now that the government actually has an ownership interest in that--we are acquiring enormous amounts of exposure and debt for the taxpayers of this country.

The health care plan is going to be another $1.5 trillion or $2 trillion on top of that. When you borrow that amount of money, you do have to pay it back. By the way, I should mention, too, the interest on the amount of debt we are going to rack up in the next 10 years alone is about $5 trillion. Think about that. That is just to pay the finance charge on the debt we have in this country. Think about the enormous burden that places on the American taxpayers and the American economy.

What generally happens in a case such as that is, when you borrow that much money, there is a lot more pressure out there, and the people who are buying that debt are, at some point, going to start demanding a higher interest rate. When interest rates go up, with the higher return on their investment, generally inflation follows with it. So you have all kinds of economic problems that are created by the level of borrowing we have already incurred. And we are going to add a new health care entitlement on top of that. It literally is breathtaking the amount of intervention we are seeing in the private marketplace today.

I talked about some of the spending and some of the borrowing that has been done. But in the taxes that are going to be associated with health care--and I could go down a list. There is a three-page list of the various, what we call pay-fors or ways of raising revenue to help finance health care. But there is also another big tax looming on the horizon, and that is the carbon tax, what we call the national sales tax on energy. If this climate change bill, which is currently moving through the House of Representatives, reaches the Senate, and if it does, in fact, pass the Congress this year, that, too, will entail an incredible amount of taxation, because there is no way in this country you can attach, essentially, a cost to carbon per ton and force companies that emit to buy the credits that would be associated with that without them passing it on. They are going to pass it on. Everybody admits that. The President has admitted that. The leadership on the other side has admitted that. All the utility companies in the country will tell you that.

A carbon tax, a national sales tax on energy, would hit places such as where I am from in the Midwest the hardest because we are, by and large, proportionately more dependent upon coal-fired power than are many other areas in the country. We have a sparse population, which means we have a ``higher carbon footprint,'' which means people in the Midwest, in States such as mine, are going to pay way more for energy under any kind of a climate change bill or what we call a cap-and-trade bill or cap-and-tax bill.

However you want to refer to it, there is no way of getting around the fact that it is going to cost an enormous amount every single year for families in this country, for businesses in this country, for industrial users, for school districts. I have seen the statistics from school districts in my State, from commercial users, from residential users about what those costs are going to be. They are stunning.

So that is another tax that is still out there. Add that to the health care tax that will come with whatever health care bill is passed through here, and the amount of taxation is going to start to rival the amount of spending and borrowing that is going on in Washington.

But it brings me to my final point, and that is what I am concerned about and what I am starting to hear more and more from people in my State of South Dakota--in many cases unsolicited--who come up to me and raise this issue of the amount of government ownership of our private economy. We are seeing, again, unprecedented levels. If there is one bedrock principle in American history, it is the adherence to the ideals of private enterprise.

In recent months, however, the United States has substantially deviated from this historical pattern, and the Federal Government now owns substantial shares of major U.S. corporations. We own--the taxpayers; I mean you and I and all of us here--we are now shareholders in a lot of major U.S. corporations. The taxpayers--the Federal Government--own 79 percent of AIG, 75 percent of General Motors, 10 percent of Chrysler, 36 percent of Citibank, 80 percent of Freddie Mac and Fannie Mae. And it goes on and on and on.

So we have all this spending, borrowing and taxing and now, on top of that, increasing the amount of government ownership of America's private economy. If there is one thing Americans are clear on, it is that the government should not be taking over bigger and bigger shares of the American economy.

There was a survey recently by Rasmussen that said 75 percent of Americans agree the Federal Government should not take over the U.S. banking system. That was a poll done in February. More recently, 60 percent say that the bailout loans given to GM and Chrysler were a bad idea. That was an April 21 poll. A new poll, done on May 31, just recently, shows that 67 percent of Americans are opposed to providing General Motors with $50 billion and giving the government a 70-percent ownership interest in GM. Mr. President, 56 percent of voters said it would be better to let GM go out of business. None of us want to see that. But I think none of us, at least most Americans do not want to see the government owning more and more of American companies. The Federal Government is inevitably going to use that ownership stake to push its own agenda.

In a moment of extreme candor, former Labor Secretary Robert Reich declared that if the government is an active shareholder, they should ``push management to take actions that are not necessarily geared toward higher shareholder return.''

Think about that statement. The government owns more and more of American businesses. They should ``push management to take actions that are not necessarily geared toward higher shareholder return.'' In other words, the government should use its newly acquired power in formerly private companies to further its own agenda.

Both the political process and the free markets are going to be distorted if that happens. In fact, in the New Republic, Noam Scheiber recently wrote that ``government ownership invariably politicizes management decisions which could be a fiasco.'' The article notes that a coalition of unions is lobbying against providing bailout dollars to Principal Financial Group because of its opposition to ``card check.'' You find more and more of these pressures on now because the government has a bigger and bigger stake in the government dictating day-to-day management decisions in American business. That is not a path I would argue we want to go down.

The Economist commented on the government-forced Chrysler bankruptcy:

In its haste it has vilified creditors and ridden roughshod

over their legitimate claims over the carmaker's assets. At a

time when many businesses must raise new borrowing to

survive, that is a big mistake. . . . The Treasury has also

put a gun to the heads of GM's lenders.

In a recent Bloomberg article, Bradley Keoun warns of some of the problems that Citigroup--and other banks

incur in accepting bailout money--may encounter as a result of the partial government ownership. Among them he cites government pressure for stricter compensation rules, directives to focus on ``State- approved social objectives,'' instead of increasing earnings, scrutiny of advising or being forced to ``exit risk-taking businesses that are profitable competitors.''

I think there is plenty of thought out there from people who understand the economy and the importance of the private market, its tradition, its contribution to the success of the American economy, and the prosperity we enjoy today, as well as lots of anecdotal and other evidence that when the government gets into these particular situations where it is trying to influence the day-to-day decisions of private business in this country, those who are trying to manage our private businesses in this country, leads to all kinds of fiascos and disaster.

I would mention one other point and that is, according to Bloomberg, after demands from lawmakers, Citigroup consented to support cramdown legislation, even though this policy was opposed by others in the banking industry.

It is pretty clear these types of interventions into the private marketplace, into the free market economy in this country, lead us down a path that is not good for the American taxpayer, not good for the American economy, and that it stifles innovation and entrepreneurship. In fact, I would argue it kills the entrepreneurial spirit in this country to have government taking bigger and bigger ownership interests, bigger and bigger ownership stakes in the American economy, and further dictating the decisions, the day-to-day decisions which American businesses make that are designed to grow their companies, to get a better return for their shareholders, to become more profitable, to make America more prosperous, to raise our standard of living, and to deliver more benefits to their employees--all these things that have driven this economy and made it the envy of the world. I don't think we want to go down a path or stay down a path that gets us deeper and deeper into ownership of the private economy.

