STOP Act

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

I ask unanimous consent to set aside the pending amendment.

I call up amendment No. 1489 and ask for its immediate consideration.

I am sure, listening to that, it is hard to understand exactly what this is all about, so let me take a moment.

I want to first thank Senators Lieberman and Collins for all their hard work and I want to thank Senator Gillibrand for writing the STOCK Act.

I come to the floor as the chairman of the Ethics Committee with an amendment that we wrote together, Senator Isakson and I, who is the vice chair of the committee. So this is quite a bipartisan amendment and I don't think it should be controversial or troublesome in any way.

This amendment actually comes from a bill that Senator Isakson and I wrote together after the Countrywide fiasco. If you want to recollect that unhappy issue, it was a situation where Countrywide had set up a VIP program and they literally targeted Members of Congress of the House and Senate to put them into this program and never told the Members of Congress that there was this program, and yet it went forward. And because there is no rule that personal mortgages be shown on the disclosure form, this was quite a shock when it all came out. What we are saying is we want to improve the disclosure requirement on home mortgages.

Right now, if it is at your own personal home, you don't have to show the mortgage, and this would correct that. It would mean that you have to show the date the mortgage was entered, the balance, and a range, the interest rate, the terms, the name and address of the creditor. So it is an omission--but actually it is a pretty glaring omission--in our financial disclosure requirements because, again, of the Countrywide example. We don't want to have a situation--because we are not allowed to get better treatment than anyone else. And the fact that we didn't disclose these mortgages--it was quite a story when it came to light that there was this special VIP program at Countrywide. So this legislation, this amendment, addresses this omission. It requires Members of Congress to make a full and complete disclosure of all the mortgages on their personal residences.

Again, right now this requirement is in place for mortgages that you may have on investment properties but not on your personal properties. It would include Members of Congress and their spouses as well.

In his State of the Union Address, the President spoke about the deficit of trust between Washington and the rest of the country. I don't know that this amendment is going to cure all those problems, but I do think it shows that we are ready to learn from a bad experience, which was the Countrywide experience. So I think the Boxer-Isakson amendment and the underlying bill are sensible steps toward rebuilding our Nation's faith in government.

Again, the rules are already clear that we are not permitted to get any financial arrangements that are better than they are for any other constituent, so I think by this disclosure we are saying that even in our own personal mortgages we have to be aware of this. I think this listing is called for, and I urge my colleagues to support this amendment and the underlying legislation.

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

I very much thank Senator Collins for that question.

Senator Isakson and I, as the chair and vice chair of the Ethics Committee, are applying this to the Members of Congress. That is because the scandal that took place with Countrywide involved the Members of Congress. We are not including staff in this. It also applies to more than one residence, because some of our Members have seven homes, six homes, four homes, two homes. If you have mortgages on any of those properties, you would now have to disclose those.

Mr. President, I would be happy to go on as a cosponsor to Senator Collins if she wants to take on the additional burden of moving this idea forward. I don't have any problem with it.

The point is, I am here--and I have been very open about it because I know what I am talking about when it comes to Members of Congress, because as chair of the Ethics Committee, I don't oversee Treasury. This is not my role, this is not my expertise, and I am very humble about that. I did see what happened here, along with, I would say, every member of the Ethics Committee and Senator Isakson.

This is a bipartisan amendment and we know what we are talking about, and we are saying there was a problem and Members of Congress were courted by Countrywide. Did they court other people? I don't know. But if there is some proof that they did and there is need to go and cover them with a similar amendment, I would be happy to work with my colleague on that. But I am not going to change this particular piece of legislation, because I know what I am talking about here. I know how to fix this. I know we have made a big mistake, and I feel it is our job to clean up our own business. And our own business, when it comes to this, is not good.

Would I wish to look over at what the Bush administration did or what the Obama administration is doing or what other administrations will do? I am happy to do that. But I am here to address our house--our house. Clean it up. Act as a role model.

I do not have any problem with supporting another piece of legislation. Maybe there is a problem over there. I, frankly, do not know what their ethics rules are. I know what our ethics rules are, and I know we have made a glaring omission when Members may have three, four, five, six, seven houses; they may have two, three, four, five, six mortgages and they never have to show them. Let's clean it up.

If my friend believes there is need for another amendment, I am happy to look at it. But Senator Isakson and I are doing something we have long wanted to do. This is not something we just made up. We have had a bill for a long time doing exactly this. This is a moment we would like to get it done.

I yield the floor.

I thank my colleague for that because it was a little surprising. My understanding, and I hope to stand corrected by the Senator from Maine, if I am wrong, and the Senator from New York, that the whole idea behind the STOCK Act, the bill written by Senator Gillibrand and the bill written by Senator Brown, did not deal with the executive branch. I thought the whole notion behind this was for us to clean up our act. Clean up our act over here. That is the best way to proceed.

