Floor Statements

Mr. President, I would like to, on another subject, speak for just a moment about the area of international trade.

Yesterday, the Senate approved an increase in the debt ceiling by $800 billion. That is the fiscal policy debt, that is the amount of money that is spent over that which is collected in revenues. That means our kids and grandkids assume this responsibility. It is Federal debt.

The budget deficit is the highest in history. This is a completely, thoroughly irresponsible fiscal policy. There is no question about it. Oh, I know people say we have had economic slowdowns or recessions or wars or terrorism and this and that and the other thing.

Look, we have had that for a century. But we have never had the size of the deficits we have now had in times like this. As far as I know, we have never before decided to fight a war with borrowed money and ask generations that come after us to pay for it.

But I want to talk about another debt that is growing, and it is larger than the fiscal policy indebtedness that we have. And that is the foreign debt, which arises from trade deficits. This chart goes back to 1998. I could go further. It shows that we have the largest trade deficits in history, by far. Last month, it was $54.1 billion, the third highest in history. You can see where it is going. It is growing and growing and growing.

Last month alone, the trade deficit with China--just one country--was $15 billion. Now, nobody talks about this. Nobody seems to give a rip. Some people apparently think this will have no consequence for this country or its long-term prognosis. But they are wrong. This trade deficit is dangerous and will be debilitating to the country's economy unless we do something about it.

Month after month after month we see these reports. And on this chart, this red ink has everything to do with jobs, which define the quality of life in this country. There is no social program in this country that is as important as a good job that pays well, that gives someone an opportunity to go to work, have some security, have benefits, and take care of their family and have a good life. The expansion of jobs and opportunity in this country will determine what kind of a country we have, what kind of opportunity exists for our kids and our grandkids. And jobs are leaving the country.

Yesterday, I had a call from some American workers. I will not describe the company. They are workers for a company that produces a great product. They want to sell that product in China.

Now China has a $15 billion monthly surplus with us this past month. They ship us their shirts, their shoes, their trousers, their trinkets. They ship it all to us, and we buy it. But can we get our products into China?

These workers say they've been told that to have their product be sold in China, it has to have a 40- to 50-percent Chinese content, otherwise you cannot get it in. So, therefore, the workers are concerned that the company is now going to begin processing operations in China. Why? Because China insists on it.

Well, look, that violates the World Trade Organization.

That does not come as a shock, of course. There is a systematic violation all the time, by these countries that decide they want to ship all of their products to the United States, but they want to keep their markets closed to us. That means our good jobs are leaving, not coming.

There are a lot of reasons for it, one of which is we have had incompetent trade negotiators under Republican and Democratic administrations, completely incompetent. They think their job is to negotiate agreements, the more the better, and they don't care what's in them. If they don't get an agreement, they think they fail. So they negotiate an agreement, and give away the store.

We just negotiated a bilateral trade agreement with China. Do you know what our negotiators agreed to? On automobile trade, they agreed to this: After a phase-in, China can impose a 25-percent tariff on U.S. automobiles sold in China, and we will impose a 2.5-percent tariff on any Chinese vehicles sold in the United States. Let me say that again. Our negotiators agreed with China that we would allow them to impose a tariff 10 times higher than the tariff we would impose on them in reciprocal automobile trade.

Now, what on earth would possess negotiations to result in that, with a country with whom we have a very large trade deficit?

We know China is ramping up an automobile industry and an export automobile industry, and we now have a trade agreement with them where our negotiators said it is all right to have an imbalance that is tenfold in reciprocal automobile trade.

What does that mean? To strip all the varnish from it, it means it is all right with our negotiators for American jobs to be obliterated and Chinese jobs created on automobile trade. That might be all right with some unnamed trade negotiator, but it is not all right with me. Whoever negotiated that was fundamentally incompetent.

We have some companies these days that are not American companies. Oh, they are American in terms of charter. They get a charter, a corporate charter, that allows them to become an artificial person, be able to sue and be sued, and to contract and be contracted with. They have all the rights of people, except they don't die. They can go broke, but they will never die. These artificial people are responsible only to their shareholders.

These companies have decided they would like to have all the benefits of doing business in the United States as American companies, and all the protection that exists from that, except they don't want to have the obligation of paying taxes in the United States. Therefore, they do business through a mailbox in a tax haven country. They can set up a business in the Grand Cayman Islands or the Bahamas. In some extreme cases, they have even decided they want to renounce their American citizenship to avoid paying their tax obligation to the United States, in what is known as an inversion.

In addition to that, we now have company after company--and all you have to do is open up the Wall Street Journal every day to see it-- doing something called outsourcing. That means taking American jobs and moving them somewhere else in the world, where it is cheaper. Instead of doing business in America, paying American workers $10, $15 an hour, they can perhaps do it in Sri Lanka, Bangladesh, Indonesia, or China. I have described at length on the floor of the Senate the fact that Huffy Bicycles decided to do that, and the little red wagons, Radio Flyer wagons--that firm was in America for 100 years. They decided to move production elsewhere. Why? Because they can pay sub-minimum wages. Huffy Bicycles used to pay $11 an hour to American workers. They got fired because they were too expensive. You can make them for 30 cents an hour in China, and you can work those people 7 days a week and 12 hours a day.

So we have what is called outsourcing. American companies are outsourcing jobs. That is a fancy term that describes the firing of American workers, in most cases, and employing overseas workers to do the same job at a fraction of the price.

What's even more nuts is that our tax code provides incentives for outsourcing. That's right, when a company wants to outsource, when a company wants to shut down their plant in South Carolina or in Ohio, and do that production in China, we say to that company: We have a treat for you. Get rid of your American workers, shut down the plant, move the whole thing to China and you can get a special tax break.

I happen to think that is absolutely nuts. What kind of a country provides a tax incentive for its companies to get rid of American workers and employ foreign workers? What kind of a country's tax system does that? This country's tax system does it. Yes, we voted on that. I offered an amendment to close that insidious loophole, that perversion in the Tax Code. Guess what. I lost in the Senate.

Here's something else. In a recent bill, the Senate Finance Committee, in conference, decided that U.S. companies who have foreign controlled subsidiaries and have not repatriated their overseas earnings to the United States will be able to repatriate that income at a tax rate of only 5.25 percent. Well, I have a lot of constituents who would love to have that tax rate. Wouldn't that be a wonderful thing? If it is good enough for the biggest companies, which outsourced jobs, it ought to be good enough for all Americans.

Ma Ferguson was Governor of Texas once and was involved in a debate about the English-only language back in the 1930s. She had a press conference and held up a Bible and she said, ``If English was good enough for Jesus, it is good enough for Texas.'' It is the good-enough theory, I guess. The 5.25-percent tax rate is good enough for corporations that moved American jobs overseas. Why is a 5.25-percent tax rate not good enough for people named Johnson and Olsen? Why is 5.25 percent not good enough for everybody?

Why is it that this Congress, when it looks at these issues, won't even take a baby step in the right direction? We are hemorrhaging good jobs in this country. This is a race to the bottom. We fought for a century about important things. We fought for a century about the right of workers to organize. It is a very important right in America. It was a similar fight that lit the fuse that caused freedom all over Eastern Europe. Lech Walesa led that fight, the right to organize. People died in the streets on that issue--the right to say that we are not going to have 12-year-old kids working down in a mine, or in a factory. Child labor laws, safe workplace laws--a whole range of issues. We fought for a century to create safe workplaces, child labor laws, minimum wages, the right to organize, all of these issues, which have, in my judgment, made this a better place.

The fact is, there are American companies now that simply pole-vault over the issues and say we don't have to worry about that, about hiring kids. We can hire kids, we can hire 12-year-olds, work them 12 hours a day, pay 12 cents an hour, and we don't have to worry. How do we do that? We hire them overseas, hire them elsewhere. That means those who have to compete in this new world order have to compete with countries that have decided they are going to make it illegal for workers to organize. You have to compete with 12-year-old kids who are paid 12 cents an hour.

If you wonder whether that is happening, I can show you stories. There is one about a woman named Sadisha, who is making tennis shoes for 16 cents an hour. This is an hour and a half of labor in a pair of tennis shoes that comes to our store shelves for $80 a pair, and Sadisha's pay is 24 cents for making the tennis shoes.

You think that doesn't happen? It does. I can tell you stories about the kids in India who were making carpets, who came to this country and testified before the Congress about the conditions in which they worked. The people they worked for took gunpowder and lit the gunpower on the children's fingertips to create scarring, so these little kids could be employed to sew these carpets. And the carpets were sent to our store shelves so we could buy them, and congratulate ourselves on the low prices.

Is there an admission price to the American marketplace? Is there? Are there some basic set of standards, or is this a race to the bottom to have us compete with that sort of situation?

I held a hearing not too long ago with some young women from Honduras working in a sweatshop making designer shirts, for a very prominent American label. They were working under incredibly abusive conditions. The story is the same all over.

People talk about this being free trade. Look, this is simply a sea of red ink, a trade deficit that is weakening this country, and we have not paid any attention to the rules of trade that would begin to stop this. We had better wake up and decide that our interest is to be protective--and, yes, I use that word even though it is a pejorative word these days--protective of the economic interests of this country. We must do that.

I spoke of Lech Walesa. Let me describe his speech to a joint meeting of the Congress, one of the most remarkable moments I recall in my service here.

He told us about a Saturday morning in a shipyard in Gdansk, Poland, when, having been fired as an electrician in that shipyard, this unemployed electrician was leading a strike against the Communist government demanding rights for the labor movement in Poland.

He said they grabbed him that Saturday morning and began to beat him. The Communist secret police grabbed him and beat him severely and threw him over the barbed wire fence at the edge of the shipyard. He laid there, having been beaten severely, face down, bleeding in the dirt. He said he wondered while laying there, this unemployed electrician having been beaten severely, what to do next. Well, he picked himself up, and climbed right back over the barbed wire fence, right back into the same shipyard, to continue the fight. Ten years later this unemployed electrician was announced at the door of the U.S. House of Representatives as the President of his country, the President of Poland.

This was not an intellectual, not a scholar, not a diplomat, not a soldier, but an unemployed electrician with uncommon courage. He said this to us: We didn't have any guns. The Communists had all the guns. We didn't have any bullets. The Communists had all the bullets. We were armed only with an idea, a powerful idea: People ought to be free to choose their own destiny. And then he said: Ideas are more powerful than guns.

There was a lot of applause that day, and appropriately so--applause of courage, the progress towards freedom and labor rights in Poland. But around here, we seem to have short memories. We are trading away our hard-won rights.

The first baby step we should have taken in this Congress we decided not to take. I offered an amendment, and it was defeated, to stop the perverse and insidious tax breaks that incentivize American jobs going overseas. Let's not reward companies that move our jobs overseas. Stop it; stop it now. It is a baby step to decide to shut down that tax incentive.

We did not get it done this time. I lost that vote. But I am relentless, and I will again be on this floor the minute we return in January demanding once again an opportunity to debate and to vote on this issue. This is about American jobs. It is about hope and opportunity in this country. It is about expanding this great American experiment, and this issue, I assure you, will not go away.

Mr. President, I yield the floor.

Mr. President, I intend to speak on another matter at some point. I see several of my colleagues are in the Senate. Senator Levin, I believe, wishes to speak for a short time. I see Senator Bond is in the Senate, as well.

I will take 5 minutes to say I have deep respect for my colleague from Texas. I like him and I am pleased he is a Member of this body. I have deep disagreement with what he has said, and I will take this moment to respond to it.

