Floor Statements

Mr. President, yesterday I and 28 of my Senate colleagues introduced legislation allowing the reimportation of FDA-approved prescription drugs from Canada and other countries. We have introduced legislation of this type before, but we have been blocked from consideration in the Senate. We do not intend to be blocked this year. We intend to get the Senate on record. We believe there are sufficient votes in the Senate to pass a bill dealing with the reimportation of prescription drugs. We very much hope we can get a bill to the President and have that legislation signed.

The 29 Senators who have reached agreement on this represent a broad bipartisan consensus in the Senate. That bipartisan group includes Senator Snowe, Senator Grassley, Senator Kennedy, Senator McCain, Senator Lott, Senator Stabenow, and many others--a broad group of Republicans and Democrats joining together to try to put downward pressure on prescription drug prices.

Let me show two pill bottles in the Senate. These bottles held the drug called Lipitor, one of the most popular cholesterol-lowering drugs in America. Obviously, the Lipitor tablets that went into these two bottles are made by the same company. In each bottle, it is the same FDA-approved tablet, made by the same company in the same plant and put in the same pill bottle. The only difference is price. This bottle was sent to a Canadian pharmacy that paid $1.01 per tablet; this one was sent to the United States pharmacy that paid $1.81 per tablet.

Why are the Americans charged nearly double for the same pill, put in the same bottle, made by the same company? Because the company can and does call the shots. We do have price controls on prescription drugs in this country: it is the pharmaceutical industry that is controlling prices, and they have decided that the U.S. consumers should pay the highest prices in the world for prescription medicines.

Many of us believe that should not be the case. Miracle drugs offer no miracles to those who cannot afford them. We have so many senior citizens living on fixed incomes in this country who need prescription drugs. Senior citizens are 12 percent of this country's population. Yet they consume over one-third of all the prescription drugs in our country. That is why this issue is so important.

The reimportation legislation we have introduced is again a broad bipartisan agreement between Republicans and Democrats, one we intend to push to a vote. We believe it is finally time that we have a vote in the House and the Senate and get a bill to the President. We understand the President has not supported this. We understand the Food and Drug Administration has been very strong and assertive in saying there are safety issues with this legislation.

That, of course, is patently absurd. We have had testimony before the U.S. Congress that in Europe, for 20 years, they have done reimportation. In Europe, they call it ``parallel trading,'' where if you are from France and want to buy a prescription drug from Germany, that is just fine. If you are from

Italy and want to buy a prescription drug from Spain, that is just fine. Parallel trading in pharmaceuticals has occurred for 20 years, and there has been no safety issue.

We had a pharmaceutical company executive named Dr. Peter Rost, the vice president of marketing for a major drug company, who said:

The biggest argument against reimportation is safety. What

everyone has conveniently forgotten to tell you is that in

Europe, reimportation of drugs has been in place for 20

years.

This is an executive from the drug industry itself.

He said something else that is important:

During my time responsible for a region in northern Europe,

I never once--not once--heard the drug industry, regulatory

agencies, the government, or anyone else saying that this

practice was unsafe.

He is talking about the practice of importing drugs between countries. He goes on to say:

And personally, I think it is outright derogatory to claim

that the Americans would not be able to handle reimportation

of drugs, when the rest of the educated world can do this.

This is a big issue. This is not a small issue. The price of prescription drugs is on the march upward. Too many Americans cannot afford their medication. It is unfair to have the American people charged the highest prices in the world. We are talking only about importing FDA-approved drugs made in FDA-approved plants, in many cases put in identical bottles, shipped to two different locations. One location is to an American who will pay the highest price, and the other location is to other major countries around the world whose citizens are charged much lower prices.

We think that is unfair. We intend to try to put downward pressure on drug prices in this country by using trade. Let the American people benefit from this kind of trade.

Finally, if people wonder whether the price difference is just with respect to Lipitor, it is not. The unfair price discrepancy is significant for Prevacid, Zocor, Nexium, Zoloft--the list is very substantial.

For instance, Nexium is advertised a great deal on television. In the United States the price for 90 doses is $409. The price in Canada is $239. Or Zocor. A well-known football coach on television tells us how important Zocor is. As an American, he pays $383 for 90 doses; a Canadian pays 46 percent less. That describes the problem we are trying to correct.

Mr. President, there are many issues we confront these days that are significant and serious. I wanted to bring one to the attention of the Chamber as I introduce legislation.

I send a bill to the desk and ask for its appropriate referral on behalf of myself and Senator Clinton.

Mr. President, this legislation deals with trade. Let me describe what was announced this morning by the administration.

Last year's trade deficit was $618 billion. You can see from this chart what has happened in the last 8 or 9 years. Our trade deficit has gone in the red by a dramatic amount, ending up at $618 billion for 2004.

What does that mean? That means we purchased from other countries $618 billion worth of goods more than we sold to other countries. In other words, every single day, 7 days a week, $1.8 billion leaves this country and goes into foreign hands to pay for goods that we purchased from abroad.

As a result, foreign entities have $2.5 trillion worth of claims against our assets, our property, our stocks, and our assets. We are, with our trade policies, selling America.

With China alone, we have a $161 billion trade deficit. This is unbelievably out of balance. We purchase China's trinkets, trousers, shirts, and shoes. Now they're making plans to ship Chinese automobiles to this country.

By the way, as I told my colleagues before, in the last trade agreement with China we agreed they could charge a tariff on imported U.S. cars which is 10 times higher than the tariff we can charge on Chinese cars sold in the United States.

Who did that? I don't know; some trade negotiator.

It is the same old story with cars from China, cars from Korea, wheat to China, beef to Japan. It is the same old story.

I mentioned to my colleagues many times what Will Rogers said in the 1930s: ``The United States of America has never lost a war and never won a conference.'' He said we can't send negotiators to Costa Rica and come back with our shirts on. He surely must have been thinking about the people who had been negotiating trade agreements that resulted in these kinds of deficits.

Now our trade deficit on a yearly basis is over 5 percent of our gross domestic product. Who holds this debt? Japan holds $715 billion of asset claims against our country, and China, $191 billion.

Does anybody think this is healthy for our country? This kind of trade deficit and combined trade debt is going to injure America's future economic growth and continue to accelerate the movement of U.S. jobs overseas. That is what is behind all of these numbers.

American corporations in recent decades have discovered that you can move technology and capital at the speed of light. And they have discovered there are a billion people in other parts of the world who are willing to work for 30 cents an hour. When you can ship technology and capital to someone overseas willing to work for 30 cents an hour, you begin to hollow out the manufacturing sector in this country.

The news this morning of the largest trade deficit in the history of this country is sober news. This town will sleep through it once again. The White House will sleep through it, and so will the Congress. It doesn't matter much to most people.

We have a debt limit in this country that says once the government borrows a certain amount, we have to have a debate, and vote on it. Otherwise, you can't go any further.

But there is no trade debt limit. Whatever the trade debt is, it is. Katy bar the door, no matter how high it is. There is no requirement to do anything about it.

The legislation I introduced, along with my colleague Senator Clinton, will establish a trade debt limit and a trade deficit limit. When the trade deficit exceeds 5 percent of our gross domestic product, then it requires certain things. It is an alarm clock that requires the administration's trade review group to have an emergency meeting, and within 45 days the administration and the trade ambassador have to submit to Congress a plan to reduce the trade deficit.

Somebody someplace, someday, some way has to decide the current situation can't continue. This is all about jobs and future economic opportunity. This is real, and it is immediate. And we have to do something about it.

That is why we have introduced this legislation. This country has been in a deep sleep about an abiding trade problem in which we link with other countries in bilateral agreements. In almost every case these are not mutually beneficial. Instead, the agreements are beneficial to them and detrimental to us. Yet, we have people on street corners chanting ``free trade.''

I think trade is fine, I think fair trade is important, and I think expanding trade is valuable. But I believe free trade, if it means a trade agreement which undercuts this country's ability to compete, free trade which pulls the rug out from under our workers, and establishes conditions under which we cannot compete, is wrong for this country.

I will not go through again the list of issues of potato flakes going to Korea, beef to Japan, wheat to China. I could go through dozens of them. I will not do that again today. My point is that at some point somebody has to have the backbone and the will and the nerve to stand up for this country's economic interests. That has not been done for a long while. It needs to be done now because this trade deficit has reached crisis proportions.

One final chart: Some said that last month the trade deficit was actually a little better than the month before. This is a town of warped reality on a lot of issues. Let me describe what has happened to our trade deficit month by month since 1998. It does not take a sharp eye to see what is happening.

This trade deficit is growing. It is dangerous. It is harmful to the long-term economic interests of this country. We have to do something about it.

Mr. President, there are many issues we confront these days that are significant and serious. I wanted to bring one to the attention of the Chamber as I introduce legislation.

I send a bill to the desk and ask for its appropriate referral on behalf of myself and Senator Clinton.

Mr. President, this legislation deals with trade. Let me describe what was announced this morning by the administration.

Last year's trade deficit was $618 billion. You can see from this chart what has happened in the last 8 or 9 years. Our trade deficit has gone in the red by a dramatic amount, ending up at $618 billion for 2004.

