HUBZone Expansion Act of 2012

Mr. President, I am here to introduce a bill that would address entitlement reforms and the debt ceiling called the Dollar for Dollar Act. I continue to hope Speaker Boehner and President Obama will negotiate a deal north of $4 trillion before year end. However, I think we should also prepare now for the possibility that they will not, especially based on recent conversations. The next opportunity we have to make the structural, transformative reforms to Social Security, Medicare, and Medicaid that will save these programs and put our country on a path to fiscal solvency will be during the debt ceiling vote which will come up after the first of the year as soon as we get back.

I am introducing the Dollar for Dollar legislation that will raise the debt ceiling by roughly $1 trillion in exchange for roughly $1 trillion in reforms to Social Security, Medicare, and Medicaid. This puts into legislative language many of the concepts laid out in a bipartisan Simpson-Bowles and Domenici-Rivlin proposal. This meets our obligations to older and younger Americans.

Young Americans expect us to solve their fiscal issues so they are not saddled with debt and robbed of opportunity for the American dream. Seniors expect us to honor the commitments we have made to them. If we act now, we will be addressing the debt ceiling more than 3 months before we reach it.

Let me walk through those changes that are well known to policymakers and Congress and the administration. I will begin with Medicare. Medicare's trust fund has $27 trillion in unfunded liabilities, and it is expected to be insolvent by the year 2024. According to an Urban Institute study, an average income of a married family will contribute about $119,000 in payroll taxes to Medicare in today's dollars over their lifetime and consume about $357,000 in today's dollars in Medicare benefits. Obviously, this is unsustainable. Everybody in this room knows this. The pages in front of me know it. Medicare needs to be structured in a way to provide care for current and future beneficiaries in a fiscally responsible manner.

This bill would structurally transform Medicare, keeping fee-for- service Medicare in place forever, while having it compete side-by-side with a reformed Medicare Advantage program called Medicare Total Health. Seniors would maintain the option of choosing fee-for-service Medicare or a private plan as they do today. I think most of us know that about 25 percent of the people in our country who are on Medicare are in a private plan today.

The competition created by these reforms would significantly reduce Medicare costs by $290 billion--and this is very important--without a spending cap on the program. This proposal is similar to one backed by Alice Rivlin, former Budget Director for Bill Clinton.

In addition, this bill would update cost-sharing requirements to reflect 21st-century health care practices, such as capping out-of- pocket expenditures for beneficiaries and unifying deductibles and coinsurance structures. This bill also would improve solvency by requiring higher income beneficiaries to pay more for their premiums.

Finally, it would raise the eligibility age incrementally from 65 to 67 by the year 2027. Moving to Medicaid, the bill would provide increased flexibility for States to achieve Medicaid savings by establishing a waiver process for States to better manage their Medicaid programs. It also would eliminate a massive ``bed tax'' gimmick used to bilk Federal taxpayers out of $50 billion over a 10- year period.

Next, let me walk through Social Security changes. Although some have suggested we should ignore the impending crisis in Social Security funding, we should address it now because it is already beginning to cause the Federal Government to spend more than it takes in, and the Social Security trust fund is projected to be exhausted in the year 2033. It also will be much more painful to make these adjustments to achieve solvency in Social Security if we procrastinate.

In order to return the program to long-term solvency, the bill would enhance the progressivity of benefit calculations. In addition, it would adopt chained CPI in measuring inflation to calculate annual cost-of-living adjustments. Chained CPI is the Bureau of Labor Statistics most modern and most accurate measure of inflation. By the way, the bill would apply chained CPI government-wide, which would also affect revenues, and it would reflect revenues in a positive way as it relates to our budget deficits. It would slowly raise the retirement age to better reflect longevity increases.

Finally, the bill would strengthen the disability insurance program by moving beneficiaries into Social Security insurance at an earlier age. This part of Social Security will go bankrupt by the year 2017 if we do nothing.

