FBI Priorities Act of 2009

Madam President, I ask unanimous consent to proceed for up to 10 minutes as in morning business.

I have sought recognition to introduce three bills relating to limiting Executive power. Because of the past period of time since 9/11, we have seen enormous expansion of Executive power. We have seen the President, during President George W. Bush's administration, use signing statements extensively. We have seen President Obama use a signing statement already in his short tenure, which, in effect, nullifies what the Congress has done.

The Constitution is plain that there is a presentment of legislation to the President and he either signs it or vetoes it. What we have found is that Presidents are now cherry-picking the parts they like and the parts they don't like. So I am submitting legislation on Presidential signing statements.

The second issue of concern involves the immunity for the telephone companies which would deprive Federal jurisdiction for some 40 cases. I believe telephone companies have been good citizens in providing very important information. I believe there is a way to maintain the jurisdiction of the Federal courts and still not subject the telephone companies to litigation or possible damages by having the Government substituted as the party defendant. I am introducing legislation on that subject.

Third, I am introducing legislation that would establish a requirement that the Supreme Court of the United States take jurisdiction on all appeals involving the terrorist surveillance program. That program has caused a great deal of controversy because of the issue as to whether the President has authority under article II to ignore the explicit provisions of the Foreign Intelligence Surveillance Act. The terrorist surveillance program, was declared unconstitutional by a Federal court in Detroit. An appeal taken to the Sixth Circuit was dismissed for reasons of lack of standing. The forceful dissenting opinion in that case showed that there was sufficient basis for standing--a very flexible judicial doctrine.

The Supreme Court of the United States denied certiorari, so at this point, we don't know whether the President's exercise of authority there under article II of the Constitution is correct. Certainly, if the President has that constitutional authority, it supercedes the statute. But that is a matter which should have been decided a long time ago by the Supreme Court, and the Supreme Court has avoided moving on that subject.

Today, I have an article I have offered on executive power. It appears today in the New York review of books, where I outline my intent to introduce these pieces of legislation. The article comes from a longer floor statement I had prepared. It has been reduced somewhat in size.

In the 7\1/2\ years since September 11, the United States has witnessed one of the greatest expansions of executive authority in its history, in derogation of the constitutionally mandated separation of powers. President Obama, as only the third sitting senator to be elected president in American history, and the first since John F. Kennedy, may be more likely to respect the separation of powers than President Bush was. But rather than put my faith in any president to restrain the executive branch, I intend to take several concrete steps, which I hope the new President will support.

First, I intend to introduce legislation that will mandate Supreme Court review of lower court decisions in suits brought by the ACLU and others that challenge the constitutionality of the warrantless wiretapping program authorized by President Bush after September 11. While the Supreme Court generally exercises discretion as to whether it will review a case, there are precedents for Congress to direct Supreme Court review on constitutional issues--including the statutes forbidding flag burning and requiring Congress to abide by Federal employment laws--and I will follow those.

Second, I will reintroduce legislation to keep the courts open to suits filed against several major telephone companies that allegedly facilitated the Bush administration's warrantless wiretapping program. Although Congress granted immunity to the telephone companies in July 2008, this

issue may yet be successfully revisited since the courts have not yet ruled on the legality of the immunity provision. My legislation would substitute the government as defendant in place of the telephone companies. This would allow the cases to go forward, with the government footing the bill for any damages awarded.

Further, I will reintroduce my legislation from 2006 and 2007--the Presidential Signing Statements Act--to prohibit courts from relying on, or deferring to, Presidential signing statements when determining the meaning of any act of Congress. These statements, sometimes issued when the President signs a bill into law, have too often been used to undermine congressional intent. Earlier versions of my legislation went nowhere because of the obvious impossibility of obtaining two-thirds majorities in each House to override an expected veto by President Bush. Nevertheless, in the new Congress, my legislation has a better chance of mustering a majority vote and being signed into law by President Obama.

To understand why these steps are so important, one must appreciate an imbalance in our ``checks and balances'' that has become increasingly evident in recent years. I witnessed firsthand, during many of the battles over administration policy since September 11, how difficult it can be for Congress and the courts to rally their members against an overzealous executive.

The Terrorist Surveillance Program--Act I

As chairman of the Senate Judiciary Committee from 2005 to 2007, I led the effort to reauthorize and improve the 2001 USA PATRIOT Act, which was originally set to expire at the end of 2005. Indeed, after intensive bipartisan negotiations, the Judiciary Committee succeeded-- to the surprise of most observers--in approving a revised bill by unanimous vote. The full Senate then approved the bill by unanimous consent, but the conference report negotiated with the House of Representatives faced stiffer opposition. Nevertheless, after days of floor debate, I awoke on December 16, 2005, fully expecting to finish Senate action on the long-delayed reauthorization.

So, I was startled--really shocked--to read the lead story in the New York Times that morning, titled ``Bush Lets US Spy on Callers Without Courts,'' which revealed that our intelligence agencies had been engaged in warrantless wiretapping since shortly after September 11, in flat violation of the Foreign Intelligence Surveillance Act--FISA--of 1978. This is James Risen and Eric Lichtblau, ``Bush Lets U.S. Spy on Callers Without Courts,'' the New York Times, December 16, 2005. The news caused the Senate to delay passage of the PATRIOT Act reauthorization for months. Senator Charles Schumer expressed the sentiments of many: ``I went to bed last night unsure of how to vote on this legislation. . . . Today's revelation that the Government listened in on thousands of phone conversations without getting a warrant is shocking and has greatly influenced my vote.'' More importantly, the disclosure in the Times launched a fierce debate about the extent of Presidential authority in the war on terror that has yet to be fully resolved.

That day, I assured my colleagues the reports would be a ``matter for oversight by the Judiciary Committee . . . a very high priority item.'' When Congress reconvened in January 2006, I made good on my promise: I held multiple hearings into the program the Times revealed, later dubbed the Terrorist Surveillance Program. As acknowledged by President Bush, this highly classified program launched in the weeks after September 11 purported to authorize the National Security Agency to intercept phone calls between terror suspects overseas and persons inside the United States. Critics like me argued that the President's program violated FISA. After all, the law declared the procedures set up by FISA to be the ``exclusive means'' by which such surveillance of telephone calls and other communications could be conducted. FISA also made criminal all domestic electronic surveillance designed to obtain foreign intelligence ``except as authorized by statute.'' Although the law defined limited exceptions in emergencies, reports in the press made it clear that none of them applied to the warrantless wiretapping that was done in the Terrorist Surveillance Program.

I recognized that, as administration supporters argued, the President might have inherent power to disregard FISA and to conduct unfettered foreign intelligence surveillance under article II of the Constitution, the section that defines his authority as Commander in Chief. I was not, however, sympathetic to the administration's further argument that Congress had implicitly authorized the President to carry out programs such as the Terrorist Surveillance Program when it authorized the use of military force against terrorists in September 2001.

I was also convinced that President Bush's failure to notify Congress of the secret program violated provisions of the National Security Act of 1947. That statute requires the President to ``ensure that the congressional intelligence committees are kept fully and currently informed of the intelligence activities of the United States.'' But the administration informed only eight legislators of the Terrorist Surveillance Program: the chairman and ranking members of the Senate and House Intelligence Committees, and the two top leaders in the majority and minority of both Houses, leaving out both me and Senator Patrick Leahy as chair and ranking member of the Judiciary Committee, despite the fact that when FISA was enacted in 1978, it went through both the Intelligence and Judiciary Committees. While the law explicitly permits notice to this limited ``Gang of 8'' for certain covert operations--such as efforts to influence political conditions abroad without disclosing the U.S. role--the Terrorist Surveillance Program did not fit this exception.

Indeed, those notified were very uneasy about the arrangement. Senator Jay Rockefeller, then ranking member on the Intelligence Committee, sent a secret handwritten letter to the Vice President saying the administration's surveillance activities ``raised profound oversight issues'' on which, owing to the arrangement, Rockefeller could not ``consult staff or counsel.'' A sealed copy of the letter had to be stored in a classified Senate area for over 2 years until knowledge of the Terrorist Surveillance Program became public. Once the story broke, Representative Jane Harman, who as ranking member of the House Intelligence Committee was another Gang of 8 member, informed President Bush that she believed ``the practice of briefing only certain Members of the intelligence committees violates the specific requirements of the National Security Act of 1947.''

I raised this issue in a January 24, 2006, letter sent to Attorney General Alberto Gonzales in advance of the first Judiciary Committee hearing on the Terrorist Surveillance Program. Gonzales replied:

``It has for decades been the practice of both Democratic

and Republican administrations to inform only the Chair and

Ranking Members of the intelligence committees about certain

exceptionally sensitive matters.

The attorney general added that, according to the Congressional Research Service, the leaders of the intelligence committees had acquiesced in this practice. In my view, Gonzales's argument could appeal only to those unacquainted with the ways the executive branch has, in practice, dealt with the intelligence committees. Administrations of both parties have sometimes told the chair and ranking member that they have important information to disclose, but insisted that they will reveal this information only to some group within the committee and the top congressional leadership, such as the ``Gang of 8.'' In many cases, the offer is accepted as the only way of getting the information--at least in a timely manner.

To the extent the administration relied on such precedents to justify notifying only the ``Gang of 8,'' it should have informed me and Senator Leahy as well. Indeed, administration officials briefed both of us on the Terrorist Surveillance Program when they later sought comprehensive FISA reform. It is quite glaring, then, that they neglected to brief us in 2005, even as we were considering reauthorization of the PATRIOT Act, which was central to the administration's counterterrorism efforts.

In the spring of 2006, new allegations about the government's surveillance

activities surfaced--not at congressional hearings, but again through leaks to the press. On May 11, 2006, USA Today reported that the National Security Agency had been ``secretly collecting the phone call records of tens of millions of Americans, using data provided by AT&T, Verizon and BellSouth.'' This is Leslie Cauley, ``NSA Has Massive Database of American's Phone Calls,'' USA Today, June 11, 2006. Although the records reportedly included only data like telephone numbers, rather than the contents of calls, the revelations stirred new controversy.

One month later, on June 22, the Chicago Sun-Times reported that AT&T had changed its privacy policy to make customer data a ``business record the company owns,'' one that ``can be disclosed to [the] government. . . .'' This is Associated Press, AT&T Says it Can Disclose Account Data on Net, TV Clients, Chicago Sun Times, June 22, 2006, at 25. I was very interested in the legal basis for this assertion of ownership and what relationship it had, if any, to the reported disclosures of communications data to the government. As luck would have it, that very day, the Judiciary Committee's Antitrust Subcommittee was holding an unrelated hearing on the proposed merger of AT&T and BellSouth, featuring the firms' respective CEOs, Edward Whitacre Jr. and Duane Ackerman. I could not let the presence of these CEOs pass without confronting them on the surveillance program.

I asked Mr. Whitacre whether his ``company provide[d] information to the Federal Government.'' He kept repeating that they ``follow the law''--a comment that I told him was ``contemptuous of this committee,'' because I was asking a factual question and he was offering a legal conclusion. Mr. Whitacre defended his answer on the grounds that he had spoken to a number of attorneys who advised him he could say nothing more.

The episode did not go unnoticed. For example, under the headline ``Privacy flap engulfs hearing,'' the Atlanta Journal-Constitution detailed that ``a Senate hearing Thursday intended to explore the consumer impact of a proposed AT&T-BellSouth merger instead turned into a contentious face-off over phone privacy.'' (see Marilyn Geewax, AT&T Bellsouth Merger; Privacy Flap Engulfs Hearing; Panel Wonders About Use of Phone Records, Atlanta Journal-Constitution, June 23, 2006, at 4G.

In truth, the matter merited its own hearing, but my efforts to hold one were thwarted by Vice President Cheney. Soon after the story broke, I announced my intention to schedule a hearing with the CEOs of the named carriers. I planned to either subpoena the companies or arrange a hearing closed to the public, which the telephone companies had agreed to attend without receiving a subpoena. Unfortunately, Vice President Cheney went behind my back to persuade all of the other Republicans on the committee not to support the subpoena and to boycott the session I had called to discuss a possible private hearing. In the face of this opposition, I had little choice but to agree to a proposal by Senator Orrin Hatch for a brief delay to give him an opportunity to solicit the administration's views on my bill to permit court oversight of the Terrorist Surveillance Program. When I announced this course of action at the executive session, a highly contentious debate ensued.

Senator Leahy, long at odds with the Vice President, opined that since we were not going to ``find out independently'' what the government sought from the telecoms and instead wait ``for Dick Cheney to tell us what we should know'' that we might as well ``just recess for the rest of the year.'' On the other hand, Senator Dianne Feinstein reported that she would not vote for the subpoenas because the ``telephone companies who are trying to be a good citizen should not be held out to dry.'' As a member of both the Judiciary and Intelligence Committees, she added that ``it is very difficult for this committee to legislate without knowing the program'' and therefore the Intelligence Committee was the appropriate venue for legislation on the matter. Senator Dick Durbin, noting the absence of many Republicans, complained, ``I thought there would be a conversation about this, but apparently there will not be.'' He continued that the ``fortitude and strength [I] had shown in this committee, leading up through the month of May has ended in a June swoon.''