What does that mean? That means we purchased from other countries $618 billion worth of goods more than we sold to other countries. In other words, every single day, 7 days a week, $1.8 billion leaves this country and goes into foreign hands to pay for goods that we purchased from abroad.

As a result, foreign entities have $2.5 trillion worth of claims against our assets, our property, our stocks, and our assets. We are, with our trade policies, selling America.

With China alone, we have a $161 billion trade deficit. This is unbelievably out of balance. We purchase China's trinkets, trousers, shirts, and shoes. Now they're making plans to ship Chinese automobiles to this country.

By the way, as I told my colleagues before, in the last trade agreement with China we agreed they could charge a tariff on imported U.S. cars which is 10 times higher than the tariff we can charge on Chinese cars sold in the United States.

Who did that? I don't know; some trade negotiator.

It is the same old story with cars from China, cars from Korea, wheat to China, beef to Japan. It is the same old story.

I mentioned to my colleagues many times what Will Rogers said in the 1930s: ``The United States of America has never lost a war and never won a conference.'' He said we can't send negotiators to Costa Rica and come back with our shirts on. He surely must have been thinking about the people who had been negotiating trade agreements that resulted in these kinds of deficits.

Now our trade deficit on a yearly basis is over 5 percent of our gross domestic product. Who holds this debt? Japan holds $715 billion of asset claims against our country, and China, $191 billion.

Does anybody think this is healthy for our country? This kind of trade deficit and combined trade debt is going to injure America's future economic growth and continue to accelerate the movement of U.S. jobs overseas. That is what is behind all of these numbers.

American corporations in recent decades have discovered that you can move technology and capital at the speed of light. And they have discovered there are a billion people in other parts of the world who are willing to work for 30 cents an hour. When you can ship technology and capital to someone overseas willing to work for 30 cents an hour, you begin to hollow out the manufacturing sector in this country.

The news this morning of the largest trade deficit in the history of this country is sober news. This town will sleep through it once again. The White House will sleep through it, and so will the Congress. It doesn't matter much to most people.

We have a debt limit in this country that says once the government borrows a certain amount, we have to have a debate, and vote on it. Otherwise, you can't go any further.

But there is no trade debt limit. Whatever the trade debt is, it is. Katy bar the door, no matter how high it is. There is no requirement to do anything about it.

The legislation I introduced, along with my colleague Senator Clinton, will establish a trade debt limit and a trade deficit limit. When the trade deficit exceeds 5 percent of our gross domestic product, then it requires certain things. It is an alarm clock that requires the administration's trade review group to have an emergency meeting, and within 45 days the administration and the trade ambassador have to submit to Congress a plan to reduce the trade deficit.

Somebody someplace, someday, some way has to decide the current situation can't continue. This is all about jobs and future economic opportunity. This is real, and it is immediate. And we have to do something about it.

That is why we have introduced this legislation. This country has been in a deep sleep about an abiding trade problem in which we link with other countries in bilateral agreements. In almost every case these are not mutually beneficial. Instead, the agreements are beneficial to them and detrimental to us. Yet, we have people on street corners chanting ``free trade.''

I think trade is fine, I think fair trade is important, and I think expanding trade is valuable. But I believe free trade, if it means a trade agreement which undercuts this country's ability to compete, free trade which pulls the rug out from under our workers, and establishes conditions under which we cannot compete, is wrong for this country.

I will not go through again the list of issues of potato flakes going to Korea, beef to Japan, wheat to China. I could go through dozens of them. I will not do that again today. My point is that at some point somebody has to have the backbone and the will and the nerve to stand up for this country's economic interests. That has not been done for a long while. It needs to be done now because this trade deficit has reached crisis proportions.

One final chart: Some said that last month the trade deficit was actually a little better than the month before. This is a town of warped reality on a lot of issues. Let me describe what has happened to our trade deficit month by month since 1998. It does not take a sharp eye to see what is happening.

This trade deficit is growing. It is dangerous. It is harmful to the long-term economic interests of this country. We have to do something about it.

Mr. President, today, I am introducing my bipartisan prescription drug importation legislation, the Pharmaceutical Market Access and Drug Safety Act, along with Senators Snowe, Grassley, Kennedy, McCain, Stabenow, Jeffords and many others. In all, the bill has 28 cosponsors, and I expect we will add more cosponsors in the coming weeks and months.

I am particularly pleased that Finance Committee Chairman Charles Grassley has joined forces with us on this year's bill. Chairman Grassley has made a significant contribution to the drug importation debate and has provided invaluable assistance in ensuring that our bill complies with our country's trade obligations. Chairman Grassley's support also helps to demonstrate the growing momentum in the Senate for a vote on our bipartisan drug importation legislation.

I am also glad that, in addition to being tri-partisan, this year's bill is also bicameral. Congresswoman JoAnn Emerson and Congressman Sherrod Brown are introducing the companion to my bill in the House of Representatives today.

This is an issue whose time has come. By now, it is well-documented that American consumers pay by far the highest prices in the world for prescription medicines, and our citizens are desperate for relief. Earlier this month, we learned that prices on 31 of the top-50 bestselling drugs went up during the last two-month period. For instance, the price of the top-selling drug Lipitor has gone up 5 percent--double the inflation rate for all of 2004--in just the two months since November, 2004. Lipitor costs the American consumer nearly twice as much per pill as the Canadian consumer.

These recent price increases come at the expense of American consumers--especially those seniors and uninsured Americans who do not have health insurance coverage for prescription drugs. The Pharmaceutical Market Access and Drug Safety Act is a step that the Congress can take to put downward pressure on drug prices in our country. By some estimates, U.S. consumers could save up to $38 billion if they could purchase prescription medicines at the Canadian prices.

This year's bill is substantially similar to the bill that Senator Snowe and I introduced last year but it has been refined in response to technical assistance we have received from various stakeholders. We have thoroughly and pro-actively addressed all of the safety issues that some have raised with respect to drug importation. The fact is that a system of drug importation, called parallel trade, has flourished with no safety problems within the European Union for the last two decades. I am convinced that if the Europeans can safely trade pharmaceuticals within Europe, the United States can safely do so, and our bill gives the Food and Drug Administration the authority and resources it needs to oversee such a system.

We simply cannot continue on our current course of inaction, and I want to put my colleagues on notice that I am determined to get a vote on this legislation this year on the Senate floor. The agreement that Senator Snowe and I reached earlier this month with Majority Leader Frist and new Health, Education, Labor, and Pensions Committee Chairman Enzi to hold a hearing specifically on the Dorgan-Snowe bill is a step in the right direction.

I am convinced that if the full Senate is given the opportunity to vote on our bill, it will pass with overwhelming bipartisan support. I look forward to continuing to work with my colleagues to get this legislation passed by Congress and sent to the President for his signature.

Mr. President, today, I am introducing my bipartisan prescription drug importation legislation, the Pharmaceutical Market Access and Drug Safety Act, along with Senators Snowe, Grassley, Kennedy, McCain, Stabenow, Jeffords and many others. In all, the bill has 28 cosponsors, and I expect we will add more cosponsors in the coming weeks and months.

I am particularly pleased that Finance Committee Chairman Charles Grassley has joined forces with us on this year's bill. Chairman Grassley has made a significant contribution to the drug importation debate and has provided invaluable assistance in ensuring that our bill complies with our country's trade obligations. Chairman Grassley's support also helps to demonstrate the growing momentum in the Senate for a vote on our bipartisan drug importation legislation.

I am also glad that, in addition to being tri-partisan, this year's bill is also bicameral. Congresswoman JoAnn Emerson and Congressman Sherrod Brown are introducing the companion to my bill in the House of Representatives today.

This is an issue whose time has come. By now, it is well-documented that American consumers pay by far the highest prices in the world for prescription medicines, and our citizens are desperate for relief. Earlier this month, we learned that prices on 31 of the top-50 bestselling drugs went up during the last two-month period. For instance, the price of the top-selling drug Lipitor has gone up 5 percent--double the inflation rate for all of 2004--in just the two months since November, 2004. Lipitor costs the American consumer nearly twice as much per pill as the Canadian consumer.

These recent price increases come at the expense of American consumers--especially those seniors and uninsured Americans who do not have health insurance coverage for prescription drugs. The Pharmaceutical Market Access and Drug Safety Act is a step that the Congress can take to put downward pressure on drug prices in our country. By some estimates, U.S. consumers could save up to $38 billion if they could purchase prescription medicines at the Canadian prices.

This year's bill is substantially similar to the bill that Senator Snowe and I introduced last year but it has been refined in response to technical assistance we have received from various stakeholders. We have thoroughly and pro-actively addressed all of the safety issues that some have raised with respect to drug importation. The fact is that a system of drug importation, called parallel trade, has flourished with no safety problems within the European Union for the last two decades. I am convinced that if the Europeans can safely trade pharmaceuticals within Europe, the United States can safely do so, and our bill gives the Food and Drug Administration the authority and resources it needs to oversee such a system.

We simply cannot continue on our current course of inaction, and I want to put my colleagues on notice that I am determined to get a vote on this legislation this year on the Senate floor. The agreement that Senator Snowe and I reached earlier this month with Majority Leader Frist and new Health, Education, Labor, and Pensions Committee Chairman Enzi to hold a hearing specifically on the Dorgan-Snowe bill is a step in the right direction.