I am going to be introducing and filing a piece of legislation tomorrow which addresses this issue and which provides an exit strategy for the Federal Government and for the taxpayers to begin to get out of all these ownership interests they have in the American economy, and I will have the opportunity on the floor to talk more about that at a later time. But this afternoon, I wished to touch on these issues as we begin the debate which has sort of captured this city and the Congress and the administration and I think very soon will engage the American public over health care reform and the trillions of dollars of new taxes and revenues that are going to be necessary to finance the proposal the new administration has for health care reform and how that takes us even further down the path of government intervention and a level of nationalization of our private economy--in this case health care--and that pattern that just seems to be continuing and which I think more and more Americans are reacting to and more and more Americans, I believe, are going to become engaged in.

Members of Congress on both sides are going to be hearing from their constituents about what they perceive to be a real threat to the long- term viability, the long-term prosperity, and the long-term protection of the taxpayers' interests.

I hope they will become more engaged. I certainly hope we will be able to defeat proposals that come before the Senate that call for greater governmental ownership, greater governmental intervention, greater expansion of governmental powers in Washington that will limit the choices of Americans, limit their access to health care opportunities, health care therapies, health care treatments that all too often are lost, I believe, in a system where the government rations care.

I yield the floor, and I suggest the absence of a quorum.

Madam President, on behalf of Senator Lieberman I ask unanimous consent, notwithstanding rule XXII, that I be permitted to call up amendment No. 1290 and that the amendment be modified with the changes at the desk; that once this modification is made, amendment No. 1256 be withdrawn.

I announce that the Senator from West Virginia (Mr. Byrd) and the Senator from Massachusetts (Mr. Kennedy) are necessarily absent.

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

Mr. President, I ask unanimous consent to speak as in morning business.

Mr. President, yesterday I reintroduced the Credit Card Fair Fee Act. This legislation will provide fairness and transparency in the setting of credit card interchange fees.

Several weeks ago, the Senate passed legislation that will crack down on abusive fees and practices that credit card providers impose on consumers and cardholders. It is landmark legislation. It was 20 years in the making. I was pleased to support it and glad it passed.

We also need to take a hard look at the fees and the restrictions credit card providers impose on retailers. Retailers such as the restaurant down on the corner, the grocery store, the shop, these have to be looked at as well.

Currently, banks and credit card companies impose a system of fees and restrictions on retailers that accept their cards as a form of payment. There is a growing recognition that many of these fees and restrictions are anticompetitive and unfair to businesses and consumers.

Many people assume credit cards make their money off the customers who use them in direct payment, interest charges, and penalties. It turns out there is a whole level of fees that is imposed on retailers which, obviously, is passed on to consumers but have a direct impact on sales in America. If we do not address flaws in the system, many businesses will find it hard to make a profit, and the credit card fees cause consumer prices to go up as well. The most flawed element of the current system of merchant fees is the interchange fee. It is a fee merchants pay to card issuing banks on each debit or credit card transaction.

Under the current system, card networks, such as Visa and MasterCard, unilaterally set the rates for these interchange fees. These fees vary from card to card, but they average about 2 percent of the transaction they cover. Card companies don't let their member banks negotiate with merchants over the fee rates, and they prevent merchants from encouraging customers to use cards that carry lower fees.

Yesterday, the Secretary of the Treasury was in before my appropriations subcommittee. It turns out, we accept credit cards for some 200 different agencies in the Federal Government. I asked the Secretary how much we pay in interchange fees to these credit card companies--as we accept credit card payments for everything from taxes to purchases at the Government Printing Office. It turns out it is well over $200 million a year. The GAO did a study in which it was asked whether, in fact, the Federal Government bargains for lower interchange fees because of the volume of business we do. It turns out there is virtually no bargaining allowed, not even with the Federal Government.

If merchants want to accept credit cards, those merchants simply have to abide by the rates, just like the Federal Government, that the card networks set, even when the rates are increased.

In fact, card companies regularly increase their interchange rates. A report by the Federal Reserve Bank in Kansas City found that between 1996 and 2006 Visa and MasterCard interchange rates increased from approximately $1.30 per $100 transaction to $1.80. That is about a 40- percent increase over that 10-year period of time. The rates have gone up even further for cards that have rewards programs. The total amount of interchange fees collected last year was $48 billion, according to estimates of the National Retail Federation. It is a huge increase from 2001, when the figure was $16.6 billion.

Despite these rising fees, many merchants have no real choice but to accept these cards as a form of payment. Consumers use their credit and debt cards for over 40 percent of all transactions. Interchange fees cut into retailer profits and force many merchants to raise consumer prices or go out of business.

As you think about it, what does it mean for the profitability of a company if the business is required to pay the credit card company 2 percent of the sale price on every sale? Well, for some companies that operate on a very tight margin, it can be significant. Best Buy, the large and successful electronics retailer, has a net profit margin of only 2.2 percent. Whole Foods, a well-known grocery store, has a profit margin of 1.4 percent. The food and drugstore retail sector has a profit margin of only 1.5 percent, according to Fortune magazine.

How can these companies continue to be profitable if rising interchange fees paid to credit card companies cut into their already small operating margins? In 2007, the National Association of Convenience Stores reported the entire convenience store industry had profits of $3.4 billion dollars; however, they paid credit card interchange fees of $7.6 billion. Over twice the amount of industry profit was paid to credit card providers.

Of course, it has an impact on smaller businesses. Rich Niemann, a friend of mine, who is coming by my office this afternoon in Washington, runs Niemann Foods, a chain of 65 grocery stores based in Quincy, IL. Every year I meet with him, and every year he asks me for help with interchange fees. Last year, Niemann Foods made $6 million in profits but paid $3 million in interchange fees. Those fee payments are going up every year. He has no ability to negotiate any change in those fee amounts. It is a growing expense he can't control.

Rising interchange fees cause many merchants to raise the price of their goods to cover these interchange fees. I don't want to drive small grocery stores out of business or small convenience stores. We don't want prices to go up for consumers across the board because of nonnegotiable credit card fees. The Credit Card Fair Fee Act will help restore fairness. The goal is simple. It incentivizes companies that provide credit cards and the merchants that accept them to sit down together and negotiate fees and terms both sides can live with.

The bill establishes a framework for negotiations and gives both sides a legitimate voice at the table. Under the bill, merchants would receive limited antitrust immunity to negotiate collectively with the providers of card systems over the fees and terms for access to the system. The bill then motivates the merchants and card providers to work out voluntary agreements. It establishes a mandatory period for negotiations.