When this uncomfortable meeting--and the accompanying slings-- concluded, I drafted what I refer to as a ``lawyer's letter'' to the Vice President. I wrote:

I was surprised, to say the least, that you sought to

influence, really determine, the action of the Committee

without calling me first, or at least calling me at some

point. This was especially perplexing since we both attended

the Republican Senators caucus lunch yesterday and I walked

directly in front of you on at least two occasions en route

from the buffet to my table.

I concluded with a solemn warning:

If an accommodation cannot be reached with the

administration, the Judiciary Committee will consider

confronting the issue with subpoenas and enforcement.

This spat proved great fodder for the editors. The lurid details were splashed across the pages of national newspapers around the country. The Los Angeles Times confided that the ``unusually public rupture between a senior GOP lawmaker and the White House'' provided ``a rare public glimpse of the tactics employed by a vice president who prefers to operate behind the scenes.'' It said I ``lashed out'' in a letter in an ``unusually harsh attack.'' This is Gregg Miller, Specter Says Cheney Tried to Derail Hearings, Los Angeles Times, June 8, 2006, at A6. The front page headline of The Hill screamed ``Specter Rebukes Cheney,'' and the Washington Post averred that the ``simmering tensions'' over the ``administrations tight-lipped position on the programs'' had finally ``boiled over.'' see Alexander Bolton, Specter Rebukes Cheney, The Hill, June 8, 2006, at 1; Michael A. Fletcher, Cheney Plays Down Dispute With Specter, Washington Post, June 9, 2006, at A4.

Someone in Cheney's office must have been up all night, because I had my reply by mid-morning the next day. The White House, he said, was willing to negotiate in good faith. Extensive discussions culminated with a compromise bill and a July 11, 2006, meeting with President Bush in the Oval Office. The President agreed to submit the surveillance program to judicial review, but was insistent that the Senate not alter the agreed-upon terms. Usually, after securing such an agreement, one walks out of the Oval Office to the cameras and advertises it, but I chose to make the announcement at the committee's next executive session on July 13.

My bill of 2006 to expand and revise FISA gave jurisdiction to the Foreign Intelligence Surveillance Court--the Intelligence Court--which was set up by the original FISA law to rule on surveillance requests by Federal agencies--to review the legality of the Terrorist Surveillance Program. Determining the constitutionality of the program would turn upon submissions to the Intelligence Court by the attorney general about its function and procedures, with particular attention to safeguards to ensure that the Terrorist Surveillance Program targeted suspected terrorists and not innocent Americans. The bill further required the attorney general to inform the House and Senate Intelligence Committees of all surveillance programs and created a new criminal offense for misuse of intercepted information. In return, the government was given additional flexibility with respect to the issuance and duration of emergency warrants. And in a nod to the administration, the bill also acknowledged that the president, as commander in chief, retains certain authority inherent in article II of the Constitution, although it left decisions about the scope of that authority to the courts.

Some complained that I had ``sold out'' in making this deal. See, e.g., Jonathan Mahler, After the Imperial Presidency, N.Y. Times, November 9, 2008, Magazine, at MM42. These critics fail to appreciate the disadvantage Congress faces in resisting expansions of executive power. The Terrorist Surveillance Program was put into effect when President Bush signed a secret order in 2001. He did not need to hold any hearings or convince any colleagues. Vice President Cheney could rely on the fractious nature of the Senate, and the great influence of the executive, to easily kill the prospects for my planned subpoenas of the telephone companies. The administration's damage control, like the initial action, was

swift and unilateral. By contrast, on the legislative side, we could not begin to act until we established a factual record through a series of hearings and secured consensus on a path forward.

As committee chairman, I was battered by Senators on both sides in my efforts for oversight. On the right, there were members who touted Article II and party loyalty. They were inclined, at a minimum, to accept the strained arguments that the Authorization for Use of Military Force had authorized the Terrorist Surveillance Program, and that the failure to notify the full intelligence committees did not actually violate the National Security Act. On the left, there was genuine outrage at some administration tactics, but they were also in no hurry for compromise, no matter how favorable the terms. They were very cognizant of the fact that the longer they let the friction between the branches drag on, the worse it looked for Republicans and the better for them and their allies. For example, as the New York Sun reported in June 2006, ``[f]ear of government excess in the war on terror ha[d] driven membership rolls'' in the ACLU ``to more than 550,000 from less than 300,000,'' and the group's fundraising had ``surged.'' See Josh Gerstein, For ACLU's Anthony Romero, These Should Be Best Times, New York Sun, June 27, 2006.

Ultimately, the Judiciary Committee approved my FISA reform bill on September 13, 2006, but in contrast to the bipartisan vote on the PATRIOT Act reauthorization a year earlier, there was a 10-8 party-line vote. A final vote on the Senate floor was never taken, largely because the House had settled on a different approach to the Terrorist Surveillance Program that did not authorize court review of the program. Once again, the inherent constraints on the bicameral legislative branch served to benefit the executive, as the President's surveillance program continued unabated throughout our internal debates.

The courts fared no better at reining in the Terrorist Surveillance Program. In August 2006, Judge Anna Diggs Taylor of the U.S. District Court for the Eastern District of Michigan issued an opinion in ACLU v. NSA, finding the program unconstitutional. Almost a year later, in July 2007, the U.S. Court of Appeals for the Sixth Circuit overturned her decision. On a 2-1 vote, it declined to rule on the legality of the program, finding that the plaintiffs lacked standing to bring the suit. The Supreme Court then declined to hear the case, even though the doctrine of standing has enough flexibility for the Court to have acted. My bill to mandate Supreme Court review of this and other cases therefore seems all the more necessary to resolve the question.

With the Supreme Court abstaining, another lone district judge took a stand. In In re National Security Agency Telecommunications Records Litigation, Chief Judge Vaughn Walker in the Northern District of California considered a case brought by an Islamic charity that claims to have been a subject of the surveillance program. In a 56-page opinion he wrote:

Congress appears clearly to have intended to--and did--establish the exclusive means for foreign intelligence surveillance activities to be conducted. Whatever power the executive may otherwise have had in this regard, FISA limits the power of the executive branch to conduct such activities.

As detailed further below, the hurdles faced by the few judges willing to examine the Terrorist Surveillance Program, and the snails' pace of appellate review, make my bill to mandate Supreme Court review of this and other cases all the more necessary to resolve the question.

Shortcomings of the Legislative and Judicial Branches as Checks on

Executive Power.

The courts, including the Supreme Court, have admittedly been more effective than Congress in restraining executive excesses, but both have been too slow. This failure is exemplified by the judicial and legislative efforts to address the administration's treatment of detainees in the war on terror.

In Hamdi v. Rumsfeld, decided on June 28, 2004, nearly 3 years after September 11, the Supreme Court ruled that a U.S. citizen being held as an enemy combatant must be given an opportunity to contest the factual basis for his detention before a neutral magistrate. In a stern rebuke of executive overreaching, Justice O'Connor's opinion declared, ``We have long since made clear that a state of war is not a blank check for the president when it comes to the rights of the Nation's citizens.'' The same day, the Court held in Rasul v. Bush that detainees at Guantanamo Bay were entitled to challenge their detention by filing habeas corpus petitions--the time honored legal action used to contest the basis for government confinement. Two years later, on June 29, 2006, the Court announced in Hamdan v. Rumsfeld that the President could not conduct military commission trials under procedures that had not been authorized by Congress and that failed to satisfy the obligations of the Geneva Conventions' Common article III and the Uniform Code of Military Justice.

Instead of fully embracing these decisions, however, Congress responded with the Detainee Treatment Act and the Military Commissions Act of 2006, both of which eliminated detainees' right to habeas corpus review on grounds that foreign terrorist suspects did not have the same rights as others in U.S. custody.

During debate on the Military Commissions Act, I offered an amendment that would have guaranteed habeas corpus for detainees. In the face of sharp criticism from my own party, I argued that I was not speaking ``in favor of enemy combatants.'' Rather, I was ``trying to establish . . . a course of judicial procedure'' to determine whether the accused were in fact enemy combatants. I pointed out that my fight to preserve habeas rights was, in essence, a struggle to defend ``the jurisdiction of the federal courts to maintain the rule of law.'' I concluded with a plea for the Senate not to deny ``the habeas corpus right which would take us back some 900 years and deny the fundamental principle of the Magna Charta imposed on King John at Runnymede.'' Despite these entreaties, my amendment narrowly lost on a 48-51 vote.

I had lost the battle, but was not prepared to surrender. On January 18, 2007, Attorney General Gonzales testified before the Judiciary Committee and argued that proposals to restore habeas corpus, such as a bill Senator Leahy and I had introduced, were ``ill-advised and frankly defy common sense.'' I was astounded at his claim that ``there is no express grant of habeas in the Constitution.'' I asked him: ``The constitution says you can't take it away except in case of rebellion or invasion. Doesn't that mean you have the right of habeas corpus unless there is an invasion or rebellion?'' He replied, ``The constitution does not say every individual in the United States or every citizen is hereby granted or assured the right to habeas. . . . It simply says the right of habeas corpus shall not be suspended.'' I protested, ``You may be treading on your interdiction and violating common sense, Mr. Attorney General.''

This exchange received notice in a number of papers, as my position gained momentum. The Detroit Free Press, for example, editorialized:

The moment when Alberto Gonzales proved he was just wrong

for the job of U.S. attorney general came . . . after Sen.

Arlen Specter, R-Pa., asked him about the constitutional

guarantee of criminal due process, known as habeas corpus.

See Editorial, Gonzales Twisted Rule of Law Too Well, Detroit Free Press, August 28, 2007.

That September, I made a second attempt to restore habeas corpus jurisdiction with an amendment to the Defense Department's authorization bill. This time, a majority of Senators voted for it, including seven Republicans. Unfortunately, the 56-43 majority was insufficient because, in the face of a filibuster threat, Senate procedure required sixty votes to pass. Ironically, a procedural tool that protects Senate minorities had become a shield for the executive branch.

Thus, yet again, it was left to the Supreme Court to beat back the encroachment of executive power, which it finally did on June 12, 2008. In Boumediene v. Bush, the Court held that detainees held at Guantanamo Bay ``are entitled to the privilege of habeas corpus to challenge the legality of their detention.'' Because the Combatant Status Review Tribunals established by the Defense Department in 2004, following the Hamdi and Rasul decisions, and the limited procedural review permitted before the DC Circuit

failed to constitute an adequate and effective substitute for habeas corpus, the Court held that the Military Commissions Act had effected ``an unconstitutional suspension of the writ.''

As satisfying as it was to be vindicated, I was frustrated that Congress had left the task of reining in the executive to slow-paced and incomplete judicial review. While the Boumediene decision ensured habeas rights for detainees, it took 7 years; and even then the Court almost failed to take on the case. All along, the Court's rulings were piecemeal and avoided taking strong stands on controversial constitutional questions. The result was a protracted process that delayed justice for detainees and left important areas of constitutional law murky.

Indeed, the Supreme Court actually denied Boumediene's initial petition for review on April 2, 2007. Then, on June 29, in a highly unusual move, the Court reconsidered and agreed to hear the case. The justices gave no reason for the reversal, but some speculate that they were moved by intervening disclosures concerning the military commissions. In particular, a military officer and lawyer who had been involved in overseeing the tribunals said that the process was flawed and that prosecutors had been pressured to label detainees as enemy combatants.

As much time as it took in these cases, at least the Supreme Court eventually ruled on the merits in Boumediene. The same cannot be said for Supreme Court review, or even substantive appellate review, of President Bush's warrantless wiretapping program. Thus far, only individual judges in the district courts of Michigan and California have been willing to take a strong stand on the Terrorist Surveillance Program.

Like many in the legislature, it appears the courts are reluctant to act. They do not want the responsibility. Only after significant time has passed, and it is relatively safe, do they finally consider such issues on the merits. I have proposed legislation in the past to require expedited review of certain important cases, including the challenges by civil liberties organizations and other plaintiffs to the Terrorist Surveillance Program, and I will do so again in the new Congress.

Signing Statements

Even where Congress manages to negotiate its internal checks and to act decisively against expansions of executive power, presidents have used signing statements that override the legislative language and defy congressional intent.

There was an explosion in the use of signing statements during the Bush administration. The Boston Globe reported in 2006 that President Bush ``has used signing statements to claim the authority to disobey more than 750 statutes--more laws than all previous presidents combined.'' This is Charlie Savage, In Proposed Iran Deal, Bush Might Have to Waive Law: '05 Statute Forbids Providing Reactor, Boston Globe, June 8, 2006.

Two prominent examples make the point. As detailed earlier, I spearheaded the delicate negotiations on the PATRIOT Act Reauthorization which included months of painstaking efforts to balance national security and civil liberties, disrupted by the dramatic disclosure of the Terrorist Surveillance Program. The final version of the bill to reauthorize the PATRIOT Act featured a carefully crafted compromise, which was necessary to secure its passage in 2006. Among other things, it included several oversight provisions designed to ensure that the FBI did not abuse special terrorism-related powers permitting it to make secret demands for business records. President Bush signed the measure into law, only to enter a signing statement insisting that he could withhold from Congress any information required by the oversight provisions if he decided that disclosure would ``impair foreign relations, national security, the deliberative process of the executive, or the performance of the executive's constitutional duties.''