There is a newfound passion, apparently, for providing votes for nominees for judgeships. When I say a newfound passion, let me explain that I was here in the 1990s. There were 60 nominees for the Federal court that never got a vote in the Senate by a Republican-controlled Senate. Many of them never even got 1 day of hearings. It was unbelievable what went on with the majority party in this Chamber when the Clinton administration was sending down nominees.

Contrary to what my colleague just indicated, this notion of obstructionism, this is a newfound technique. You create your own reality and debate from that reality. There was no obstructionism. This Senate approved 201 Federal judges; 201 of the nominations for Federal judgeships that were sent down here by this President. We held up about 10 of them.

Now, the Constitution says something about our obligations. This is not about obstruction. It is not about unconstitutional behavior. It is not anything of the sort. It is about those in the Senate who understand that the Constitution says we have a responsibility when it comes to putting someone on the Federal bench for a lifetime.

When someone sends a name to this Senate as this President did that says, I want this man to serve for a lifetime on the Federal bench--by the way, this person has a record of writing articles saying that his belief is that women are subservient to men--I say, wait a second. It is not somebody I want to sit on the Federal bench for a lifetime. I don't happen to think that sort of thinking represents what I want to put on the Federal bench.

We held up, I believe, 10 nominees and approved 201. We approved 93 percent of the President's requests. We are told this is obstructionism? And now we are told, today, there is a lesson in the South Dakota Senate race as a result of this? This ``obstructionism'' created a result in the Senate race in South Dakota of which we all need to be mindful?

Let me state what the South Dakota Senate race was about. It was not about obstructionism and judgeships. It was about $20 million coming out of the basement of the White House through various orifices and devices, directed at the minority leader in the State of South Dakota in a campaign that in many respects, in my judgment, was shameful. But it was not about obstructionism. It was not about judges because the fact is we approved 201 Federal nominees sent to us by this President. We have been extraordinarily cooperative.

Let me say again, I was here during 8 years of the Clinton administration when 60 nominees were sent down here that never got a vote. Some of them never got one day of hearings. Let me say that on my behalf I want to cooperate with this President. But my colleagues and I have constitutional responsibilities with respect to putting someone on a Federal bench for a lifetime that involves two steps: One, the President proposes a nominee; and, second, under advice and consent, the Senate then makes its judgement. We have a responsibility here. It is a constitutional responsibility.

I have read and reread that Constitution. I am proud of what we have done. We have been extraordinarily cooperative with this President and will continue to be so. But that does not mean all of us walk to this Chamber with ink on our shoes and become a giant rubber stamp to say: Me too. Yes, sign me up. OK, I am fine, I am with you. It is not our role and it is not our responsibility.

When we approved 201 Federal nominees to the Federal court from this President, which was 93 percent of the nominees of this President, I think it strains credibility to somehow call this obstructionism. And it certainly strains our sense of irony to hear those calling us obstructionists when not very long ago there were 60 nominees, some of which never got a day of hearings, and none of which got a vote on the floor of the Senate.

Going forward, I think we ought to understand this: The so-called lesson we were described moments ago about the election in South Dakota, that is all nonsense. It is not what that was about. We believe we have a responsibility to cooperate. We will. We also believe we have a constitutional responsibility to use our heads, our hearts and our minds to make good decisions about the future of this country. We will continue to do that as well.

Incidentally, I have in my hand a record of two votes during the Clinton administration where there were cloture motions that were required for nominees. So this notion that somehow it is the first time ever there was a filibuster, nonsense, that's just not true.

I have records of both votes. It has been done before. It has been done by the majority party. It is just when they do not get 100 percent of their nominees, they do not get a rubber stamp coming out of this Chamber, that somehow they have a problem with that. The American people should not have a problem with it. The Constitution certainly does not have a problem with it, and I do not.

I want to be cooperative, but I do not want to sit and listen to a re-creation of reality that does not square with what we have done in the Senate.

Mr. President, I yield the floor.

Mr. President, let me follow Senator Bond.

I intended to use 20 minutes. I would be happy to follow the Senator.

Mr. President, let me suggest the Senator from Michigan begin, and then be followed by the Senator from Missouri, and then myself, followed by the Senator from Oklahoma. I ask unanimous consent that be the order.

Mr. President, I believe I was to be recognized for 20 minutes following the Senator from Oklahoma.

And two additional Senators as well.

Mr. President, this morning in the newspaper we read a report of that which we know, that the administration is going to propose a Tax Code overhaul. I think almost every American would believe that it is worth overhauling the Tax Code. The Tax Code is so complicated, and it desperately needs an overhaul.

The headline reads: ``Bush Plans Tax Code Overhaul. Changes Would Favor Investment, Growth.''

It says:

The Bush administration is eyeing an overhaul of the tax

code that would drastically cut, if not eliminate, taxes on

savings and investment . . . .

I want to read just for a moment an op-ed piece that appeared in the Washington Post. It is an op-ed piece written by I believe the second richest man in the world, Warren Buffett. Warren is a charming, delightful man. I had the opportunity to get to know him some. He has been incredibly successful as an American businessman. He wrote an op- ed piece about taxes and the tax burden that I want to read into the Record.

I ask unanimous consent to print his entire op-ed piece in the Record. It is entitled ``Dividend Voodoo.''

It reads:

Let me, as a member of that non-endangered species, give

you an example of how the scales are currently balanced.

He means with the Tax Code. Again, this is the second richest man in the world.

The taxes I pay to the federal government, including the

payroll tax that is paid for me by my employer, Berkshire

Hathaway, are roughly the same proportion of my income--about

30 percent--as that paid by the receptionist in our office.

My case is not atypical--my earnings, like those of many rich

people, are a mix of capital gains and ordinary income--nor

is it affected by tax shelters (I've never used any). As it

works out, I pay a somewhat higher rate for my combination of

salary, investment and capital gains income than our

receptionist does. But she pays a far higher portion of her

income in payroll taxes than I do.

His point is that he and the receptionist pay about the same percentage of their income. Understand, this is the second richest man in the world and his receptionist in his office.

Then he says:

Now the Senate says that dividends should be tax-free to

recipients. Suppose this measure goes through and the

directors of Berkshire Hathaway (which does not now pay a

dividend) therefore decide to pay $1 billion in dividends

next year. Owning 31 percent of Berkshire, I would receive

$310 million in additional income, owe not another dime in

federal tax, and see my tax rate plunge to 3 percent. And our

receptionist? She'd still be paying the 30 percent, which

means she would be contributing about 10 times the proportion

of her income that I would to such government pursuits as

fighting terrorism, waging wars and supporting the elderly.

Let me repeat the point: Her overall federal tax rate would

be 10 times what my rate would be.

I read that into the Congressional Record because I thought it was a fascinating description by Warren Buffett, one of the richest men in the world, about the issue of deciding that dividends should get extraordinarily preferential tax treatment. In fact, some say we should eliminate the tax on savings and investment, therefore, exempting interest, dividends, and capital gains from tax.

We have a lot of people who do different things. Some people work hard. Some people invest and clip coupons. Some people get up and shower in the morning. Some people work hard in difficult jobs, labor jobs and others that require them to shower at night. Some people work outside. Some people work indoors. Some people have income from wages. Some people have income from dividends or earnings or royalties of some type.

So the question is how should the Tax Code treat all of this? I ask this question: Which is more worthy, work or investment? Or are they equally worthy? And if so, if work is as worthy as investment, then why would one decide to treat investment income with such preferences in the Tax Code? And why would one decide to tax work and exempt investment? Why would one decide to say we are going to take out this activity called work and sock it with a tax, and we are going to take out this activity called investment and make it tax exempt? What is the value system that says let's tax work but exempt investment?

I think the value system, although I do not subscribe to this, is one that says the most important element in this business cycle of ours, in this free enterprise system, is investment.

Investment is very important, there is no question about that. But so, too, is work. Let me read something I put in the Congressional Record in 1996 in the Senate. It was about a fellow who I think is a hero. I have only met him once. I did not know him at all at that point. I read about him in the Minneapolis Tribune as I came through the Minneapolis Airport one morning. His name is Robert Naegele, and this relates to the point of value of work relative to value of investment.

Robert Naegele and his wife Ellis did something very extraordinary, something that surprised me when I read it in the Minneapolis Star Tribune that morning at the Minneapolis Airport. He owned a company called Rollerblade, a very successful company, the largest company producing inline skates in America, rollerblades.

Most people know about rollerblades. I happen to like to rollerblade. I enjoy rollerblading. So he owned and was chairman of this company called Rollerblade.

He sold the company after it was very successful, and he made an enormous amount of money. Just before Christmas in the year 1996, just after he sold this company and made a substantial amount of money, he decided he was going to return some of the profits from the sale of that company to the employees who worked in that company. He did not tell any of the workers about it. They began opening what they thought were Christmas cards from the previous owner of this company, Mr. Naegele and his wife.

It turns out it was, in fact, a Christmas card with a check. The check was computed on the basis of the number of months these people had worked for the company. It was an amount of money that he wanted to return to the employees as a result of the profit he had made from selling this company that made rollerblades.

The checks were as high as $20,000 to those who had worked there a long period of time. He said: By the way, I have prepaid the taxes on this bonus. So this is a check that is free and clear. I have paid the taxes on it for you. He said: I did this because while I was very fortunate to run a very successful company, I understand that this company was successful because of the wonderful men and women who worked there. They worked in the plant. They worked in shipping. They worked in manufacturing. They worked in the finance area. They made this company. They were this company. They helped make me successful, and I made a lot of money. But I want to share it with those workers.

I thought, what a wonderful story. What a heroic thing to do, to finally recognize something that has been so lost in this country in recent years: the value and the worth of the workers who perform the work, who make these companies.

These days, employees are too often treated like a wrench: Use it, use it up, throw it away; it is just another tool. Mr. Naegele understood an employee is not just another tool. An employee is a part of the personality and productivity of that company. The work is as important as the investment. It is workers and management. It is workers and investors. All of it together makes a company and makes a company successful. Very seldom do you see that ethic exist these days in how people look at these companies. But I put something in the Senate Record on January 10, 1996, paying tribute to this fellow.

I tell that story today because it describes the value of work and the understanding of what work contributes to this country, to the innovation of its business community, and to the capability of what America can offer its employees in the free enterprise system.

The question of how we tax is very important. We must build roads, we must provide for our country's common defense, we must build schools and educate children, we must provide health care to those who cannot provide for themselves--there are things we must do. So we must pay a tax.

The question of how we impose that tax burden on the American people is very important. And this ethic, somehow this notion, this value system that says, oh, by the way, let's tax work and exempt investment, is one that I think relates directly to values.

What is the value system that tells us work is less worthy than other enterprises? Work is not less worthy than other enterprises. It is an important part of what has helped build this country.

I do not diminish at all entrepreneurs and investors. They are an important part of this. But so, too, is the important labor force in this country.

I taught economics for a brief period in college. Samuelson, Econ. 101, you teach the streams of income and what generates the streams of income. You teach the business cycle--all of these issues. Nothing has really changed very much over the years except there is a change with respect to those who want to create a new reality here, suggesting that somehow there is one element of this system of capitalism that is so much more important than the others. I do not believe that is the case. I believe all of this fits together like the picture of a puzzle. A significant part of America's progress has been the worker and the ethic of work and the value of work.

We will work together to overhaul this country's tax system. But I will not be a part of a system that says let's decide to impose a burden on the receptionist in the office that is 10 times the burden we will impose on the world's second richest man. That is not a value system that makes sense to me.

Oh, some will come here and say: But we have to do that to incentivize growth. That doesn't incentivize growth. That retards fairness, but it doesn't incentivize growth.