In conclusion, I am offering a bill that would implement structural entitlement reforms and, in exchange, it would raise the debt ceiling dollar for dollar. Dealing with this now would avoid facing a crisis next year when we hit that debt ceiling in February or March, which would rattle financial markets and generate tremendous uncertainty in our country and around the world. We need to get our fiscal problems behind us so that businesses, investors, and all of the American people can have confidence about the future. If we do that, the economy will truly take off.

So if I could, if one of the pages could take this to the desk, I am introducing this bill. I hope Senator Reid will put in place a process through regular order for bills of this nature to be introduced and go through the appropriate committees. I hope when we deal with the debt ceiling in this coming year, we do so on a dollar-for-dollar basis, just as has been recently established this last year--the precedent has been set--that during this fiscal dilemma we are dealing with, when we raise the debt ceiling, we actually lower spending by a dollar. Up until this point, almost all the things we have talked about have been through discretionary spending. Thus far, we really haven't addressed entitlement reforms.

Again, let me reiterate that I hope the President and Speaker Boehner come to some accommodation over the next couple of weeks that actually deals with some maybe $4 trillion in size that would actually put this in the rearview mirror. But as the conversations continue, and not much substance is coming forward, that is looking doubtful. So I hope as we end this year and move into next year we will begin to put in place an open process whereas we move toward the debt ceiling and use the same precedent we have already used this last year, so that when we raise the debt ceiling by a dollar, we will reduce spending by a dollar.

We have all said we need revenues and we need entitlement reform. What I have done today is to lay out a way--and I know other Senators will have ideas, and I hope they will bring them to the floor--for us to raise the debt

ceiling by around $1 trillion and in return have entitlement reform on a dollar-for-dollar basis, saving and reforming these programs, so that seniors in the future certainly will have the opportunity to continue these programs they depend upon so much, and the young people who are coming behind us will have the certainty that we, as mature adults, I hope, have dealt with these issues in an appropriate way.

Mr. President, I rise to introduce the Liquefied Natural Gas, LNG, for NATO Act.

The United States is in possession of vast resources that could directly contribute to the energy security of our closest NATO allies, who face over-reliance on Russian and Iranian gas sources. In 2009, the United States overtook Russia as the world's largest natural gas producer due to vast unconventional reserves. At current U.S. consumption rates, the United States possesses perhaps a century of gas supply. This development has caused U.S. natural gas prices to fall to nearly a half to a third of gas prices in other key European and Asian markets and has prompted numerous applications for export licenses of U.S. liquefied natural gas exports.

Pursuant to Section 3 of the Natural Gas Act, gas exports are subject to approval by the Department of Energy's Office of Fossil Energy and the Federal Energy Regulatory Commission, which must certify that a particular export is in the U.S. public interest. For destination countries with which the United States has a free trade agreement, a presumption is created that the export is in the public interest, and the license is automatic. For non-free trade agreement nations, a study must be conducted to determine the public interest, entailing a notice and comment period. Several companies have submitted applications to retrofit U.S. LNG import terminals for regasification and export; to construct new LNG export terminals; and to export cryogenic natural gas to Latin America by rail and ship. After approving one application, the Obama administration deferred others until at least 2013, pending a study completed last week. This study found that under any scenario, LNG exports will be a net benefit for the U.S. economy. Moreover, continued development of unconventional gas suppliers is an important source of job creation in the United States.

U.S. shale gas reserves are already transforming European natural gas markets since LNG previously destined for the United States has now been made available for Europe. The United States can do much more to both use LNG exports to benefit NATO allies facing energy insecurity in Europe and to promote economic growth in the United States.

Turkey currently relies on Iran for 20 percent of its gas imports, which could come under increased pressure when the European Council's decision of October 15, 2012 to prohibit the ``purchase, import or transport of natural gas from Iran'' is implemented. Moreover, several allies and partners in Central and Southeastern Europe, Bulgaria, Croatia, Hungary, Greece, the Czech Republic, and Moldova, will see their long-term contracts with Gazprom expire in the coming years. For these countries, targeted U.S. LNG exports, along with infrastructure investment and other policy responses, could help alleviate energy insecurity. It is possible that several other NATO allies and partners may opt for U.S. natural gas imports, and even paying a reliability premium for them, if the opportunity existed.