The second example arose in 2005. Congress overwhelmingly passed Senator John McCain's amendment to ban all U.S. personnel from inflicting ``cruel, inhuman or degrading'' treatment on any prisoner held by the United States. There was no ambiguity in Congress's intent; in fact, the Senate approved the proposal 90-9. However, after signing the bill into law, the President quietly issued a signing statement asserting that his administration would construe it ``in a manner consistent with the constitutional authority of the President to supervise the unitary executive branch and as Commander in Chief and consistent with the constitutional limitations on the judicial power.''

Many understood this signing statement to undermine the legislation. In a January 4, 2006, article titled ``Bush Could Bypass New Torture Ban: Waiver Right Is Reserved,'' the Boston Globe cited an anonymous ``senior administration official,'' according to whom ``the president intended to reserve the right to use harsher methods in special situations involving national security.''

These signing statements are outrageous, intruding on the Constitution's delegation of ``all legislative powers'' to Congress, but it is even more outrageous that Congress has done nothing to protect its constitutional powers. The legislation I introduced in 2006 would have given Congress standing to challenge the constitutionality of these signing statements, but has until now failed to muster the veto-proof majority it would surely require. The executive branch operates free of such internal dissent. Although John McCain promised to drop signing statements altogether, Barack Obama, while deploring Bush's practice, said during the campaign that ``no one doubts that it is appropriate to use signing statements to protect a president's constitutional prerogatives.''

Here again, the President does not need to convince any colleagues to issue a signing statement, he needs only put pen to paper. Indeed, 2 days after criticizing President Bush's signing statements, President Obama issued one of his own regarding the Omnibus Appropriations Act of 2009. Citing among others his ``commander in chief'' and ``foreign affairs'' powers, he refused to be bound by at least 11 specific provisions of the bill including one longstanding rider to appropriations bills designed to aid congressional oversight. As I told the Wall Street Journal, ``We're having a repeat of what Democrats bitterly complained about under President Bush,'' and if President Obama ``wants to pick a fight, Congress has plenty of authority to retaliate.''

The Terrorist Surveillance Program--Act II

Many of the issues surrounding the Terrorist Surveillance Program and executive authority resurfaced in 2008. FISA reform legislation, which began making its way through the Senate in February of last year, included a controversial provision giving retroactive immunity to the telecommunications companies for their alleged cooperation with the Terrorist Surveillance Program.

Throughout, my chief concern was to keep the way to the courts open as a means to check executive excesses. I offered an amendment, both in committee and on the floor, to substitute the U.S. Government for the telephone companies facing lawsuits related to the Terrorist Surveillance Program. Instead of immunity, my amendment would have put the government in the place of the companies, so the cases could go forward without posing a legal threat to the companies themselves.

When this proposal was defeated, I proposed yet another amendment, which would have required a federal district court to determine that the surveillance itself was constitutional before granting immunity. I also cosponsored an amendment that would have delayed the retroactive immunity for the telephone companies until a mandatory inspector general's report on the Terrorist Surveillance Program had been issued.

I tried to impress upon my colleagues the importance of our actions:

We are dealing here with a matter that is of historic

importance. I believe that years from now, historians will

look back on this period from 9/11 to the present as the

greatest expansion of Executive authority in history--

unchecked expansion of authority . . . The Supreme Court of

the United States has gone absent without leave on the issue,

in my legal opinion. When the Detroit Federal judge found the

terrorist surveillance program unconstitutional, it was

[reversed] by the Sixth Circuit on a 2-to-1 opinion on

grounds of lack of standing. Then the Supreme Court refused

to review the case. But

the very formidable dissenting opinion laid out all of the

grounds where there was ample basis to grant standing. Now we

have Chief Judge Walker declaring the act unconstitutional.

The Congress ought to let the courts fulfill their

constitutional function. . . . Although I am prepared to

stomach this bill, if I must, I am not yet ready to concede

that the debate is over. Contrary to the conventional wisdom,

I don't believe it is too late to make this bill better.

The date was July 7 and the Senate had just returned from recess, which allowed me to close with a flourish:

Perhaps the Fourth of July holiday will inspire the Senate

to exercise its independence from the executive branch now

that we have returned to Washington.

Despite my fight to keep the courts open, in the end all my amendments were defeated. Nevertheless, as I said I would, I ultimately voted for the FISA reform bill. I chose not to reject the entire package--which had the support of nearly seventy senators, including both presidential candidates--not only because my classified briefings on the surveillance program convinced me of its value, but also because of the important oversight provisions it imposed on future surveillance programs.

The FISA reform bill required prior court review of the government's procedures for surveillance of foreign targets, except in exigent circumstances. It also required that the Intelligence Court determine whether procedures for foreign targeting satisfy fourth amendment protections against unreasonable searches. In addition, before monitoring U.S. citizens outside the country, it required individualized court orders based on probable cause. Finally, the bill mandated a comprehensive review of the Terrorist Surveillance Program by several inspectors general. Indeed, the final bill had many elements in common with my earliest efforts to place the Terrorist Surveillance Program under FISA--it just took years to get there. And Congress and the courts may yet need to correct its flaws.

A Plan for the Future

These experiences have crystallized for me the need for Congress and the courts to reassert themselves in our system of checks and balances. The bills I have outlined are important steps in that process. Equally important is vigorous congressional oversight of the executive branch. This oversight must extend well beyond the national security arena, especially as we cede more and more authority over our economy to government officials.''

As for curbing executive branch excesses from within, I hope President Obama lives up to his campaign promise of change. His recent signing statements have not been encouraging. Adding to the feeling of deja vu is the Washington Post's report that the new administration has reasserted the ``state secrets'' privilege to block lawsuits challenging controversial policies like warrantless wiretapping: ``Obama has not only maintained the Bush administration approach, but [in one such case] the dispute has intensified.'' Government lawyers are now asserting that the trial court lacks authority to compel disclosure of secret documents, and ``warning'' that the government might ``spirit away'' the material before the court can release it to the litigants. This is Carrie Johnson, ``Handling of `State Secrets' at Issue: Like Predecessor, New Justice Dept. Claiming Privilege,'' The Washington Post, March 25, 2009. As the article notes, I have reintroduced legislation this year with Senators Leahy and Kennedy to reform the state secrets privilege. I doubt that the Democratic majority, which was so eager to decry expansions of executive authority under President Bush, will still be as interested in the problem with a Democratic president in office. I will continue the fight whatever happens.

(The further remarks of Mr. Specter pertaining to the introduction of S. 875, S. 876 and S. 877 are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Madam President, what is the parliamentary situation?

I thank the Chair.

Madam President, yesterday, when we were finally allowed to proceed to the Fraud Enforcement and Recovery Act, we began making real progress. Ten amendments were offered during the course of the day, four amendments were adopted, and six remain pending. I believe, had we not stopped voting at 5 o'clock, we could have finished the bill and passed it last night. As things stand, we hope to dispose of the six remaining amendments through the course of this morning. We should complete Senate consideration of the bill without further delay.

I should note that the number of Senators who have cosponsored this bill continue to grow--now at 17 Senators. Most of the Senators who offered amendments yesterday praised the underlying bill. I think we have only one pending amendment that regards the underlying bill; only one that actually directly relates to it. Senator Grassley will speak to that amendment. Most of the amendments that have been offered, almost all the remaining amendments pending, aren't within the jurisdiction of the Judiciary Committee, they are within the jurisdiction of the Banking Committee, and I look forward to the leadership of that committee--the committee of jurisdiction--with respect to guidance on those amendments.

In my view, it would have been better if Senators had withheld their amendments and waited to offer them on the housing and banking legislation that is going to be considered next week by the Senate. Then you would have at least had a bill that was relevant to the amendments. But, of course, every Senator can do whatever he or she wants to. Now, the banking/housing amendments that have been added to this Judiciary bill will complicate passage and enactment of what everyone agrees is needed--the fraud enforcement legislation. I think that is unfortunate.

Among the examples are amendments affecting the use of TARP funds.

Modifying the Troubled Asset Relief Program is a complicated matter. I wish it were not complicating this bill. I have no problem with such amendments being on a bill that actually relates to TARP, but this one does not. Indeed, in the 6 weeks, the month and a half since the fraud enforcement bill was reported by the Judiciary Committee, my staff and I reached out to Senators and no one raised these TARP issues. Had they, we would have engaged with Chairman Dodd and Senator Shelby and tried to work them out as best we could in the proper setting.

The Obama administration has reformed the TARP process. It is doing its best to get a handle on the use of these funds. I intend to look to their views and to those of Chairman Dodd, but I believe complicating passage of this fraud enforcement bill with those issues is not helpful. Nonetheless, we will do what we have to in order to complete this process.

The Obama administration's Statement of Administration Policy expresses their strong support for enactment of the underlying fraud enforcement bill. They note:

Its provisions would provide Federal investigators and

prosecutors with significant new criminal and civil tools and

resources that would assist in holding accountable those who

committed financial fraud.

To give an idea, the Justice Department, the FBI, the Secret Service, the Special Inspector General for the TARP, law enforcement officers, good government advocates--all support the underlying bill. The New York Times wrote last weekend:

Senators should not be asking if the expenditure on fraud

enforcement called for in this bill is affordable, but

whether it is enough.

Fraud has damaged our economy. It has wrecked the lives and life savings of thousands of hardworking Americans. That is why this bill should not be complicated with a lot of extraneous material that is not in the jurisdiction of this bill. We have people around this country facing economic crises. They are preyed upon by some of these mortgage fraud groups. They promise to help them out of any kind of a mortgage difficulty they have and then they steal their retirement accounts. They steal the money they may have saved for their children to go to college. They steal the equity in their homes. Then they disappear, so people are left with no homes, no equity, no retirement accounts. If they saved money for their children to go to college, there is no money there, and the people who have committed the fraud get away.

On those occasions when sometimes they are chased down, they may actually face a fine. But if they have stolen $200 million and get a $10 million fine--big deal. It is the cost of doing business. But if we have very tough legislation that allows the Justice Department and others to go in right at the get-go, to be able to go in and go after these people and make it very clear: If you are involved in this kind of fraud, if you are involved in this kind of theft, you are not going to get a fine, you are going to go to prison, then they are going to pay attention.

I can tell you from my own experience as a prosecutor, I know fines in this kind of fraud situation do not serve as much of a deterrent. But if we are able to send in the police to arrest these people, and they know they are going to spend years behind bars, then they start paying attention. That is the only thing that really does it, and that is the only thing that is going to protect these Americans, American taxpayers, honest, hardworking men and women--the only thing that is going to protect them from losing everything they have in a downturn in the economy.

We should pass this bill without further delay. We should move to the task of helping law enforcement find and hold accountable those who engage in such fraudulent conduct. This should be fairly easy. We can pass this bill and say: We are against crime, we are against fraud, we want the good guys to win, we want the bad guys to go to jail. It is as simple as that. That is why there are Republicans and Democrats who support this--across the political spectrum.

Strengthening fraud enforcement is a key priority for President Obama. During the campaign the President promised to ``crack down on mortgage fraud professionals found guilty of fraud by increasing enforcement and creating new criminal penalties.''

The President made good in his promise in his budget, calling on FBI agents ``to investigate mortgage fraud and white collar crime,'' and more Federal prosecutors and civil attorneys ``to protect investors, the market, and the Federal Government's investment of resources in the financial crisis, and the American public.''

As taxpayers, we all have a stake in this. If these people are able to get away with their fraud, if they are able to get away with siphoning off this money, we taxpayers pay the bill in the long run. Those who are hit with the fraud pay far more than that. They may pay with their life savings, with their homes, with everything they have ever worked for.

This bipartisan Fraud Enforcement and Recovery Act is a chance to authorize the necessary additional resources to detect, fight, and deter fraud that robs the American people and the American taxpayers of their funds. Investing resources in detecting and deterring fraud yields dividends for the American people. That is what this bill would do, and we should pass it without further delay.

I want my colleagues to know, at some point, if people are not here to offer amendments, we will call up and vote on the amendments that are pending and then go to final passage. I know the Democratic and Republican leaders talked about a budget matter that has to come up that will probably take us into the evening. I am trying to save the time of all Senators, so I urge Senators to come because at some point everything that is pending is going to be called up and is going to be voted on up or down. I would at least like to have the Senators on the floor who are sponsoring them. Then we will go to final passage.

I suggest the absence of a quorum.

Madam President, I thank my friend from South Dakota for his courtesy in talking to me first about the amendment. As I pointed out to him, these are matters before the Banking Committee. The Judiciary Committee has really got nothing to do with it, the same as many of these. I will wait for Senator Dodd and Senator Shelby to respond; I will not.

I am going to make a unanimous consent request. I have notified both sides of this. There is a Boxer-Snowe amendment No. 1000. I ask unanimous consent that at 10:50--I realize it is going to be objected to, but I am trying to save both Republicans and Democrats from being here until 2 o'clock tomorrow morning because of the bill that comes up after this. I ask unanimous consent--and if this is objected to, I will repeat the request later on--that at 10:50 the pending business be set aside, the Boxer-Snowe amendment No. 1000 be brought up, there be 8 minutes of debate evenly divided before a vote, and that it then be in order to go to a rollcall vote on the amendment.