We have a lot to do to fix this tax system of ours. I proposed in the past and will again a way with respect to the current income tax system to remove the burden of some 70 to 80 million Americans from even having to file a tax return. We don't need to have the streets clogged on April 15 for people to get to the post office to get their tax returns postmarked. We can and should dramatically simplify this tax system. But we should not take a giant step in the direction of deciding there are some who will pay a substantial amount more than others, in reverse order here, with the highest amounts being paid by those who are least able to afford it, and the lowest amounts being paid by those who are most able to afford it.

We are blessed to be a part of this great country. We could have been born anywhere. We could live anywhere. We share this planet with 6 billion people and, through God's grace, somehow we ended up here. There is not another place like it. It is our job to take what we have inherited and make it better.

They say we inherit this from our folks and borrow it from our children. This great democracy of ours, including the progress over two centuries now that I am very proud of, requires nurturing and constant attention. Yes, one of the controversial and difficult areas has always been, How do you raise the revenue to do that which is necessary in our Government?

We can debate about how large government should or should not be. My colleague from Oklahoma will follow me today. He is working, probably today--I suspect almost every day for months and months, on this question of, How do we construct a new highway program? What amount of money is necessary? With what formula shall it be distributed? That is really important work. That is an investment in the infrastructure of this country that is very important.

When he and others get a bill that we can finally get to the floor and create, I hope a 6-year program--then we have to figure out how we pay for that just as we have to pay for everything else. The question isn't whether there should be a tax system. There is a system by which we collect taxes. The question is how should that system be constructed so that it is fair to all Americans.

I look forward to a debate this coming year in which we talk about tax reform and changing our tax system because I think this is a system that is ripe for change. But it is critically important that we have a discussion about the tax burden and what is fair.

The President announced today he is going to have a commission, which is a good thing. I hope that all viewpoints will be involved in that commission. You can get a commission to propose almost anything here in this town. I saw a few of the names on that commission, and I certainly think it needs some more energy and some more thought from other points on the compass.

But I would say to the President, I think the Congress will welcome a debate about overhauling the Tax Code. But if it is proposed that we decide, for example, that dividends, interest and capital gains income shall be eliminated from the tax rolls, we will welcome that debate with a very aggressive discussion about what is the value of work and why should we diminish the value of work.

I indicated earlier today about the ``good enough'' description, by Ma Ferguson, the former Governor of Texas. I will not recall that story again, but if a 5.25-percent tax rate is good enough for companies who move their jobs overseas, why is it not good enough for all Americans? If a zero-percent tax rate is good enough for those earning dividends, why is it not good enough for the wages of workers.

Let me just show you, if you exempt investment income from taxation, the top 10 percent get most of the benefit--$463 billion in realized dividend, capital gain and interest income. The bottom 90 percent have far less.

So you see, if you eliminate dividends, for example, from taxation, a massive amount of the tax breaks goes to the same old corner that it always goes, those who have the most.

Bob Wills and his Texas Playboys used to have a line in their 1930s song:

The little bee sucks the blossom

And the big bee gets the honey.

The little guy picks the cotton

And the big guy makes the money.

Every time we focus on tax reform we find the same thing, especially in recent years.

Let me again say I am all for changing our Tax Code in ways that are thoughtful. We ought to simplify it. But we ought to resist efforts that will make it more unfair and strive to move

towards efforts that will make the burden fair to all Americans. That has certainly not been the case in recent years. My hope is when we next see a proposal dealing with America's Tax Code that we will see something that represents some semblance of fairness. Otherwise there is likely to be a debate breaking out in the Senate, which would be a very healthy thing, in my judgment.

I yield the floor.

If the Senator will yield for a moment, I would say I was actually not a professor. I did teach economics at the college briefly, but I was able to overcome that experience.

I thank my colleague from Montana and my colleague from Iowa. I listened carefully to his comments.

We are here debating the proposition of increasing the debt limit by $800 billion. We have come through a time in the 1990s when we were actually running budget surpluses. We were paying down the debt. Now we are stacking debt on top of debt on top of debt. This is the most reckless fiscal policy I have ever seen. I didn't vote for it. I don't feel responsible for things I didn't vote for.

Let me say that if this Senate passes an increase in the debt limit and does nothing about the underlying fiscal policy that has created it, then this Senate ill serves the American people.

The President says: You know, we have had an economic slowdown, a recession, war, and terrorism. Yes. So have other Presidents. That is all true. But it seems to me it probably would have augured well for this administration, then, to recognize that things have changed and therefore fiscal policy must change. We are spending $5 billion a month every month in Iraq and Afghanistan--$4 billion in Iraq, $1 billion in Afghanistan. We are not paying for one penny of it. It is all being charged.

This administration says we are fighting a war. Yes, we are fighting a war and guess what, this administration doesn't ask anyone to pay for it. They say we want to give big tax cuts mostly to people at the upper income level. What kind of fiscal policy is that?

Part of this increase in the debt limit, I suppose, is to accommodate something that was done last year on the floor of the Senate. It says, you know what we have to do now? We have to reconstruct the country of Iraq. We want the American people to ante up $20 billion to reconstruct the country of Iraq. I offered an amendment. I said: I don't think we ought to do that. Iraq has the second largest oil reserves in the world. I had soldiers tell me they stood in indentations in the sand and got oil on their boots. I think the Iraqi people ought to pump oil and sell it at $45 a barrel. They will have more money than they know what to do with. But this administration believes the American taxpayer should pay for the reconstruction of Iraq and the Senate should raise the debt limit to make this happen. It is just one domino in this line, but it is a hood ornament of failure.

The question is, When will this place and when will this administration come to its senses? I am not saying one side is all right and the other side is all wrong. But I am saying this: This fiscal policy was constructed at the White House at a time when they said we have so much surplus we don't know what to do with it. Let's start giving it back. Some of us stood on the floor of the Senate and said we ought to be a bit conservative. What if something happens we did not anticipate and things change? A war? A terrorist attack? An economic slowdown?

The President says, no, don't worry about that. The future is bright.

So we put in place tax cut after tax cut after tax cut and we are now choking on red ink and the President doesn't seem to care much at all. He doesn't address it, talk about it, or think about it. I think it's true to the admonition in Bob Woodward's books about the President saying I don't want second guessers around me. Once we decide to do something, that is what we do, and I don't want to talk about it. It seems to me when you have a fiscal policy that created an avalanche of debt for this country, the thing you ought to do--it is like the old southern saying about the law of holes. When you find yourself in a hole,

stop digging. Maybe we ought to stop digging. Maybe this administration ought to describe the fiscal policy that stops making this hole deeper. But that is not what this is about today and I regret that.

There is so much to talk about. We are talking about the budget deficits and the accumulated debt. By the way, every penny of the Social Security surplus is being spent.

This administration makes the case that what matters is debt held by the public.

No, no, that is not what matters. It is not just debt held by the public. It is debt held by the public and debt instruments that exist in the Social Security accounts which we are going to have to repay. All of that represents an obligation that this country must meet and it is growing and mushrooming in a way that is dangerous for the future of this country. Everybody knows it except the President, apparently, and those in this Chamber who have decided this President's fiscal plan is moving us in the right direction.

You know the old saying in the western movies: Are you going to believe me or your lying eyes?

The fact is, we understand what is happening here. We see it. Only in this town, where we make an industry out of creating euphemisms, can we have enough sugar to sugarcoat this nonsense. This is awful. This fiscal policy is injuring this country in a very dramatic way. We ought to take a step right now on this debt ceiling limit and decide we are going to tell this administration we demand a change in fiscal policy.

Let me ask for two additional minutes, if the Senator from Montana has it.

I am happy to yield.

The response to that is this administration is spending every single penny that comes into the Social Security trust fund. They want to fight the war and do all these things and no one has to pay for it. Don't worry. Be happy. Dance down the sidewalk and be oblivious to what is happening.

We have the largest budget deficit in the history of this country and one that, incidentally, all the experts say you cannot grow out of. But we have our colleagues saying, we will just hang around, thumb our suspenders, and grow out of this. I guarantee we will grow out of it, they huff and puff.

Nonsense. And they know it is nonsense.

In addition to the biggest budget deficit in the history of this country, we have the biggest trade deficit in the history of this country, as well. I worry that one of these days the currency traders are going to look at this and say, as an electronic herd, we are moving elsewhere. When they do, the collapse of this dollar will have enormous consequences.

I ask this President to provide some leadership in a fiscal policy that moves us in a constructive direction.

I yield the floor.

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

Mr. President, my understanding is that the vote is ordered for 5:15.

Mr. President, I wanted to come to the floor to say that this Senator is going to miss the booming voice and the southern drawl of the Senator from South Carolina who is one of a few who has relentlessly, over a long period of time, talked about the issue of international trade. He has talked about how it relates to our country's economy. Very few come to the floor to talk about the doctrine of comparative advantage and Adam Smith and the kind of things that I have had the privilege of hearing from Senator Hollings.

As one who comes to the floor to talk about trade a lot, I am going to miss very much the work which has been done by Senator Hollings and which he has been doing for so many years. He is absolutely right about these issues.

They will take a look at statements and say, well, he is a protectionist. I don't view Senator Hollings as wanting to put up walls around this country. I think if the charge is that Senator Hollings or I or others want to protect the economic interests of the United States, we ought to plead guilty quickly. That is why I am here and why he has served this country for so many decades. We want to protect the economic interests of this country.

I wanted to say, having heard the comments just offered by my colleague from South Carolina, how proud I am to have served with him. Being here when Senator Hollings was here and when Senator Byrd has been here and a few others is a very special privilege for someone like myelf.

Of course, I yield.

I thank my colleague from South Carolina and wish him well.

Sinking Of The ``Leopoldville''

Mr. President, yesterday I was privileged to be at a very moving ceremony at the Tomb of the Unknown Soldier.

Very few people will know of this issue, but I want to mention it because yesterday was the commemoration of the 60th year of the sinking of the SS Leopoldville, a troopship that was sunk in the English Channel on Christmas Eve 1944 by a torpedo shot by a German U-boat. Seven-hundred and sixty-three young American soldiers died in the frigid waters of the English Channel on that Christmas Eve.

What was most interesting about this and in many ways the most tragic of this circumstance is that those young soldiers died in the waters of the English Channel, and virtually no one knew of them.

On Christmas Eve of 1944, at a critical period, during the Battle of the Bulge, the announcement that 763 young American soldiers had been killed would have been devastating to the psyche of the American public, according to the Defense Department. So the result was there was no news. This was an enormous tragedy that occurred with virtually no one knowing of it.

Yesterday, we placed a wreath at the Tomb of the Unknown Soldier. I was proud to have been a part of the ceremony. My uncle was on this ship and was killed when it sunk. I walked down the aisle to place the wreath with Tony Martinez, one of the survivors from that night, and with Lucy Ruggles, the widow of one of the fellows who was killed in that event. I believe 20 survivors from this ship were there yesterday at Fort Myers and at the Tomb of the Unknown Soldier, along with more than 100 family members and friends.

Let me say just a word about what happened.

The Leopoldville was a Belgium ship staffed by a Belgium crew. It was within 5 miles of the French coast. They could see the lights of the French coast when the German U-boat hit it with several torpedoes. Then this ship sank. There were 2,300 soldiers on this ship, and 763 of them died on Christmas Eve 1944.

There was no notice to anybody about the tragedy because the Americans, the English, the Belgiums, the French, and others decided to keep it silent. Sixty years later, we know much more about it largely thanks to a book that was written, by Allan Andrade.