I am convinced that if the full Senate is given the opportunity to vote on our bill, it will pass with overwhelming bipartisan support. I look forward to continuing to work with my colleagues to get this legislation passed by Congress and sent to the President for his signature.

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

Mr. President, I ask unanimous consent that I be able to speak for as much time as I consume in morning business.

Mr. President, something is happening in our Tax Code that very few people understand, and I wanted to call it to their attention.

There is something going on called repatriation, which is a $2 word that probably people won't understand. But I want to explain it.

Repatriation is a process by which U.S. companies that have moved some operations overseas, begun to manufacture and sell products overseas and made income overseas, are able to bring their profits back into this country.

When an American corporation makes a profit as a result of selling overseas, or producing overseas--we have something in this country called deferral in our tax law. It says you can defer paying taxes on your foreign profits as long as you don't bring them back into this country. But when you bring them back--which is called repatriation-- then you must pay taxes like everybody else does.

Let's take Huffy bicycle company, for example. The Huffy bicycle company made bicycles for almost 100 years in this country. They sold them in Wal-Mart, Sears, and Kmart. Huffy then shut down their plants in the United States, and got rid of their workers. Today Huffy bicycles are still sold in the United States but they are made in China for roughly 30 cents or 40 cents an hour labor by people who work 7 days a week, 10 to 12 hours a day. The company decided they should actually manufacture their bicycles in China and presumably make more money.

What happens to that income? We have a perverse and insidious provision in our tax law that says, shut your manufacturing plant, move those jobs overseas, and we will give you a deal. You don't have to pay taxes on the profits that you once made in the United States when you made that bicycle or the Radio Flyer little red wagon, which is now made in China, or the Newton cookies, but now earn on the same products made overseas until you bring those profits back to the United States. Only then do you have to pay taxes. That is the deal.

Whenever companies defer their tax obligation, they understand that when they repatriate the income to the U.S., they are going to have to pay taxes. But they got a special deal, as is always the case, it seems.

Last year a bill was passed with a tiny, little provision which was very controversial. I opposed the provision, but it got passed. The special deal is that the repatriation of income back into this country now by companies that earned that income overseas--in some cases by moving their American jobs overseas--now get to pay taxes at the 5\1/4\ percent tax rate.

What prompts me to come to the floor to talk about this, despite the fact I opposed this last year, was a New York Times article that says, ``Hitting the Tax Break Jackpot.''

Let me quote a part of it.

When Congress passed a one-time tax break on foreign

profits last fall, lawmakers said their main purpose was to

encourage American companies to build new operations and hire

more workers here at home. But as corporations are gearing up

to bring tens of billions of dollars back to the United

States this year, adding jobs is far from their highest

priority. Indeed, some companies say they might end up

cutting their workforces here in the U.S.

Hewlett-Packard, which has accumulated $14 billion in

profits and lobbied intensely for the tax break, announced

January 10 that it would continue to reduce its workforce

this year. That would come on top of more than 25,000 jobs

eliminated during the previous 3 years.

We have a provision in tax law now that says to these companies that have earned this money overseas, you deferred taxes on them previously, now you are going to bring them back. We encouraged them to bring them back. And, by the way, while all the other American people are working and paying income taxes--and, yes, those at the bottom of the ladder who pay income taxes pay the lowest rate of 10 percent but it is 10 percent, 15 percent, up to 35 percent, despite the fact everybody else is going to pay a higher rate of taxes--you repatriate those profits, and we will allow you to pay an income tax rate of 5\1/4\ percent.

There was a Governor of Texas named Ma Ferguson. Ma Ferguson became Governor of Texas, I believe, when her husband died. As Governor of Texas, Ma Ferguson got involved in a very controversial issue dealing with some sort of initiative in Texas about English only. She held a press conference. She held up a Bible. She said: If English is good enough for Jesus, it is good enough for Texas.

She didn't quite understand, I guess.

But the good enough concept is something we all talk about here. If the 5\1/4\ percent income tax rate is good enough for the biggest corporations in this country that have moved jobs overseas, and now bring profits back and get to pay 5\1/4\ percent, why is it not good enough for the Olsens, Johnsons, and the Larsens? Those are names from my hometown. Why is it not good enough for the people living down the street, or up the block, or on the farm who may pay multiples of this tax rate?

Let me show a chart. These companies aren't doing anything wrong. These companies are simply going to benefit handsomely from what this Congress did for them--to say to them: By the way, we will give you a very special deal. This is Exxon Mobil, IBM, Hewlett-Packard, Pepsi- Cola, and so on--unpatriated foreign earnings totaling tens of billions of dollars. And they get to pay income taxes at 5\1/4\ percent. That sounds like a sales tax, doesn't it? That sounds like a sales tax and not an income tax. But do average folks get to pay an income tax at 5\1/4\? No. Nobody else does.

It kind of reminds me Tom Paxton's old song. He seemed to be able to say it in kind of a simple way. He got all excited--this folksinger-- when the Congress gave a big, old loan to Chrysler Corporation. So he wrote a song saying, ``I'm Changing My Name to Chrysler.''

Oh the price of gold is rising out of sight, and the dollar

is in sorry shape tonight, what a dollar used to get us now

won't get a head of lettuce. No the economic forecast isn't

bright.

He says:

I'm changing my name to Chrysler. I am going down to

Washington, DC, I will tell some power broker, ``What you did

for Iacocca would be perfectly acceptable to me.''

Maybe he would want to write a couple more verses. Maybe he would like to pay income taxes at 5\1/4\ percent. Maybe every citizen of my home State of North Dakota would like to be able to pay a 5\1/4\ percent income tax rate.

If it is good enough for Exxon Mobil, why isn't it good enough for my citizens, or good enough for all the citizens of this country?

This was done last year with very little debate; just stuck in a big old bill and says it is going to create jobs. Let us give a special deal to some big old economic interests. Nobody will care and nobody will know.

Now we see the result--hitting the tax break jackpot. Those who are going to get the biggest benefits as a result of the generosity which I think has probably not ever been given before. All of these companies expected that the profits they earned overseas would be taxed at the regular tax rate when they brought the profits back. That is what they were told. That is what the deal was. That is what the deferral was in the Tax Code.

Guess what. They got a big old fat tax break unlike any that is given to any other American citizen. They get to pay 5.25 percent.

By the way, they boast that they would be creating jobs and that now appears not to be true. Some of the same companies that moved their American jobs overseas to boost foreign profits now get a special deal back home to pay lower taxes than virtually any other American citizen.

Congress ought to hang its head and maybe Tom Paxton ought to write another song: If it is good enough for Hewlett-Packard and good enough for Exxon Mobil, it ought to be good enough for constituents who live up the block and down the street and on the farm in this country.

Enough about that. These things happen behind closed doors with little debate and great complexity and people do not understand. Somehow at the end of the day it is always kind of the cake and crumbs approach to public policy: The big interests get the cake; the little folks get the crumbs and hope everyone is happy and nobody debates too much about it.

Social Security

There is a lot of this influence in the Social Security debate. I will talk for a moment about that. I also will talk about the budget that was offered yesterday. The Social Security debate is

an example of this strange approach to public policy.

Social Security was created in 1935. The first monthly benefit was paid in 1940. Social Security has lifted tens of millions of senior citizens out of poverty. Fifty percent of America's elderly were living in poverty when Social Security was enacted. Today it is less than 10 percent.

The fact is, Social Security works. It has been a Godsend for a lot of people who reach retirement age. Social Security is the one dependable source of income they know will be there. It is the social insurance that they have paid for over all the years when they worked. Social Security includes not only old-age retirement benefits but also provides disability and survivor benefits. It is the one piece of that social insurance that workers knew would be there, and it has always been there.

Now, in 1983, a commission said, when the baby boomers retire, they will hit the retirement rolls like a tidal wave.

After the Second World War, the soldiers came home. We have all seen the pictures. We beat back the oppression of Hitler and Nazism. What a wonderful time. There was a great outpouring of romance and affection when the soldiers got home. We had the biggest baby crop in the history of the world. We had a lot of babies. Those GIs came home; they had families; they raised families; they built schools; they created jobs; they went to college on the GI bill. They built this country.

There comes a time, then, when the baby boomers will retire and we have a strain on the Social Security system. So we decided to save for that. This year, for example, we collected Social Security taxes from worker paychecks--$151 billion more than needed to pay out current Social Security benefits. We are doing that every year. This will help grow Social Security trust assets to over $5 trillion by 2018.

The President said the other night something that is not right or not accurate. He said, in the year 2018, the Social Security system will be paying out more than it takes in. That is just flat wrong. Our colleague, Daniel Patrick Moynihan, once said everyone is entitled to their own opinion but not everyone is entitled to their own set of facts.

In the year 2018, the Social Security system will be taking in taxes from paychecks as well as a substantial amount of interest that will exist on the Treasury bonds that have been accruing over these many years in the Social Security trust. This interest, along with the tax collected from paychecks, will far exceed that which is necessary to be paid out. It is the year 2042 or 2052, according to either the Social Security actuaries or the Congressional Budget Office, where we hit the point we can no longer pay full benefits. It is not bankrupt at that point, but unless we make some adjustment, we cannot pay full benefits.