If they fail to reach a voluntary agreement, the matter would then go to an arbitration-style proceeding before a panel of judges appointed by the Justice Department and the Federal Trade Commission. The judges would collect and disclose full information about credit card fees and costs and then order a mandatory settlement conference to attempt to facilitate a deal. If that fails, the judges would conduct a hearing where the merchants and card providers would each propose what they think is a fair set of fees and terms. The judges then would select the proposal that most closely represents what would be fairly negotiated in a competitive market. This set of fees and terms would govern access to the card system by merchants for a period of 3 years.

The bill contains safeguards to ensure the judges can only select a set of proposed fees and terms that is fair and pro-consumer. But the ultimate goal is to reach a deal before the process gets to the point where the judges would need to issue a ruling.

This is an archaic element of commerce in America that has a direct impact on consumers, the money we pay

for goods and services, as well as the profit margins of a lot of businesses that are struggling. The credit card companies have been unable to justify their interchange fees in terms of the actual cost of processing credit card payments. It is a profit margin on their side for which they are not accountable.

My legislation is supported by the Merchants Payments Coalition, a coalition of retailers, supermarkets, convenience stores, drugstores, fuel stations, online merchants and other businesses. The coalition's member associations collectively represent about 2.7 million stores nationwide, with approximately 50 million employees.

I ask my fellow colleagues in the Senate to take a look at the legislation. I warn them in advance, if they are interested in looking at this issue of credit cards and interchange fees, be prepared. You are going to hear from every bank that issues a credit card, and they are going to tell you the Durbin legislation is the end of the world. But I hope you will also listen to the merchants and retailers in the States you represent. They will tell you this system is unconscionable and unsustainable.

To have the credit card companies dictate these fees to their retailers all across America is fundamentally unfair. We should have arm's length negotiation. We should also have at the Federal Government level a negotiation to determine what is the best arrangement for taxpayers when it comes to paying these credit card fees to the companies that provide credit cards for transactions with the Federal Government. It is not an unreasonable approach.

I hope my colleagues will take a look at this issue, and I hope they will listen to their merchants and retailers back in their States.

Guantanamo

Mr. President, I wish to commend the Obama administration for the progress they have made to date on closing the detention facility at Guantanamo Bay. According to media reports today, the Obama administration has reached a historic agreement with the Government of Palau to transfer 17 Guantanamo detainees to this Pacific island. These 17 detainees are Uighurs from China.

The Bush administration determined that all 17 are not enemy combatants and do not pose any risk to U.S. national security. The Bush administration had determined the Uighurs couldn't be legally returned to China, for fear they would be imprisoned and tortured. A Federal Court looked at all the classified evidence against these 17 Uighurs and found there was no legitimate reason to hold them and ordered them released. The President, this administration, is going to follow that court and follow the law.

I commend President Obama and those working with him for finding a solution to what has been a vexing problem by convincing the Government of Palau to accept Uighur detainees. This is the kind of diplomacy we need to achieve a better standing in the world and a more peaceful and secure situation for the United States.

Something else happened yesterday as well. There was an important development. The administration transferred Ahmed Ghailani to the United States to be prosecuted for his involvement in the 1998 bombings of our Embassies in Kenya and Tanzania. Those bombings killed 224 people, including 12 Americans. I have been to Kenya. I saw the bombed building. It was devastating. It is hard to imagine what happened inside that building and nearby when those bombs were detonated. We know 224 people died, including 12 of our own.

I wish to commend President Obama for his determination to hold Ahmed Ghailani accountable for his alleged crimes. For 7 long years, the Bush administration had failed to convict any of the terrorists who planned the 9/11 terrorist attacks. For 7 long years, only three individuals were convicted by military commissions at Guantanamo. Two of those individuals, incidentally, have been released. President Obama has been clear, it is a priority for his administration to bring to justice the planners of 9/11 and other terrorists who have attacked our country, such as Ahmed Ghailani.

Unfortunately, this issue has become very political and very complicated over the last several months. Some of my colleagues on the other side of the aisle have expressed some things on the Senate floor which I don't think are consistent with the security of the United States. Senator McConnell, the distinguished minority leader, and Senator Kyl, the distinguished assistant minority leader, have argued we should not transfer suspected terrorists from Guantanamo to the United States in order to bring them to justice. They have argued we cannot safely hold any of these detainees in prison in the United States, even--one of their arguments--during the course of the trial.

When you look at the failed track record of prosecuting terrorists at Guantanamo, it is pretty clear if Ahmed Ghailani isn't prosecuted in the U.S. courts, there is a good chance he will never be punished for his crimes. President Obama made it clear when he said:

Preventing this detainee from coming to our shores would

prevent his trial and conviction. And after over a decade, it

is time to finally see that justice is served, and that is

what we intend to do.

Even Senator Kyl appears to have softened his position. On the floor of the Senate yesterday, he spoke about Ahmed Ghailani and said:

Everybody acknowledges that there are some people who need

to be tried for serious crimes, in effect, like war crimes,

and they should be tried in the United States.

I commend Senator Kyl for this statement. I think it is a sensible, reasonable position. But let us acknowledge the obvious: If we are going to try these Guantanamo detainees in the United States, we are going to incarcerate them while we try them. There is no other reasonable alternative. If they are found guilty and face imprisonment, what will we do with them? I am glad Senator Kyl acknowledged the obvious. Of course, we have to bring these terrorists to justice, and an American court is the best place to do it.

The U.S. Government frequently brings extremely dangerous individuals to the United States for prosecution. Ramzi Yousef--the mastermind of the 1993 World Trade Center bombings, captured in Pakistan--was brought to trial in the United States, convicted, and is now being held in a Federal supermaximum security prison, a convicted terrorist.

Some of my colleagues on the other side of the aisle continue to argue we should not prosecute Guantanamo detainees in U.S. courts because no prison in America is safe to hold them. Ramzi Yousef was held in the Metropolitan Corrections Center in New York during the course of his trial for over 2 years--safely. My colleagues seem to think American corrections officers are not capable of safely holding terrorists. Republican Senator Lindsey Graham, who is a military lawyer, said:

The idea that we cannot find a place to securely house 250-

plus detainees within the United States is not rational.

What is the record? Today, our Federal prisons--and this is the most updated number from the Justice Department--hold 355 convicted terrorists, including al-Qaida leaders such as Ramzi Yousef, who masterminded the World Trade Center bombing in 1993. No prisoner has ever escaped from a Federal supermaximum security facility. Clearly, we know how to hold these terrorists safely and securely so no one in America is at risk.

Unfortunately, some on the other side of the aisle continue to argue that we should keep Guantanamo open at all costs. I disagree. I believe, President Obama believes, and I think many Americans believe that closing Guantanamo is an important national security priority. But it isn't just the President--and President Bush, for example--who want to close Guantanamo. Among those military and security leaders calling for the closing of Guantanamo are: GEN Colin Powell, the former Chairman of the Joint Chiefs of Staff and former Secretary of State; Republican Senators John McCain and Lindsey Graham; former Republican Secretaries of State James Baker and Henry Kissinger and Condoleezza Rice; Defense Secretary Robert Gates, first appointed by President Bush; ADM Mike Mullen, the Chairman of the Joint Chiefs of Staff; and GEN David Petraeus.