I have been advised that there would be an objection because they have not heard from the Banking Committee, from Senator Dodd and Senator Shelby. I would urge them to come to the floor so we can move forward, as most of the amendments pending or about to be pending have absolutely nothing to do with the jurisdiction of the Judiciary Committee, have nothing to do with the jurisdiction of the bill on the floor, have everything to do with a bill that is coming up next week from the Banking Committee. So I would urge the Banking Committee to come to the floor and speak to the amendments that are all within the jurisdiction of their committee.

I mention this because if we don't, the other alternative is to accept everything and go immediately to final passage. I don't think that would be responsible because then the fraud bill that virtually everybody in this body, Republicans and Democrats, supports is going to die because it won't go past the other body. I realize every Senator has a right to offer any amendment he or she wants, but at some point we have to be realistic. If we are against the people who are committing fraud on the American taxpayers, something for which all of us have made speeches that we are in favor of stopping them--newspapers from the right to the left have editorialized in favor of stopping them--let's be honest and actually pass a bill that does it. The message amendments should wait until an appropriate bill that has something to do with them.

I am also trying to help Senators. We are going to complete this bill before we go to budget matters. We can complete it easily by noon. As Senators know, I have supported Republican amendments that came up yesterday. They have all been accepted, including an amendment by Senator Grassley and myself. But we want to complete this legislation. I am perfectly willing to stay here all night long to finish this and the budget. But every hour we take on this is an hour longer on the budget. It is somewhat frustrating that Senators who have a concern can't find time to show up on the floor. Senators from both sides of the aisle don't have time to show up on the floor on a bill which we were notified 3 weeks ago was going to be on the floor at this time. I urge them to do so. Because as soon as these amendments are disposed of one way or the other, we will go to final passage.

I yield the floor.

Madam President, while the Senator from South Dakota is in the Chamber, if I may ask him a question, we also have amendment No. 982 offered by Senator Coburn which allows the unused TARP funds to pay for the Fraud Enforcement and Recovery Act. I ask the Senator if the Coburn amendment and his amendment are mutually exclusive?

I thank the Senator. I have read it carefully, and that was my conclusion. This is a matter more in line with the Banking Committee, and I will let them speak to it. This is unprecedented, that we have amendments on bills, whether this one or others, that are mutually exclusive. I did note that. I thank my friend from South Dakota for his comments.

I yield the floor.

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

Madam President, I was distracted in another conversation. Senator Coburn left the floor. I wished to speak to him about his amendment because it appears to have already been covered in the Isakson-Conrad amendment. I would like to ask if he also feels that way. I would hope he might come back to the floor so we could discuss that.

I also wish to notify the other side I am about to renew my unanimous consent request for a vote on the Boxer amendment. I will not until they have time to talk to the Republican side. There is no Republican on the floor right now. But in a few minutes, I will renew my request for a rollcall vote on that amendment.

In the meantime, Madam President, I suggest the absence of a quorum.

Madam President, I will object, and I will just take a moment to explain.

First off, I would note, as he typically does, the Senator from Arizona came and talked to me before and was very straightforward with what he was going to do.

This talks about recoveries available under the False Claims Act. I think the Senate expert on the False Claims Act is Senator Grassley, a senior member of the Senate Judiciary Committee. Senator Grassley opposes this, as do I. I know there are going to be other amounts the distinguished Republican leader is going to bring up, but my reason in opposing them--and he has explained each one of them to me ahead of time, so there is no surprise--but I will oppose them because I believe without whistleblowers, a lot of these billions of dollars in fraud that have been found wouldn't have been found. Without the whistleblowers, the Government--the American taxpayers--wouldn't recover so much.

The False Claims Act--and, again, Senator Grassley and others were the leaders in putting that together--has brought back more than $22 billion into the U.S. Treasury.

Now, it has a balanced approach in providing incentives for said whistleblowers. They share in such recoveries if it is warranted and if it is approved by the judge. A judge has to approve it. It has worked out very well. Rather than there being an arbitrary cap, I would rather leave it to the judge to make the determination. Simply saying, well, we will limit it to three times the cost, then I worry about seeing a padding of expenses. I think it is very well balanced the way it is, including having a judge make the final decision.

I think one of the things we all agree upon--I am sure the Senator from Arizona and I agree--is that we have to find fraud, we have to root it out, and we have to bring those who commit fraud to justice. What I am thinking about, as Senator Grassley has pointed out in the past, as have I, we have to give an incentive to the whistleblowers to bring the case. After all, we have seen all too often a whistleblower will alert us to the fraud, and the first thing that happens is they lose their job. They often risk retaliation. In fact, if they are turning in their coworkers or their supervisors and bringing out the fraud, this could be life-altering. It could actually change their professional career, often for the worse. They are looked at as the bad guys, but they are not the bad guys; they are the good guys. We ought to reward them.

I will vote against it in this case. I object to considering it. I know the Senator from Arizona is going to have further amendments, but I just want him to know--and I want my colleagues to know what I have told him privately. I commend him for--as we have always done in cases we have had--talking to me ahead of time, as I have with him when I have had amendments or matters that may involve him.

So I yield the floor.

I object.

Mr. President, as I indicated to my friend earlier, I would object to that, and I do object.

Mr. President, reserving the right to object, I hate to try to fix something that I don't think is broken. The False Claims Act has worked very well for the U.S. taxpayers. It has worked well. I know the Senator from Iowa worked so hard in putting this together in the first place. It has brought more than $22 billion back into the Treasury. The awards to whistleblowers have to be approved by a judge. I don't want to fix something that is not broken, so, therefore, I will object, and I do object.

Mr. President, I know the distinguished Senator from Iowa wishes to speak on this amendment, and we will soon have a rollcall vote. I ask the Senator from Arizona and the Senator from Iowa if we could withhold for 2 minutes in order for the Senator from Wisconsin to speak on an amendment of his, and then we will go back to the amendment of the Senator from Arizona.

Will the Senator yield for a unanimous consent request?

Mr. President, I ask unanimous consent that the vote on the Kyl amendment, now pending, occur at 11:45 but that there be 2 minutes equally divided immediately preceding the vote. First, I make that request.

Mr. President, I ask for the yeas and nays on the amendment.

Mr. President, I also ask unanimous consent that there not be any amendments to that amendment.

Mr. President, I understand the senior Senator from New York has an amendment. While the senior Senator from Iowa is on the floor, I ask unanimous consent that it be in order for the Senator from New York to bring up his amendment--that the pending amendment be set aside for 5 minutes--speak on it, and if there are no objections to it, it then be accepted, and we go back to the Kyl amendment so as not to interfere with the unanimous consent agreement to have a vote on the Kyl amendment at 11:45 a.m. I make that request.

If I can get the attention of the senior Republican, my request is that the Senator from New York be allowed to bring up his amendment for 5 minutes, and at the conclusion of the 5 minutes, unless more time is requested by unanimous consent, that the matter, if it can be disposed of, be disposed of, but in any event, at the end of that time, we go back to the Kyl amendment on which there is a unanimous consent agreement for a rollcall vote at a quarter of 12.

I so modify it. That would still leave the amount of time Senator Kyl has requested prior to a vote on his amendment.

Mr. President, are we now back on the Kyl amendment?

Before that happens, I thank the Senator from New York and the Senator from Iowa. They have been meeting with me and my staff for weeks on this amendment. I am glad they were able to reach agreement on the amendment.

I yield the floor.

Wait a minute. Reserving the right to object, would the Senator repeat that? That is not my understanding of what he was to do. Would the Senator repeat the unanimous consent request?

That was not my understanding of what the Senator was asking, so I would object.

Amendment No. 1004

Reserving the right to object, and I shall not object, it is my understanding that we now have about 7 minutes or 8 minutes. Then we will go off this and go back to the Kyl amendment. I want to protect the Senator from Arizona on his amendment. Even though it is one I disagree with, I want to protect his right to have that.

Mr. President, I assume the Banking Committee will talk about the amendment of the Senator from Nevada.

If I could have the attention of the Senator from Nevada, if his staff would allow me to have the attention of the Senator from Nevada for a moment, I realize we are merely constitutional impediments to the staff. I hate to interfere.

Again, this is one of a series of amendments that is not at all within the jurisdiction of the Judiciary Committee. I find it an interesting amendment, but it is within the jurisdiction of the Banking Committee. I was hoping, since there is going to be a banking bill next week, that some of these banking amendments would actually go on the Banking bill and have Judiciary amendments on the Judiciary bill. And I would assume that the discussion will be carried out by Senators Dodd and Shelby of the Banking Committee, in that there is no relationship at all to the Judiciary Committee bill.

I would add to that, of course, that the Senator from Nevada has an absolute right to bring up anything. Someone can bring up something on agriculture and price supports, I suppose. But I wish we could keep it to Judiciary matters.

Mr. President, am I correct we are now back on the Kyl amendment?

I thank the Chair, and I suggest the absence of a quorum.

Mr. ENSIGN addressed the Chair.

I withhold that request for the Senator from Nevada.

Amendment No. 1000

Mr. President, I thought the Kyl amendment was pending by unanimous consent.

Mr. President, I suggest the absence of a quorum.

Mr. President, I suggest the absence of a quorum. Will the Senator give up the floor?

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

Mr. President, I understand that the Senator from Arizona and I have 2 minutes equally divided between us before the vote?

I know Senator Kyl is on the way. I will say what I said before, when he was standing on the floor. I, along with Senator Grassley, strongly oppose his amendment because the False Claims Act is so well put together, has a balanced approach of providing incentives for whistleblowers, and has recovered more than $22 billion for the Treasury. That is why Senator Grassley and I oppose the amendment by the Senator from Arizona. Awards to whistleblowers have to be approved by judges, so there is a mechanism to handle excessive awards.

When we have something like the False Claims Act that is working as well as it is--as I said, it is one of the few things that has made money for the Federal Government. So far it has made $22 billion for the U.S. taxpayers. I hate to interfere with something that is working.

My time is up. The Senator from Arizona is on the Senate floor.

I move to reconsider the vote and to lay that motion on the table.

The motion to lay on the table was agreed to.

vote explanation

Madam President, if the Senator will yield for a moment, this bill would have been easily finished last night, but I understand, under the Senate schedule, we were unable to continue at that time. I hope we will finish soon so that we don't have to spend a great deal more time. We have had a large number of amendments that are basically Banking Committee amendments, and other committees, not the Judiciary Committee. We should come back to realizing that this is a Judiciary bill. Every one of us says we are against those who are stealing life savings and money set aside for kids' colleges and stealing people's homes. We all say we would love to put them in jail. We will not do it until we get the bill through.

I yield the floor.

Madam President, I wish to thank the Senator from Missouri for her statement. I hope people listen to what she had to say because it is a warning to many. Again, I would reiterate that one of the reasons we are trying to move this fraud bill through, everybody will be against fraud and everybody is against crime, but as the Senator from Missouri knows so well, you have to have some laws on the book to go after fraud and go after crime. I wish to speak further on that, but I see my dear friend and distinguished colleague from Vermont on the floor.

I will yield the floor so he can also speak on a matter.

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

Madam President, with the vote and disposition of the Kyl amendment today and the Kyl amendment and the Leahy-Grassley amendment yesterday, we have basically completed work on the underlying bill. Those were the only amendments that affected the underlying bipartisan fraud enforcement bill. A number of other amendments have come in, but they, of course, have nothing to do with this bill. They are not within the jurisdiction of the Judiciary Committee. They are, in large part, extraneous to the fraud enforcement bill. Many if not all are within the jurisdiction of the Banking Committee. I haven't seen one yet that should be in Agriculture, but hope springs eternal. Today, a Senator offered an amendment drawn from the HELP Committee jurisdiction. In a way, it is a compliment that so few people have suggested changes that they wanted to make to the Judiciary Committee bill. I guess Senators are anxious in case they are not around here next week when we have a Banking bill.

I would like to conclude consideration of the bill that actually is before the Senate. We will soon have a list of

amendments on which both sides will agree to have votes. I don't think any of them really have anything to do with the Judiciary bill, but every Senator has a right to offer whatever amendments he or she wants, whether germane to the bill or not, and to get a vote on them. If they are all going to require rollcall votes, we should be done certainly sometime before midnight. Then we can pick up the next piece of legislation, which I understand we should have done by Saturday. Of course, the only amendments really involving this bill could have been done yesterday. We could have finished this bill yesterday.

I would like to speak briefly about the bipartisan Fraud Enforcement and Recovery Act. This bill has received overwhelming support. Almost everyone recognizes the importance of strengthening the Federal Government's capacity to investigate and prosecute the kinds of financial frauds that have undermined our economy. The legislation has strong bipartisan support. I applaud Senator Grassley, who is the lead cosponsor. He worked with me to write this bill. He has been a leader on this issue.

Senators Specter and Snowe have joined as cosponsors. Many different law enforcement and good government organizations are supporting this bill as well, including the Fraternal Order of Police, the Federal Law Enforcement Officers Association, the National Association of Assistant United States Attorneys, the Association of Certified Tax Examiners, and Taxpayers Against Fraud.