The President's proposal for private accounts, however, anticipates a level of investment return on private accounts that, if realized, means the economic growth in the country would put Social Security in a position where it would not have a problem at all for the long term. With that kind of economic growth as projected by the President, there will be no problem in Social Security. It will meet its obligations over the long term.

But we have a circumstance now where the President and Administration official say Social Security is in crisis, it is bankrupt, it is flat bust, depending on whom you listen to. The purpose of using that language is to convince people there is a very serious problem here. There may need to be some adjustments because people are living longer, better, and healthier lives. But there is not a crisis that justifies taking the Social Security system apart, which is what the President proposes to do.

He proposes several things, none of which he talks about but all of which are part of his plan: First, borrow a great deal of money, from $1 to $3 trillion. Second, change the indexing in Social Security and cut benefits. Under his plan, you are borrowing money, cutting benefits, investing the borrowed money in the stock market, and hoping in the end it comes out all right.

All the indications I have seen, whether from the Congressional Budget Office or the Brookings Institution or others, say that workers will come out further behind, not ahead, as a result of this plan.

The question, What should we do, is answered, we preserve, protect, and strengthen Social Security. This program works. It is probably true that almost none of those who are proposing these changes--borrowing money and putting it in private accounts and taking the Social Security system apart--will ever have to worry about Social Security. Almost all of them will have sufficient assets to not be too worried about Social Security for themselves. But there are a lot of people in this country who do worry about Social Security. It has always been there and can always be there as part of the social insurance that represents the foundation of retirement security.

Retirement security has two parts. One part is the guaranteed insurance on which we pay premiums in the form of taxes every month from our paychecks. That is always there. The second part in retirement security is private investments, 401(k)s, IRAs, and others. I support that. I believe we ought to do even more to incentivize private investments. But we should do that without taking apart the Social Security Program.

The Budget

Now, finally, I mention the budget. The budget offered yesterday is a budget that has a great many controversial issues. All Members would agree we have the largest deficits in the history of this country. This country is way off track in fiscal policy. It needs to be put on track. It is not just fiscal policy. Fiscal and trade policy, between them, contributed somewhere between $1 to $1.2 trillion in debt just in the last year. That is unsustainable. You cannot continue to do that.

The trade deficit we will know on Thursday of this week, but the trade deficit is somewhere around $600 to $700 billion--just in the past year. The fiscal policy budget deficit is somewhere around $560 billion. This country cannot continue it do this. It is off track.

We have to put it on track.

The budget that was offered yesterday claims that we will have a budget deficit this year of roughly $427 billion. The fact is that figure takes the Social Security tax money we are supposed to be putting into Social Security and uses it to make the deficit look smaller. The real budget deficit for the current year is expected to be about $587 billion, and although that is the real deficit, that does not include the costs of Iraq, Afghanistan, and prosecuting the war because the President does not include that in the budget. Why? Because he says we do not know what it will cost despite the fact we have known for a long while it is costing at least $5 billion a month. He is now saying, I want you to approve an extra $80 billion in emergency funding. So we have roughly a $580 billion out-of-balance budget that does not even include the extra money that is necessary that the President knows he will ask Congress to spend on Iraq and Afghanistan and the military budget.

You could get a much better grip on what all this costs by taking a look at the numbers in his proposed budget dealing with gross debt. He is proposing about a $677 billion increase in gross federal debt next year versus this year. So that is the real measure of how much we are spending that we do not have--a $677 billion increase in gross debt.

Now, we know we have to tighten our belt. There are some things in the budget I agree with, some I do not. I do not agree that, for example, we ought to shut down Amtrak except for the east coast. That is what the President wants to do. I do not support that. I think rail passenger service strengthens this country and it is good for this country.

I do not agree that we should cut back on Indian tribal colleges. It is the one step up and out of poverty and toward hope and opportunity that has been remarkably successful. I could go through a list of things where I might disagree.

On the spending side, I do not agree with the President that we ought to begin building earth-penetrating, bunker-busting, designer nuclear weapons. What on Earth is that about? Spending money to build more nuclear weapons? Bunker busters? I do not understand that. Not only is it the wrong

message for the world, it is spending money we do not have on things we do not need.

Let me give you an example of a little program in this budget that we have spent almost $200 million on over the years. It is Television Marti. It is this country deciding to send television signals to the Cuban people to tell them how good things are outside of Cuba. Well, I visited Cuba. The Cuban people know how good things are outside of Cuba. That is why they try to escape Cuba.

It is interesting, we spend all this money on Television Marti to broadcast into Cuba. We do it through Aerostat balloons, and now we do it with a sophisticated C-130 airplane, which is very expensive. And guess what. No Cubans see the television broadcasts. Oh, we broadcast. We have expensive studios and expensive people, and we have balloons, and we have airplanes, and we broadcast these television signals to the Cuban people. And the President wants to double the money for it, despite the fact that all those signals are jammed and the people do not see the broadcasts. I do not understand that.

What on Earth could they be thinking about? They are going to double funding for the broadcasting signals into Cuba that are jammed and that the Cuban people cannot see. In fact, one of the reasons he wants to double funding is he wants to buy another airplane for this program. So you talk about waste, it is unbelievable.

I think the most important point to make about the budget, however, is it is time for Republicans and Democrats, for the President and the Congress, to level with the American people. We have a fiscal policy that is reckless, is way out of control and is completely unsustainable. You cannot spend $677 billion that you do not have--not next year, not last year, not the year after next. You cannot have a trade deficit that is wildly out of balance. And you cannot have a Tax Code that incentivizes shutting down American factories and sending American jobs overseas. You cannot keep doing these things.

There are some who take a look at this place, and they see a bunch of windbags in blue suits, I suppose. They think we just talk, and occasionally, when the lights go out, we pass something like a 5.25 percent special tax break for the biggest economic interests.

The American people deserve for us to be serious about fiscal policy, about trade policy and about tax policy, and for us to begin to put together a plan to put this country back on track. It is not all the fault of one side or the other. But if both sides do not pull in the right direction, this country cannot provide economic health and opportunity and growth in the future.

What is happening in this country no one on this floor recognizes because no one in the Senate has lost a job because of outsourcing; no one here has lost a job because their plant was closed.

Let me again say, as I conclude, the people who worked for Huffy Bicycles know what that is like. The people who worked for Schwinn Bicycles know what that is like. The people who worked for Fig Newton know what that is like. The people who worked for Levi Strauss know what that is like. The people who made T-shirts and shorts for Fruit of the Loom know exactly what that is like. They all lost their jobs because they cannot compete with people who are willing to work for 30 cents an hour overseas. The employers have found a billion people on this Earth who are willing to do it. And they will not only work for 30 cents an hour, you can put them in factories and dump sewage and dump chemicals into the air and water. You can work them 7 days a week, and if they decide to create a union, you can fire all of them, just like that.

If this country does not get serious about stemming the outmigration of jobs and about stemming the hemorrhaging of red ink in international trade in our trade deficit and dealing with our fiscal policy and budget deficit, our economic future is not going to be a bright future.

We have far too much promise as a country to let this happen to us. We need leadership, yes, from the White House, and from Congress, to deal with serious things in a serious way. I hope that happens soon. I want to be a part of a group that is bipartisan that says let's put this country back on track. But I see precious little evidence of bipartisanship these days. The minute you stand and talk about the facts, all of a sudden you are being excessively partisan, and the White House comes after you; to wit, the story yesterday about the RNC and what they have decided to do with respect to Senator Reid.

Well, there is a lot at stake in this Congress and this President getting it right for a change: on budgets, on trade, on taxes. And I, for one, hope we can begin a serious discussion about serious issues in the days ahead and give people some hope that their future will be a brighter and better future.

Mr. President, I yield the floor.

Mr. President, although Congress has the responsibility to advise and consent on the confirmable posts of Cabinet Secretaries, I have historically cast my vote in a manner that provides wide latitude for a President to select his Cabinet team. I have voted for Cabinet nominees with whom I have very substantial and deep disagreements because I believe a President should be able to select a team of his choice to pursue his administration's goals.

But there are those occasions where it is important for the Congress to express its independent judgment about the record and the qualifications of a Cabinet nominee.

That is the case with the nominee the President has sent us for the post of Attorney General.

I have met with Judge Gonzales on a number of occasions, and I think he is smart and capable and has served the President loyally for a long period of time. But I am very troubled by the results of the Judiciary Committee hearings on the nomination of Judge Gonzales. I believe there are serious questions about the role of Judge Gonzales in the development of guidelines defining ``torture'' in the war on terror that should be unsettling to all Americans. Judge Gonzales was evasive in answering direct questions about these issues and refused to release all of the information that has been requested by the Judiciary Committee.

With respect to civil liberties and issues relating to how our Government conducts itself, I want an Attorney General who will follow the law and not look for cracks or crevices in the law that will enable an administration to pursue its own course. Frankly, and regrettably, I think that Judge Gonzales in his work in the White House has not demonstrated the willingness to be independent, nor has he shown the concern about civil liberties that I want to see in an Attorney General.

These are difficult and uncertain times for our country. The war on terrorism is difficult and will likely be lengthy. It is important we have the tools available to combat terrorism, but it is also equally important for us to preserve our civil liberties and protect the constitutional rights of our citizens even as we wage the war on terrorism. For that reason, I believe it is critical to have an Attorney General who will understand that his responsibility is not to the administration, but rather to the Constitution.