Meanwhile, European nations are ramping up capacity to import LNG. At present, Europe imports LNG primarily from Algeria, Egypt, Oman, and Qatar to meet about 26 percent of its gas needs, due in large part to a lack of LNG import terminals, which are mostly located in Western Europe, as well as underdeveloped onward interconnectors and storage capacity in Europe. However, numerous European countries, some with financing from the European Bank for Reconstruction and Development, EBRD, are considering construction of additional LNG import terminals, including Bulgaria, Croatia, Estonia, Lithuania, Latvia, Poland, Romania, Turkey, and Ukraine. In light of these dynamics, the United States is well-positioned to

become a strategic energy supplier of LNG to NATO allies in need of diversification.

The LNG for NATO Act would not direct supply, which should remain exclusively the function of private industry. Instead, this legislation would affect Section 3 the Natural Gas Act to create a presumption that licenses to export U.S. natural gas to NATO allies is in the U.S. public interest, giving NATO allies the same preferential treatment enjoyed by our free trade partners. Specifically, swift passage of this act will make gas export licenses automatic for Turkey, which relies on Iran for 20 percent of its gas demand, and those NATO countries, whose long-term gas contracts with Russia's Gazprom expire in the coming years.

Through market forces, NATO allies will be more secure and the Alliance will be stronger. While the U.S. Congress will no doubt continue to debate full liberalization of natural gas exports, the LNG for NATO Act follows other precedents for narrowly tailored exceptions to our export licensing regime.

I am hopeful that the LNG for NATO Act can command bipartisan support and swift passage.

Mr. President, I rise to speak in support of a bill that I am cosponsoring today with my colleague from Maine, Senator Collins, that will ensure that the Small Business Administration's, SBA, Historically Underutilized Business Zone, HUBZone, program will support the many communities around this Nation that have been negatively impacted by base closures.

Over the course of my career, my state has experienced two major base closures--Loring Air Force Base was closed by the 1991 BRAC round and Brunswick Naval Air Station was closed by the 2005 BRAC round. Like every community around the Nation that has experienced a base closure, Brunswick and Loring have fought tirelessly to replace the jobs and economic impact of their military installations.

Unfortunately, theirs is an exceptionally difficult task. Consider, for instance, that the closure of Brunswick Naval Air Station directly eliminated nearly 3,300 military and federal civilian jobs, and indirectly caused the loss of approximately 3,800 additional jobs from the region. Overcoming the effects of such dramatic changes in a local employment and economic market is, without question, a long-term challenge that is made even more difficult in a period of prolonged economic recession.

That is why I have always argued that the Nation has a responsibility to do everything within our power to help those communities that have supported our military infrastructure for decades to recover from the devastating economic impacts of a base closure.

One way that we can assist in their recovery is to encourage the location and growth of small businesses in and around closed military installations. As Ranking Member of the Senate Committee on Small Business and Entrepreneurship, I frequently talk with small business owners and employees about their challenges and needs. In many cases, they tell me about the difficulties they face in competing against larger and more established businesses for federal contracts.

That is why, in my efforts to champion our Nation's small businesses and to promote their interests, I have supported the Small Business Administration's HUBZone Empowerment Contracting program. Congress established this program as part of the Small Business Reauthorization Act in 1997 in order to spur business development and employment opportunities in economically distressed areas of the country. In 2004, with my support, we took the critical step of expanding the HUBZone program to include ``base closure areas,'' which directly addressed military installations that have been closed through any of several military base closure and realignment authorities, including BRAC rounds.

Although this was an important step forward, the 2004 expansion to include closed military installations in the HUBZone program was limited to areas within the physical boundaries of the military base. Current law requires that 35 percent of the employees of a HUBZone qualified small business concern also must live within the HUBZone designated area.