Now let me address the authorizations in the bill. I have rarely seen such detailed justification with regard to an authorization. I mention this because this is not an appropriations bill. It is authorizing legislation. It still has to go through the appropriations process. Every agency authorized to receive money in the bill has set out in detail exactly what it would do with that money if it is authorized and appropriated. The detail includes the number of agents, prosecutors, and other key personnel who would be hired, and each agency has explained why the added resources are needed. Those detailed justifications have been shared with anyone interested in reviewing them.

In total, the bill authorizes $245 million a year over the next 2 years to hire more than 300 Federal agents, more than 200 prosecutors, and another 200 forensic analysts and support staff to rebuild our Nation's fraud enforcement efforts. We have broken those numbers down agency by agency.

These resources for additional agents, analysts, and prosecutors are desperately needed. The number of fraud cases is now skyrocketing, but resources were shifted away from fraud investigations after 9/11. Today, the ranks of fraud investigators and prosecutors are drastically understocked, and thousands of fraud allegations go unexamined each month.

Reports of mortgage fraud are up nearly 50 percent from a year ago and have increased tenfold over the past 7 years. In the last 3 years, the number of criminal mortgage fraud investigations opened by the Federal Bureau of Investigation, FBI, has more than doubled, and the FBI anticipates that number may double yet again. Despite this increase, the FBI currently has fewer than 250 special agents nationwide assigned to financial fraud cases, which is only a quarter of the number the Bureau had more than a decade ago at the time of the savings and loan crisis. At current levels, the FBI cannot even begin to investigate the more than 5000 mortgage fraud allegations the Treasury Department refers each month. Other agencies have documented similar crises in their ability to keep up with the rising pace of new cases.

We all know that fraud enforcement simply can't be adequately covered with funds allocated in the recently passed recovery legislation for State and local law enforcement. As someone who pushed strongly for recovery legislation that included State and local law enforcement, I know the purpose behind those funds and what they are dedicated to. It is intended to ensure that State and local law enforcement agencies and crime prevention programs could avoid layoffs, make new hires, and reinforce their work to prevent the increased crime so often associated with economic downturns. In so doing, these funds would reinforce and revitalize those neighborhoods that have experienced economic development and that could so easily backslide. State and local law enforcement fund are urgently needed for those vital purposes. They should not be diverted from State and local law enforcement needs to fund Federal fraud investigations.

Moreover, while states have done admirable work cracking down on mortgage fraud, the Federal Government must play a substantial role in this area. Mortgage fraud schemes and other financial fraud schemes often cover many States and jurisdictions, which hampers the ability of any State or local investigators and prosecutors to reach them. These schemes also are often extremely complex and labor-intensive to unravel, requiring the expertise and resources of the Federal Government and the mortgage fraud task forces in which Federal and State law enforcement officers work closely together. We simply cannot ask States to solve this enormous and complex problem on their own. I believe that we need to be good law enforcement partners and that the Federal Government needs to do its share. To fulfill those responsibilities these additional funds need to be authorized.

I agree that the $10 million in additional funding to the FBI for mortgage fraud enforcement in the omnibus appropriations bill is a good start, but it is just a small start to what is needed. I wish the economic recovery had been able to include an additional $50 million for the FBI that the Senate initially was willing to include, but that additional funding was stripped away. Unfortunately, to achieve bipartisan support and passage of the economic recovery package, those funds were eliminated. The funds currently being provided are insufficient to tackle the magnitude of this problem. I refer all Senators to the testimony before the Judiciary Committee by the Director of the FBI and the Deputy Director of the FBI and to the detailed justifications the FBI and other law enforcement agencies have provided.

I believe authorizing and funding fraud enforcement will save the government money. That is what the Justice Department has found. That is what Taxpayers Against Fraud has found. That is what the administration indicates in its Statement of Administration Policy in strong support of this bill. As the administration says: ``These additional resources will provide a return on investment through additional fines, penalties, restitution, damages, and forfeitures.'' I would add that strong fraud enforcement will also save money by deterring fraudulent conduct.

According to recent data provided by the Justice Department, the government recovers on average $32 for every dollar spent on criminal fraud litigation. Similarly, the nonpartisan group Taxpayers Against Fraud has found that the Government recovers $15 for every dollar spent in civil fraud cases. Just last year, the Justice Department recovered nearly $2 billion in civil false claims settlements, and, in criminal cases, courts ordered nearly $3 billion in restitution and forfeiture. Strengthening criminal and civil fraud enforcement is a sound investment, and this legislation will not only pay for itself, but should bring in money for the Federal Government.

If fraud goes unprosecuted and unpunished, then victims across America lose money. In many cases, American taxpayers take the loss directly. For example, in the case of many mortgage frauds, the Federal Government has guaranteed the loans, and when the fraud is uncovered, American taxpayers, as well as the victim, lose out. More directly, with the billions of dollars of Federal funds now going out through the recovery legislation, the Troubled Assets Relief Program, and other bailout programs, we should all recognize that enforcement will be essential to protect those recovery funds from fraud and to recover any money that is fraudulently taken. If we do not take action to investigate and prosecute this kind of fraud, Americans will lose far more money than this bill costs.

The only organizations that have opposed this legislation are the Heritage Foundation and the National Association of Criminal Defense Lawyers. They have argued that the legal fixes

in this bill constitute overreaching by the Federal Government. In fact, this bill does not overfederalize or overcriminalize.

Senator Grassley and I took great care in crafting it to avoid those kinds of excesses. The bill creates no new statutes and no new sentences. Instead, it focuses on modernizing existing statutes to reach unregulated conduct and on addressing flawed court decisions interpreting those laws. This is exactly the kind of Federal criminal legislation that these critics should appreciate. Rather than gratuitously adding new laws or expanding Federal jurisdiction, it acts in a targeted way to fill in gaps identified by investigators and prosecutors to make it easier for them to reach the conduct most relevant to the current financial crisis.

The bill amends the definition of ``financial institution'' in the criminal code in order to extend Federal fraud laws to mortgage lending businesses that are not directly regulated or insured by the Federal Government. These companies were responsible for nearly half the residential mortgage market before the economic collapse, yet they remain largely unregulated and outside the scope of traditional Federal fraud statutes. This change will finally apply the Federal fraud laws to private mortgage businesses like Countrywide Home Loans and GMAC Mortgage.

The bill would also amend the major fraud statute to protect funds expended under the Troubled Assets Relief Program and the economic stimulus package, including any government purchases of preferred stock in financial institutions. The U.S. Government has provided extraordinary economic support to our banking system, and we need to make sure that none of those funds are subject to fraud or abuse. This change will give Federal prosecutors and investigators the explicit authority they need to protect taxpayer funds.

This bill will also strengthen one of the core offenses in so many fraud cases--money laundering--which was significantly weakened by a recent Supreme Court case. In United States v. Santos, the Supreme Court misinterpreted the money laundering statutes, limiting their scope to only the ``profits'' of crimes, rather than the ``proceeds'' of the offenses. The Court's mistaken decision was contrary to congressional intent and will lead to financial criminals escaping culpability simply by claiming their illegal scams did not make a profit. Indeed, Ponzi schemes like the $65 billion fraud perpetrated by Bernard Madoff, which by definition turn no profit, are exempt from money laundering charges under this formulation. This erroneous decision must be corrected immediately, as dozens of money laundering cases have already been dismissed.

None of these changes constitute overcriminalization. Rather, they reach fraudulent conduct at the center of our ongoing economic crisis. Americans are rightly demanding accountability for this fraud, and we cannot have full accountability without the participation of Federal investigators and prosecutors armed with the tools and resources they need.

We can delay no further in taking decisive action to strengthen fraud enforcement and doing everything we can to fight the scourge of fraud that has contributed to our economic crisis. There is simply no good reason for us not to act. The administration ``strongly supports enactment'' of this bill. The Justice Department supports it, the FBI supports it, the Secret Service supports it, the TARP inspector general supports it, the HUD inspector general supports it, Federal and State law enforcement officers support it.

The bottom line, Madam President--before I lose my voice entirely-- is, this legislation is to stop people who have been robbing the retirement savings of Americans, who have been robbing their homes from under them, who have been robbing the money they have set aside for their kids' college education and getting away with it under some of the elaborate mortgage fraud schemes. They get away with it because there is no real ability to go after them. There is neither the money nor the personnel. This legislation gives both money and personnel but also gives teeth to the law.

I have said on this floor several times, if you have somebody who sets up a $100 million fraud scheme, they do not care what happens to the people in their way. They do not care if they ruin the lives of the people they are going after. They do not care if the people lose their homes because they figure if they get caught, they might have to give a little bit of the money back in a fine or otherwise. They are not deterred. They, obviously, do not have a sense of conscience or morality. They do not care if people lose their life savings. They do not care if people lose their retirement. They do not care if people lose their hope for the future. All they want is the money.

Madam President, I tell you right now, if these same people think they are going to go to prison for what they are doing, if they think they will spend time behind bars for years and years, then maybe-- maybe--some Americans may be able to keep their homes, some Americans may be able to keep their dreams, some Americans may be able to keep their retirement, some Americans may be able to keep sending their children to college.

People are now losing that dream. That is why there is strong bipartisan support for this bill. That is why I must admit I am somewhat frustrated that many have come here to try to bring amendments that have absolutely no place in this bill, and, if anything, would slow up the ability to protect Americans. But they have the right to do this.

We will soon have a list of amendments, we will set the list in, and we will set a time for final passage. And maybe--maybe--within a few weeks the President will be able to sign this legislation and people will be a lot more protected than they are now.

Madam President, I suggest the absence of a quorum.

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

Mr. President, the first point I wish to make is that with the false claims provisions in the Leahy-Grassley bill, which deals with other provisions as well, but the False Claims Act is essential to accomplishing the overall purposes of the bill, along with other tools to do it--to get rid of fraud. We are trying to just, in this bill, in a very rifle shot way, correct some court opinions that have been detrimental and weaken the False Claims Act. That is all we are trying to accomplish in this bill that deals with bigger things as well.

What Senator Kyl is bringing up is a legitimate subject of discussion because it has been brought up at other times since passage of the False Claims Act 22 years ago. I don't say it is not legitimate to discuss it. But there is broader false claims legislation in the Judiciary, and it ought to be discussed at a time when we have hearings on this subject. There have been no hearings on this.

These amendments should be reviewed by the full committee under the regular order process. That is the first point I wish to make to Senator Kyl about why not to consider this amendment right now.

The second one is the point he made on how big of an award is big enough to incentivize people to turn in fraud.

Yes.

Mr. President, the second point I wish to make before I get to my formal remarks is on the question the Senator from Arizona raised about how big of an incentive is enough to get reported. That is a legitimate question.

Here is my experience with 22 years of the False Claims Act, dealing with whistleblowers, Government agencies listening to whistleblowers or not, the Justice Department taking a case or not taking a case, or whether the whistleblower initiates the case on their own. What I have found is that the False Claims Act does not come up early in anybody's thought process--about initiating a thought process that there might be fraud out there and somebody ought to be investigating and get to the bottom of it. Usually,

the whistleblower has ample evidence of that or they wouldn't be doing it in the first place. They jeopardize their profession and their job in Government. That isn't right, but whistleblowers who want to do the patriotic thing actually jeopardize their professional future. What I have found is they don't even know about the False Claims Act or about getting a percentage of it. They don't even know about whistleblower protection laws. They want to do the patriotic thing. They want to report fraud.

So to talk about the award being the incentive to come forward, I don't want to say that in some cases that may not be the case, but in most cases these are patriotic people knowing about the fraudulent use of taxpayer money, they think it is wrong and ought to stop, and they think it ought to stop within the agency. They don't get anywhere with the agency, so they come to other people, and eventually along the line, probably, somebody says: You need to take this to court, and you can get something out of this if you win and if you have a case. Probably the majority of them don't win. So they get nothing out of it. But they are trying to be patriotic citizens.

I think that bringing up the issue of how much of an award is big enough to get this information out should not even be a part of the debate. It is still something because we are talking about taxpayer money and what is an incentive to do this, but it ought to be discussed in a thoughtful way, not on an amendment to a bill that is trying to correct a few bad court decisions to get the False Claims Act back to its original purpose.

I thank the Senator from Vermont for letting me cooperate with him on this issue. The Senator from Vermont also recognizes that the False Claims Act is a very useful tool against fraud, which is the overall purpose of the rest of Senator Leahy's and my bill.

The other thing you have to remember is that this has brought in $22 billion. Senator Leahy made that very clear. There are so many court cases I can tell you about where the Government, through the Justice Department, came in and tried to belittle the whistleblower, the claimant, to reduce, or even eliminate, any access to an award; how many times judges have had to berate people in the Justice Department. I am not talking about Presidents Obama, Bush, Reagan, Bush 1, or Clinton; I am talking about several of them where you wouldn't even have a case--in other words, saying to the prosecutor and the Justice Department: Do you realize you would not even have had a case without this patriotic whistleblower coming forward?

More recently, there has been a case where the Justice Department asked not to proceed forward. The judge stepped in and said: We are going to go forward; there is something wrong here, and we are going to get to the bottom of it.

So we have $22 billion back because of patriotic Americans. Do you know what. Just because the False Claims Act has been out there, it has been a preventive to fraud, like all the other tools Senator Leahy has in this bill that will not only help with prosecution, but the possibility of prosecution is going to be a preventive factor.