Because of my concern for all of these issues, I cannot vote to confirm Judge Gonzales for the post of Attorney General. It is unusual that I vote against a President's choice for a Cabinet post, but I believe this an unusual time and circumstance, and I believe it is critical that we have an Attorney General who can resist the efforts of those who would diminish our civil liberties as we wage this war on terrorism.

Mr. President, I ask unanimous consent to speak for 15 minutes in morning business.

Mr. President, we are embarking on a debate with respect to the subject of Social Security. Last evening, the President gave a State of the Union Address and today is traveling around the country to talk about a very important issue, Social Security.

In many ways the issue is about values. There has been a great deal of discussion about values in this country, especially as it applies to political debates. I think the debate about the Social Security system is a debate about values.

Some months ago, a friend of mine died in a small community in North Dakota. I sent some flowers and called. He was a man in his eighties. He lived a great life. He was a wonderful person. I got a note from his wife. Here is what she said about her husband. She said: Oscar always helped his neighbors and he always looked out for those who did not have it so good. That is all she said. But what a wonderful description of someone's value system and of someone's life: He always helped his neighbors and always looked out for those who did not have it so good.

In many ways that prompted the origin of the Social Security program. In the 1930s, one-half of America's senior citizens were living in poverty.

When I was a young boy, my father asked me, in the town of 300 people where we lived, to drive an old fellow to the hospital. The man lived alone in a very small shack. He did not have any relatives. He lived alone, and he was quite sick. My dad asked if I would drive him to the hospital. The nearest hospital was 60 miles away.

I went over and picked him up and drove him to the hospital. He never made it back. But this old man, who was then sick and did not have very much, lived on Social Security. The only thing he had was a small Social Security check, but it was the difference for that man between not having money to buy food, not having money to live, and being able to survive.

I know--and my colleagues know--how critically important Social Security has been to so many of America's elderly. Yes, I am talking about the people who built this country. I am talking about the people who built America's schools and roads and worked in America's factories. They are the people who turned this country into the strongest economy in the world, a beacon of hope for all people. Then they grow old and retire, and they reach their declining income years. The question is, what is there for them?

The one thing that for 70 years has always been there for them is something called Social Security. No, it is not an investment program. It is an insurance program. The money that goes into the Social Security system comes out of paychecks in something called the FICA tax. The FICA is not for investment. The ``I'' stands for ``insurance.'' Social Security has been a core insurance program. It provides insurance with respect to benefits for those who retire. It provides benefits for those who are disabled, and it provides benefits for dependent children. For example, when the breadwinner of the house lost their life, dependent children received the benefits. So it is more than a retirement program, but it is also that. It is the risk- free portion of retirement. It is the piece that for 70 years the American elderly could count on. They would know it would be there no matter what.

Some have never liked it and have always wanted to take it apart. There was a memorandum leaked about 3 weeks ago from the White House that was interesting. It was from the chief strategist who is putting together this program to privatize a portion of Social Security. That memorandum said toward the end something that was very interesting. It said: This is the first time in six decades we have a chance to win this fight on Social Security. Of course, the whole implication of that is, we have never liked it, but we have had to bear with it. Now we have a chance to deal with it.

The administration, as announced by the President last evening, wants to make some changes. He says the Social Security system is in crisis. He predicted last night that at a certain time the Social Security system would be bankrupt. But it is not in crisis, and it will not be bankrupt. He is simply wrong.

Our colleague, former Senator Pat Moynihan, used to say: Everyone is entitled to their opinion, but not everyone is entitled to their own set of facts. I hope we can discuss this issue using the same set of facts, at least.

Let me begin by saying something most everyone would acknowledge. In the year 1935, when Franklin Delano Roosevelt signed the law that created Social Security to protect our elderly from what he called ``poverty-ridden old age,'' one half of the senior citizens in this country were impoverished. Now it is slightly less than 10 percent.

Has the Social Security program worked? Of course, it has. It has been a remarkable program that has lifted tens of millions of senior citizens out of poverty. It has worked over the years unfailingly.

The President says it is in crisis. It is set to be bankrupt at some point. Therefore, let's make some changes. He says: Let's create private accounts with a portion of the Social Security system and invest it in the stock market.

What he didn't say last night was how he would do that. He would be required to borrow $1 to $3 trillion at a time when we are up to our neck in debt with the highest budget deficits in the history of America. He would borrow $1 to $3 trillion in additional funding, invest it in private accounts in the stock market, cut Social Security benefits at the same time, and say that somehow this is going to be better for our elderly. With great respect--and I

have great respect for this President--he is flat wrong.

I know he is telling us what he thinks will happen in the year 2020, 2040, 2050. Four years ago the President told us what he thought would happen in the next 10 years. He said: We will have the largest budget surpluses in history. Four years later, we have the largest budget deficits in the history of our country. This administration can't see 4 years ahead, let alone 40 years. Economic projections are very uncertain under the best of circumstances. You show me great economists and I will show you people who can't remember their address or their telephone number, but they can tell us with great certainty projections of 40 and 50 years. Of course, that is all nonsense.

All of us hope for a future that has robust economic growth. We hope things will be well. But we don't know. That is why 4 years ago, when the President was saying: We are going to have huge budget surpluses and let's provide very large tax cuts the bulk of which went to upper- income people let's do that right now, I stood up in the Senate and said: Maybe we ought to be a little conservative. What if these budget surpluses don't materialize? What if something happens? Never mind, they said. And so they put in place these policies. We now have the largest budget deficits in the history of the country. They say: What, us? We didn't do that.

Of course, this fiscal policy is way off track.

Now the President said last night that Social Security is broken. It is going to go bankrupt and somehow it must be fixed. He says it ought to be fixed by privatizing a portion of it, by putting it in the stock market and borrowing a substantial amount of money to accommodate that and cut Social Security benefits at the same time.

Let me go through a couple of points about that. This is from Paul Krugman of the New York Times. He says:

The actuaries predict that economic growth, which averaged

3.4 percent per year over the last 75 years, will average

only 1.9 percent over the next 75 years. In the long run,

profits grow at the same rate as the economy. . . . Any

growth projection that would permit the stock returns the

privatizers need to make their schemes work would put Social

Security solidly in the black.

His point is an interesting one and central to the discussion. The President says there are serious financing problems with Social Security. He uses language such as ``flat busted'' and ``bankrupt.'' They do that because the Social Security actuaries use a very conservative estimate of economic growth, much below the economic growth of the past 75 years. But then he says: If we put money in the stock market, that will have higher investment returns. And they base these higher returns on higher economic growth.

The point is, if you have the high economic growth that they use to project these returns, the Social Security system doesn't need fixing at all. It doesn't need adjustments at all. It is well and able to be available for the long term. If we get any kind of reasonable economic growth, the Social Security system is fine for the long term. If we don't get the kind of economic growth we would hope and expect, then the investments in the stock market the President wants to make by taking Social Security funding away are not going to provide the returns he promises.

You can't have it both ways. You can't argue both sides of that. It doesn't make any sense. Mr. Krugman is right.

Peter Orszag from the Brookings Institute testified last Friday at a hearing I chaired:

. . . young workers today in the middle of the income

distribution would experience a reduction in benefits of

almost 40 percent, or about $9,000 a year, even including the

payout from the individual accounts included in the plan.

To better illustrate, this is from the Congressional Budget Office, a nonpartisan office that we rely on. We fund it and rely on it, Republicans and Democrats, for our estimates. The Congressional Budget Office points out the Bush plan would not only slash guaranteed benefits but private accounts don't nearly make up for the loss.

In fact, workers will be worse off than they are now--much worse off, as you can see from the graph. The green represents the guaranteed benefit, and the workers would receive the yellow, which is the income from private accounts. As you see, it falls far short of what they would receive under the current Social Security program.

The Congressional Budget Office, which I referenced, said that the Social Security program can pay 100 percent of its benefits from now until 2052. After 2052, it can pay only 78 percent. That assumes that we have dramatically lower income growth for the next 75 years than we had in the previous 75 years. If we have any reasonable economic growth, we don't have any kind of a problem here. There is no shortfall. In 2052, the Congressional Budget Office says we would be about 22 percent short of paying full benefits. The benefits we would pay then will still be higher than we pay now in real terms.

If all of this happens, we will need to make adjustments in Social Security. But those adjustments don't represent a major surgery or a wholesale operation. They can be reasonably modest adjustments that keep Social Security whole and strengthen Social Security for the long term.

Let me show you what is happening with respect to the trust fund. The money that is taken out of workers' paychecks to put into the Social Security account is now more than is necessary to fund Social Security. This past year, $151 billion more was collected in Social Security than is necessary. That is to be put into a trust fund, not for the purpose of spending on other things, not for funding the war against terrorism, not for highways or health care or law enforcement; it is only for the purpose of funding Social Security. And so the trust funds are made up of Treasury bonds. That is what the money is used to purchase--a Treasury bond. That treasury bond then pays interest. This is what happens to those buildups of assets: $1.68 trillion in 2004. It would be more than that in 2005, an annual surplus in Social Security trust funds. You can see what is happening on this graph all the way out to 2040. That is the taxes that are collected to be put into this account as well as the interest that is earned on these trust funds. You can see what is happening. It is not something that justifies someone calling this bankrupt or flat busted as some do.