Let me say thanks to Carmella LaSpada, who is the Executive Director of the White House Commission on Remembrance, for putting together a program yesterday that was extraordinarily moving. At that program, we heard from the survivors of the Leopoldville. They told us that the Belgium crew in most cases didn't speak English. When the ship was torpedoed and began to sink, the Belgium crew got in the life boats, and by and large the young American soldiers were stranded on that ship, and 763 of them died.

I was invited to be a speaker yesterday and to be at the Tomb of the Unknown Soldier as a part of the ceremony because my uncle, Allan Dorgan, was one of the casualties that evening.

I have known a lot about this in recent years because there has been a lot of investigation done.

I just wanted to say that yesterday was a very moving day with discussions and visits with those who survived this sinking, and also a tribute to the memory of those who perished in the sinking of the Leopoldville.

I hope America remembers that the young soldiers, 19, 20, 18, and 21 years of age who died that night in the frigid waters of the English Channel did not die in vain. They were patriots.

There is an old saying that when the night is full of knives, the lightning is seen, and the drums are heard, the patriots are always there ready to fight and die as necessary for their country. These 763 patriots died that evening, and the world didn't know it. But they know it now. Yesterday's ceremony was a tribute to their service to our great country.

I know we have a 5:15 vote. My colleague, I believe, wishes to speak. I wish to speak just for a moment about a trade issue. Might I ask my colleague how much time he needs?

Mr. President, I think as a courtesy to my colleague from Montana, I will not speak 5 or 6 minutes on trade. I will do that tomorrow because I think we have about 6 minutes before the vote.

But let me just say this in 1 minute.

Mr. President, I would like the Record to reflect that I was necessarily absent for the vote on the conference report to H.R. 4520. While I believe that there were some missed opportunities on this legislation, overall I support the bill. I voted for the original bill when it passed the Senate and to invoke cloture on the conference report. Had I been present, I would have voted in support of the conference report.

Mr. President, the Senate is not in order. The Senator from Louisiana has an hour. She deserves to be heard. The Senate is clearly not in order.

Let me, in the few moments remaining, thank the Senator from Iowa. Yesterday, someone asked him what he was doing, and he said: I am supporting my farmers.

The fact is, farmers in his State, our State and others, have been hit by weather-related disasters. You ought not treat farmers in different parts of the country in different ways. If you are going to provide disaster assistance to people in one part of the country, those farmers who have been hit with weather-related disasters in other parts of the country deserve to be helped as well.

This is a case of the Government saying to farmers during a tough period, you are not alone; we are here to help you. This is not a case of farmers begging to be helped. It is a case, for example, in our part of the country, where torrential rains wiped out the opportunity for farmers to even plant a crop on 1.7 million acres. Think of that. There were 1.7 million acres that could not be planted. These are farmers that will lose their farms if we do not offer some help.

The Senator from Iowa has been doing something very simple and powerful in the Senate. He is standing up for family farmers.

My colleague from North Dakota, Senator Conrad, myself, and others are insistent we provide disaster relief and do so in the right way.

What is being done in the conferences, back and forth, the ping- ponging of inadequate proposals, proposals that are unusual, is not fair.

I commend the Senator from Iowa for being unwilling to sit by idly, silently, and allowing this to happen. I stand with him, as does my colleague, Senator Conrad, and many others.

Madam President, I wonder if the Senator will yield for a question.

Madam President, I understand the Senator from North Carolina is speaking as in morning business under a block of time allocated to the other side by prior agreement.

I ask unanimous consent that following the Senator from North Carolina--if nobody is on the floor--that I be recognized for 15 minutes as in morning business, preserving the remainder of the 30 minutes allocated to the other side. If other speakers on that side are here to follow the Senator from North Carolina, I suggest that I follow them at the end of the 30-minute period.

Madam President, I believe I asked for 15 minutes.

Madam President, I came to the floor because we are going to have a great deal of business in the final days of this legislative session. Some of the legislation will be very significant. This is one piece of tax legislation that originally came out of the Senate Finance Committee and the House Ways and Means Committee. It rests on all of our desks. It is a large unwieldy piece of legislation dealing with, in some cases, arcane portions of our Tax Code.

There is much in this conference report on what is called the FSC/ETI bill, which is the shorthand way we talk around here. Others call it the JOBS bill. There is much I commend, much that I support, and much that I think represents good work. But I want to talk a moment about some missed opportunities as well.

I am mindful of what Mark Twain once said. It is always easy to be negative. Mark Twain once said, when asked if he would debate: Of course, if I can take the negative side.

They said: We haven't told you the subject.

He said: It doesn't matter, the negative side doesn't require preparation.

I am mindful of that when I am trying to pick apart some pieces of this bill, but I think it is important to talk about missed opportunities at this late date.

I am going to vote for this bill, but I will tell you what is not in it and should be.

We are drowning in debt in this country. We have the largest budget deficit in the history of America, and add to that the largest trade deficit in the history of this country. We are neck deep in debt. We are spending money we do not have, in some cases on things we do not need. We send our men and women to war and say, by the way, we will not pay for that, we will have them pay for it when they come back. We are drowning in debt.

One part of dealing with that debt in fiscal policy is to try to get the revenue into the coffers of the Federal Government that is owed by those who are required to pay taxes.

Let me describe a couple headlines from recent days:

House Negotiators Reject Tougher Tax Shelter Penalties.

Those House negotiators said: No, we do not want to get tough to shut down tax shelters and tax dodgers. I am talking now about very large corporations that make billions of dollars and decide they want to do everything they can do as an American citizen, except they do not want to pay taxes. They do not want the obligation of paying taxes.

Madam President, $40 billion would have been raised as a result of the provision that was objected to by the House negotiators. That's $40 billion saved in taxes that will not be paid by companies that should have been full taxpayers.

October 7:

How Big Tax Shelters with Cities Shortchanges the Federal

Treasury.

This is about people buying a sewer system. Can you imagine someone wanting to own a sewer system? But cities are now selling their subways, city hall, and the sewer system. Why? Because if they sell it to a corporation, a corporation can depreciate it, and then they can each share in the tax writeoff because a city does not have a tax write off because it is not taxable. So we see these things being sold to

private investors so that everybody wins, except the taxpayer loses, and our debt goes up and up because entities that should be paying taxes are not.

Let me talk just for a moment about the issue of missed opportunities with respect to runaway plants and moving American jobs overseas.

This morning there was an announcement about the number of jobs created in the last month. We need to create about 175,000 jobs a month just to keep pace with the increased population moving into the workforce. This month it was only 96,000 new jobs, far short of what is necessary just to keep pace with the new people coming into the workforce.

Even as we struggled to create these new jobs, we have in place a provision in this country's Tax Code that says to a company: Guess what. If you will just decide to move your jobs overseas, we will give you a tax cut for doing it.

We will give you a big fat tax cut if you move your jobs overseas. Now, I cannot think of a more pernicious, obscene thing to do than to say to American companies, move your jobs and we will give you a tax cut.

If some tax concessions are going to be given, give them to the businesses that create jobs and stay here, not to the businesses that fire their workers and move their jobs to China, Bangladesh, Sri Lanka, and Indonesia.

We voted on this provision and the Senate actually turned it down. Senator Mikulski and I offered an amendment that said let us shut down this pernicious tax cut that says to people, move your job overseas and we will give you a benefit. That, it seems to me, should have been a revenue raiser in this bill.

Or how about the proposition of American companies that decide they want to have all the benefits that accrue to being an American citizen as a corporation--because in law we say a corporation is a citizen, artificial citizenship. It can sue and be sued; contract and be contracted with. It wants in some cases all of the opportunities of citizenship in this country except for paying taxes. That is why we see corporations that decide what they want to do is do their business through a post office box in the Cayman Islands. Why? Is that where they run their company, from a post office box? No. What they want to do is shelter their income from this country so they can have all the benefits our country has to offer them but avoid paying U.S. taxes that are required.

Who then pays the taxes? Oh, it is just the working men and women who get up in the morning and dress and go to work all day. They do everything right, and at the end of the day they try to provide for their families and try to pay shelter and transportation, all the things that are necessary to send their kids to school, pay for health care, and then pay taxes as well.

It seems to me this is a terrible missed opportunity to shut down aggressive tax shelters, to shut down the tax opportunities that have come from tax haven subsidiaries of U.S. corporations.

I could go through a list of corporations. One corporation, for example, set up 441 entities in the Cayman Islands alone. Yes, an American corporation, an energy company, for example, set up 441 subsidiaries in the Cayman Islands. Why? Because they do not want to pay taxes.

The Halliburton Company has 17 tax haven subsidiaries, including in Liechtenstein--Panama, Cayman Islands, Liechtenstein. I would like to see these shut down. If you are setting up circumstances where you are doing business through a post office box in the Bahamas or the Cayman Islands or, yes, Liechtenstein, in order to avoid paying taxes, the next time you get in trouble maybe you should call out the Liechtenstein Navy to protect you, or the Bahamian Navy. Someone told me the Bahamian Navy has 20 people.

These companies want all the benefits that can come to an American citizen, but they do not want to pay their fair share of taxes. Again, we have people who get up every morning in this country, they are good citizens, pay their bills, and they pay their taxes, because they want to send their kids to the best schools, and they want to be able to have affordable health care. They want to live in safe neighborhoods. They want grandma and grandpa to have access to health care. They want a good job that pays well. Instead, we have a tax system that says, oh, by the way, we will give you a tax cut to ship your job overseas and oh, by the way, it is fine for you to access, even if you stay here, tax shelters so that if you make money, you do not have to pay, but your workers do. Your workers should pay taxes, but you make $2 billion, you do not have to pay. Do your business through a mailbox somewhere.

These are enormous missed opportunities, and they are missed opportunities because, as this says--and this is why House negotiators reject tougher tax shelter penalties. What that means is a bunch of people come to this conference and say, no, we want to protect these special deals, we do not want to close these loopholes. The fact is, the American people deserve better. This country is drowning in debt.

People ask, how do you get a handle on the fiscal policy? The first thing you do is you stop this sort of nonsense. You stop subsidizing jobs being exported overseas by American companies that are told by this Government, shut down your plant and we will give you a tax cut if you move your job overseas.

Yes, we voted on that in the Senate and it was voted down. Closing that loophole was voted down in the Senate. My hope would have been with the deficit growing worse and worse, that perhaps in conference, working on this bill, we would have seen a conference that would have closed these loopholes, closed these shelters, closed off the opportunities that result in such a massive amount of lost revenue to the Federal Treasury at a time when we are deep in debt.

At a time as well when our country is reliant on about 60 percent of our oil from others around the world, it seems to me that we also missed some opportunities to move aggressively in areas to make us more independent with respect to our oil supply. It seems to me that when we have a circumstance where we need additional energy and we reach for 60 percent of that oil from troubled parts of the world, it puts our economy in great jeopardy. When we are talking about incentives for energy production in this country, we could have done and should have done much better. If we do not understand that the 60 percent reliance on Saudi Arabia and Kuwait and, yes, Iraq, Venezuela, and Nigeria is very troublesome to this country, then we do not understand very much.

I happen to think we are going to always continue to use fossil fuels--coal, oil, and natural gas. I also believe we ought to move toward a hydrogen fuel cell future in which we stop putting gasoline through our carburetors; find an inexhaustible supply of energy such as hydrogen, which is ubiquitous and everywhere, and when you use a fuel cell hydrogen vehicle you put water vapor on the tailpipe, you have twice the power to the wheel. What a remarkable future.