Yesterday, Senator Kyl made a statement taking issue with some of

my earlier comments about Guantanamo.

Senator Kyl asked: ``What is wrong with the prison at Guantanamo?''

Let me respond to Senator Kyl's question. What is wrong with Guantanamo is that it is a recruiting tool for al-Qaeda and other terrorists.

That is not just my opinion. That is the opinion of our military leaders, based on their experiences fighting the wars in Iraq and Afghanistan.

Chairman of the Joint Chiefs of Staff Mike Mullen said:

The concern I've had about Guantanamo is it has been a

recruiting symbol for those extremists and jihadists who

would fight us. That's the heart of the concern for

Guantanamo's continued existence.

General David Petraeus said Guantanamo is, ``a symbol that is used by our enemies to our disadvantage. We're beat around the head and shoulders with it.''

And Defense Secretary Robert Gates said:

Closing Guantanamo is essential to national security. It

has become a rallying cry and recruitment tool for our

enemies--endangering the lives of our soldiers in the field,

diminishing the willingness of American allies to help wage

the fight against al-Qaida and undermining the moral

authority of the country.

Of course, Senator Kyl is entitled to his point of view and I respect him and count him as a friend. But he offers no evidence to support his view, certainly no evidence that compares with those I have quoted here, starting with Gen. Colin Powell.

Not only is Guantanamo a recruiting tool for terrorists in the Middle East. There is evidence that al-Qaida is actually recruiting terrorists in Guantanamo itself. McClatchy Newspapers conducted an extensive investigation and concluded:

Instead of confining terorists, Guantanamo often produced

more of them by rounding up common criminals, conscripts,

low-level foot soldiers and men with no allegiance to radical

Islam . . . and then housing them in cells next to radical

Islamists.

McClatchy found that, ``Guantanamo became a school for jihad'' and ``an American madrassa.''

Rear Admiral Mark Buzby, the former commander of Guantanamo's detention facility, said, ``I must make the assumption that there's a fully functioning Al-Qaeda cell here at Guantanamo.''

Senator Kyl also continues to claim that no one was abused at Guantanamo and that there is no connection between the abuses at Abu Ghraib and Guantanamo. I commend him for his reading of the Senate Armed Services Committee Report.

But the Senate Armed Services Committee issued a bipartisan report that reached a different conclusion. Senator Levin, the chairman of the Armed Services Committee, and Senator McCain, the ranking member of the committee, found, ``Secretary of Defense Donald Rumsfeld's authorization of aggressive interrogation techniques for use at Guantanamo Bay was a direct cause of detainee abuse there.''

Senators Levin and McCain also concluded, on a bipartisan basis, that there was a connection between the abuses at Abu Ghraib and Guantanamo. They said:

The abuse of detainees at Abu Ghraib in late 2003 was not

simply the result of a few soldiers acting on their own.

Interrogation techniques such as stripping detainees of their

clothes, placing them in stress positions, and using military

working dogs to intimidate them appeared in Iraq only after

they had been approved for use in Afghanistan and at GITMO.

And, as I said yesterday, Susan Crawford, a top Bush administration official, concluded that Mohammad Al-Qahtani, the so-called 20th hijacker, could not be prosecuted for his role in the 9/11 attacks because he was tortured at Guantanamo Bay.

For many years, President Bush said that he wanted to close the Guantanamo detention facility, and there were few, if no complaints from the Republican side. But the President never followed through on his commitment.

Now that President Obama has made that same call, we hear this chorus of opposition. I think President Obama has accepted the challenge--the challenge to make certain that these detainees are treated in a responsible way; that those who should stand trial will stand trial for their crimes and war crimes; that those who cannot be brought to article 3 courts in America should be tried before reformed military tribunals that have rules of evidence and procedure more consistent with our values and laws; that some will be returned, like the Uighurs, if they pose no threat, to places where they cannot threaten the United States and that some will be kept in detention because they continue to be a threat to our Nation. That is a responsible course of conduct. It deserves bipartisan support.

I yield the floor.

Mr. President, will the Senator yield for a question?

I was hoping to ask the Senator from Kentucky a question.

Madam President, I ask unanimous consent to be able to speak as in morning business for 20 minutes.

Madam President, I rise today to again call attention to the irresponsible and reckless fiscal path we find ourselves on as a nation and to urge my colleagues to act now to take the first step toward meaningful, comprehensive tax and entitlement reform through the enactment of the Securing America's Future Economy Commission Act, which I introduced with Senator Joe Lieberman.

I urge my colleagues to take the time to read a recent letter from Senator

Lieberman and I urging their support of this legislation.

The SAFE Commission has broad bipartisan support outside of Congress, including the Peter G. Peterson Foundation, the Business Roundtable, the Concord Coalition, the National Federation of Independent Business, the Brookings Institution and the Heritage Foundation--I think if you get the Concord Coalition and the Heritage Foundation to support a piece of legislation, it has to be pretty bipartisan and fair--and also the Committee for a Responsible Federal Budget. All of these organizations back the SAFE Commission concept as the way to tackle tax reform and our entitlement crisis.

I say to the Presiding Officer, as you may know, recently Chinese Prime Minister Wen Jiabao publicly voiced his concern about the security of the ``huge amount of money'' China has invested in the United States, saying, ``To be honest, I am definitely a little worried.'' He then went on to call on the United States to ``maintain its good credit, to honor its promises and to guarantee the safety of China's assets.'' I hope this frightens you as much as it frightens me. China is the largest foreign creditor of the United States, holding an estimated $1 trillion in U.S. Government debt. Though it may be unlikely due to the complex interdependent relationship we have with China, if China were to call in that debt, sell off its holdings, or direct its foreign investments away from the United States, the impact on our economy and our national security would be devastating. I have been saying for years that we cannot allow countries that control our debt to control our future.

The fact is foreign creditors have provided 70 percent of the funds the United States has borrowed since 2001. As a result, 51 percent of the privately owned national debt is held by foreign creditors--mostly foreign central banks. That is going to be increased significantly because of all the borrowing we are doing. These lenders are starting to express significant concerns about the status of our fiscal situation. To be frank, they should be concerned.

Our spending is out of control. As a result, our debt is skyrocketing. When I arrived in the Senate in 1999, gross national debt stood at $5.6 trillion, or 61 percent of our GDP. The Obama administration recently projected the national debt to more than double to $12.7 trillion by the end of fiscal year 2009. From 2008 to 2009 alone, the Federal debt will increase 27 percent, boosting the country's debt-to-income ratio--or national debt as a percentage of GDP--from 70 percent last year to 89 percent this year.