Even Mr. George Will, a columnist who is a rather predictable and consistent conservative and has written for many years as a conservative voice, has said that this is not about economics, it is about philosophy. Why did he say that? Because the arguments for the President's plan don't stand on their own in terms of economics. They don't add up, they don't fit, and they don't square with the facts. It is about philosophy. It is about people who have not liked Social Security and would like to take it apart.

If we have any kind of robust growth--this is from the Social Security trustees' annual report--if we have optimistic economic growth assumptions, not the pessimistic ones, on the graph you see what happens: The trust fund assets go up out into the future past 2080. So this notion that somehow that is a crisis, there is an impending bankruptcy, the system is flat busted, is just wrong.

Once again, I respect very much the President. I understand that he has a right to offer these proposals. Some see this as novel and aggressive. He would see it as transformational. I happen to think there are some things that represent timeless truths. There are some values that to embrace is not old-fashioned, or if old-fashioned is worthy of credit. If it is old-fashioned to support a program that has worked well for 75 years and will work for the next 75 years and longer, which helps lift America's elderly out of poverty, then we should just accept the notion and plead guilty to being hopelessly old- fashioned, believing that this is the value that strengthens America.

When those who build in this country--the people who go to work every day, build the private companies, build the manufacturing plants, build the roads and the schools--when they retire and reach their diminished- income years, we don't want them living in poverty. That is why as a country we put together this program called Social Security as a basic insurance program.

Some say--England has gone to private accounts, and Chile, which everybody points to as a country which has

gone to private accounts--that means you can earn more in the marketplace. Let me talk about Chile. In Chile, the only program that exists are those private accounts. You don't have company pensions, for example; you have these private accounts. Do you know what happened in Chile? They are telling old folks: Why don't you delay retirement until the stock market comes back a bit?

That is the experience with Chile. In England, what we have discovered is the companies are charging massive fees, overcharging people. They have had bad experiences with these private accounts. In this country, the Social Security system has been there consistently, and it works. So the question is, why would we want to take apart something that works? There is such an urgency in this Congress to move toward policies that benefit those who are the most affluent. It is always a rush to do that. What about an urgency to support the kind of program that makes life better for those who have reached their retirement years? What about an urgency to support, strengthen, and preserve the Social Security system? That represents an important part of our value system in the Congress.

I know we debate a lot of issues here; some are big, some are little. Some treat the serious too lightly; some treat the light too seriously. Some people think we are just a bunch of windbags in blue suits. I understand that. But there are occasions in which we sink our teeth into something important and have a debate that matters. This is a debate that really does matter.

If President Bush is able to convince this Congress to begin taking apart the basic retirement insurance program that has lifted so many tens of millions of Americans out of poverty in their retirement years, I think this country will have lost ground, not gained ground.

I am not suggesting there are no changes that can be made from time to time. Most people do not realize that in Social Security, a change is being made now. In 1983, when there was a reform package dealing with Social Security, it was decided that people are living longer and better lives. Because of that, the age of retirement had to be increased. So it was--two months a year going from age 65 to age 67 retirement. That is happening. We are on the road, from now until another 20 years from now or so, to take the retirement age to 67. The Congress supported that. The President--Ronald Reagan at the time-- supported that. That is underway. Adjustments have been made and will be made. But again, that doesn't justify someone claiming that there is bankruptcy pending in the Social Security program and that we ought to begin taking it apart.

I have told my colleagues previously about my uncle. I will do it again briefly. It describes what is happening in our country. My uncle and aunt went to something called the Prairie Rose Games; I think it was probably 12 years ago. The Prairie Rose Games are the games in our State, like in many States, that give people of different age brackets an opportunity to engage in different sports. My uncle and aunt, I believe, were 72 at the time. They bowl. As they looked at what was going on, they saw mixed bowling. They thought, that is something we can do, so they entered bowling. They had driven down to the Prairie Rose Games in their small RV and pulled up in the campsite and looked at this and said: We are going to bowl.

My uncle, age 72, saw that they had foot races for people 70 and above and for all different age brackets. That was his age bracket. He entered three races. He had never run a race in his life. At age 72, he entered the 400, the 800 and the 3K. He won all three of them. He won all three easily at age 72. He thought to himself, this is really quite extraordinary. I appear to be faster than people my age. So he started running. He went to Minnesota and ran in the Minnesota games, and he went to South Dakota and ran in the South Dakota games. Then he went to Arizona and ran there. He also went to California.

My aunt thought he had a stroke. She thought it was the dumbest thing she had ever seen--this old man going all over the country engaging in races. My uncle has 43 Gold Medals. He discovered he could run faster than anybody his age. He just had a bout of illness, but up until about a year ago, he was still running at age 81.

That would not have happened 20 years ago or 40 years ago. Now people are living longer, healthier, more active lives, and good for them.

So all of these issues, to the extent there might be a strain on Social Security, not bankruptcy, but a strain on Social Security--this is born of success. People are living longer. It is not rocket science to fix these things. Small adjustments can be made if they are needed to be made. But given what is happening with our elderly in this country living longer, needing to rely more on Social Security--no one should decide now is the moment to turn our back on them. That does not make any sense. Or to decide a program that has enriched the lives of so many tens of millions of Americans somehow ought to be taken apart. Why? For philosophical reasons.

One of the leading conservative voices of the far right said Social Security is the soft underbelly of the welfare state. That tells you a little something of what is going on, doesn't it? It is not a worthy program; it is some sort of welfare. It is not, of course. People pay for their Social Security insurance. They paid for it every month they worked out of their paychecks. And when they reach retirement age, they do not know a lot of things, but they know this: That this country, as good as it is, as big as it is, as wealthy as it is, as generous as it is, and as consistent as it is in values will continue to maintain a Social Security program that people paid for so that it is there.

It is certain to be there. It is not the risk part of retirement. It is the guaranteed part of retirement because people paid for it.

We have also said, in addition to Social Security, we want everyone to save more for retirement. So we have 401(k) plans, IRAs, and we say you get tax incentives for this and that. I support all of that. In fact, I believe we ought to have a two-step program instead of the President's plan as he outlined it last night.

The first step is to preserve and strengthen the Social Security program as it now exists for the long term, and we can do that without breaking a sweat. The most important thing is to preserve, protect, and strengthen Social Security. Don't take it apart. Preserve it and commit our country to do that.

Second, provide dramatic new incentives for retirement savings programs, IRAs, 401(k)s, and all the other programs we have to try to convince people to save more and invest more. I support that. That makes sense. But we ought not mix the two and decide to take apart Social Security and borrow $1 trillion to $3 trillion, stick it in the stock market, and cut Social Security benefits. That is a giant step in the wrong direction. We can do better than that. This Congress can do better than that, and the American people deserve better than that.

As I said before, this is about values and priorities. For example, you can fix whatever adjustments are necessary in Social Security by deciding that the tax cuts given to those whose incomes are half a million dollars a year or more need not continue.

Here is the choice: Tax cuts for people with half a million dollars a year in income or more, or make Social Security whole for 75 years and longer. That is the choice. That is just one of a dozen choices. It is an easy choice. It is a values question. What really is our set of priorities with respect to our commitment to America's elderly? What kind of country do we want to have? What do we think enhances and promotes value in this country?

Finally, as I have told my colleagues many times, I grew up in a town of 300 people. It is a town that had its own programs without Government, people taking care of people. It would be nice if that were the case all across the country, but we know that is not the case. So we put together certain efforts to incentivize people to take care of themselves, to invest for the future, to save for the future.

One part of that is Social Security. From 1935 until the year 2005, we can be proud of what this important Social Security program has done for our country. We ought to, in the spirit of Franklin Delano Roosevelt and in the

spirit of tens of millions of lives that have been enriched and pulled out of poverty because of this program, be dedicating ourselves to preserving and strengthening Social Security, not taking it apart, not borrowing money, not sticking Social Security money in the stock market, and not continuing to spend Social Security trust fund revenue on something for which it was not intended. But instead we should be putting our shoulder to the wheel and doing the right thing for this country.

We will have a great debate about this. A lot will be said about it. I do not attempt to tarnish anyone else who feels differently. I have respect for the President. We have a disagreement. I will not denigrate those who have a different feeling or who oppose my position, but I must say I feel very strongly about this issue because I think it is part of the core value system of this country.

This is a great, big, strong, wonderful, generous country, and doing the right thing is not very hard for this Congress in this circumstance.

Mr. President, I yield the floor, and 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 will take just another minute. I understand none of my colleagues wish to speak. I was speaking without notes, so I did not mention something I intended to mention. Most Americans do not know that at the moment there is a flurry of activity going on that also relates to values.

This Congress, last year, passed legislation that contained a provision that is just Byzantine. It provides a tax break to companies that have, in many cases, moved their U.S. jobs overseas, earned income overseas, kept the income over there, and, under what is called a deferral, are not having to pay taxes on it in this country.

We have a tax break for companies that shut down their American plant, move their plant overseas, earn income overseas, do not bring the income back, and they get what is called a deferral. They do not pay taxes.

At some point, however, when they want to bring their income back to this country, they have to pay income taxes just as Americans do, and the companies that stayed here do, and the people who work for those companies do. Except last year, this Congress decided to give a big break to those who would repatriate their income from overseas profits.