I have no problem if my colleague wants to write an amendment, she herself, on this particular issue. If she can make the case that it has been shown that VIP loans were given to members of the executive branch--whether under George Bush or Barack Obama--and I think in the years she is looking at it would have been under Bush, but those are the years the Countrywide scandal took place--if my friend has absolute information for me that shows that members of the Bush administration or the Obama administration got special treatment from the Countrywide scandal, I would like to know about it. I do not know anything about that at this time.

If my friend believes it would be a good thing to do, to offer a separate amendment covering certain members of the executive branch, I am happy to look at it. But it strikes me as bizarre that this has become an issue. It sounds like what is going on from the Republican side is all of a sudden they want to turn attention over to the executive branch rather than focus it on us--which I think is critical. But I am happy to look at any amendment that deals with abuses the Senator can show me were occurring over on the executive branch side during those years that Countrywide was doing its damage. I would be happy to support an amendment. But I think we should keep this amendment clean. I think this amendment should be clean because we are looking at a particular ethics rule and we are essentially cutting out a loophole which has allowed colleagues to not have to list their personal residences when, in fact, we know some of them got special treatment.

I yield the floor.

Mr. President, if I can respond?

The Senator can't yield--I would like to have the floor now. She can't yield to another colleague except if it is for a question. I would like to have the floor since the Senator just said I was incorrect. I would like to correct her, if I might.

What I said was, when these bills were introduced, they were directed at the Congress. That is what I said. I talked about the bills. I did not talk about what went on amending them, et cetera. I will repeat what I said was accurate. Both Mr. Brown's bill and Mrs. Gillibrand's bill were, in fact, talking about the Congress.

What I would also like to say is if my colleague wants bipartisanship, she should be happy with this amendment since it is coming from Senators Boxer and Isakson, the chairman and the vice chairman of the Ethics Committee.

We did not investigate the executive branch and Countrywide's going after the people in the Bush administration and the Obama administration. We do not have that information. If she has information that shows there have been sweetheart deals over there, I certainly want to know about it. As I said, if my colleague wants to offer a first-degree amendment that broadens this, I am happy to look at it. Because if it can be shown to me that there have been abuses over there, from the mortgage companies going after these folks over there, I am happy to agree to that. I would have to take it to Senator Isakson because he is, in fact, the coauthor. Also, I have to point out that this same amendment I offered was put forward in a bill by Senator Cornyn in 2008. So there is a lot of interest on this.

I am a person who likes to know what I am talking about. I try very hard. I do not know if there has been abuse from the mortgage companies over to the executive branch. But I know for sure there has been a big problem here with colleagues getting sweetheart deals. I want to put an end to it.

If my colleague wants to strengthen my amendment, she can offer a second-degree amendment. If she can prove to me that there has been abuse and there has been a problem and there is not enough protection, I am happy to support it. But I guess I am a little taken aback as I come here in a bipartisan spirit to offer a bipartisan amendment, I have kind of been the subject of some weird sort of attack for not going far enough with my amendment. I find it bizarre, to be totally frank, and I will continue to stay on the floor until I understand what this is all about. Maybe I have nothing to do with it. If I said something wrong, I would like to know what it is. But I am offering, in good faith, a bipartisan amendment that is a no-brainer, that comes straight out of the Countrywide scandal that we studied in a bipartisan way, in Congress, and we are moving to correct the problems we know exist.

If there are more problems out there and if my friend has proof of that, if she can prove it to us, I am happy to support a first-degree amendment to this amendment.

I yield the floor.

Mr. President, we can go back and forth 100 ways to Sunday. I thought I explained exactly why Senator Isakson and I have a narrow bill. We are trying to fix a problem we know exists. We feel very strongly that for the good of the Senate, in particular--because this is the body we serve in. We love it. We want to make it strong and appreciated and not derided. We had a scandal that touched this body and we had a thorough investigation. It took a long time to get to the bottom of it. We uncovered the fact that Countrywide had a sweetheart deal and they were aiming it at Members of Congress.

We have crafted this amendment to respond to what we know is a problem. I am not in the business of coming down here and legislating on things that I might guess are a problem or, gee, maybe I can throw out a fishing net and catch everybody in it. If there is a problem elsewhere, I am happy to support my colleague if she would like to broaden this. I am not against it. I am saying for me and Senator Isakson, we have offered an amendment that cures a very simple problem; that ethics rules, as they are today, allow Senators and Members of Congress to avoid showing the mortgages they hold on personal residences. If the same thing exists in the executive branch, I don't know about that. I am dealing with an amendment here and so is Senator Isakson, that we know about.