As shown on this chart, here is where we were back when I came to the Senate in 1999. In 2008, last year, the national debt as a percentage of GDP was 70 percent. Today, it is at 89 percent. You can see we are going to be very close to 100 percent of our GDP on our national debt. I call this the Pac Man that is eating up our revenue--particularly the interest. We are going to pay money that could be used for other things.

Alarmingly, the figures I just mentioned do not count our accumulated, long-term financial obligations. The Peterson Foundation recently pointed out that the Federal Government has accumulated $56.4 trillion in total liabilities and unfunded promises for Medicare and Social Security as of September 30, 2008. That works out--listen to this--to $483,000 per American household or $184,000 for every man, woman, and child in the country to pay for these unfunded obligations. In other words, we have $56.4 trillion in total liabilities and unfunded promises for Medicare and Social Security. It is an unfunded liability. If you look at it per household, it is $483,000 per household, and if you look at it per individual, for every man, woman, and child in the United States, it is $184,000.

To be completely fair to President Obama, our annual deficit and growing national debt have been problems for some time now. And, folks, I have come to the floor of the Senate time and time again to talk about paying down debt, balancing our budget, and so forth.

To my knowledge, President Bush never once mentioned the debt in any one of his State of the Union Addresses to Congress. But under the Obama administration, we have exacerbated the problem with an Omnibus appropriations bill that includes $408 billion in nonemergency funding, a $787 billion stimulus bill, and a 10-year proposed budget where the lowest deficit for a single year is larger than any annual deficit from the end of World War II to President Obama's inauguration.

I know we are going through some tough times. Over the past year, we have been hit by an economic avalanche that started in housing, spread to the financial and credit markets, and then continued onward to every corner of our economy. I know it well. I am a Senator from Ohio. We are spending money to get out of this economic mess, but we cannot allow that to be an excuse to continue our reckless fiscal path. We have to start finding ways to work harder and smarter to do more with less. It does not take an economist to realize our course is unsustainable. I know it, the Obama administration knows it, the American people know it.

The Obama administration knows we can no longer ignore this crisis. Peter Orszag, whom I consider a friend, the Obama administration's OMB Director, has even said:

I don't want to sound like the boy crying wolf, but it is a

fact that, given the path that we are on, two things: One is

we will ultimately wind up with a financial crisis that is

substantially more severe than even what we are facing today

if we don't alter the path of Federal spending; and secondly,

that if we were on that path in the future and something like

we are experiencing today occurred, we would have much less

maneuvering room to fight those fires, because we will have

already depleted the fire truck.

And I am disappointed that as OMB Director he has forgotten his commitment to entitlement and tax reform he so boldly and loudly called for when he was CBO Director. You would think a change in title would not cause such a memory loss on as important an issue as the financial health of our country. To me, it can only mean one thing: that Peter Orszag's boss, President Obama, must not be serious about addressing the growing national debt or, worse, does not understand our fiscal crisis or, even worse than that, that he just does not care.

Just last Friday, the Washington Post ran an opinion piece taking the administration to task for lacking a plan on just how we start to dig our country out of this financial crisis. The article details Treasury Secretary Geithner's trip to Beijing 2 weeks ago, where he went to reassure China--the world's largest holder of our Treasury debt, as I mentioned--that lending money to the U.S. Government is still a wise thing to do.

Mr. Geithner insisted that:

In the United States, we are putting in place the

foundations for restoring fiscal sustainability.

In a moment that all Americans should consider a wake-up call, Mr. Geithner was met with laughter--laughter--when he told a group of Chinese students that their country's assets were very safe in Washington.

Madam President, I ask unanimous consent to have printed in the Record this Washington Post article. The title of it is ``No Laughing Matter, Why the U.S. needs to get serious now about long-term budget deficits.''

Madam President, this week, as you know, President Obama announced a plan to reenact statutory pay-as-you-go, pay-go. Now, what is ``pay-go''? Pay-go basically is this: If you want to spend more money, you either have to find other spending you are going to reduce or, in the alternative, you are going to have to raise taxes to pay for it.

Unfortunately, the President's plan exempts things like the 2001-2003 tax cuts, patching the alternative minimum tax, updating physicians' payments in Medicare--and last but not least, modifying the estate tax. These expenses would be exempt from pay-go.

Folks, I believe this is intellectually dishonest. This does not reflect the high standards the President has set for his administration. In my opinion, it is more like the smoke and mirrors of the past that got us into the mess we find ourselves in today.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, puts it like this:

It is like quitting drinking--

She was referring to the President's pay-go announcement. Here is what she says--

It is like quitting drinking, but making an exception for

beer and hard liquor. Exempting these measures from pay-go

would increase the 10-year deficit by over $2.5 trillion.

That's not fiscal responsibility.

Today, I am reiterating my call for President Obama and Congress to enact the first pillar of meaningful tax and entitlement reform through the enactment of the SAFE Commission Act. I am asking my colleagues and their staffs to step up and look at this legislation and read the ``Dear Colleague'' letter Senator Lieberman and I sent this last week with materials from the Peterson Foundation. Those materials, for a Senator or for staff members, lay out what I am talking about today. In addition, there is a DVD that is called IOUSA that was put together by the Peterson Foundation. I think it takes about an hour to look at it, but I don't know of anything that is out there today that depicts our financial crisis as well as that DVD does.

The SAFE Commission we are talking about would create a vehicle, much like we do for the BRAC process, to take on the tough issues of Social Security, tax reform, and creating, by a vote of 13 out of 20 members-- there would be 20 members on the Commission; 2 of them would be from the administration, but it would take 13 out of 20--and if you have 13 out of 20, the recommendations would be fast-tracked through a special process and brought to the floor of both Chambers.

In other words, we would give it expedited procedure and then we would have to either vote up or down, just as we do on the BRAC process. It would break the logjam in Washington and show the American people and the world that we are serious about getting this Nation back on track.

For the life of me, I cannot understand why President Obama doesn't support this concept. I know he is getting a hard time from Speaker Pelosi and from several other Members in the House of Representatives, although Steny Hoyer is in favor of the commission approach to solving our entitlement and tax reform crisis. We all know we can't get this done through the regular order of business. We know it. We would not be able to get it done. The proof of it is we haven't been able to do it thus far, so we are going to need the Commission. Everybody understands we are going to need it.

I know the President wants to move on climate change. But he has to know that from a substantive point of view and a political point of view, he is going to have to do something about this long-term financial crisis in which we found ourselves. It would seem to me he could go forward with climate change, he could go forward with health care reform, and get the Commission formed. It will take the Commission at least a year to finish its business.

Think of this: If the Commission is able to get 13 out of 20 members to come back with a bipartisan solution to dealing with tax reform and entitlement reform, that would be wonderful. It would take that issue off the President's plate. In other words, sooner or later, our President and his party are going to have to face up to the fact that the people of America are really worried--and so are the people of the world--about us doing something about tax reform and entitlement reform.