However, small businesses that are interested in establishing a location at a closed military installation in order to gain the benefits of becoming a HUBZone small business concern are likely to discover that not very many people live on the grounds of that closed base, leaving them without sufficient workers to meet the 35 percent requirement. This, of course, defeats the very purpose of the HUBZone designation for closed military installations by serving as a disincentive for small businesses to open shop at a redeveloping base.

In light of these facts, and considering that the economic and employment impacts of closing a military installation are unquestionably and disproportionately felt by the people who reside in the communities around former military installations--not just within the fencelines of former bases--it is clear that the HUBZone designation for closed military installations needs to be clarified.

That is why the bill that I have cosponsored with my colleague adjusts the designation of a base closure area to include the geographic area that is the municipality, county, or census tract in which the installation is located (as well as the adjacent census tract), which incorporates up to 50,000 people. And so, to my friends and colleagues here in the Senate, I urge you to join me in supporting this bill and showing your strong support for providing the maximum benefits of the HUBZone designation to the many communities around our nation that have been impacted by base closures.

Mr. President, I rise to speak in support of a bill that I am cosponsoring today with my colleague from Maine, Senator Collins, that will ensure that the Small Business Administration's, SBA, Historically Underutilized Business Zone, HUBZone, program will support the many communities around this Nation that have been negatively impacted by base closures.

Over the course of my career, my state has experienced two major base closures--Loring Air Force Base was closed by the 1991 BRAC round and Brunswick Naval Air Station was closed by the 2005 BRAC round. Like every community around the Nation that has experienced a base closure, Brunswick and Loring have fought tirelessly to replace the jobs and economic impact of their military installations.

Unfortunately, theirs is an exceptionally difficult task. Consider, for instance, that the closure of Brunswick Naval Air Station directly eliminated nearly 3,300 military and federal civilian jobs, and indirectly caused the loss of approximately 3,800 additional jobs from the region. Overcoming the effects of such dramatic changes in a local employment and economic market is, without question, a long-term challenge that is made even more difficult in a period of prolonged economic recession.

That is why I have always argued that the Nation has a responsibility to do everything within our power to help those communities that have supported our military infrastructure for decades to recover from the devastating economic impacts of a base closure.

One way that we can assist in their recovery is to encourage the location and growth of small businesses in and around closed military installations. As Ranking Member of the Senate Committee on Small Business and Entrepreneurship, I frequently talk with small business owners and employees about their challenges and needs. In many cases, they tell me about the difficulties they face in competing against larger and more established businesses for federal contracts.

That is why, in my efforts to champion our Nation's small businesses and to promote their interests, I have supported the Small Business Administration's HUBZone Empowerment Contracting program. Congress established this program as part of the Small Business Reauthorization Act in 1997 in order to spur business development and employment opportunities in economically distressed areas of the country. In 2004, with my support, we took the critical step of expanding the HUBZone program to include ``base closure areas,'' which directly addressed military installations that have been closed through any of several military base closure and realignment authorities, including BRAC rounds.

Although this was an important step forward, the 2004 expansion to include closed military installations in the HUBZone program was limited to areas within the physical boundaries of the military base. Current law requires that 35 percent of the employees of a HUBZone qualified small business concern also must live within the HUBZone designated area.

However, small businesses that are interested in establishing a location at a closed military installation in order to gain the benefits of becoming a HUBZone small business concern are likely to discover that not very many people live on the grounds of that closed base, leaving them without sufficient workers to meet the 35 percent requirement. This, of course, defeats the very purpose of the HUBZone designation for closed military installations by serving as a disincentive for small businesses to open shop at a redeveloping base.

In light of these facts, and considering that the economic and employment impacts of closing a military installation are unquestionably and disproportionately felt by the people who reside in the communities around former military installations--not just within the fencelines of former bases--it is clear that the HUBZone designation for closed military installations needs to be clarified.