So I feel strongly that if the issue of an award limit comes up, it ought to be discussed thoroughly and thoughtfully in a tool--the False Claims Act--which has proven its worth by $22 billion and a lot of unknown preventable fraud out there. We ought to think through it thoughtfully.

I want this amendment defeated. The False Claims Act is the No. 1 tool for recovering taxpayer dollars lost to waste, fraud, and abuse. Whistleblowers who bring fraud cases on behalf of the Government, known as qui tam relators, often risk everything to uncover truth.

Currently, the False Claims Act provides a reward to whistleblowers who come forward with good-faith allegations of fraud, waste, or abuse of Government dollars.

They are allowed to file a lawsuit on behalf of the Federal Government, and the case remains under judicial seal in Federal court. The Justice Department then decides to join a case or not join a case. If the Justice Department joins a case and the case is successful, a whistleblower can recover 15 to 25 percent of the funds recovered. If the Justice Department does not join--then it is going to be a much more difficult process for the whistleblower and his or her counsel-- the whistleblower can go forward with the case and if they are successful, they can recover more, somewhere between 25 and 30 percent, depending upon the judge.

While some are arguing that this represents a windfall for whistleblowers, the statistics paint a different picture.

In fact, in cases where the Department of Justice joins the whistleblower, the average share for the whistleblower is not 25 percent or 30 percent, it is 16 percent. Compare that 16 percent with the percentage it takes to administer Government generally, throughout Government--about 12 percent. Do you, Mr. President, think there are enough people in the Justice Department, enough FBI people to know where all the skeletons are buried, where all the frauds are being committed? No. This average award is not too far out of line with the average administrative costs of Government.

There have been 6,197 qui tam complaints filed since 1986 which have resulted in $13.7 billion in recoveries to the Federal Government. That averages about $2.2 million recovered for complaint filed.

In these 6,197 cases, the Government has paid qui tam whistleblowers $2.2 billion in awards. That means the average share award for a qui tam whistleblower is about $350,000. This is hardly a windfall that one would seek, particularly if one is ruining their professional career by being a whistleblower, coming forth to do what is patriotic, to do what is right. It is, in fact, an incentive that helps fuel complaints coming in.

However, if we start adding new caps to the already existing whistleblower caps, we could reduce the incentive for whistleblowers to proceed through the cases--or coming forward in the first place--that would help us then recover billions of dollars.

I wish to share the story of Tina Gonter who was a qui tam whistleblower who testified before the Judiciary Committee last year. Ms. Gonter worked closely with the Government and went undercover at the company for months collecting documents and evidence of a fraud against the Navy. She even wore a wire for the Federal agents of the Defense Department.

Ultimately, a couple of individuals went to jail as a result of Ms. Gonter's work. But the Government refused to sue the contractor for fraud. Believe that, the Government refused to sue with obvious evidence. Ms. Gonter filed a false claims case against the company, and it was not joined by our own Justice Department. The judge in that case even scolded the Justice Department and the Navy for not joining the case.

Ultimately, Ms. Gonter prevailed, and the contractor paid over $13 million to the Federal Government. Ms. Gonter received a share of that money, but had she not brought this case, the Justice Department and the Defense Department would have been satisfied with simply putting two people in jail and allowing the contractor to walk away with the money it received for providing fraudulent product to the Navy. And it is not just a case of fraudulent product to the Navy. It is a serious safety matter for the people in the military who put their lives on the line in the defense of our freedom.

That is only one example out of 6,197 that the False Claims Act provides power to get fraudulent activity under control. It is a check on the power of the Government bureaucracy to look the other way--that is what the Justice Department did in this case--and pretend that fraud did not happen on their watch. However, it is fueled by courageous whistleblowers, such as Tina Gonter, and without sufficient financial incentives to come forward and fight these cases for 5 to 10 years they can take in court, we may lose this valuable tool against fraud.

It is about recovering money, taxpayers' money. I find it ironic--I hope people are listening now because there is a conflict here between maybe people on my side of the aisle who think this is a good idea--I find it very ironic that those outside groups supporting this amendment were in staunch opposition to the idea of the Senate imposing any caps on executive compensation at companies receiving bailout funds. Now instead, they want to cap

the recovery of good-faith whistleblowers to come forward with claims of fraud at companies that are ripping off American taxpayers.

The False Claims Act works and will continue to work if we do not cut the incentives for relators to go to court. The law already has a cap for whistleblower recoveries. I urge my colleagues to oppose this amendment which is based on a couple of extreme examples from outlier cases that are not the norm.

We have $22 billion coming in under this act. Early on, we fought the defense industry to get this bill passed, and the defense industry tried to gut it after it was passed. When they could not because they did not have the proper prestige, they came to the American hospital industry to fight a front for them. That did not happen. I don't know exactly what groups are out there now backing all this. But when are you ever going to realize that in this country, the taxpayers deserve some respect? And if there is fraud in your industry, it is no holds barred on the recovery and the preventing of fraud.

I yield the floor.

Mr. President, I ask unanimous consent for 15 seconds.

Mr. President, I would like to point out, as I did in my debate, that we have a much larger False Claims Act bill pending in the Judiciary Committee. I think what the Senator from Arizona brought up is a legitimate subject for discussion, but it ought to be discussed in the wider global issue of the False Claims Act and not in a fraud bill where we are just trying to make some very short changes in the False Claims Act.

I ask my colleagues to vote against the Kyl amendment.

I will take it off your time.

Pretty soon we are going to have a motion dealing with small business. I want to address that issue now so that I get it addressed properly as a senior member of the Senate Finance Committee.

Everyone in this body knows that small businesses are an extremely important and dynamic part of the U.S. economy. I wish to say, and I often do, that small business is the employment machine of our economy.

President Obama agrees with that. Small businesses have generated 70 percent of the net increase in jobs in the United States over a long period of time. Three weeks ago, we debated this issue during the budget resolution debate. During the debate, the Senate spoke on this point, because Senator Cornyn had a small business tax relief amendment. That amendment passed by an overwhelming vote of 82 to 16.

America's small businesses have been suffering during this recession. If you go back to your States frequently, as I do, you will hear about it from your small businesses very directly. A few weeks ago, Senator Landrieu and Senator Snowe held a hearing on the crunch hitting small business. They found that big banks have been cranking down lending to small businesses. At a time we are putting more money into big banks, why? I do not know that we got an explanation. I have been trying to get an answer out of Treasury on whether banks receiving the bailout money have been similarly squeezing out small business customers. I am still waiting for an answer from our Treasury Department.

A very good source of answer, though, as we turn elsewhere, an answer about the environment of small business, is found in the monthly surveys of small businesses conducted by the National Federation of Independent Business. We all know about the NFIB, the largest small business organization. NFIB has been conducting these surveys now for 35 years.

The membership of that organization includes hundreds of thousands of small businesses all across America. You can find the survey on NFIB's Web site www.nfib.org. I wish to encourage every Member to check out this month's survey, because I am going to be referring to it with charts I have with me.

The survey shows some extremely disturbing trends on credit availability. Small businesses depend on credit. Small businesses are getting squeezed very hard. That chart is up now. As you can see, the chart shows the availability of loans has fallen off the cliff as late as 2007 and gets worse as you get into 2009.

You see on the right side of the chart the sharp downturn evidencing the lack of ability of small businesses to get loans. This credit crunch as well as other factors has contributed to the near record low in the NFIB's index of small business optimism. I wish to have you view this, something like we regularly view, the University of Michigan's monthly index on consumer confidence.

The NFIB takes surveys regularly. This chart shows small business owners turning extremely pessimistic in the last couple of years. You can see how that has ``downturned'' very rapidly at the right end of the chart. What you see here is the attitude of decisionmakers in small business of America,

the people who create the jobs. Those are the decisionmakers for the businesses that President Obama and we in the Congress agree are most likely to grow or contract jobs.

The pessimism evidenced by the chart is at its second lowest point in the 35-year survey. This data should concern every policymaker in this body. As bad as the two sets of charts are, I have a worse picture.

This chart shows the net increase or decrease in small business hiring plans. The survey asks the small business owner simply whether he or she plans to expand, on the one hand, or contract, on the other hand, employment over the next 3 months.

As you can see even more dramatically, look at the right-hand side of the chart here. If I said on those others to the left hand, in each case I was talking about the right. I do know the difference between the left and right hand. But as you can see even more dramatically on the other two charts, this chart shows small business activity contracting tremendously.

Small business hiring plans are at their most negative level in the entire 35-year history of this survey, again, the right side of the chart. Let me repeat, because it is so important, this goes back to 1974, those surveys. Since NFIB started doing them, the likelihood of small business owners adding workers has never been worse.

With this pessimism, we should not be surprised then that job losses for small businesses have been growing dramatically. The national employment report recently released by Automatic Data Processing shows 742,000 nonfarm private sector jobs were lost from February to March 2009. Of those 742,000 lost jobs, 614,000 or 83 percent, were from small business.

The President's recent efforts to increase lending to the small business sector are commendable. The centerpiece of his small business plan will allow the Federal Government to spend up to $25 billion to purchase the small business loans that are now hindering community banks and other lenders.

Unfortunately, that is only a drop in the bucket.

Remember that small business accounts for about half of the private sector. Moreover, the positives that will come to small businesses from this relatively small package of loans--which will ultimately and obviously have to be paid back--will be heavily outweighed by the negative impact of the President's proposed tax increases. Helping small businesses get loans just to take that money back in the form of tax hikes is not helping the economy or small businesses.

The President's budget proposes to raise the top two marginal rates from 33 percent and 35 percent to 40 percent and 41 percent respectively, when PEP and Pease are fully reinstated. President Obama's marginal rate increase would mean an approximately 20 percent marginal tax rate increase on small business owners in the top two brackets.

Many of my friends on the other side will say that while they agree that successful small businesses are vital to the success of the U.S. economy, the marginal tax increases for the top two brackets will not have a significant negative impact on small businesses. I take exception to that argument. They used Tax Policy Center data, and I want to show why that should not be allowed.

Proponents of these tax increases seek to minimize their impact by referring to Tax Policy Center data that indicate about 2 percent of small business filers pay taxes in the top two brackets. In testimony before the Senate Finance Committee, the liberal think tank, Center on Budget Policy and Priorities, also used that figure. Moreover, Secretary Geithner has testified using that figure. They argue that a minimal amount of small business activity is affected.

However, there are two faulty assumptions to this small business filer argument.

The first faulty assumption is that the percentage of small business filers is static. In fact, small businesses move in and out of gain and loss status depending on the nature of the business and the business cycle. The nonpartisan Joint Committee on Taxation has indicated that, for 2011, approximately 3 percent of small business filers will be hit by these proposed higher rates. These statistics compare to a 2007 Treasury which showed 7 percent of flow-through business owners paying the top rate. In the latest analysis, when the impact of the alternative minimum tax is fully included, that percentage may drop some.

The second faulty assumption is that the level of small business activity, including employment, is proportionate to the filer percentage. This is where the argument is hogwash.

According to NFIB survey data, 50 percent of owners of small businesses that employ 20-249 workers would fall in the top two brackets. You can see it right here on this chart. It shows what I am talking about. According to the Small Business Administration, about two-thirds of the Nation's small business workers are employed by small businesses with 20 to 500 employees.

Do we really want to raise taxes on these small businesses that create new jobs and employ two-thirds of all small business workers? Of course, we don't. But that is exactly what the majority is going to do if they follow the President's lead.

With these small businesses already suffering from the credit crunch, do we really think it's wise to hit them with the double-whammy of a 20 percent increase in their marginal tax rates?

Newly developed data from the Joint Committee on Taxation demonstrates that 55 percent of the tax from the higher rates will be borne by small business owners with income over $250,000. This is a conservative number, because it doesn't include flow-through business owners making between $200,000 and $250,000 that will also be hit with the budget's proposed tax hikes.

If the proponents of the marginal rate increase on small business owners agree that a 20 percent tax increase for half of the small businesses that employee two-thirds of all small business workers is not wise, then they should either oppose these tax increases, or present data that show a different result for this group of people.

As we prepare for the conference on the budget resolution, the President and the congressional Democratic leadership have an opportunity to change course. They have an opportunity to revisit the tax heavy, spending heavy, and debt heavy budget they have passed 2 weeks ago. Both budgets would perpetuate the double whammy of constricted credit on the one hand and high taxes on the other, directed at America's job creation engine--small business.

In the coming days, we Republicans will try to persuade our Democratic friends who have all the controls of fiscal policy to change course for the benefit of small business that we all agree ought to be our first concern. One way they can change course is to focus, like a laser beam, on jump-starting the Nation's job engine--small business America. We need an upturn in the small business optimism index that is contrary to what this chart shows. We need to reverse the direction of this sharply downward sloping arrow. If we ignore this negative environment, we are just kidding ourselves. We need to change course and reverse this even more sharply downward sloping hiring plan arrow.

That is where the President and Congress agree we need to get more job growth. As we take the final steps on the budget, let's match that budget with this reality

I yield the floor.

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

Mr. President, before we begin the debate on appointing conferees on the budget resolution, will the Parliamentarian inform us of the parliamentary status on the floor.

Mr. President, floor staff informs me they are working on an agreement that will allow us to go to the consideration of the conferees. At this point, we will open the discussion but will not turn to it. I will use this time to make my statement so that we are efficiently using the time of the Senate.