Wouldn't it be great--I mean, if I were the Governor, as I was for 8 years in Ohio, and somebody said: Governor, you know what. You have a real problem. And what we are going to do is, we are going to put a commission together on a bipartisan basis, and we are going to come back with recommendations to get the job done--I would kiss them and say: Wonderful. I could kind of forget about it, except for the two people in the administration who were working on it. If they came back with a bipartisan solution, wow. Get it through Congress and we deal with the substantive problem and we get a big political problem off our plate just before going into the next Presidential election. So I just hope there is some more thought being given by the administration, more thought given by the Congress.

We all say: Oh, yes, we are concerned about the national debt. We have to do something about it. But when you go home, what are you going to point to for the people, your constituents? What are you going to point to and say: I am sincere about this; I want to do something about it. Then they are going to ask you: Well, what did you do? One of the things you can do is say: I supported a bipartisan commission. They are going to go to work during the next year. They are going to come back with recommendations, and this is the way we can deal with the problem that is going to be such a burden on the future of our country.

I came here in 1999, and one of the reasons I came here was to deal with our deficits and with reducing our national debt. I am going to be leaving this place at the end of next year. I have three children, and I have seven grandchildren. I happen to believe that just like the pages who are here today in this room, they are going to have to work a lot harder, work a lot harder than I do in order to maintain the standard of living that I have been able to have because the competition in the world today is a lot keener than it was 15 or 20 years ago. They are just going to have to work harder than they have ever had to work before to maintain the kind of standard of living that we would like to have for them and for my children and grandchildren. But if you think about it, if we don't deal with this problem I am talking about today, we are going to lay on their backs taxes that will break the bank.

So we put them in a position where they are going to have to work harder to maintain a decent standard of living. Then, what we are saying to them is, we are going to let you pay for those things that we weren't willing to do without or pay for on our own. To me, that is absolutely immoral. It is absolutely immoral.

One of the things I would hope is--and I feel like a broken record, but I

would hope that the Holy Spirit would somehow enlighten us to face up to this very serious responsibility, one that if we don't face up to, will have a devastating impact on the future of our country and our children and grandchildren.

I yield the floor, and I note the absence of a quorum.

Yes, I will.

Mr. President, I regret that the Senate was unable to reach an agreement with regard to consideration of the amendment which Senators Lieberman, Akaka, Collins, and Voinovich offered to H.R. 1256. The amendment, which was ruled nongermane, reformed several Federal employee retirement provisions. It made changes to benefit computation rules for certain Federal employees, including the ability to count sick leave and part-time service, and it authorized Federal agencies to reemploy Federal pensioners on a part-time basis.

I cosponsored this amendment. Its importance particularly resonates with me as a large number of Federal employees work and reside in my home State of Maryland. But that is not why I cosponsored it. I cosponsored the amendment because it was the right thing to do for all of America's Federal employees.

The Lieberman amendment would have extended to employees under the Federal Employees' Retirement System certain benefits which already apply to employees under the older Civil Service Retirement System. This bipartisan amendment had the potential to affect the lives of hundreds of

thousands of Federal employees who work hard every day, many at modest pay grades, only to find that their benefits do not mirror those of their colleagues in the same positions.

We had an opportunity to send an important message to America's Federal workers by bringing up this amendment. We had an opportunity to give them additional incentives to continue the missions they pursue on behalf of all of us, to demonstrate that Congress still cares about doing what is right and fair. I regret we were unable to consider this amendment because of the objections of a minority of Senators.

I commend Senator Lieberman and the other Senators who worked so diligently on this amendment. We will have other opportunities. I pledge my continued support for America's Federal employees, just as they continue to work for America each and every day.

Mr. President, I ask unanimous consent to speak as in morning business.

Mr. President, I am glad we are now engaged in the health care debate, but this debate is long overdue. I congratulate the Obama administration for taking on the tough issues. This is not an easy subject in order to reach the type of consensus necessary in order to pass major legislation. There are a lot of special interests that are going to make it difficult for us to move forward.

I am proud this administration is taking up this issue because we are in a health care crisis in America. I say that because the cost of health care is not sustainable. We spend twice as much as the next most expensive nation in the world per capita on health care--$2.4 trillion a year, 15 percent of our gross domestic product. Those numbers are increasing dramatically each and every year. The cost of health care is not sustainable.

We had a great deal of discussion here about fiscal responsibility and bringing our budget into balance. President Obama is correct. If we do not deal with the escalating cost of health care, it is going to make it virtually impossible for us to bring our budgets into balance in the future--whether it is a Medicare budget or Medicaid budget or a household's budget. We have to do a better job in reining in the cost of health care. America needs to be competitive internationally. We cannot be competitive internationally unless we find a way to bring down the cost of health care.

Family insurance premiums have gone up threefold in the last 8 years alone--much faster than earnings, three times as fast as earnings. The consequences for Marylanders is that they are going into bankruptcy. You have heard it said that we are only one health incident away from filing bankruptcy in America for many families. They have to make difficult choices: Should I really go see a doctor? Is it really that important, because do I really have the money to lay out? It is not covered by my insurance, or I don't have insurance, what do I do?

We have 46 million Americans today who have no health insurance, and it is very costly in the way they enter the system. They use the emergency rooms. They don't get preventive health care. They spend a lot of money. It increased 20 percent over the last 8 years.

In my State of Maryland, we have 760,000 Marylanders, 15.4 percent of our nonelderly population, without health insurance.

We need to reform our health care system. We need to build on what is right in our health care system and correct what is wrong.

What is right is that we have some of the highest quality health care in the world. I am proud that people from all over the world travel to my own State of Maryland to visit Johns Hopkins University or the University of Maryland Medical Center or NIH in order to get their health care needs met or to train their health care professionals. We want to maintain that edge in America, of leading-edge technology to keep people healthy. We have choice in our health care system. I believe that is good. You can choose the health plan in many cases. You certainly can choose your provider in many cases. That adds competition to quality of care in our system.

We have to correct what is wrong. The first thing we have to correct is the cost. We have to bring the cost down.

The first way to bring down the costs is for everyone to be in the system to deal with the uninsured. I congratulate our committee for coming forward with proposals that will include every American in our health care system. I think that is the prerequisite to health care reform.

Second, the proposals that are coming forward that recognize the advantage of preventive health care. In 1997 we amended the Medicare bill to include preventive health care services. Well, that has kept our seniors healthier, living better lives, and being less costly to the system itself by detecting diseases at an earlier stage. In some cases we can even prevent diseases by preventive health care.

That is what we need to do. It saves money. Preventive health care services cost in the hundreds of dollars. Surgery related to diseases not caught in the early stages are in the tens of thousands of dollars. It makes sense economically.