We will not get there because the energy companies, particularly many of them that have a vested interest in what we are doing now, do not want to get there. There are some who are very excited about a new Apollo project in which this country describes a completely new energy future. I would hope some of those incentives would have been in this bill, and they are not.

This legislation which is presented to us now over the weekend is legislation that has a number of things that I believe moves us in a good direction, a number of constructive things.

I will make one other point on tax shelters. My colleague Senator Grassley, for example, announced some long while ago that he was going to put a stop these phony lease transactions between cities and companies. Yet, the way this conference report comes out they actually went easier on some of these transactions. The same is true with respect to inversions.

Corporations that decide, we do not want to be American citizens anymore, we renounce our American citizenship, we want to become citizens of the Bahamas. Why? I do not know. Sun, sand, good food. I do not know. They want to become citizens of the Bahamas in order to avoid paying U.S. taxes so they do something called inversion, which is renounce your citizenship.

There was a date set by my colleague Senator Grassley and his counterpart and they said, beyond this date, understand you are in jeopardy when you do

this. Well, guess what. In this conference, they went a year forward from that date. I do not have the foggiest idea why they did that.

By the way, this is not a criticism of Senator Grassley because he has been a leader in shutting down these abusive transactions. My assumption is that the House of Representatives came over once again and said, no, we cannot buy that.

It is unbelievable that corporations that want to renounce their citizenship are given even an inch of ground by anybody in this Chamber, let alone anybody in that conference. We ought to say, you want to renounce your American citizenship in order to save on taxes? Shame on you. You are not going to get tax benefits or tax savings from this Tax Code, not from this Congress. You want to do what is called an inversion and renounce your American citizenship? Then this Congress is not going to give you one cent of benefits in the Tax Code.

Yet regrettably, what has happened here is they have actually given another year's flexibility to the companies that did that, a year beyond the date in which my colleague--and good for him, Senator Grassley--said, here is the date.

I am happy to yield.

I ask unanimous consent for 1 additional minute to answer my colleague.

Let me answer my colleague from Louisiana by saying of course it is absurd. Let me say it seems to me the first obligation in this Congress is to make sure we are doing what we should do for those men and women who, when called, left their homes, left their families, left their jobs, and went to serve this country. It is unbelievable to me, some of the priorities that have been established around here.

I heard the Senator from Louisiana make the case earlier today. She is absolutely right about that. The soldiers she is talking about should not be put at the end of the line. They ought to be at the front of the line when you talk about trying to do what is right in this bill. I appreciate the leadership of the Senator from Louisiana on that point.

I yield the floor.

Will the Senator yield for a question?

I think the Senator was not in the Chamber when I began my presentation. I did say I intend to vote for this. I said there is much in it that I commend and much that I support, including some of the energy provisions that I believe you just mentioned. I was speaking specifically only about the series of tax shelters representing, in my judgment, a missed opportunity.

But I think the Senator from Wyoming missed the opening comments of this Senator. He probably missed that I did say there is much here to commend, and I was speaking about what I think is a gross abuse, which we call tax shelters, which we have to close, and I think most Members think at some point we will have to close them.

Mr. President, I rise to thank members of the Defense Authorization Committee for addressing the Energy Savings Performance Contract, ESPC, program. Not only did the conference adopt the Senate position on the importance of this program, they went a step further and extended the program through 2006. Getting this reauthorization has been a long process and unfortunately one that will need to be revisited during the next Congress. We could have avoided this situation by simply providing a permanent authorization for the program, but since we didn't, I believe we should focus on this issue at the beginning of the next Congress instead of waiting until the contracting authority runs out in 2006.

I want to take a moment of the Senate's time to explain to my colleagues the importance of energy savings performance contracts. Energy Savings Performance Contracts allow Federal agencies to enter into unique contracts through which private companies provide energy- efficiency improvements in Federal buildings. What makes these contracts unique is that the private companies are reimbursed for these improvements only through the resulting stream of savings on that Federal agency's energy bill. Simply put, if there are no savings, then there are no payments. The Federal Government owns the energy efficiency improvements, but pays for these improvements through actual energy savings achieved. The Government retains the monetary value equivalent of any savings that exceed the payments to the private company during the duration of the contract and then retains all energy savings once the contract is complete. Importantly, the Federal agency pays no upfront capital costs for the upgrade.

The authority to enter into these contracts expired last year. To ensure continuation of the program, several of us in the Senate worked to include renewal authority in the comprehensive energy bill. Unfortunately, that extension authority was removed from the modified version of the energy legislation introduced by the majority leader. One of the main reasons for this deletion was because the CBO has assigned a significant revenue impact to continuation of the program. This scoring occurred even though the private sector energy efficiency providers are required by law to guarantee the energy savings and thus provide no net cost to the Treasury. Let me say this again, unless there are savings, the Government owes nothing. CBO's interpretation of how to score these contracts may be in line with the literal meaning of the Budget Act, but it certainly is not in line with the spirit of the act. By allowing these private sector companies to work with the Federal Government on installing energy efficiency measures, an enormous service is being provided. We are saving energy; the Government is not required to pay up front costs; and at the end of the day, the Government and the American taxpayer gets the benefit of lower energy bills.

With passage of this short-term extension, the Senate must now turn its attention to passing a permanent extension. The start-stop program we have now is not conducive to getting these efficiency measures installed. During debate on the fiscal year 2005 budget resolution over 40 companies and associations signed a letter in support of the ESPC program. The signatures ranged from USPIRG to the Chamber of Commerce. There are not many instances when you have those two associations agreeing on a measure, so I believe the benefits of the program speak for itself.

In closing, I want to again thank members of the conference committee

for their work and support for this program.

Mr. President, I have come to the floor to speak about the issue of reimportation of prescription drugs. I also wanted to talk for a moment about the tax bill that is being negotiated by the conference committee between the House and Senate, especially with respect to the runaway plant issue and tax incentives that now occur for those who shut down their American manufacturing plants and export jobs. I will speak about those two issues briefly.

Before I do that, I'd like to address some of the remarks of my colleague from Georgia, who was speaking when I came to the floor of the Senate.

I disagreed strongly with my colleague when I heard his speech at one of the national political conventions. He certainly had every right to give that speech. I disagree strongly with the presentation he gave on the Senate floor, but he has every right, of course, to express those opinions on the Senate floor.

I have great respect for my colleague from Georgia. I honor his service. He has provided great public service to this country in many different ways, so I honor that service.

But I, of course, reserve the right to disagree with my colleague as well, just as he came to the floor and disagreed with some of the votes that have been cast by Senator Kerry.

The last time I was on the floor when my colleague from Georgia came to speak, he was offering a proposal that we take away the right of the American people to vote for Senators. He proposed instead that Senators be appointed or selected by State legislatures, and that the right of the people to vote for Senators should be rescinded.

Well, I thought that did not sound like a very modern approach. We left that idea a long time ago in this country, and I got up and spoke and indicated I did not have quite such a pessimistic view of this country's future and certainly did not agree that we ought to revert back to the States appointing their Senators and taking away from the American people the right to elect Senators. But that was the only previous occasion I recall on which I took the floor of the Senate and disagreed with my distinguished colleague from Georgia. I must say, however, that I feel compelled to disagree once again.

I have not come to the Senate floor to be critical, ever, of President George W. Bush's military record. I would not do that. And I would not be critical of Senator Kerry's military record. Both of them served.

My colleague came to talk about Senator Kerry's record in voting for defense for this country. This is not a new technique in American politics. This is timeless. It always happens that someone stands up and points at someone else and says: You don't represent this country's interests in defense. You don't support a strong defense. You are not willing to stand up when you need to stand up and be counted and support a strong defense for this country.

Sometimes that works. But let me just say this. I don't think it works when you point at someone who decided on graduation from Yale that he would volunteer to go to Vietnam; not only that, he would volunteer to serve on a swift boat, where he was certain to be involved in hostile action. He didn't have to do that. He did that, he volunteered. He received a Bronze Star, a Silver Star, three Purple Hearts, and still has fragments in his body from the wounds from which those Purple Hearts arose. I don't think it works to point fingers at that man and suggest he, somehow, is weak on defense.

My colleague's assessment of Senator Kerry has changed some. Senator Reid pointed out that in March of 2001, at a banquet in Georgia, my colleague from Georgia introduced Senator Kerry. Here is what he said about him:

My job tonight is an easy one. It's to present to you one

of this Nation's authentic heroes, one of this party's best

known and greatest leaders, and a good friend.

Then he said this, my colleague from Georgia:

John has worked to strengthen our military, reform public

education, boost the economy and protect the environment.

Let me say that again because it is important. It is at odds with what we just heard from my colleague from Georgia on the floor of the Senate this afternoon. Speaking of John Kerry, my colleague from Georgia said:

John has worked to strengthen our military.

This is a speech from March 1, 2001. What is the difference between then and now? John Kerry has had the same record on defense.

Incidentally, John Kerry has supported a great amount of this country's defense: the Apache helicopter, Aegis, The Bradley, Black Hawk, B-2 bomber, C-17 cargo jets, F-16, F-18, Tomahawk missiles, C- 130s, and I could go on and on and on. Billions, tens of billions, yes, trillions of dollars for defense Senator Kerry has voted for.

What is the difference between March 1, 2001, in my colleague's assessment of Senator Kerry where he said ``John,'' speaking of Senator Kerry, ``has worked to strengthen our military,'' what is the difference between that and the discussion we have just heard today? The difference is, it's an election year and my colleague has, apparently, decided to change his mind. If there were an Olympic event called ``stretching,'' I have a couple of personal nominations for who might win the gold medal.

This ought not be, in American elections, an attempt to find out who is the worst. It ought to be a search for who is the best. Who can best lead this country? Who has a vision for the future that grows our economy, that protects our country, protects our homeland, provides for a strong defense, protects the environment? It is a search, in my judgment, for who is the best, not who is the worst.

We have two candidates running for President, both fully qualified to serve in that office. It does not serve our country well to point at one and say somehow he is weak on defense, doesn't support defense, especially when it is so at odds with the record. But it is now an election year. I guess almost anything goes.

There is a term, I suppose, for changing one's mind, and it is called flip-flop. I have not used it, but some have used it to the point of significant repetition this year. I will not use it here

except to say what we have just heard today is at significant odds, not only with the record of a member of our caucus who has served with great gallantry but also at odds with the previously stated views of the person who made the speech today.

Let me end as I began and say I honor the service of the Senator from Georgia. I disagree with him about these issues. Four weeks from today this country will see fit to make an informed choice between two men who strive to serve for the next 4 years as this country's President. Both candidates, I am sure, care about national security. Both care about homeland security. As was stated in the debate last week, both love this country.

I submit, just as one Senator, both are qualified to serve in that office. Both parties have nominated people they choose to support and support aggressively. I come to the Senate floor today to simply say this: John Kerry is someone with whom I have served for many years. I have watched him vote. The fact is, he supports a strong defense for this country. He always has and always will. When it came time to answer his call, his country's call, he left one of the prestigious colleges in this country upon graduation and said: Let me volunteer. He went to Vietnam. He went in harm's way.

There is no amount of energy or wind that can be exerted by others who will change the basic fact of a voting record that is in strong support of America's defense.

I am happy to yield.

That is correct.

I say to the Senator, I have, in fact. I serve on the appropriations subcommittee here on the Senate. I care a lot about this country's defense. And I voted against the MX missile program, because I felt it was a terrible waste of money. But I am a strong supporter of defense. I believe anyone who looks at my record will understand the weapons programs I supported, significant weapons programs, have added strength and boosted this country's capability.