If the Senator asks again why our amendment is narrow, let me again answer it in another way: We are curing a narrow problem but a problem that exists. We are not throwing out some big fishing net to catch everybody in it whom we don't know about. We think this will make the Congress a better place. We do. Because there are Members who have two, three, four, and five homes. They may have two, three, four, and five mortgages, and we think it is important for the public to know that.

But, again, I hope my colleague from Maine supports this. I don't know if she does.

She doesn't oppose it. That is a good start. I hope she supports it. If she feels she can make it stronger, she should offer a first-degree amendment, let me take a look at it, let me see whether it is necessary, and let me see whether there is reason to do it. I can surely tell her I am very open to broadening it, but the reason it is crafted the way it is is that it is dealing with a problem we are not guessing exists; we know it exists where there have been abuses before and we are trying to cure that problem.

I thank the Senator for her patience.

I yield the floor.

Mr. President, we are in an age of tight budgets and tough choices, and I rise today to introduce legislation that would address some loopholes in the Tax Code that provide ways for Americans with superhigh incomes to pay lower tax rates than are paid by regular hardworking, middle-class families. These middle-class families feel they are struggling to get by but then find that some people with extremely high incomes are actually paying a lower, all-in federal tax rate than they are. To them, it defies common sense, and I think for all of us it defies common sense. Americans deserve a straight deal, and right now they are not getting one from our tax system.

To see the unfairness of our current tax system, we don't have to look much further than the national headlines. According to a Forbes magazine report last fall, billionaire Warren Buffet ``paid just 11.06 percent of his adjusted gross income in Federal income taxes'' in 2010. Mr. Buffet is the first to express his dismay at this circumstance and acknowledges that the rate he pays is lower than the tax rate paid by his own secretary. Mr. Buffet has called for a correction of this anomaly, and I agree with him. So does President Obama, who, in his State of the Union Address, said Washington should stop subsidizing millionaires. I agree.

We should celebrate the success of people who are earning $1 million and more a year, but we don't--particularly in this time of tight budgets and hard choices--need to subsidize that. The legislation I have introduced today, the Paying a Fair Share Act of 2012, would ensure that those with extremely high incomes pay at least a minimum Federal tax rate of 30 percent. I thank Senators Akaka, Begich, Leahy, Harkin, Blumenthal, and Sanders for being initial cosponsors of this measure.

The structure of our bill is pretty simple. If your total income-- capital gains included--is over $1 million, you calculate your taxes under the regular system. If your effective tax rate turns out to be greater than 30 percent, you pay that rate. If, on the other hand, your effective tax rate is under 30 percent, like Warren Buffet's 11 percent, then you would pay the fair share tax rate.

After collecting input from some of my colleagues, I have also included a provision to allow the fair share tax to be gradually phased in for taxpayers earning between $1 million and $2 million per year. Taxpayers earning less than $1 million--which is 99.9 percent of all Americans--wouldn't be affected by this bill at all. Taxpayers earning over $2 million would be subject to the 30 percent minimum Federal tax rate, and those in between $1 million and $2 million would pay, on a phased-in basis, a portion of the extra tax required to get up to the 30-percent effective tax rate. This way we make sure no taxpayer faces a tax cliff where earning an additional $1 of income increases his or her taxes by more than $1.

In his State of the Union Address on Tuesday, President Obama called for legislation to ensure that the highest earning taxpayers pay at least a 30-percent tax rate. The Fair Share Act would do just that. To call our tax system fair, I believe the highest income Americans should pay a higher rate--not a lower one--than middle-income taxpayers. For more context, let's take a look again--because I have given this speech over and over on the floor--at how superhigh-income-tax payers fare under our current system.

This is the Helmsley Building in New York, as I have pointed out before. It is on Park Avenue, and it has a unique characteristic, which is that it is so big it has its own ZIP Code. Because the Internal Revenue Service publishes information about tax payment by ZIP Code, we can see what the tax payments are that come out of this building. What we find with the latest information that the IRS has published is that the average filer has an adjusted gross income of over $1 million in the Helmsley Building, but the average tax payment out of that building is only 14.7 percent.

To provide a little context for that, if we look at what the average New York City janitor or the average New York City security guard pays in terms of an effective all-in Federal tax rate, it is 28.3 percent for the security guard and 24.9 percent for the janitor. So at this point it looks as if the people who are the very successful occupants of the Helmsley Building pay an actual lower Federal tax rate than the people who come in and clean the building, and that does not seem fair or sensible.

One might say, well, maybe it is just something about the Helmsley Building that causes it, but it is not. Despite Leona Helmsley's infamous line that it is only the little people who pay the taxes, it is a broader issue than that. Take a look at the income tax information about the 400 highest earning Americans.