There is some $600 billion in income earned overseas that has not been repatriated and on which income taxes have not been paid. So guess what. This Congress said to all those big companies that made all this income overseas, some of which was made by shutting down their American plant and moving the jobs overseas: If you bring that money back, we will give you a deal. You get to pay income tax at the rate of 5.25 percent--5.25.

Do you know of anybody else working in this country who gets to pay a 5.25-percent income tax. How about the people working at the 7-Eleven at the counter, a person who is changing oil in a car, a person who is working on a road crew, do you think any of those people are paying 5.25-percent income tax on their earnings? No, they are not. The lowest bracket in the income system in this country is 10 percent, and it goes up to 35 percent. But now we have a new low bracket, and it is a special bracket. For those who earned income overseas and now repatriate the income to this country, some of which came as a result of moving American jobs overseas, they get to pay income taxes at 5.25 percent.

It reminded me of that great old song by Tom Paxton, ``I Am Changing My Name to Chrysler.'' This country gave a big loan to Chrysler many years ago when Mr. Iacocca was with Chrysler. It was very controversial. Tom Paxton wrote a song. He says:

Oh the price of gold is rising out of sight

And the dollar is in sorry shape tonight.

What a dollar used to get us

Now won't get a head of lettuce

No the economic forecast is not bright.

Then he goes on to talk about who gets the benefits and who pays the bills. At some point, I will read the entire lyrics to this song.

It is a little like my colleague from Texas who knows about Bob Wills and his Texas Playboys, a lyric from a song of the 1930s that goes: The little bee sucks the blossom but the big bee gets the honey. The little guy picks the cotton and the big guy gets the money.

Guess what. There is a lot of that spirit in the breasts of those who serve in this Congress who believe we ought to offer a 5.25-percent income tax rate to just a special group of people, those who have some $600 billion parked overseas.

What about a 5.25-percent income tax rate for all Americans? Or what about charging those who repatriate that income the regular income tax rate and put that money into the Social Security system? Once again, it is a question of priorities and values and this Congress came up short on this issue.

Very few people know that at the moment there are lawyers, accountants, and business executives scurrying around trying to figure out how they are going to take advantage of a special income tax rate that only they get, and the folks who work hard in this country and take a shower at night because they worked in tough conditions all day, they get to pay 10, 15, 25 or 30 percent income taxes. Maybe, as Tom Paxton said in ``I Am Changing My Name to Chrysler,'' we need to change our name so we get some of that 5.25-percent income tax rate. Maybe ordinary Americans ought to get some of that. Again, it is about values and about priorities.

I am going to talk more about this subject because the American people need to understand what this Congress did. It is about cotton and honey and big guys and big bees, and I will talk more about it in the future. I was thinking about it while I was talking about Social Security and priorities and values. It is something the American people ought to understand. There is a special deal out there and it is not for them, regrettably, because this Congress decided they are not worthy. It is just the big interests that are worthy of the 5.25- percent income tax rate.

Mr. President, I have serious reservations about the nomination of Condoleezza Rice for Secretary of State.

While I believe that the President deserves the opportunity to select his own team in the construction of his Cabinet, the confirmation process is one which gives the U.S. Senate the opportunity to reject a selection that it feels would not be in the best interest of our country.

The nomination of National Security Advisor Rice to become Secretary of State has been troubling to me because she was a part of the dispensing of intelligence information to justify the war in Iraq. That intelligence turned out to be fundamentally wrong.

There is no question that Ms. Rice has the intellect, the academic background, and the work history to justify this nomination. She is extraordinarily talented and skilled. But even so, I have significant reservations about her role in the use of intelligence leading up to the Iraq war.

I recognize she was working for and representing the President, the Vice President, and others in the administration, but nonetheless she too must bear responsibility for some very significant mistakes.

I sought out Condoleezza Rice yesterday for a personal conversation about a number of the issues that concerned me. We had a full and lengthy discussion about those matters, especially the use of intelligence leading up to the war.

I've decided after much reflection that I will cast a vote for her confirmation, but it is a close call for me. I fervently hope that this administration, including the President and the new Secretary of State, will rethink some of the foreign policy initiatives that I believe have made our country less secure--not more secure.

So I will cast a yes vote with reservations and hope that this administration has learned from the serious mistakes in foreign policy it has made in its first term.

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

Mr. President, the business before the Senate is the nomination of Governor Leavitt to be the Secretary of Health and Human Services. I come to the floor to express my support for Governor Leavitt. He has come to Washington in recent years to be the head of the Environmental Protection Agency. He is someone of considerable talent, and he is someone with whom I have worked when he was Governor of the State of Utah.

I have great respect for him, and I am very pleased that someone of his capability and talent would offer himself again for this Cabinet post. I am very pleased to support his nomination.

I do want to say that one of the issues that he will confront as the Secretary of Health and Human Services is the issue of the reimportation of prescription drugs. It has been a hotly debated issue in the U.S. Congress. Sufficient votes exist in both the House and the Senate to pass legislation allowing for the reimportation of prescription drugs. The only reason that legislation has not been passed and gone to the President is it has been blocked by a minority, and blocked by those who want, apparently, to protect the President from having to veto legislation that includes reimportation.

The President has indicated opposition to the reimportation of prescription drugs.

Let me describe why the reimportation issue is important. The fact is, American people pay the highest prices in the world for prescription drugs. That occurs because the pharmaceutical industry can charge those prices. Unlike most other industrialized countries, we have no price controls. There, in fact, are some price controls, but the controls are in the hands of the pharmaceutical industry. They actually control prices in this country, and they control prices because of a piece of legislation that was passed a couple of decades ago that prohibits the reimportation of prescription drugs, except by the drug manufacturer itself. For that reason, unlike other countries, citizens in our country are not able to routinely purchase an FDA- approved drug which is sold for a much less expensive price in other countries.

There is an exception to that, which is the allowance for prescription drug reimportation for personal use by someone who actually travels personally across the border to Canada or Mexico and purchases the FDA-approved prescription drug. They are allowed to bring a 90-day supply for personal use into our country. With the exception of that, a pharmacist from this country is not able to purchase from a pharmacist in Canada, and a licensed distributor in this country is not able to purchase from a licensed distributor in Canada.

The fact is, that is an exception to what is happening in other parts of the world--Europe for over 20 years. If you are living in Germany and want to buy a prescription drug from Italy, no problem. You can do that. If you are in Spain and want to buy a prescription drug from France, that is not a problem, either. It is called parallel trading. Those engaged in it in Europe have testified before Congress and indicated it has been going on for decades with no safety issues at all. Yet in this country, we have this artificial barrier that prevents a pharmacist from Grand Forks, ND, from buying an FDA-approved drug sold by a pharmacist in Winnipeg, Canada. It makes no sense at all.

We were not able to pass this legislation because the pharmaceutical industry has great influence here and with the Administration. As a result, the legislation has been blocked.

Yesterday, Senator Olympia Snowe from Maine and I met with Majority Leader Frist and Senator Enzi. We indicated that we would be reintroducing our bipartisan legislation. Senator Snowe and myself, Senator McCain, Senator Kennedy, Senator Stabenow, and many other of our colleagues, will cosponsor the major bipartisan piece of legislation dealing with the reimportation of prescription drugs.

We had a commitment yesterday that was expressed publicly last evening; that the bipartisan piece of legislation dealing with the reimportation of prescription drugs will have a hearing on its own merit exclusively directed at that bill before the Health, Education, Labor and Pensions Committee. I appreciate that very much. That is the first step in getting this kind of legislation passed through the Congress.

Our approach is to try to put downward pressure on prescription drug prices because we think it is unfair that the consumers in this country pay the highest prices in the world.

With your consent, Mr. President, I will show two pill bottles--two, of a dozen, I could show. The bottles that I hold up today are bottles of Lipitor. As one can see, they are identical in color, identical in shape and size, and they contain an identical tablet. It is something called Lipitor for the reducing

cholesterol. The medicine taken is one of the most popular medicines sold in this country taken to lower cholesterol levels in patients. It is sold in Canada and in the United States.

As you can see, the same pill is put in the same bottle, is made by the same company, and is FDA-approved in both cases. The difference? Price. The American consumer is charged $1.86 per tablet and the Canadian consumer, $1.10 per tablet. Why would one justify charging nearly double the price to the American consumer? What justifies that? These pills are, in most cases, made in the same plants, put in the same bottle, but shipped to two different places with two different pricing schemes. In almost every case, the pricing scheme with medicine of this type is to price the brand-name prescription drug at a higher price in the United States than exists in other countries. We think that is unfair to the American consumer. We don't propose price controls. Rather, we suggest the American consumer have the same access to be able to purchase the FDA-approved medicine from other major, industrialized nations with drug safety systems comparable to our own.

We recently had some testimony at a gathering here in the Congress that I want to review for a moment. Dr. Peter Rost, who is a drug industry executive, says:

The biggest argument against reimportation is safety. What everyone has conveniently forgotten to tell you is that in Europe reimportation of drugs has been in place for 20 years--

And done safely.