I remind my colleagues that some of the key elements in the Senate- passed budget resolution we will soon be taking to conference. The budget needs to be considered in the context of the very tough hand we have been dealt. This administration and this Congress have inherited a mess of truly staggering proportions. If we start with the deficit outlook, we can see that the previous administration inherited surpluses that they rapidly turned into record deficits, and then record deficits of a proportion that stagger the imagination. I don't think anybody could have anticipated we would have deficits approaching $2 trillion in a year.

We also saw in the previous administration a dramatic increase in the Federal debt--a more than doubling of the Federal debt in the period that the previous administration was responsible for.

The Obama administration inherited record deficits, a doubling of the debt, the worst recession since the Great Depression, financial market and housing crises unparalleled since the 1930s, and nearly 4 million jobs lost in the last 6 months alone. On top of it all, we have ongoing wars in Iraq and Afghanistan.

I often think what it must be like to be President Obama, who wakes up every morning with this heavy responsibility on his shoulders. In our caucus today, we had the Chairman of the Federal Reserve Board, Chairman Bernanke. I told him that I believe when the history of this period is written, he will go down as one of its heroes--somebody who helped rescue us from what could have been a financial collapse, not only here but around the country.

In the budget resolution that passed the Senate, which we will be taking to conference, we have tried to preserve the major priorities of the President: reducing our dependence on foreign energy; a focus on excellence in education; fundamental health care reform, because that is the 800-pound gorilla that can swamp the fiscal boat of the country; middle-class tax cuts; and cutting the deficit in half over the term of the budget.

The budget we produced reduced the deficit by more than half over the next 5 years. We have reduced the deficit by two-thirds. I am proud of that fact. We reached 3 percent of GDP a little less

than that--which all of the economists say is essential to stabilizing the debt.

At the same time, we have adhered to the President's intentions to make certain strategic investments--one of the most important in energy--to reduce our dependence on foreign energy, because that is an imperative for this country, a strategic imperative, a financial imperative, and a national security imperative.

The budget resolution that went through the Senate reduces our dependence on foreign energy, creates green jobs, preserves the environment, and helps with high home energy costs. It does it in the following ways: one, a reserve fund to accommodate legislation to invest in clean energy and address global climate change; second, providing the President's level of discretionary funding for the DOE; third, building on the economic recovery package to provide investments in renewable energy, efficiency, and conservation, as well as low carbon coal technology, and modernizing the electric grid.

I thank Chairman Leahy once again for his incredible courtesy and graciousness in allowing us to interrupt his very important legislation so we can go to this matter of naming conferees, because we are under a tight deadline there. I thank the chairman of the Judiciary Committee for his incredible graciousness.

We also, in this budget, preserve the President's priority of a focus on excellence in education. If we are not the best educated, we are not going to be the most powerful country in the world for very long. So we adopt the priority of investments in education to generate economic growth and jobs, to prepare our workforce to compete in the global economy, to make college more affordable, and to improve student achievement. We do it, again, in three ways: a higher education reserve fund to facilitate the President's student aid increase; by extending the simplified college tax credit, providing up to $2,500 a year in tax credit--that is a dollar-for-dollar reduction in your tax liability; and, finally, by providing the President's requested level of $5,550 for Pell grants and fully funding his education priorities, such as early education.

When I am asked about the President's budget, I give it very high marks because I think it has the priorities exactly right--reducing our dependence on foreign energy, excellence in education, and health care reform, all in the context of dramatically reducing the deficit. So on health care, the budget resolution that previously passed the Senate, which we will take to the conference committee, bends the health care cost curve, reducing costs long term, improves health care outcomes, expands coverage, increases research, and promotes food and drug safety. Again, we do it in three different and very specific ways: No. 1, a reserve fund to accommodate the President's initiative to fundamentally reform the health care system. As many have said, we have a sickness system, not a wellness system. We have to make a transition. We also have a reserve fund to address Medicare physician payments, because we know that the doctors across the country who serve Medicare- eligible patients are due for major deep cuts--cuts of more than 10 percent. We are not going to let that happen. Third, it continues investment in key health care programs, such as the NIH and the FDA.

Not only have we preserved the President's key investment priorities, reducing our dependence on foreign oil, moving toward excellence in education, health care reform, but we also preserve his fourth key priority of cutting the deficit dramatically. In the budget resolution that previously passed the Senate, we reduce the deficit by two-thirds by 2014--that is in dollar terms we reduced it by two-thirds. Most economists say you ought to evaluate it as a percentage of the gross domestic product, that that is the best way to see what you are accomplishing. If we look at it in those terms, we are reducing the deficit by more than three-quarters, from 12.2 percent of GDP in 2009 down to less than 3 percent of GDP out in 2014.

I am especially proud of that trajectory on the deficit, because I think it is absolutely critical. I would be the first to say we need to do even more in the second 5 years, but this is a 5-year budget. The reason it is a 5-year budget is that, of the 34 budgets that Congress has done since the Budget Act was instituted, 30 of those 34 times we have done a 5-year budget. Why? Because the forecasts beyond 5 years are murky, at best, highly unreliable. So we have stuck to a 5-year budget, as has traditionally been the case.

With respect to the revenue side of the equation in this budget, the Congressional Budget Office, in looking at what we have done, would conclude that as a total, compared to current law, the budget resolution that passed the Senate reduces taxes. Let me emphasize that, because some want to put all the emphasis on the tax increases in this package; but if you take the tax increases and the tax reductions and put it all together, and you look at a net result, you find that we are cutting taxes over the 5 years by $825 billion. That is because we have extended the middle-class tax relief that is from the 2001 and 2003 acts, the 10-percent bracket, the childcare tax credit, the marriage penalty relief, and the education incentives. All of that is in this bill.

We also provide alternative minimum tax reform relief for 3 years to prevent 24 million people from being swept up in the alternative minimum tax.

We also have estate tax reform, $3.5 million an individual, $7 million a couple, indexed for inflation. That means 99.8 percent of estates in this country will pay zero; 99.8 percent of estates will pay zero.

We also have business tax provisions and the traditional tax extenders, such as the research credit, that are included in this budget, for a total of tax relief of $958 billion.

On the other side of the equation, we have loophole closures, such as codifying economic substance and international tax enforcement to go after these offshore tax havens, these abusive tax shelters. We raise $133 billion for a net tax reduction of $825 billion over the 5 years of this budget.

On the spending side of the house, domestic discretionary spending, again as a percentage of the gross domestic product--and the reason, of course, economists say that is what you should focus on rather than the dollar amounts is that this takes account of inflation. It gives a more fair comparison year by year.

We hear all this talk that this is a big spending budget. No, it is not. This budget reduces domestic discretionary spending as a percentage of gross domestic product from 4.3 percent in 2010 down to 3.2 percent in 2014. We are taking domestic discretionary spending down to one of its lowest levels in the last 50 years.

In fact, nondefense discretionary spending increases under this budget resolution an average 2.5 percent.

In addition, we have a series of budget enforcement tools that are in this resolution: discretionary caps for 2009 and 2010. Some have said we ought to have discretionary caps for 2011 too. Well, why? Well, why? We are going to be back here a year from now. We have discretionary caps for 2009 and 2010. Why do we need them for 2011, when we are going to be right back here, same place, same time 1 year from now?

We also maintain a strong pay-go rule. We provide a point of order against long-term deficit increases; a point of order against short- term deficit increases; we allow reconciliation for deficit reduction only in the resolution out of the Senate; and we provide a point of order against mandatory spending on an appropriations bill.

Let me address, very briefly, this last provision because what we found was some of our colleagues have gotten increasingly clever about finding new ways to spend money. We found they were increasing mandatory spending on appropriations bills. Mandatory spending is typically not done on an appropriations bill, as the Chair well knows. Appropriations bills are designed to deal with discretionary spending, not mandatory spending. Mandatory spending is things such as Social Security and Medicare, certain farm supports. Those are mandatory spending items. We found some of our colleagues have gotten very clever and started to increase mandatory spending on appropriations bills. We have created a point of order to try to short circuit that bad practice.

The budget resolution also attempts to address our long-term fiscal challenges. Let me be very clear. My colleague will momentarily speak, and he

will be highly critical of the budget resolution for not more fully addressing our long-term challenges. It may surprise listeners to hear me say that I agree with him. If there is a place this budget can be fairly criticized, it is that it does not do enough long term. I think we do a pretty good job in the first 5 years. But beyond that--this is only a 5-year budget--but beyond that, much more needs to be done.

The ranking Republican on the Budget Committee, Senator Gregg, and I have a proposal that I believe needs to be pursued. It is to have a task force given the responsibility to come up with a plan to get us back on a sounder, long-term fiscal track and to come to Congress for an assured vote if 12 of the 16 members of that group could agree.

Nonetheless, there are three important elements of this budget resolution that deal with our long-term fiscal circumstance. No. 1 is the health reform reserve fund. That, after all, is the biggest threat to our long-term fiscal security and stability. No. 2 is we have program integrity initiatives to crack down on waste, fraud, and abuse. We have five in this budget, and they are very important--Medicare, Social Security, defense, and others as well. I hope very much that these are pursued in the conference committee.

No. 3 is we have a long-term deficit increase point of order to require a 60-vote point of order against moves to increase long-term deficits.

Finally, let me say that on this question of the long term, the President has been very clear. At the fiscal responsibility summit on February 23, the President said this:

Now, I want to be very clear. While we are making important

progress towards fiscal responsibility this year, in this

budget, this is just the beginning. In the coming years,

we'll be forced to make more tough choices, and do much more

to address our long-term challenges.

The President got it exactly right with that statement. We are going to have to do much more. But this budget is a good and responsible beginning.

Mr. President, with that, I will yield the floor. Let me say, momentarily we will have a unanimous consent request before us. I do not yet have it in my hands. I will say this before we begin this debate. This is an institution with Republicans, Democrats, and Independents. On the Budget Committee, we have all three represented.

I am chairman of the committee representing the Democratic Party. Senator Gregg is the ranking Republican. Senator Gregg is someone with whom we have strenuous debates and disagreements. You will see that in the coming hours. But I wish to make very clear that I have high regard for Senator Gregg. He is motivated by patriotism, by love of country, and by a fundamental understanding that we are on an unsustainable track, that we have to be much more serious about our long-term buildup of deficits and debt. He has not just talked about it, he has been prepared to act.

I wish to recognize him for his commitment to something I also believe in. I think it is abundantly clear we cannot stay on our current course. It is a course that will lead us to a much diminished standard of living for the future. While I believe this budget is a good beginning, I do not assert that this in any way solves our long- term problem. It does not. But it is a beginning, an important beginning, and we need to do more.

I also thank Senator Gregg for his unfailing courtesy and professionalism, not only in our public debates but in the workings of the Budget Committee. He has assembled a first-rate and professional staff. We have worked together well to do the business of the committee and the business of the country.

I thank Senator Gregg, once again, for all he has done to allow the budget resolution to be fully debated, fully discussed, to have our differences aired publicly and privately but also to do it in an air of civility and respect, something I certainly feel toward him.

Can we end the debate?

(Laughter.)

Mr. President, let me indicate with respect to the question of reconciliation being used for cap and trade or climate change, there is no provision on the House side for that purpose. At least that is the stated intention of the Speaker of the House of Representatives. And there is no reconciliation instruction in our resolution at all for any purpose.

Let me indicate I happen to agree with the Senator from Nebraska. I personally do not believe reconciliation should be used for this purpose. I must say, I am very disappointed the Republicans, when they were in a position to do so, abused reconciliation. I believe that strongly. Reconciliation was designed for one purpose and one purpose only, and that was deficit reduction. Our friends on the other side used it to dramatically cut taxes and increase the deficit. That was, to me, an absolute abuse of reconciliation.

But two wrongs do not make a right, and I do not believe using reconciliation for major substantive legislation that is not fundamentally deficit reduction is an appropriate use of reconciliation. That is No. 1.

No. 2, I think people will find that because reconciliation was designed for a very specific purpose, that it does not work well for the purposes of writing major substantive legislation. I will not go into all the technical reasons why that is the case, but it is the case. We will get to questions of reconciliation being used for other purposes as well.

I have argued strenuously, publicly and privately, that reconciliation ought to be reserved for deficit reduction. But I do want to indicate that there is no reconciliation instruction in the resolution coming from the Senate; and in the House, the Speaker has made clear that reconciliation would not be used for climate change legislation or for cap-and-trade legislation.

I would be happy to yield.

My logic does, as I have made very clear over and over, publicly and privately. But, you know, I don't get to decide. We have House conferees, we have other Senate conferees, and, of course, we have a White House that has an interest--although they have no formal role in the budget process here. They submit a budget, but as the ranking member well knows, the budget resolution is entirely a congressional document.

With that said, I do want to indicate that I previously voted for the amendment of the Senator. I will vote for it again. But I do want to indicate we do not have any reconciliation instruction in our resolution, and the House, through its leadership, has made clear they do not intend to use a reconciliation instruction for the purpose of cap and trade or for the purpose of climate change legislation.

I wish that were true. I wish the Senator had been with me in the discussions over the last few days, even in our caucus on Tuesday.

I yield the floor.