In the same way that the IRS aggregates information by ZIP Code, it also takes the highest income earners and reports on them in aggregate. The 400 top incomes for 2008--which is the last year the IRS has assembled--had an average income each of $270 million, which certainly is something to be proud of and to celebrate if one can achieve that kind of success. But the average tax rate paid by the 400 was only 18.2 percent, which is--apart from the discussions we have been having in the Senate--about what the top income tax rate should be.

We discuss often whether the top income tax rate should be 35 percent or should be 39.6 percent. It was 39.6 percent, for instance, during the booming Clinton economy. It is now 35 percent. Depending on where the tax cut discussion goes, it may go back up again. But that is not what a large number of these very high income earners pay. In fact, the top 400 aren't anywhere near that. They are at half that, at 18.2 percent. We are supposed to have a progressively graduated Tax Code, with people who earn more paying a higher rate.

Let's see who else pays at the 18.2-percent rate. We looked at Bureau of Labor Statistics information for a single filer earning $39,350. That is where you hit an 18.2-percent tax rate, just like the 400 who made $\1/4\ billion each, on average. They are in the same position as somebody who is earning a little less than 40,000 who pays 18.2 percent under our present system. If we look at the type of jobs that hit that area, according to the Bureau of Labor Statistics, in the Rhode Island labor market a truckdriver earns on average $40,200. So we have a truckdriver paying the same rate of Federal tax as somebody earning $\1/4\ billion in a year.

So I think there is plenty of room for correction and to bring our tax system in line to the principle that I think we all espouse theoretically, which is that it is a progressive tax system. The more you earn, the more you pay and indeed the higher rate you are supposed to pay. It is not supposed to be at the other way around where, at the other high extreme, you end up paying lower rates than regular Americans.

The Helmsley Building was one building that has a little story to tell all of us. Here is another building with a story to tell. This is a building that is called Ugland House, and it is in the tax haven Cayman Islands. It doesn't look like much, does it? I don't want to say it is a crummy little building, but it certainly doesn't compare to a lot of other business buildings. But it does have something remarkable happening within it. It has 18,000 corporations that claim to be doing business out of this location--18,000 corporations in this little five- story building. It gives a new meaning to the phrase ``small business.''

As our budget chairman Kent Conrad has pointed out, the only business going on in Ugland House is funny business with our Tax Code, shell companies that hide assets and dodge tax liabilities. It does not make sense that our tax system permits the highest income Americans to pay a lower tax rate than a truckdriver pays, and it doesn't make sense that we allow Americans and American companies by the thousands to hide income in offshore tax havens.

If we look at the rates that are paid--Warren Buffet 11.6 percent, the occupants of the Helmsley Building on average 14.7 percent, and the 400 $\1/4\ billion-a-year earners on average 18.2 percent--and we look at the fact that we have multi-trillion-dollar budget deficits, it means the taxes they are not paying at the nominal 35-percent rate are taxes that somebody else ends up having to pay either through deficit or through additional taxation.

This is why the Fair Share Act makes a lot of common sense, and I hope Senators on both sides of the aisle will take a look at it. This bill would do a lot of good. It would simplify taxes. There is no point chasing loopholes if someone knows they are going to have to pay the 30-percent minimum. It will simplify that. It would discourage the exotic tax dodges that allow people to go down to 14 percent or whatever tax rates because they know they are going to get caught at 30 percent, so why do the effort. The exotic tax dodges will be discouraged. It will reduce the deficit. We don't have a number yet from the Joint Committee on Taxation, but the public reporting so far has suggested it is going to be in the $40 billion to $50 billion range per year. Of course, it will bring fairness, as well as common sense, to our tax system. It makes no sense for somebody earning $80,000 or $100,000 or $120,000 a year to be paying a substantially higher tax rate than somebody earning $\1/4\ billion a year.

There are a lot of advantages that come with enormous income, and that is a great thing because America thrives on capitalism, and we all love success. We celebrate success in America. We provide an economy and a culture in which people can accomplish remarkable things and create enormous fortunes and become enormously successful. That is part of what is good and what is right with America. They do it through hard work, they do it through being smarter than other people, they do it with a lot of good personal characteristics. But with all the advantages that do come with an enormous income, paying a lower tax rate than regular working families should not be one of those advantages.

I hope we can get together to correct this, and I look forward to working with my colleagues on this issue.

Mr. President, I support the intent of the amendment offered by the Senator from Alabama. I think he is right, we need parity, as much as possible, in the disclosure requirements. I also believe he is correct the disclosure reports should be online so they are easily accessible. So the intent of his amendment is one I wholeheartedly support.