Because I serve on the Appropriations Subcommittee on Defense, I watch what others do as well. From a firsthand knowledge, I say that Senator Kerry has a strong and aggressive record in supporting this country and supporting a strong defense for this country.

No question about that.

My colleague from Georgia was talking about Vice President Cheney and John Kerry. I didn't quite understand that comparison of their records on defense. I have lived a couple of doors down from Dick and Lynne Cheney for a number of years. I know them well. I would never come to suggest somehow that Dick Cheney doesn't support a strong defense. And I know John Kerry very well. I certainly wouldn't come to suggest he doesn't support a strong defense. Both of them have records that demonstrate a support for this country's defense.

Well, enough about that. I didn't come to the floor of the Senate to speak about that. But I felt that there should be some response to the statement by the Senator from Georgia this afternoon which I think, frankly, is not supported at all by the facts.

American Jobs

On May 5 of this year, we had a vote in the Senate. That vote was on an amendment that I had offered, together with my colleague, Senator Mikulski from Maryland. The intent of the vote was to shut down a loophole that rewards U.S. companies that move their manufacturing jobs overseas.

Yes, we have that kind of loophole. It is a perverse, insidious loophole in our Tax Code that says: Shut down your U.S. manufacturing plant, get rid of your U.S. employees and outsource those jobs, and, God bless you, while you leave this country, we will give you a tax cut.

Talk about a perverse incentive to do exactly the wrong thing, that is it.

We are now seeing the conference committee between the Senate Finance Committee and the House Ways and Means Committee meet and negotiate over a FSC/ETI bill, sometimes also called the ``jobs bill.'' If they finish putting this bill together in conference and do not include a provision to eliminate this perverse incentive, they will have done precious little to help protect, nurture, and strengthen American jobs.

Incidentally, when I offered this amendment on May 5 of this year, the amendment was tabled by a vote of 60 to 39. Sixty Members of the Senate voted to say they did not want to shut down a tax loophole that provides an incentive for companies to fire their American workers and move their U.S. jobs overseas. So that loophole still exists in tax law.

Now I read in the paper this morning they really do not want to pay for the cost of this FSC/ETI bill by shutting down loopholes. This is unbelievable.

We have American companies now that decide they want to do business through a post office box in the Bahamas or the Grand Caymans. Why? Do they want to be a citizen of the Grand Caymans? Not exactly. They just want to avoid paying U.S. taxes so everyone else can pay taxes that these folks do not pay.

I suggest that once companies have decided to move their corporation and run their business out of a mailbox in the Bahamas for the purpose of avoiding U.S. taxes, the next time they get in trouble maybe they ought to call the Bahamian Navy to protect them. I understand the Bahamian Navy has 20 people. Maybe the next time one of these companies gets in trouble with some expropriated assets or other issue they can call on the combined flexed muscle of the Bahamian Navy.

My point is simple. We have a real problem in this country with the outsourcing of jobs. In the last 4 years, we have actually lost jobs at a time when we are supposed to be creating jobs. We have an expanding population. We need new jobs. But we are losing jobs.

I will not give the same speech I have given previously about the Radio Flyer and Huffy bicycles, those quintessentially American products that are now being made in China. I will not talk about the all-American cookie, the Fig Newton, now being made in Monterey, Mexico, so that it is now Mexican food. I will not give the speech about the outsourcing of these jobs to Sri Lanka, Bangladesh, Indonesia, and China. But if this country does not wake up soon and get rid of these pernicious loopholes in the tax law that say, ship your U.S. jobs overseas and we will give you a big tax cut, if we do not do that, we are not going to succeed.

Growing an economy requires us to do the right things. We cannot talk about growing the economy and then support tax loopholes and say, by the way, ship your U.S. jobs overseas. That does not work. We are outsourcing jobs every single day and no one seems to care much about it.

Incidentally, that also relates to the trade deficit, because when we outsource the jobs and ship the products from those jobs back into this country, it means we exacerbate the trade deficit, which is the largest deficit in human history.

One can make an argument as an economist--I used to teach a bit of economy in college--one can make an argument that the budget deficit is money we owe to ourselves. We cannot make that argument with respect to a trade deficit. We owe a trade deficit to other countries. It will be paid inevitably by a lower standard of living in our country in the future.

The largest trade deficit in history ought to be cause for substantial alarm in this Chamber and at the White

House. Yet there is almost a conspiracy of silence all around this town about a trade deficit that, in my judgment, hurts this country very badly.

Incidentally, Lou Dobbs has written a book about this trade deficit. I encourage colleagues and others to read it. His program, more than any on television these days, is talking about the danger of this trade deficit.

At any rate, as they finalize this jobs bill in conference, which is going on as I speak, they need to come back to the amendment I offered last May 5 with my colleague, Senator Mikulski. They need to shut down this perverse incentive in tax law, which gives benefits and encouragement and financial help to companies that move their jobs overseas.

Reimportation of Prescription Drugs

Let me make one other point on another subject that I think is critical. We are told we are near the end of this session. Perhaps on Friday of this week we will complete our work and then come back for a lameduck session, which happens to be a terrible idea. Perhaps, because this Congress has not done much of the right kind of work or much of the work it needs to do, we will have to have a lameduck session.

As we near the end of this session, the one relentless issue that many Members of Congress say they care about and want to do something about is the issue of the prices of prescription drugs. We pay the highest prices in the world for prescription drugs and there are far too many in this country who cannot afford them.

Senior citizens are 12 percent of our population yet they consume over one-third of the prescription drugs in America. Senior citizens have reached that point in their lives when they have a fixed income. Yet one-third of the prescription drugs are taken by our senior citizens. Why? Because they must. These are lifesaving drugs, miracle drugs. My hat is off to the pharmaceutical industry and to the researchers at the National Institutes of Health and others who have helped create these new drugs, but miracle drugs offer no miracle to those who cannot afford to take them.

I sat on a bale of straw the other day at a farm in southern North Dakota with a fellow who is 87 years old. He told me: I fought cancer for 3 years and I think I finally have beaten it. This is an 87-year- old man. I fought cancer for 3 years and I think I finally won. For those 3 years, my wife and I drove to Canada to buy the prescription drugs I needed to fight this cancer.

Why? Because the same FDA approved drug, the identical pill, is put in the same bottle, made by the same company, but is priced at a dramatically lower price in Canada.

He said: For 3 years, we went to Canada to save that money because we had to. Senior citizens should not have to go to Canada to save money on prescription drugs.

He is right about that. I would prefer that pharmacist be able to go to Canada to purchase those lower priced prescription drugs from the pharmacist in Canada, come back, and pass the savings along to the consumers in our country.

By getting rid of the artificial barriers that prevent re- importation, we would put downward pressure on prescription drug prices in this country so people would not have to go anywhere but their local drugstore to purchase prescription drugs. They could purchase them here for a fair price. But we are charged the highest prices in the world for these drugs.

We are told by the Food and Drug Administration that if we reimport prescription drugs from Canada in any organized way that there would be a safety issue. We are told by the Secretary of Health and Human Services that there may be a safety issue. We are told by the President that he thinks maybe we should look at this but there might be a safety issue.

That suggests somehow that Americans are not able to do what Europeans have done everyday for years. The Europeans have something called parallel trading. Their parallel trading programs allow someone from Germany to buy a prescription drug from Spain, someone from France to buy a prescription drug from Italy.

They don't have any safety issues in Europe. The marketplace determines the price for the drug, and the market puts downward pressure so the Europeans don't pay the highest prices in the world for prescription drugs as we do. They do what is called parallel trading, and there are no safety issues at all. European officials have testified before our committees. The safety issues simply are not there. It is a bogus issue.

We have drafted a bipartisan piece of legislation called the Pharmaceutical Market Access and Drug Safety Act. Myself, along with Senators Snowe, McCain, Stabenow, Feingold, and others, we have drafted a bipartisan piece of legislation that systematically addresses the safety issues so that there cannot be any safety concerns. Our bill would allow the reimportation of prescription drugs from Canada and from other major developed countries and would put downward pressure on prescription drug prices. The House of Representatives has passed such a bill. That bill is on the calendar at the desk. The bipartisan bill which we have introduced is similar to the bill that is at the desk. Yet we are unable to get a final vote in the Senate.

We have had substantial discussion. I had a discussion with the majority leader on this subject at midnight one night earlier this year on the Senate floor. I had a hold on a nominee. I withdrew that hold because I believed we had an agreement that we were going to work toward an opportunity to have a vote on this legislation. I believed that agreement with the majority leader existed. He now indicates it was not an agreement for a vote. He indicates it was an agreement that a process would begin and that the authorizing committee would work on this. The authorizing committee worked on it, to be sure. They would have markups scheduled and markups cancelled, markups scheduled and markups cancelled. The fact is, they never were able to get a bill out of committee because they couldn't get consensus on anything. We have a consensus on the bill that is on the calendar. We have a consensus on the bipartisan bill. If there is a vote on that in the Senate, it will pass by a significant margin. We don't need another consensus. There is a consensus that already exists. What we need is a vote on the floor of the Senate.

I encourage the majority leader once again to allow us the opportunity to cast this vote. Senator McCain, Senator Snowe, myself, Senator Stabenow, Senator Feingold, Senator Daschle, Senator Kennedy and many others have worked very hard on this issue. In my judgment, it is a disservice to those who deserve to pay fair prices for prescription drugs not to have a vote on this bill. It is a disservice to their interests for us not to complete work on this bill during this session of the Congress.

I ask unanimous consent to print in the Record two editorials. One is by the Chicago Tribune and it is entitled ``Shielding the Drug Industry.'' This says essentially what I have said:

While Congress dithers, States and cities skirt if not

break the law by helping seniors and others take advantage of

lower prescription-drug prices in Canada.

And the editorial talks about the desperate need for Congress to pass a law dealing with reimportation. They specifically feel that the legislation that is before the Congress would be meritorious and they talk about Peter Rost who is vice president of marketing for one of the largest drug companies who broke ranks with the drug industry in the last couple of weeks and publicly endorsed the proposal in Congress that my colleagues and I have sponsored.

Then I ask unanimous consent to print in the Record a New York Times editorial that is titled ``The Senate's Chance on Drug Costs.''

If Dr. Bill Frist, the Senator majority leader, knows

what's good for the body politic, he will allow a quick floor

vote on the drug reimportation bill he has been bottling up

for the benefit of President Bush and the pharmaceutical

industry.

As I have indicated, there is a bipartisan group of Senators who have worked a long while on this issue. The House of Representatives passed this idea by a wide bipartisan margin. This is not a partisan issue. It is bipartisan.

My hope is that the majority leader will decide that as a matter of scheduling, we will, before we adjourn sine die, address this issue and resolve it for the benefit of the American people. There is no safety issue. Everyone knows that is a bogus issue. To continue to raise that issue suggests somehow that Americans are unable to do what the Europeans have done routinely year after year. That is, put together a system--we call it reimportation; in Europe it is called parallel trading--that is safe for consumers and that puts downward pressure on prescription drug prices.

I yield the floor.

Mr. President, I seek recognition to speak about the bill and about Senator Byrd's amendment and generally about the subject the Senate is considering.

Mr. President, let me say that the Senator from West Virginia has done a great service today by

pointing out that there is a substantial difference between flexibility and accountability. I cosponsored the amendment offered by Senator Byrd, not because I want less flexibility but because I demand and expect that we should have accountability in terms of how money is spent by the Federal Government, especially in these areas.