Then he continues by saying the following:

During my time response for a region in northern Europe, I

never once--not once--heard the drug industry, regulatory

agencies, the government, or anyone else saying that this

practice is unsafe. And personally, I think it is outright

derogatory to claim that Americans would not be able to

handle reimportation of drugs, when the rest of the educated

world can do this.

This, from a drug industry executive. He obviously wasn't treated well by the industry when he said this. But it took great courage for him to say what is obvious to everyone. There is no safety issue. That is a specious argument by the pharmaceutical industry and those who support it to try to head off the Congress passing legislation that would allow for the reimportation of prescription drugs.

The bipartisan group of legislators, Republicans and Democrats, who I and others have worked with, will introduce our legislation in the coming days. We now have a commitment for a formal hearing on that legislation. We will push for a vote on the floor of the Senate. I am confident there are sufficient votes in the Senate to pass this legislation. I do not think this legislation can continue to be blocked as it was in the last Congress.

Mr. President, I wanted to make this point during the discussion about the nomination of Mr. Leavitt.

Mr. Leavitt is a person, as I said, of considerable talent. I am enormously pleased that he is assuming this role. He will understand, as I understand, that he is duty bound in his new role as Secretary of Health and Human Services to follow what the White House dictates on this issue. The White House, at least at this point, is continuing to oppose reimportation legislation. In fact, when Tommy Thompson and I put together a task force to study this issue, they issued a report at the end of last year which could have been classified as ``recently incompetent humor''--this commission conceived in this report that there was a safety issue. To show you how irresponsible it was to put the task force together to reach a foregone conclusion that the Administration previously held, they proposed that Dr. McClellan head the group. He was the point person, who was the head of the FDA at the time, who raised all the issues and was vigorously opposed to reimportation and raised those issues in a manner that would befit someone working for the pharmaceutical industry.

There was such a stink raised by Dr. McClellan to be selected to run the task force that the Administration finally backed away and had someone else run the task force. But the task force did not take a ``level look'' at what this was about. They came up and conducted the safety issue.

There is no safety issue. Dr. Rost tells you; and I encourage any of my colleagues who wish to know; go to Europe, or ask the Europeans to come over here and testify. They will tell you they have been doing this for years. The reimportation of drugs between countries has been done routinely year after year without any safety issues at all. That is just a specious issue raised by those who want to support the pharmaceutical industry and who don't want to support the interests of the American consumers who should not be charged the highest prices in the world for prescription drugs.

Let me conclude as I started. Mr. Leavitt will assume the job of Secretary of Health and Human Services. I am anxious to work with him. I look forward to working with him. I have great respect for him. My hope is that he can convince this Administration to change its policy on reimportation.

This should not continue: The same pill put in the same bottle, made in the same plant, both approved by the FDA, should not be shipped to two places, one of which will impose upon the U.S. consumer the highest prices in the world. That is not fair to Americans, and this Congress ought to have the courage and the backbone to stand up for the interests of the American people on this important issue.

Within a matter of days, we will reintroduce our bipartisan piece of legislation. Within 90 days, we will have a hearing and we intend in every way possible to press this case on the floor of the Senate.

I yield the floor, and I yield the remainder of the time on this side.

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

Mr. President, on Friday of this week we will be holding in the Democratic Policy Committee a hearing that deals with part of our overall goal to hold oversight hearings that are not being held by committees. This Friday's hearing will be on the subject of Social Security. Among the witnesses at this hearing will be Franklin Delano Roosevelt's grandson, the AARP, and we will have a couple of employees of the Social Security Administration who will testify about efforts inside the Social Security Administration to get some of the career employees to push the issue of privatization and the issue that there is, in fact, a crisis in Social Security. We are going to have a hearing on these issues.

Incidentally, we have invited witnesses who will provide a full range of opinions. A representative of the Cato Institute is invited to appear. As we have always done with our hearings, we have people with divergent viewpoints. As I indicated previously, I would invite any Republicans to join us at any of our hearings at any time.

Our intention is not to have hearings that are ``gotcha.'' Our intention is to have hearings, however, in circumstances where we believe oversight has not occurred. These hearings will give us an opportunity to explore issues in a more aggressive way.

We held hearings previously, for example, on contract abuses in Iraq by the Halliburton corporation. We will have another hearing on that subject, along with allegations about another company engaged in contract abuses in Iraq, because there is substantial waste, fraud, and abuse. The evidence of that is all around us. There is precious little effort or energy on the part of some in Congress to take a look at it and deal with it and do something about it.

Mr. President, I wish to make a couple of comments about the future of Social Security because the President talked about this issue again this morning. This is a big issue. I noticed in a recent newspaper article that someone, who philosophically doesn't appear to believe in Social Security, said: ``Social Security is the soft underbelly of the welfare state.''

Social Security is a program that was signed into law by Franklin Delano Roosevelt in 1930's. It is an insurance program. Money is taken from workers' paychecks in the form of something called FICA taxes. The ``I'' in FICA is insurance, not investment. Social Security is an insurance program. It has lifted tens of millions of elderly people out of poverty in this country. It has been amazingly successful. It is not in crisis. The President did not use that word--``crisis''--today, but he has used it the past, and others also have. It is not in crisis.

We have a responsibility with respect to the Social Security system to make some adjustments as we go along. According to the Congressional Budget Office, the Social Security system will be fully solvent until the year 2052. In the period beyond 2052, if no changes are made, Social Security would be able to pay about 80 percent of what we now pay in benefits. In fact, people are living longer, healthier, better lives as a result of Social Security. Yes, it is successful. People are living longer and healthier lives. We can and will and should make some adjustments in Social Security, but major surgery is not needed. I do not support privatized accounts in the Social Security system.

With respect to retirement security, we have two things. Social Security is the foundation. That is the basic retirement insurance. It is the one without risk and that will be there no matter what. Above that, we have retirement investments, 401(k)s, IRAs, and other private pension programs. I support those as well. I have supported aggressive incentives for the American people to invest in the stock market, in 401(k)s and IRAs and other retirement accounts. That is different than Social Security, the basic foundation of retirement security. The President suggests we should begin taking apart

the foundation. I do not support that. I do not agree with it. I say let us build on the first, second, and third floor of this structure, but let us keep the foundation intact.

Social Security, the social insurance program you pay into during your working life and you can expect to get when you retire, has made life better for tens of millions of retired elderly Americans. We ought not take it apart.

The President proposes this: He says let us borrow $1 trillion to $3 trillion and invest that borrowing in the stock market and then have faith that somehow that will produce substantial returns and at the same time reduce benefits in the Social Security program. He suggests that it will all come out just fine. Well, it will not come out just fine.

I point out that the President also told us 4 years ago that we were going to have budget surpluses as far as the eye. It didn't turn out that way. We went from the largest budget surpluses to the largest budget deficits in history. There is not exactly a substantial amount of evidence that the economic estimates in the future from this administration will be on the mark. In fact, just the opposite is true.

Our obligation is to understand the basics of retirement security. My grandmother, as I have told you before, said you don't borrow for retirement, you save for retirement. That is why this notion of borrowing $1 trillion to $3 trillion to stick in the stock market begins with a premise that doesn't make any sense.

Incidentally, one other thing: Third-grade math will tell you there is no connection here. If, in fact, those who want to privatize a portion of Social Security allege that Social Security is in trouble because the actuaries estimate average economic growth at only 1.8 percent per year, then they cannot on the other hand allege that if there are private accounts you are going to get a 7-percent return. An economy growing at 1.8 percent a year on average cannot produce the corporate profits that will rise and increase the stock market to produce 7-percent returns on investment over the long term. It doesn't work. You have inconsistent arguments for a policy that, in my judgment, is not the right policy for our country.

I welcome the debate. I don't begrudge anyone for taking a position that is dramatically different from mine. I just believe that those who believe we should privatize a portion of Social Security system are just plain wrong.

I grew up in a town of 300 people. Everybody knew everybody. I knew everyone who lived in that town. I knew the people who retired in that town and had nothing but their Social Security checks. I wasn't alive at a time when those who retired and had nothing didn't have a Social Security check, but I know that at that point in time half of those who became elderly in this country lived in poverty. Some 50 percent of the American elderly lived in poverty. Growing up in my small hometown, I knew everybody. I understood who benefitted so substantially from that monthly Social Security check and who would have lived in poverty without it. This is not about statistics; it is about real people. Those are the people who built this country and created this wonderful life which we inherited. People say we inherited this wonderful life from those who went before us and we owe it to our children. The question is, How will we deal with it? How will we treat it? Will we be responsible and make the right choices?

Those who came before us built something that is unique on this globe. We share this Earth that circles the Sun with 6 billion neighbors. Through the blessings of God, we happened to be born right here and are living right now. A lot of people on this Earth can say that. There is no place else like this. There is no one on this Earth who has what we have. It has been given to us by people who worked hard and who understood that part of what we have created in this country is to help lift tens of millions of elderly people out of poverty through something called Social Security. We ought to be here to expand it, to protect it, to nurture it, and to make sure it is available for 100 years--not take it apart. We are going to have a real debate about that.

Once again, I am not going to be engaged in name calling or be pejorative about those who have different opinions. There is room for a lot of different opinions. I feel strongly about this, and I welcome this debate. This is about values and what our country values. We will have a hearing on this subject on Friday. I invite everyone here who might wish to attend to be part of it.