As Senator Lieberman does, I have some questions about the universe of Federal employees who would be covered by the amendment of the Senator from Alabama. We have been working successfully with the Senator from Kentucky, who first brought up this issue of parity, to make sure the scope of coverage is appropriate. It seems to me one way to solve these issues is to use a similar scope as we have agreed on with Senator Paul in the amendment that Senator Shelby has brought forth. We would then have a certain consistency that we had vetted the universe of Federal employees that should be covered. That seems to me to be a very appropriate and relatively easy fix to this issue.

I do want to emphasize that I agree with Senator Shelby that those Federal employees should be required to file in the same timeframes as Members of Congress and their staffs, and that certainly those reports should be accessible online.

Mr. 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, I want to comment briefly on the amendment that has been proposed by the Senator from California to the legislation written by Senator Brown. Senator Gillibrand has a similar bill as well, and I want to explain to our colleagues what the state of the current law is, which I think would be helpful.

Under the Ethics in Government Act of 1978, there is an exemption from disclosure for mortgages secured by real property that are the personal residence of the reporting individual or his spouse.

Under the liabilities section of that same report, which we now file annually, liabilities in excess of $10,000 must be reported that are owed by the Member, the spouse, or the dependent child to any one creditor during any time during the reporting period. Credit card debts, for example, are reported. Other kinds of loans are reported. Mortgages held on investment properties--properties, for example, that are rented--are reported. The exemption only goes to the personal residence of the Member and/or the Member's spouse.

I am unclear, and need to get clarification from Senator Boxer and also the Office of Government Ethics, whether her amendment would extend the new disclosure requirement that she is proposing to executive branch employees or whether it would only apply to the legislative branch. As I read her amendment, it looks as though it only applies to the legislative branch and perhaps only to Members.

I would ask, through the Chair, if the Senator from California could clarify for me--this is truly an informational question--whether she is intending this new requirement to apply to congressional staff and whether she is intending this new requirement to apply to executive branch members who are currently required to file an annual financial disclosure form.

Mr. President, I thank the Senator from California for clarifying that issue and answering my question.

I guess my further question would be, why would we only apply it to Members of Congress and not apply it to members of the executive branch? For example, I would argue that if there are conflict of interest issues or allegations of a sweetheart deal for mortgages that might be revealed by this disclosure, that that would apply equally to, say, Treasury officials--in fact, even more so to Treasury officials or bank regulators--as it would Members of Congress.

I wonder if the Senator's intent is to make sure that Members are not getting sweetheart deals on their mortgages--which obviously no Member should be receiving a sweetheart deal on a mortgage--why that same logic would not apply to executive branch officials, particularly since arguably they have far more direct influence and jurisdiction and regulatory authority over financial institutions than do Members of Congress.

Mr. President, the reason I am raising this issue--I realize the Senator from California has not had the misfortune I have had, of being constantly on the floor listening to the debate on this bill--but a major issue we have been grappling with is parity in the rules. This issue has not just come up with regard to the amendment of the Senator from California, it has come up over and over.

I am not in any way singling out the Senator from California to raise this issue. This has come up on every single issue we have been tackling on the floor, which is, if we are going to have more disclosure for the legislative branch, should we not have the exact same or comparable disclosures for high-ranking executive branch officials?

The issue I raised, I wish to assure the Senator from California, is no means unique to her amendment. It has come up over and over and, indeed, the first amendment that we were supposed to have voted on last night was an amendment by Senator Paul, making clear that this bill applied to the

executive branch and then Senator Shelby had an amendment to make sure there was online disclosure by the executive branch.

This is an issue that has permeated the entire debate on the STOCK Act. It is not unique to the issue that has been raised by the Senator from California.

Mr. President, first, let me make the point to the Senator from California, I am a cosponsor of the STOCK Act. I cosponsored Senator Brown's bill, so it is not that I do not think legislation is needed in this area. I am a cosponsor on this bill and have commended him for his work. But the fact remains that in our committee markup the bill was changed.

I know the Senator was distracted when I answered that question. The bill was changed in committee to extend to the executive branch. It is in the bill that is before us now. The Senator was misinformed in that regard. The bill was changed to make very clear that the insider trading prohibition applied to the executive branch and that executive branch members have a duty to their agencies, to the government. We make that explicit. That was changed in committee.

The Senator is not correct that the bill that was brought to the floor only applied to Congress. It does not. It applies to the executive branch.

The second point I will make is this is not a partisan issue. We have bills on both sides of the aisle. We have amendments on both sides of the aisle. Indeed, we have disclosure amendments that apply to the executive branch coming from both sides of the aisle. Senator Wyden has a disclosure amendment that is similar to that of Senator Shelby's. We are working with both of those offices right now to try to work those out.