I don't think there is one instance in which the administration would argue they have not been given the flexibility to move funding from one account to another in order to accomplish their specific goals and purposes in defeating terrorism. The Congress has been extraordinarily generous in working with the administration in every conceivable way to move money around to areas where they need that money with which to fight terrorism.

Senator Byrd, in his amendment, indicates that he thinks we should continue to have some accountability. Under the pending bill, the Treasury Secretary is authorized to create appropriations accounts, to which the national intelligence director then can transfer funds, and there are really no limits on how those funds would be used at this point.

Let me give a short description of some of the angst I have about this when you just provide funding and say: Katey, bar the door, do what you want, and don't worry about how we feel about it.

This is a tiny little issue, but there is a small area down in the Treasury Department called the Office of Foreign Asset Control, OFAC. Its purpose is to track money that goes to fund and support terrorist organizations so we can shut down that funding. That is the purpose of OFAC. I found that OFAC has 21 people tracking American tourists traveling to Cuba. These are American citizens who are suspected of trying to take a vacation in Cuba. We have 21 people in an agency designed to try to interrupt the flow of money to terrorists who are now spending their time trying to shut down travel by the American people to Cuba.

I will give you an example. A young woman named Joni Scott went to Cuba. She didn't have a license to go there. She went there to distribute free Bibles on the streets of Havana and other Cuban cities. She is a devoutly religious young woman. I have met with her. She went to Cuba to distribute free Bibles. OFAC tracked her down and slapped her with a $10,000 fine because she didn't have a general license to go to Cuba.

And there is Joan Slote, a 76-year-old grandmother who likes to ride bicycles, who signed up with a Canadian company for a bicycle tour of Cuba. She happens to be a senior Olympian who rides bicycles in the Senior Olympics. They tracked her down and slapped a $10,000 fine on her. It was later reduced, but they decided they were going to try to attach her Social Security check because she did not pay her fine on time. That was because she had been in Europe. She rushed back home when her son had a brain tumor and was dying, went to her son's bedside, and was not at home to get her mail. What was her transgression? She was an American who decided to ride a bike in Cuba.

My point is this: This is a rather small agency, OFAC. And when Paul O'Neill was the Secretary of the Treasury, I asked him at a hearing, because I was the chair of the appropriations subcommittee--I said: Mr. Secretary, wouldn't you really prefer to use all of those assets at OFAC to track terrorists? He didn't answer for three or four times. Finally, about the fifth time, he said: Of course.

If I had my choice, that would be the most productive thing. We now discover that more and more of those people at OFAC are being used to track Americans who travel to Cuba. I don't understand that. But it goes to the point that Senator Byrd has made. Should we have some accountability? When we decide to take the taxpayers' money and appropriate that money, should we have some accountability with respect to how the money is spent? This isn't about Republicans or Democrats, conservatives or liberals; it is about accountability.

My colleague from West Virginia, a unique, extraordinary Senator, often pulls from his pocket that well-worn and underlined copy of the Constitution and he asks whether the Senate is carrying out its responsibility. Because after all, this is a Government with several branches. We want to work together. We certainly all want to fight terrorism. There is no question about that. We are willing to appropriate the funds with which to combat terrorism, but we are not all willing to say: By the way, here is the check, spend it the way you want. Congress needs to be involved.

This is not about turf. This amendment described today by Senator Byrd is a bipartisan amendment. But it is not about turf. It is about Republicans and Democrats together who have joined to take a look at this issue and say: In this circumstance, we believe there ought to be some fundamental accountability.

I am happy to yield.

Mr. President, I cosponsored the amendment not because of what I think but because of what I know. Let me describe for the Senator from Connecticut a circumstance that I believe means less accountability for the Congress and a circumstance that puts the Congress in a position of having to act retroactively with respect to an action that is already taken which dramatically changes the prerogatives of Congress.

As I understand it, under the bill, the Secretary of the Treasury is authorized to create appropriations accounts to which the national intelligence director then can transfer funds. As I further understand it, the underlying bill includes no limits on how those funds can be used once they are transferred.

As I understand it, the intelligence director would be authorized to transfer about $3.5 billion from the defense budget, and that gives the director a substantial amount of transfer authority never contemplated by Congress. The circumstance is that Congress would have to take action only retroactively to transfers that are made by the national intelligence director, which means that director begins and works to expend funds by their own volition.

My colleague from Connecticut indicates that they must get approval from the Office of Management and Budget. I would point out, that is just the administration giving itself approval to do what it wants. That is not a check and balance of any type.

My point is this: Once these transfers are made into this account and from the account, the only action that would then be available to Congress is some retro-action to say that is not what we intended. That puts Congress in a circumstance that, in my judgment, is disadvantageous for the body

in this Government that has the power of the purse.

I go back to this point, and this is a small point, but it is one that is instructive to me: If we do not tell those for whom we appropriate money how we want those funds to be spent, then, Katey, bar the door. Then you have a circumstance of the type I just described to my colleagues. I bet there is not one colleague in this Chamber who would stand up and say this young woman named Joni Scott should have been fined for going to Cuba to distribute free Bibles. I bet there is not one person in this Chamber who would stand up and say: I think we ought to fine a good Christian, a young woman who goes to Cuba and distributes free Bibles.

That is what the people in OFAC are doing. They are tracking people down, such as Joni Scott. That is not the intent, in my judgment. When we appropriate funding--and we are going to appropriate a lot of it--we are in every circumstance accommodating to the administration when it needs to move money for a good purpose, to combat terrorism. When we appropriate that money, we demand accountability. We expect and demand accountability. That is what the Byrd amendment provides.

It is not a radical amendment. First of all, it is bipartisan, and, second, it is just the most fundamental step that, in my judgment, we ought to take as a Congress because we, after all, are the ones who decide how much the American people pay in taxes, what do they have to provide for Government, and then we are the stewards of how that money is spent.

Without this amendment, we have lost control over the stream of this funding. That is why I was a cosponsor of the Byrd amendment, again a bipartisan amendment.

I think it is the right thing for us to do.

I must say to my colleague from Connecticut, I honestly do not think this amendment in any way undermines the Collins-Lieberman bill. I think, frankly, it will strengthen that bill and say to every Member of the House and Senate, Republicans and Democrats: We are going to do this in a way that requires accountability. What better message, in my judgment, than that message? So I actually think it strengthens the underlying bill.

I will be happy to yield for a question.

Mr. President, if I can reclaim my time for a moment on that point because I think this is a fruitful discussion, the authority in the underlying bill given to the national intelligence director is extraordinary and above that which we provide in most other circumstances with respect to appropriations. The two Senators may well intend that. I expect they do intend that. Our only point is there has never been a circumstance, to my knowledge, where someone has come to us on an urgent basis saying, We need to plug this hole, we need to move funds, there has never been a circumstance in which the Congress says: No, you cannot do that. We have always said: Absolutely, let us work with you.

Mr. President, let me just say, first of all, you can delegate authority, but you cannot delegate responsibility. No one can delegate responsibility. We have certain responsibilities for the taxpayers' money. I must say the amendment that has been offered, in my judgment, conforms to the Constitution's understanding of what our responsibilities are.

We have a disagreement. I don't want that disagreement to undermine my comments about the work that Senator Collins and Senator Lieberman have done. They have done a lot of work on this bill, perhaps more than anyone else in the Congress, with hearing after hearing after hearing. Very few of us not on that committee understand the hours and the work they put in on this product. I don't mean by cosponsoring this amendment to denigrate or undermine their work, I mean to improve on that work.

And let me just make this point: We have a very fundamental disagreement, the Senator from Connecticut and I, because he believes there is no new authority given to the national intelligence director. As I understand this, what happens is, the Treasury Secretary creates appropriations accounts, and he creates appropriations accounts to which the national intelligence director can then transfer funding.

I also understand under current circumstances, several billion dollars would be transferred to those accounts, and then at some point later, if the Congress determines the expenditures for which that sum of several billion dollars has been committed is not appropriate to what the Congress intended, Congress can then retroactively evaluate how to deal with that. I am saying I believe it puts us in a position, historically, that we are not

in with respect to our role as appropriators.

I think the circumstances have always been that money is appropriated through an appropriations process, not through an authorization. The bill we have today is an authorization. I happen to believe this authorization bill should give some additional authority to a new person--in this case the national intelligence director--but I am going to speak for a moment, when we finish this discussion, about the stovepipes and my concerns about what is going on in intelligence generally and why we are in a position, I think, of some vulnerability based on what is not being done.

So I happen to think that it is useful to put someone in charge, but putting someone in charge does not mean that we ought to say to them, oh, by the way, here is a pot of money, move it around as you wish, let us know how you used it, and then we will take a look at it and see whether we evaluate that to have been appropriate use. That is not the way we do things in Congress.

Of course, I would be happy to yield.

I would be happy to yield to the Senator from West Virginia.

I would be happy to yield for a response.

Mr. President, let me reclaim my time.

In my judgment, the discussion we have just had is easily resolved. Either the Senator is providing much greater authority and therefore more flexibility at the expense of less accountability to the Congress or he is not. As I read this, I believe the amendment that has been offered by Senator Byrd, Senator Stevens, Senator Inouye, Senator Warner, myself and others, a bipartisan amendment, does not in any way weaken the bill that came to the Senate floor on which the Senator has spent a lot of time. I think it, in fact, strengthens it. It strengthens the role of Congress and I think makes this a better bill.

So I understand the Senator believes that the way the Senator has created this underlying Collins-Lieberman bill does not provide less accountability for Congress. The Senator has described it as much better flexibility, and that flexibility, as I read this, comes at the expense of accountability for the Congress.

My only point is, all of us want exactly the same thing. We want this to work. If there is anybody in here who does not want this to work, they do not belong in this Chamber. We want this to work. Why do we want it to work? Because we know people want to murder innocent Americans. They want to commit acts of terror in this country and we need to stop them.

Now, how do we stop them? With good intelligence.

I cannot say how profoundly disappointed I am at the poor intelligence we have been given as a Congress in recent years. Somebody needs to answer to that. Somebody needs to be accountable for that. In part, that is what Senator Lieberman and Senator Collins are trying to do with this legislation. That is why I commend them for their work.

Let me describe a continuing problem that we have with our law enforcement and intelligence communities in their efforts to prevent another terrorist attack.

On September 10, 2001, the day before 9/11, two messages apparently related to the 9/11 hijackings were intercepted by our Government, by the National Security Agency. The Arabic language messages said, ``The match is about to begin'' and ``tomorrow is zero hour.''

Those messages were not translated until the day after 9/11.

You would think that the FBI's translation capabilities would have been vastly improved in the intervening three years. Yet last week we learned that the Inspector General of the Department of Justice had issued a report, which found that three years later, the FBI has neglected to translate hundreds of thousands of hours of intercepted communications among suspected terrorists.

This is not about politics at all. There is no partisanship in this. The question is, Do the FBI, CIA, the NSA, and others do an effective job or do they not? Can we prevent acts of terrorism or can we not?

Let me read this, from the Inspector General's report: Three years after September 11, more than 120,000 hours of potentially valuable terrorism-related recordings have not yet been translated by the linguists at the FBI.

In fact, some recordings have been deleted from audio computer files, and FBI officials speaking on condition of anonymity said officials have had to go back to original al-Qaida recordings on some occasions to try to restore them, after realizing that copies had been deleted because of capacity problems.

The inspector general's report said the linguists might not have realized that material was deleted unless a case officer simply happened to notice it missing from the final transactions. The FBI had failed to institute necessary controls to prevent critical audio material from being automatically deleted.