President Obama is right to invest in health information technology. That will save money. It also manages an individual's care in a much more effective way. So there are a lot of ways we can bring down the cost of health care. But let me talk about one issue that has gotten a lot of attention on this floor by some of my colleagues who seem to be opposing health care reform before we even have a bill before us, and that is the conversation about a public insurance option. I am somewhat bewildered by this discussion because I do not hear too many of my colleagues suggesting that the Medicare system should be done away with.

Now, the last time I checked, Medicare was a public insurance program. So let me differentiate because I think this point has been misleading on this floor.

When there is a government option, it does not mean the government provides the health care; it means it pays for the health care, as it does in Medicare. The doctors our seniors and disabled population go to are private doctors and private hospitals, as it should be. They have choice, as they should. The public insurance option just provides the predictability of a plan that will always be there.

My constituents in Maryland remember all too well the private insurance companies within Medicare who were here one day and gone the next day. Thank goodness they had the public option available to them in order to make sure they had coverage. Well, that is not true in Part D today. We do not have a public insurance option.

That was a mistake. We need a public insurance option, first and foremost, to deal with cost. We have to bring down the cost of health care. We have 46 million people without health insurance today. Are we going to let them try to

figure out what private insurance to go to without the controls on cost? That is going to add to the cost in this country, not bring it down.

We have to at least have a comparison on a fair competition between public insurance and private insurance. I favor private insurance. But I want to have a public insurance option because I want the people of Maryland and around the Nation to have choice, to be able to choose the plan that is best for them.

They can stay in the plan they have now if they are satisfied with it. We want them to, and we encourage them to. But we want them to have a choice. We want the market to work. That is why the public insurance option has become more and more important.

Let me point out the two programs that we recently changed. Medicare Advantage. Well, Medicare Advantage is the private insurance option within Medicare that our seniors have the option, voluntarily, to join.

Well, when Medicare Advantage started, Medicare Plus Choice, it was a savings to the taxpayers because we paid the private insurance company 95 percent of what we paid the fee-for-service companies within the public option, saving money for the system. It made sense.

Well, guess what. Today we are paying the Medicare Advantage plans, the private plans, 112 to 117 percent of what we pay those who are in the traditional public option in Medicare. In other words, every person who picks private insurance costs the system money.

The Congressional Budget Office, which is a nonpartisan objective scorekeeper, says the Medicare Advantage premium we pay over what we would pay if they were in fee for service costs the system $150 billion over 10 years. So the public option is not only to offer choice to the people of our country between a plan that they want and it is available to them, whether it is a private plan or a public plan--remember, the providers are going to be private. This is not who provides the benefits; it is who pays for it, who puts together the plan. It will save the system money.

Part D: There is no public option in Part D. Many of us raised that issue back then, that we could have saved taxpayer money and saved Medicare money if we at least tried to keep the private insurance companies honest by having a public plan where we know what is being charged and paid for prescription drugs. Most of it is the cost of medicine. Why can we not have transparency? Why do we have to pay the high overhead costs of private insurance without the competition of a model that could save the taxpayers money and save our system money?

This is not a government takeover, as some of my colleagues have said. Medicare was not a government takeover. Medicare pays for the private doctors and hospitals so the disabled and seniors can get access to health care in America. I think those who make the arguments, which are basically scare tactics, are not adding to the debate anything that is worthy of this issue. This is a very important issue to the people of our Nation. This is our opportunity to fix our system by improving what is right, building on it, and correcting what is wrong.

But let's strengthen the good parts of our system. Let's strengthen those coverages that people are happy about, the employers who are providing health benefits to their employees, where it is working. But let's correct the runaway costs in our system, and let's provide a reasonable way that those who do not have health insurance can get health insurance.

If we can work together, Democrats and Republicans, this is an American problem. This is about America's competitiveness. This is about American families being able to afford their health care. This is about balancing our budgets in the future so America can continue to grow as the strongest economy in the world. But it starts today in this debate about fixing one of the underpinnings of our economy that is out of whack.

We need universal coverage. We need to have options available that will keep health care affordable for all people in this country and provide quality care for each American. That is what this debate is about.

I applaud our committees that are working on this issue. I applaud all of the Members of this body and the House who are seriously engaging in this discussion.

I think we can all learn from each other. If we work in good faith, we can develop a health care reform proposal that will maintain quality but provide access and affordability to every family in America. That should be our objective. I hope we will all work toward that end.

I yield the floor, and I suggest the absence of a quorum.

Madam President, later today, the Senate will vote to approve legislation that should have been enacted years ago-- authority for the FDA to regulate tobacco products, the most lethal of all consumer products.

It has been a long and arduous path with many political obstacles. Fortunately, the legislative journey is nearing a successful conclusion. The House of Representatives overwhelmingly passed a nearly identical bill earlier this spring. In May, the Senate HELP Committee approved the FDA Tobacco bill with the support of a strong bipartisan majority. On Monday, 61 Senators voted to invoke cloture on the committee-passed bill. President Obama is anxiously waiting to sign it into law. Passage of the legislation is much more than a victory for those of us who have long championed this cause. It is a life saving act for the millions of children who will be spared a lifetime of addiction and premature death.

The need to regulate tobacco products can no longer be ignored. Used as intended by the companies that manufacture and market them, cigarettes will kill one out of every three smokers. Yet the Federal agency most responsible for protecting the public health is currently powerless to deal with the enormous risks of tobacco use. Public health experts overwhelmingly believe that passage of H.R. 1256 is the most important action Congress can take to protect children from this deadly addiction. Without this strong congressional action, smoking will continue at its current rate, and more than 6 million of today's children will ultimately die from tobacco-induced disease.

Smoking is the number one preventable cause of death in America. Nationally, cigarettes kill well over 400,000 people each year. That is more lives lost than from automobile accidents, alcohol abuse, illegal drugs, AIDS, murder, and suicide combined.

The American Cancer Society, the American Heart Association, the American Lung Association, the American Medical Association, the Campaign for Tobacco-Free Kids and eighty-six other national public health organizations speak with one voice on this issue. They are all supporting H.R. 1256 because they know it will give FDA the tools it needs to reduce youth smoking and help addicted smokers quit.

A landmark report by the Institute of Medicine, released 2 years ago, strongly urged Congress to ``confer upon the FDA broad regulatory authority over the manufacture, distribution, marketing and use of tobacco products.''

Opponents of this legislation argue that FDA should not be regulating such a dangerous product. I could not disagree more. It is precisely because tobacco products are so deadly that we must empower America's premier public health protector--the FDA--to combat tobacco use. For decades the Federal Government has stayed on the sidelines and done next to nothing to deal with this enormous health problem. The tobacco industry has been allowed to mislead consumers, to make false health claims, to conceal the lethal contents of their products, to make their products even more addictive, and worst of all--to deliberately addict generations of children. The alternative to FDA regulation is more of the same. Allowing this abusive conduct by the tobacco industry to go unchecked would be terribly wrong.