I do not know how this all of a sudden became a partisan debate or a debate about the Bush administration or anything. This is a debate about good government and how we can best assure the American people that, regardless of whether public officials are in the executive branch or the legislative branch, they are putting the public's interests ahead of their private interests and that they are not profiting from insider information, nonpublic information that is not available to the public which they are using inappropriately--if, in fact, that is even happening--for personal gain.

I did wish to clarify that the bill, as reported from committee, does apply to the executive branch as well as the legislative branch, that the statement made by the Senator was inaccurate in that regard, and that we have amendments on both sides of the aisle that we are working on right now to extend the disclosure requirements, the reporting requirements to the executive branch. Those are amendments coming from both Democrats and Republicans.

I would like to yield at this point to the Senator from Massachusetts.

Mr. President, I do not know why the Senator from California, first of all, is assuming I am somehow

opposed to her amendment. I have not said that. What I raised was a very legitimate question of asking whether she had considered extending it to the executive branch.

Then her response seems to be an attack; that if I have information that there are problems and sweetheart deals in the executive branch, I should prove them.

I am not making allegations. I do not make unsubstantiated allegations against individuals. What I was trying to tell the Senator from California is that the issue of the scope and applicability of this bill has come up over and over. It came up in committee. We changed the bill in committee to make it clear that the prohibition against insider trading and a duty applied to the executive branch as well as to the legislative branch.

I have not criticized her amendment in any way. I asked a series of questions about the scope of her amendment because this issue has come up repeatedly, on both sides of the aisle. It came up in committee during our markup. It has come up on the Senate floor repeatedly as far as what the disclosure requirements should be and to whom they should apply.

I am the one who is baffled by the response of the Senator from California, since I have not indicated any opposition whatsoever to her amendment.

I have merely brought up the fact that the issue of the scope of this bill has come up repeatedly, so I was curious why she chose to have such a narrow bill rather than applying it to executive branch officials who filed the same kinds of disclosure.

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

Mr. President, I ask unanimous consent that the pending amendment be set aside and call up amendment No. 1500.

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

Mr. President, today I understand Senator Toomey is going to be offering an amendment that will--it is quite an oversimplification to state it this way, but it would make permanent the temporary ban on earmarks. I think this is something we have talked about and talked about and talked about on this floor. In fact, the last time we talked about an amendment to put a moratorium on earmarks, my conservative rating of No. 1 in the U.S. Senate moved to No. 20 because I was telling the truth and not demagoguing an issue.

The problem we have is this: When the House of Representatives, first of all, came up some time ago--2 years ago--with doing away with earmarks, putting a moratorium on earmarks, then they defined what that moratorium was and defined an earmark in a certain House rule. The bottom line is this: It said it is any kind of an appropriation or authorization.

Now, here is where the problem is. Because everybody is upset with the process that has taken place by Democrats and Republicans on the floor of this Senate--and I will not name names, but I think most of the Members know the ones I am talking about. Many of them are members of the Appropriations Committee, where they would sit down during the course of an appropriations bill, and they would swap out deals, favors, and get things for their State. This is the type of thing that is wrong, and it should not take place.

But I have to remind my friends here that we have a Constitution for this country. Article I, section 9 of the Constitution makes it very clear that we--those of us in this Chamber and in the House Chamber across the hall--have a primary constitutional responsibility; that is, to authorize and appropriate. That is what article I, section 9 of the Constitution says we are supposed to be doing.

If you go back and study what Justice Joseph Story, back in 1833, talked about, he kind of made the interpretation of the intent of the Constitution so far as what our duties and the President's are. He said very clearly that we are doing this because if the President has the power to do the appropriating--or if you want to call it earmarks, you can call it earmarks--appropriating or authorization, that is too much power in the hands of one person. So he is very specific that our Founding Fathers wanted to make sure the President does not do this.

So what happens today? Today we get a budget from the President, which is taking place right now as we speak. I could talk about this, all the deficits in the budget and all that, but that is not my purpose for being here. My purpose for being here is to articulate how things are working today and how they have worked up until the moratorium language came into effect.

The President sends a budget to Congress. Then that is supposed to go to authorizing committees. I am on two authorizing committees--one is Environment and Public Works, one is the Senate Armed Services Committee. The Senate Armed Services Committee is staffed with experts in areas of missile defense, in areas of national defense, in areas of strike vehicles, in areas of lift capacity--all the areas that are in his budget in every area of national defense. But here is the thing: These are experts, so they advise us as we have our meetings and we are drafting in the Senate Armed Services Committee--SASC--the defense authorization bill, the NDAA, as we did just a few months ago. We come up with how we think we should be spending the money to defend America within the parameters of the President's budget.