Madam President, at this moment, I ask unanimous consent that next Senator Grassley be accorded 14 minutes; that Senator Boxer follow him for 10 minutes.

How much time would Senator Wyden request ?

And 10 minutes to Senator Wyden.

I would always be happy to give Senator Grassley time off mine.

Mr. President, let me begin by saying I think it is terribly unsportsmanlike of the chairman of the committee to say such nice things about me, to disarm my ability to effectively attack his budget, but I wish to join his thoughts because he and his staff are very good to work with. He is a professional. They are committed. He genuinely believes, as I do, that this country's outyear fiscal situation is not a sustainable event. We are trying to work together to address that situation. We hope we can gather others to join us in this effort.

I respect he has water to carry around here, and he carries it extraordinarily well on behalf of his constituency, which is the Democratic caucus and the President of the United States. I congratulate him for the exceptional job he does.

That being said----

Mr. CONRAD addressed the Chair.

Is the debate over?

That being said, let's begin where the chairman leaves off accurately and correctly in saying that the course we are on is unsustainable.

What does ``unsustainable'' mean? It is one of those terms of art we use around here. It means that by the time this budget runs its course--not necessarily the chairman's budget but the President's budget because the President's budget is a 10-year budget--by the time the President's budget runs its course, we will have passed on to our children a debt which will have tripled--tripled--a deficit which will have averaged every year for the 10 years a trillion dollars or more and a national public debt--that is the debt we owe to the Chinese, to the Japanese, and to our own people who own a fair portion of our debt--a national public debt which will have doubled as a percent of our gross national product, going up to 80 percent of our gross national product.

What does all that mean? It means essentially we will have built a debt in this Nation which our children will not be able to afford to pay down. Just the interest on that debt alone, as we move into the later years of this budget, will exceed anything else in the budget as a line item on the discretionary side of the ledger. It will exceed, for example, all the money we spend, the interest alone will exceed all the money we spend on national defense. It will exceed by a factor of three or four or maybe even eight accounts such as education, housing, veterans affairs, and health. The deficits will have been so large for so long that the debt will have grown to a point that there is no logical way or fair way that our children and our children's children, who will have to pay this debt, will be able to do it in a manner that would leave them with a nation that is as strong and as prosperous as the Nation that was given us.

Putting it another way, at the end of this budget, after these 10 years are over and beginning in about the third and fourth year of this budget, the spending will be so out of control at the Federal level, the growth of the Government will have occurred at such a rapid rate that we will have created a debt structure which will mean that our children will have about three choices in their future.

The first is that there will be a dramatic increase in inflation. We will try to pay this debt off with inflated dollars. There is no more regressive or harmful tax that a society can put on its people than to have uncontrolled inflation or massive inflation. But that is what one of the choices is.

The other choice is that we will raise taxes to a level that they will be so high we will essentially tax away the opportunity of our children to do things which were considered to be commonplace for our generation--buy a home, send their kids to college, invest in a small business, take a risk, create a job. All of that will be taxed away because the tax rates would have to get up to such a level to pay this debt off that we will no longer be able to have that type of prosperity. The third course of action, equally untenable, is that the dollar gets devalued--which is to some extent an inflationary event-- and people stop buying our debt. They simply say: I don't believe you can pay this debt off--you, the people of the United States. You are not going to be able to generate enough productivity to do it. That, of course, leads to some level of implosion of our economy which I can't even calculate or comprehend, but it is much worse than what we even confront today.

So nobody is arguing or debating--at least I am not, though there are some

who are--I am not coming to this floor and saying it is irresponsible for this administration, for President Obama to have inserted a large amount of Federal spending into the economy this year and next year. We recognize that this economy is in stress and that the only source of liquidity for our economy is our National Government and that the Federal Reserve, for all intents and purposes, has become the lender of first resort. But that is a short-run issue.

The problem with this budget is that the type of spending which has to be done now is not curtailed after 2 years. It is not reigned in. It is not reduced or even leveled off. It continues up and up in the third year, the fourth year, the fifth year, the sixth year of the budget the President sent up here. The spending continues to go up on a path that is extraordinarily steep, so that the cost of the Government, which today and historically has been about 20 percent of GDP, jumps to 21 percent, 22 percent, 23 percent, and 24 percent. In fact, if you go outside the window and you presume these numbers continue to compound, you get to a cost of Government that ends up around 28 and 29 percent of GDP. You cannot sustain an economy with that type of cost.

I have a few charts to try to put this in perspective.

The first chart is on the issue of debt. The budget, as proposed by the President--and why do I keep talking about the President's budget rather than the chairman's budget? Because the President's Director of OMB said they are essentially the same, and they are essentially the same. We can get into the differences, but the differences are at the margin and they are really not arguable. The biggest difference is that the chairman's budget only goes for 5 years, not 10 years. Well, there are other big differences, but that leaves off the second 5 years, and by leaving off the second 5 years, you don't talk about and you essentially hide some of the most dramatic effects of this spending binge.

The President's budget increases taxes by $1.5 trillion, it increases discretionary spending by $1.4 trillion, and it increases mandatory spending by $1.2 trillion. And this number, this $1.2 trillion, is grossly underestimated. What does it do in the area of savings? On the mandatory side, it does nothing in the area of savings, absolutely nothing. In fact, the few discretionary savings he sent up, which I happen to support, were dropped in the chairman's mark, especially in the area of agriculture. So as we have said, and some people have heard it before--maybe not in this room--it spends too much, it taxes too much, and it borrows too much as a budget. What it doesn't do is save too much, and that is what gets us into trouble. The practical effect of this budget's structure is that it takes Federal debt and doubles it in 5 years and triples it in 10 years.

Try to remember what we are talking about. We are not talking about going from $100 to $200 to $300. We are talking about trillions. Trillions. I don't know what a trillion dollars is. I can't even conceive of it. But that is what we are talking about. We are talking about taking the Federal debt from $5.8 trillion up to $17 trillion, or thereabouts. To try to put it in perspective, if you take all the spending, all the debt run up by all the Presidents since the beginning of the country--George Washington through Franklin Pierce through George W. Bush--all that debt that has been run up over 230-some-odd years by all our Presidents, that debt is doubled by this President within 5 years of being in office.

There is another chart which shows this even better. It is called the wall of debt. This chart wasn't invented by me, but whoever invented it was a genius, obviously. The wall of debt shows how the Federal deficit just goes up and up and up and up. This wall of debt is what our kids are going to run into when they try to have a productive lifestyle. It is what is going to cost them their ability to be successful.

By the time we get to the end of this, or even right here in the middle somewhere of this budget, the average family in this country is going to have $130,000 of new debt for which they are responsible. And $130,000 is probably more than the mortgage on the homes of most people. The interest cost on that debt, which most Americans, which all Americans are going to be responsible for, will be about $6,000. That may be more than what most people pay in interest on their homes. But that is the debt that is going to be passed on to them by this budget.

Why does it happen? It happens for one very simple reason. It is called spending. The simple fact is that under the President's budget-- and under the budget proposed by the chairman--the spending of the Federal Government goes up dramatically, comes back down, and then starts back up again. It goes up dramatically, of course, in these 2 years here, which I said I have reservations about. I especially had reservations about the stimulus package, which was a misallocation of spending, even though I supported the stimulus effort. Why does it start back up again? It starts back up again because this President, in a very forthright manner--and I give him credit for this--has said not only in his budget but he has said publicly that he genuinely believes the way you create prosperity is to significantly increase the size of the Federal Government, to take it to the left dramatically. So he does. As a result, spending goes up at a rate that is simply not affordable for our children.

Look at this black line here. This is the black line that reflects the average spending of the Federal Government between 1958 and 2008. Look at how much higher the spending is of this Government under this proposed budget. That is a huge gap. When you are talking about an economy as large as ours, when you are talking about 2, 3, and 4 percent--or in this case, 4 or 5 percent--that is where the massive deficits come from. That is where the massive increase in debt comes from. It is debt that is the issue.

The chairman used to say: The debt is the threat. He is absolutely right, the debt is the threat, but the driver of the threat is spending. Unless you are willing to address the issue of spending, you are not going to get debt under control because you can't tax people enough to cover that. Well, of course you can always inflate the economy and try to cover it, but that leads to much more harmful events.

So this is the fundamental difference we have as a party. The President has said he wants to spend, he wants to tax, and he wants to borrow. And I think it is important to note there is a little subtlety here that hasn't been focused on too much, and that is this: When President Clinton came into office, he also wanted to spend and tax, but he didn't want to borrow. He used his taxes, which he increased-- which I probably opposed--in order to reduce the deficit. This President, on the other hand, who is claiming he is going to raise taxes on just the wealthy--which is a canard if there ever were a canard around here--is using all that revenue not to reduce the deficit but to increase spending, and then he spends on top of that. So he is using it to grow the size of Government. He is very forthright about this. He is going to use those tax revenues to nationalize the health care system. That is the way I describe it; he describes it another way. He is going to use those revenues to basically create a massive expansion of spending in the other accounts of the Federal Government. But he is not going to use those revenues to try to reduce the deficit. That is the big difference between President Obama and President Clinton in the area of fiscal policy. So he doubles and triples the debt, and as a result, he leaves to our children a nation which is not affordable. So as I said, there is a fundamental difference.

You know, in the past we would get these budget debates on the floor, and they were sort of academic exercises. People would engage in them, and they would be very interesting, but I don't think anybody ever saw it as the core of the policy of the country. Even though it was important, it wasn't the core.

This debate is about this country's future. This budget is about where this country ends up. The pathway that has been laid out in this budget is a pathway that leads to a debt which the chairman has openly said is not sustainable. If the chairman knows it is not sustainable and the President knows it is not sustainable, why haven't they sent a budget up here to address that fact? Instead, they have sent a budget up here which does nothing about that fact, and, in fact, it does the opposite. It increases spending, it

increases discretionary and mandatory spending, and it saves absolutely zero in the area we most need savings, which is the mandatory accounts.

So the difference is this: The President, as I said, has been forthright. His budget--this budget--probably the most significant document we have received here in the area of fiscal policy since perhaps the time of Lyndon Johnson or before, concludes that the way to prosperity is to expand the size of Government in an exponential manner by spending on Government programs in hopes that they create some sort of economic activity and create prosperity over the long run. Well, we believe, as a party, that doesn't work because in this case it is not paid for and it creates all this debt which we then pass on to our children to pay. We believe the way to prosperity is to have a government that is affordable and to pass that affordable government on to your children. Equally important is to empower the individual citizen and groups of citizens to go out, take a risk, and create a job, not to have the Government take from the individual the ability to create jobs because it taxes the individual either through inflation or through taxes or through a huge debt burden, as is proposed in this budget--a huge debt burden that is not sustainable.

So this is a very significant debate and a very significant decision point in our Nation's history because if this budget passes in its present form, we are guaranteeing that we will pass on to our children a nation whose Government is not sustainable, and therefore we will be passing on to our children a nation which is less than what we received from our parents. No generation has the right to do that to another generation, and that is what this debate is about.

Mr. President, at this point, I yield to Senator Johanns, who has an amendment or who wishes to discuss a motion to instruct.

If the Senator will indulge me for about 2 minutes because I want to speak quickly on behalf of the amendment of the Senator from Nebraska? He has outlined a lot of the substantive reasons it is important. It would not be appropriate to do this type of huge policy on a 20-hour debate, no-amendment situation, up-or-down vote. But there is another issue which goes to the integrity of the Senate and the purposes of the Senate.

Basically, reconciliation is purely a Senate event. The House doesn't need reconciliation. The House has a Rules Committee. They can determine how long debate is going to be, when there is going to be debate, and how many amendments there are going to be.

The Senate historically has been the place where people come to talk, to discuss, to air out an issue, and then to have amendments on that issue. That is the whole function of the Senate in our constitutional process. I find it incongruous, to be kind, that the House of Representatives would be trying to dictate to the Senate the rules of operation of the Senate in a manner--first, it is inappropriate to begin with, but they are dictating them in a manner which basically goes at the fundamental purpose of the Senate, which is that the Senate be the place where debate, discussion, and amendment occurs on policy issues of great substance.

I do not argue that reconciliation is not a useful and appropriate tool to be used around here. There are many reconciliation initiatives for which I voted. But in the area the Senator has noted, which is a massive change in industrial policy, a huge tax on every person who turns on a light in every home in America, that should not be done under reconciliation. Equally important, the House of Representatives should not be explaining to the Senate or telling the Senate what the rules of the road are in the Senate. They have enough issues on their own over there.

At this point, I think the Senator from Michigan wanted to be recognized. At the completion of the remarks of the Senator from Michigan or the chairman's comments, unless the Senator has further comments, the next Member to be recognized on our side will be Senator Grassley.

Will the Senator yield for a question?

I totally want to identify my position with the Senator's argument as to the purposes of reconciliation and the fact it should not be used for major public policy initiatives which require debate and hearings in the Senate and an amendment process. Are we to presume, therefore, that your logic on cap and trade applies also to major health care reform?

If the Senator will yield for a further question, I will make this a rhetorical question. The Senator is one of the most influential Members of the Senate and of the Congress. When he says he wants something to happen, especially when it deals with the budget, I know it will.

Is this all coming off of your time?

I will be yielding my time on this side.