Under this legislation, FDA will for the first time have the needed power and resources to take on this challenge. The cost will be funded entirely by a new user fee paid by the tobacco companies in proportion to their market share. Not a single dollar will be diverted from FDA's existing responsibilities.

Giving FDA authority over tobacco products will not make the tragic toll of tobacco use disappear overnight. More than 40 million people are hooked on this highly addictive product and many of them have been unable to quit despite repeated attempts. However, FDA action can play a major role in breaking the gruesome cycle that seduces millions of teenagers into a lifetime of addiction and premature death.

What can FDA regulation accomplish?

It can reduce youth smoking by preventing tobacco advertising which targets children. It can help prevent the sale of tobacco products to minors. It can stop the tobacco industry from continuing to mislead the public about the dangers of smoking. It can help smokers overcome their addiction. It can make tobacco products less toxic and less addictive for those who continue to use them. And it can prohibit unsubstantiated health claims about supposedly ``reduced risk'' products, and encourage the development of genuinely less harmful alternative products.

Regulating the conduct of the tobacco companies is as necessary today as it has been in years past. The facts presented in the Federal Government's landmark lawsuit against the tobacco industry conclusively demonstrate that the misconduct is substantial and ongoing. The decision of the Court states: ``The evidence in this case clearly establishes that Defendants have not ceased engaging in unlawful activity . . . Defendants continue to engage in conduct that is materially indistinguishable from their previous actions, activity that continues to this day.'' Only strong FDA regulation can force the necessary change in their corporate behavior.

We must deal firmly with tobacco company marketing practices that target children and mislead the public. The Food and Drug Administration needs broad authority to regulate the sale, distribution, and advertising of cigarettes and smokeless tobacco.

The tobacco industry currently spends over thirteen billion dollars each year to promote its products. Much of that money is spent in ways designed to tempt children to start smoking, before they are mature enough to appreciate the enormity of the health risk. Four thousand children have their first cigarette every day, and 1,000 of them become daily smokers. The industry knows that nearly 90 percent of smokers begin as children and are addicted by the time they reach adulthood.

Documents obtained from tobacco companies prove, in the companies' own words, the magnitude of the industry's efforts to trap children into dependency on their deadly product. Studies by the Institute of Medicine and the Centers for Disease Control show the substantial role of industry advertising in decisions by young people to use tobacco products.

If we are serious about reducing youth smoking, FDA must have the power to prevent industry advertising designed to appeal to children wherever it will be seen by children. This legislation will give FDA the authority to stop tobacco advertising that glamorizes smoking to kids. It grants FDA full authority to regulate tobacco advertising ``consistent with and to the full extent permitted by the First Amendment.''

FDA authority must also extend to the sale of tobacco products. Nearly every State makes it illegal to sell cigarettes to children under 18, but surveys show that many of those laws are rarely enforced and frequently violated. FDA must have the power to limit the sale of cigarettes to face-to-face transactions in which the age of the purchaser can be verified by identification. This means an end to self- service displays and vending machine sales. There must also be serious enforcement efforts with real penalties for those caught selling tobacco products to children. This is the only way to ensure that children under 18 are not able to buy cigarettes.

The FDA conducted the longest rulemaking proceeding in its history, studying which regulations would most effectively reduce the number of children who smoke. Seven hundred thousand public comments were received in the course of that rulemaking. At the conclusion of its proceeding, the Agency promulgated rules on the manner in which cigarettes are advertised and sold. Due to litigation, most of those regulations were never implemented. If we are serious about curbing youth smoking as much as possible, as soon as possible; it makes no sense to require FDA to reinvent the wheel by conducting a new multiyear rulemaking process on the same issues. This legislation will give the youth access and advertising restrictions already developed by FDA the force of

law, as if they had been issued under the new statute. Once they are in place, FDA will have the authority to modify these rules as changing circumstances warrant.

The legislation also provides for stronger warnings on all cigarette and smokeless tobacco packages, and in all print advertisements. These warnings will be larger and more explicit in their description of the medical problems which can result from tobacco use. Each cigarette pack will carry a graphic depiction of the consequences of smoking. The FDA is given the authority to change the warning labels periodically, to keep their impact strong.

The nicotine in cigarettes is highly addictive. Medical experts say that it is as addictive as heroin or cocaine. Yet for decades, tobacco companies vehemently denied the addictiveness of their products. No one can forget the parade of tobacco executives who testified under oath before Congress that smoking cigarettes is not addictive. Overwhelming evidence in industry documents obtained through the discovery process proves that the companies not only knew of this addictiveness for decades, but actually relied on it as the basis for their marketing strategy. As we now know, cigarette manufacturers chemically manipulated the nicotine in their products to make it even more addictive.

An analysis by the Harvard School of Public Health demonstrates that cigarette manufacturers are still manipulating nicotine levels. Between 1998 and 2005, they significantly increased the nicotine yield from major brand-name cigarettes. The average increase in nicotine yield over the period was 11 percent.

The tobacco industry has a long dishonorable history of providing misleading information about the health consequences of smoking. These companies have repeatedly sought to characterize their products as far less hazardous than they are. They made minor innovations in product design seem far more significant for the health of the user than they actually were. It is essential that FDA have clear and unambiguous authority to prevent such misrepresentations in the future. The largest disinformation campaign in the history of the corporate world must end.

Given the addictiveness of tobacco products, it is essential that the FDA regulate them for the protection of the public. Over 40 million Americans are currently addicted to cigarettes. No responsible public health official believes that cigarettes should be banned. A ban would leave 40 million people without a way to satisfy their drug dependency. FDA should be able to take the necessary steps to help addicted smokers overcome their addiction, and to make the product less toxic for smokers who are unable or unwilling to stop. To do so, FDA must have the authority to reduce or remove hazardous and addictive ingredients from cigarettes, to the extent that it is scientifically feasible. The inherent risk in smoking should not be unnecessarily compounded.

Recent statements by several tobacco companies make clear that they plan to develop what they characterize as ``reduced risk'' cigarettes. Some are already on the market making unsubstantiated claims. This legislation will require manufacturers to submit such ``reduced risk'' products to the FDA for analysis before they can be marketed. No health-related claims will be permitted until they have been verified to the FDA's satisfaction. These safeguards are essential to prevent deceptive industry marketing campaigns, which could lull the public into a false sense of health safety. Only by preventing bogus claims will there be a real financial incentive for companies to develop new technologies that can lead to genuinely and verifiably safer products.

This legislation will vest FDA not only with the responsibility for regulating tobacco products, but with full authority to do the job effectively. It is long overdue.

Voting for this legislation today is the right thing to do for America's children. They are depending on us. By passing this legislation, we can help them live longer, healthier lives. I know that the Senate will not let them down.