That is why the bill that I have cosponsored with my colleague adjusts the designation of a base closure area to include the geographic area that is the municipality, county, or census tract in which the installation is located (as well as the adjacent census tract), which incorporates up to 50,000 people. And so, to my friends and colleagues here in the Senate, I urge you to join me in supporting this bill and showing your strong support for providing the maximum benefits of the HUBZone designation to the many communities around our nation that have been impacted by base closures.

Mr. President, today I am introducing legislation, with Senator Snowe, to expand the geographic boundaries of HUBZones located at former U.S. military installations that have been closed through the so-called Base Closure and Realignment--or BRAC--process. These military installations were often the economic heart of the community in which they were located, and those communities can struggle for years to overcome the closure of those facilities.

In recognition of this fact, Congress passed legislation providing ``HUBZone'' status for 5 years to military facilities closed through the BRAC process. Last week, the Defense Reauthorization bill passed by the Senate included language, authored by Senator Sherrod Brown of Ohio, to extend HUBZone status for these facilities for an additional five years.

The HUBZone program provides certain federal contracting preferences to small businesses located within a HUBZone. In addition to the BRAC- related HUBZones I have already mentioned, HUBZones are located in ``economically distressed communities,'' that suffer from low income, high poverty rates, or high unemployment.

According to the Congressional Research Service, there are currently 127 BRAC-related HUBZones in the United States. Unfortunately, for many of the military bases that have been closed, HUBZone status has not brought the benefits we had hoped for. One of the reasons is simple-- the law defines the geographic boundaries of a BRAC-related HUBZone to be the same as the boundaries of the base that was closed. When that is combined with the requirement that 35 percent of the employees of a qualifying business must live within the HUBZone, the problem is clear: very few people live on these former bases, so it is difficult or impossible for businesses to get the workers they need to meet the requirements of the HUBZone program.

One of these HUBZones is located at the former Brunswick Naval Air Station, in Brunswick, Maine. This facility closed in 2011, as a result of the 2005 BRAC round. When the Navy left, the host community lost more than 2400 military and civilian personnel. Brunswick and its neighbor, Topsham, have a combined population of just 22,000, so losing the Naval Air Station has had a significant economic impact on these communities. Because so few people actually live within the boundaries of the former base, its HUBZone designation does not provide any real assistance to these communities.

My legislation would expand the geographic boundaries of BRAC-related HUBZones to include the town or county where the closed installation is located, or census tracts contiguous to the installation, up to a total population base of 50,000. This would provide a large enough pool of potential workers to enable qualifying businesses to locate within the HUBZone, and to help host communities overcome the loss of military installations closed through the BRAC process.

The Association of Defense Communities has endorsed the concept of expanding BRAC-related HUBZones in this manner. In a letter to Senate Armed Services Committee Chairman Levin and Ranking Member McCain, the ADC noted how important it is that ``Congress restore its intent to support BRAC-impacted communities attracting small businesses to help build and strengthen their local economies.''

Steve Levesque, the Executive Director of the Midcoast Regional Redevelopment Authority, or MRRA, which oversees the redevelopment of the former Brunswick Naval Air Station, also urges Congress to modify the HUBZone program. In a letter, Steve explained that BRAC facilities do not have the residential areas needed to support the 35 percent residency requirement for businesses located within the HUBZone. As a consequence, these businesses cannot ``realize the HUBZone benefits for BRAC'd installations as envisioned by Congress.''

This point was underscored in a letter from Heather Blease, an entrepreneur who is hoping to locate a new business at the former Brunswick Naval Air Station. Ms. Blease describes the HUBZone law as ``flawed,'' because the 35 percent residency requirement makes it impossible for businesses like hers to achieve HUBZone status.

I ask my colleagues to consider the legislation I am offering today to help communities get back on their feet after the loss of a military installation closed through the BRAC process.

Mr. President, I ask unanimous consent that letters of support be printed in the Record.