I will give you an example. A couple years ago, before there was any discussion on the moratorium, the President had in his budget $330 million to go to a launching system. It was called a bucket of rockets. It was a good system, something we need, something that would be very helpful to have. But with the limited resources we have and the fact that we were fighting a war on two fronts at that time, we made a determination in the Senate Armed Services Committee that $330 million would be better spent if we bought six new F-18E/F models. Those are strike vehicles. One of reasons for that was the President in his budget did away with the only fifth-generation fighter we had, the F- 22. That was back in his first budget, and he is talking about delaying the F-35, the Joint Strike Fighter, which is going to be necessary to have.

So we made that decision, and that was made by a majority of the members of the Senate Armed Services Committee. It had nothing to do with whose home State makes the F-18. None of that made any difference. It was just that we could do a lot more to defend America by having six new F-18s than we could by having the launching system called a bucket of rockets. Now, if you do that today, that is an earmark, to say: Well, no, that was not in the President's budget.

I have to remind everyone, it does not matter whether the President of the United States is a Democrat or Republican; the President is the guy who designs the budget. A lot of people do not know that. It is not the Democrats, not the Republicans, not the House, not the Senate. It is the President. When he designs this budget, he makes the determination as to how he thinks everything should be spent. If we say we cannot do authorization and appropriation, then that would be called an earmark, and there is a ban on earmarks.

The reason I have kind of walked around the barn a long way on this issue is that I have an amendment, the amendment I have just now brought up for consideration, amendment No. 1500. What that does is it merely defines an earmark as an appropriation that has not been authorized. I just described the authorization process. If we go through that, then there are not going to be any earmarks in the way most people think of earmarks, but we will be doing our duty.

I feel very confident we are going to be able to get this passed. Several of the individuals here very responsibly have talked about this issue. For example, Senator Toomey said yesterday on the floor that some earmarks ``ought to be funded. But they ought to be funded in a transparent and honest way, subject to evaluation by an authorizing committee.'' So here is the author of the ban on earmarks agreeing that if we go through an authorization process, it is all right to fulfill our constitutional function of appropriating and authorizing.

Senator Coburn, my junior Senator, said:

It is not wrong to go through an authorization process

where your colleagues can actually see it. It is wrong to

hide something in a bill. . . .

Agreed. We all agree on that. That was a year ago when he made that statement.

Senator McCain--by the way, I introduced this amendment in bill form last year. He was my cosponsor. We introduced it together. That was merely changing the definition of an earmark to be an appropriation or spending that has not been authorized.

Senator McCain said:

Some of those earmarks are worthy. If they are worthy, then

they should be authorized.

That is the whole issue. I can understand some Democrats wanting to do away with congressional earmarks because if they do that, it goes right back to Obama. If I were in a position where I felt President Obama or any other President could do a better job of appropriating money, that would be another motivation to do this. But for responsible conservatives who believe in what the Constitution says, this is a very easy solution to the problem.

The amendment will be brought up. I do not know when yet. I suppose I could find out just what our timing is going to be. But the amendment I have offered simply bans any congressional earmark that is not first authorized.

If we do this, instead of an outright ban, it will preserve our ability to keep the President's power in check. I would hope that many of my colleagues go back and read what our Founding Fathers had in mind when they talked about article I of the Constitution. I think they would find that they made it very clear we want to have a separation of those powers so we do not have either the House or the Senate or the Presidency doing everything. Instead, we should follow the Constitution.

So that is what my amendment is all about. I will be looking forward to bringing it up. I think it probably will be considered today. I look forward to that.

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

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

Mr. President, across the Nation, Americans wonder if Washington is working for them. Congress's approval rate, as we know so well, is an abysmal 13 percent, 12 percent--different surveys--but not very good. One factor contributing to this distrust is the sense that elites in Washington are using their positions to get ahead financially. Members of Congress have the privilege and the honor of being elected to serve the public. Unfortunately, some elected officials have used the information they have acquired through service to the public--and I might put service to the public in quotation marks--to enrich their stock holdings. That is wrong. Public servants should not receive financial benefits for the votes they cast or the issues they work on. That is why I appreciate the work Senator Gillibrand, Senator Lieberman, and Senator Collins are doing in this legislation.

How many articles do we have to read about the appearance of impropriety on the investment decisions of lawmakers and their staff? In a Washington Post article from June of 2010, Taxpayers for Common Sense said:

By being on a committee with a particular jurisdiction,

they're in a better position of influencing the performance

of their investments, or at least appearing to have that

ability.

I am not saying my colleagues do that. I think perhaps some do. I do not know that, but I do know that the appearance to the public is that Members of the Senate are in a position to enrich themselves on a variety of issues and investments.

In a Washington Post article on December 20, the Project on Government Oversight--this was about a year, 13, 14 months ago, this article--said:

It's a problem. They will come back and say that it's

ludicrous that I would think of my stocks, that they only

think about the nation's interests and of their constituents.

The problem is, we can't know.

That is exactly right. We can't know.

This is a USA editorial from yesterday:

If lawmakers were really concerned with ethics, they'd put

their equity holdings in blind trusts, so they wouldn't have

the obvious conflict of interest that comes from setting the

rules for the companies they own.

Banking committee members wouldn't invest in financial

institutions, armed services committee members wouldn't

invest in defense contractors, and energy committee members

wouldn't investment in oil companies.

These stories simply do not reflect well on the world's greatest deliberative body. Most of us think these investments don't affect our decisions. They probably do not. But isn't it time we hold ourselves to a higher standard?

That is what the STOCK Act is all about. The Senate is considering the

STOCK Act, which clarifies the insider trading laws, that they apply the same way to Members of Congress as they do to people in the rest of the country. But the STOCK Act only deals with insider trading, which is very important, but that is only a small part of the problem. Senator Merkley and I are proposing the Putting the People's Interests First Act amendment to the STOCK Act. It would require all Senators and senior staff, probably legislative director, their most senior legislative people--person--and their Chief of Staff, all Senators and their Chiefs of Staff, all subject to financial disclosure, to sell individual stocks, divest themselves of individual stocks that create conflicts or place all of those individual stock investments in blind trusts.

No one is required to avoid equities. We can still invest in broad- based mutual funds or exchange-traded funds. We have already had this in a limited way. Senate ethics rule 37.7 requires committee staff making more than $125,000 a year to ``divest himself or herself of any substantial holdings which may be directly affected by the actions of the committee for which {that person} works'' unless the Ethics Committee approves an alternate arrangement.

The Armed Services Committee requires all staff, spouses, and dependents to divest themselves of stock in companies doing business with the Department of Defense and Department of Energy. The Committee does permit the use of blind trusts.

In the executive branch, Federal regulations and Federal criminal law generally prohibit employees, their spouses, and their children from owning stock in companies they regulate.

All Senator Merkley and I are saying is Members of the Senate should hold themselves to the same standard we require of committee staff and executive branch employees. We tell committee staff and executive branch employees they can't do this. Why should we be allowed to do this? If we think this is a sacrifice--which it is not, ultimately-- remember that while the median net worth of all Americans dropped 8 percent from 2004 to 2010, the median net worth of Members of Congress jumped 15 percent over that same period. It is not a judgment of my colleagues, simply what we should do, what the public would want us to do.

Some argue selling our stock will make us lose touch with the rest of society. That thinking falls on deaf ears for most Americans. Why should they vote on issues that affect the oil industry when they own oil stocks? Why should Members of the Senate vote on issues that affect health care when they own stock in pharmaceutical companies--Big PhRMA stocks?

Appearance matters. Right now the American people do not trust that we are acting in the Nation's best interests far too often.

I will close with this and then turn to Senator Merkley. Public service is a privilege. Folks around Washington are paid pretty well for what we do--are paid very well for what we do. We take these jobs seriously. We should take them seriously. We should look at them as the privilege they are to serve in the greatest deliberative body in the world and get to serve my State, 11 million people; the State of Senator Gillibrand, 19 million people, something like that; and the State of Senator Merkley--millions of people we serve. It is a privilege to do it. There is no reason our colleagues need to be buying and selling stocks in multimillion dollar portfolios. When asked about the fact that the Senate Armed Services Committee conflict of interest rules apply only to staff and to DOD appointees, President Bush's Deputy Secretary of Defense Gordon England said, ``I think Congress should live by the rules they impose on other people.''

In the State of the Union Address the President said, ``Let's limit any elected official from owning stocks in industries they impact.''

Everything we do in this body, almost everything we do--committee hearings, floor sessions, calls to agencies--affects businesses and the profits businesses make or do not make. That is why Senator Merkley and I are introducing this amendment. It is simple. It is direct. The public should expect nothing else.

I yield the floor.

Mr. President, I ask unanimous consent to bring up a modified version of amendment No. 1481.

Mr. President, I would just briefly explain that we narrowed the amendment to only cover those who disclose, which means people pretty much making over $120,000 or so. It conforms with the disclosure requirement under the STOCK Act. Our concern is top staff in major decisionmaking positions and sitting U.S. Senators. That is our target, that is our concern, and we wanted to conform it with provisions Senator Gillibrand has put in her legislation subject to the STOCK Act.

Thank you, Mr. President. I appreciate Senator Merkley's input and involvement in helping with this amendment.

I yield the floor.