After September 11, 2001, the FBI director said this:

The FBI needed to change from an agency primarily focused

on investigating crime to one whose primary focus is the

prevention of future terrorist attacks.

The Inspector General says:

Yet necessary system controls have not been established to

prevent critical audio materials from being automatically

deleted, such as protecting sessions of the highest priority

on digital collection systems, active on-line storage until

linguists review them.

This is the Inspector General, again. He says:

The results of our tests showed that three of our FBI

offices tested had al-Qaida sessions that potentially were

deleted by the system before linguists had a chance to review

them.

There is something wrong here. How can you have 120,000 hours of intercepted phone messages and all kinds of audio recordings-- terrorists, al-Qaida recordings--that have never been listened to? Is there a recording in that 120,000 hours that sounds like the recording on September 10, 2001, a recording that says: ``Tomorrow is the zero hour,'' and no one has listened to it? I don't know.

The American people understand, I think, that the capability of our intelligence system, the CIA, the FBI, and others, will determine whether we are successful in preventing another terrorist attack.

So it is disheartening when you see the same failures cited over and over, with little improvement.

Let's go back to August 2000, before this administration took over. In that month, we had a report of the National Commission on Terrorism--a report authorized by this Congress, issued by a commission chaired by Ambassador Paul Bremer. This was the same Paul Bremer who later went on to head the Coalition Provisional Authority in Iraq.

The Bremer commission, 4 years ago--this is before 9/11--had this to say:

The FBI's ability to exploit the increasing volume of

terrorism information has been hampered by aging technology.

All U.S. Government agencies faced a chronic shortage of

linguists to translate raw data into useful information. This

shortage has a direct impact on our counterterrorism efforts.

Mr. Bremer said then, over 4 years ago, that what we need are additional linguists, we need to interpret the raw data, we need to be able to understand it, determine what it means for this country's safety.

Here we are 4 years later and we get an Inspector General's report that says there are 120,000 hours of potentially valuable terrorism- related recordings not even translated.

Indeed, the Inspector General of the Department of Justice concluded that one-third of terrorism-related audio recordings were not translated within 12 hours as mandated by the FBI rules. There are 123,000 hours in languages primarily related to counterterrorism-- Arabic, Farsi, Urdu, Pashtun--that have not been translated; 370,000 hours of recordings in languages connecting to counterintelligence probes had not been deciphered by that time. That is nearly one-half million hours potential leads to terrorist plots, sitting there, uninterpreted.

We can pass legislation. We can have a debate about all these issues. But if agencies can't get their act together, can't do the job, don't even interpret the al-Qaida recordings to understand what is there, how on Earth are we going to protect this country?

The 9/11 Commission, incidentally, the Commission which has prompted this bill coming to the floor of the Senate, says the following:

The analysts for the 9/11 Commission

. . . had difficulty getting access to the FBI and

intelligence community information they were expected to

analyze. The poor state of the FBI's information systems

meant that such access depended in large part on an analyst's

personal relationships with the individual in the operational

units or squads where the information resided. For all of

these reasons, prior to 9/11 relatively few strategic

analytic reports about counterterrorism had been completed.

Indeed, the FBI had never completed an assessment of the

overall terrorist threats to the U.S. homeland.

And I continue to quote:

The FBI did not have an effective intelligence collection

effort. The FBI did not dedicate sufficient resources to the

surveillance and translation needs of counterterrorism

agents. It lacked sufficient translators proficient in Arabic

and other key languages, resulting in a significant backlog

of untranslated intercepts.

This from the 9/11 Commission. Following the release of this information from the 9/11 Commission, we now have the release of the Inspector General's report, which is absolutely stunning. It is astonishing to receive a report that, nearly 4 years after a recommendation was made by the Bremmer-Sonnenberg Commission, 3 years after we were attacked on 9/11, that we have 120,000 hours of recordings of intercepted information, a portion of which is from al- Qaida, and it has not yet been interpreted or translated. This is unbelievable.

I talked for a few moments about accountability. Where is the accountability here? Who is accountable for that? Who is responsible for that?

I want to make one other point, if I might. Again, I know I had a discussion with my colleague from Connecticut. My colleague from Maine is on the floor. I don't know whether she heard me, but I said I appreciated the work the two have done to bring this to the floor. Much of it has great merit, in my judgment. Much will be very protective of this country's interests and advances our interests in combating terrorism. I do support the amendment because I think that amendment will strengthen the bill. But let me say one other thing. The 9/11 report is a roadmap and we are using that roadmap in an attempt to construct some legislation here. Other roadmaps, for example, include this Inspector General's report of which we have just become aware. That ought to tell us something about where we are headed here. It is not good.

Let me mention one additional point. As we evaluate what yet needs to be done to protect this country, and discuss issues of transparency, there remain 28 pages of information up in the Intelligence Committee that should still be released. They are classified ``top secret.'' Some in the Senate have read this material; all have the opportunity to read it. It comes from the December 2002 report of the Joint Intelligence Committee of the House and Senate that was sent to the White House and then was published. That report was on 9/11, what happened, and how it happened. That report was published in the December 2002 with 28 pages missing, and the 28 pages deal with Saudi Arabia. That is what has been said publicly, disclosed publicly, but yet they are deemed top secret and the American public is not able to see them. Then, the chairman of the Senate Intelligence Committee, Richard Shelby, indicated that he thought 95 percent of it could be easily declassified. The Foreign Minister of Saudi Arabia thought it should be declassified. Yet it has been classified by the White House, which refuses to share this information with Congress and the American people.

I believe, once again, that all of us should continue to ask the White House to declassify those 28 pages. That, too, is a contribution to understanding what happened and what we do about it.

Those 28 pages, in my judgment, should be released. They cannot as long as they are classified ``top secret.'' In my judgment, they should be declassified. Again, Senator Shelby indicated that he thought 95 percent of it could easily be declassified, and, as I indicated, the Foreign Minister of Saudi Arabia called for its declassification. Considering that fifteen of the 19 terrorists who struck this country were Saudis, I think our country deserves to get to the bottom of this.

I believe, once again, as we finish discussing these issues on intelligence, 9/11, and how to strengthen this country, how to prevent future acts of terrorism, that these 28 pages ought to be made available to the American people.

I came to the floor today to talk about this inspector general's report and to weigh in briefly on an amendment offered by my colleague, Senator Byrd.

Let me conclude as I started by saying that I believe Senator Byrd has done a great service to the Senate by once again saying there is merit in many of these proposals and that he doesn't come to the floor to denigrate these proposals. He comes to the floor to strengthen these proposals. I agree with him that we have a government in which we have separating powers with respect to the ability and the fight to try to prevent further acts of terrorism from occurring in this country.

All of us need to work together. But we need to work smart. Working hard and working smart sometimes can be two different things. I hope we will work smart working together to have accountability in Congress to provide the flexibility while still retaining accountability so we can create this new agency, get rid of these stovepipes, and have agencies that are forward working, that will share information which will protect this country from future acts of terrorism. All of us share that goal.

I yield the floor.

Mr. President, will the Senator yield for one point?

I thank the Senator.

I only make the point that I don't think any of us disagree with the point of having sufficient flexibility so the agencies will make decisions to hire people to translate the tapes. Somebody must be accountable today--not just tomorrow--for 120,000 pages not being translated.

My point is, whether Senator Byrd or myself or any other Senator, we all want sufficient resources to be devoted to the task at hand-- especially the urgent task at hand. With or without the kind of flexibility you provide in this bill, I believe the evidence is that in every circumstance in the last 3 years when the administration asked for flexibility in moving funding, it has been granted by this Congress, and it has done so immediately. I know that because I am an appropriator and I see what comes to us. We move it immediately.

I wanted to make the point that I don't think there is any disagreement at all about our interest in seeing critical issues funded. We all want that to happen.

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

Mr. President, I have asked the two managers of the bill if I might speak in morning business for a few minutes. Let me ask for 7 minutes, and if they need the floor to do business on the 9/11 Commission bill, I will give up the floor. I want to speak of something I think is very important.

Mr. President, first I will talk about disaster aid. I will talk specifically about disaster aid for family farmers in the northern Great Plains who have been hard hit.

We have been talking a lot about disaster aid for people who have been victims now of four successive hurricanes in the Southeast. God bless those people who have been victims of the hurricanes. They have had a difficult time. Perhaps none of us can understand how

awful it has been for them. Those storms have swept a wide tract across the southeastern corner of the United States.

I have always believed, in my service in the United States Congress, that for those who need help because of natural disasters, the Congress should help. I have always voted for assistance, when I served in the both the House and the Senate. The people who await the aid need to understand we want to make certain we provide this assistance during this difficult time.

In recent days, I have been reading reports about the disaster aid that the Senate included in the Homeland Security Appropriations bill. In that bill, the Senate included legislation dealing agricultural disaster assistance for family farmers around the country, not just in the Southeast. Now some are saying maybe the disaster aid we put in the Homeland Security appropriations bill will have to be stripped out. I want to talk about that for a moment.

It is critically important that we provide disaster aid not only for those people and those farmers in the Southeast, but also for other farmers around the country who have lost their entire crops due to weather-related disasters.

I was reading an e-mail from a young woman. She wrote an e-mail that I will paraphrase. It describes the culture of family farming and describes why I care so much and why some of my colleagues are so passionate about this issue. Her name is Annie. She writes that her dad is a farmer and was diagnosed with an inoperable brain tumor that proved to be cancerous. He has now been taking aggressive treatment. The prognosis is not great. She said: When we found out about dad's cancer, our neighbors told us not to worry about the farm. She said: My youngest brother was trying to manage the farm on his own this summer, but on August 25, 100 neighbors showed up at the farm with combines, grain carts, trucks, and semis to harvest the wheat. The local Case dealership donated some manpower and some machinery. The local crop insurance agency catered an outdoor barbecue to feed 150 people who worked.

She sent pictures of her dad, who is suffering from a brain tumor, but more importantly a picture of all the combines that came over, all the trucks, all donated, all from folks who showed up because they knew a neighbor was in trouble. It is part of the culture and the value system of family farming. The network of farms that dots the prairies in this country, especially in the northern Great Plains that I know so much about in terms of family farming, is part of the culture of this country.

A wonderful author named Richard Critchfield talked of the origin of family values that originated on family farms, and moved to small towns and big cities to refresh and nourish family values in this country. That is why family farms are so critically important.

In my part of the country this year we did not have hurricanes, but in the spring we had torrential rains. These are pictures of the same State. This is the southwestern corner of my State. It looks exactly like a moonscape, or perhaps the surface of Saturn, as we have seen in pictures. There is no vegetation, nothing growing. There has been a protracted drought. I had people tell me north of Hettinger, North Dakota, they had 2.2 inches of total moisture from January 1 to July 1--6 months, 2.2 inches of total moisture. Their land was destroyed; no vegetation at all.

This picture is the same State, the State of North Dakota, with a farmer standing in his field inundated by water. There were 1.7 million acres in North Dakota not planted this year. Let me say that again: 1.7 million acres could not be planted. Farmers like this farmer standing in the middle of his field risk everything. When they cannot plant their entire farm, they will go broke if they do not get some help. Drought and inundated by torrential rains, they could not plant 1.7 million acres, and in August, when the corn and beets needed heat units to grow, we had a freeze. It was a very unusual occurrence in North Dakota, but it froze in August, a frost that damaged some of these crops.

The Senate passed a disaster aid package for victims in the Southeast recovering from the hurricanes, and also passed an agricultural disaster aid package on the Homeland Security bill. We need to finish that job.

I hear and now read in the National Journal and Congressional Quarterly that some are saying it is likely we will not keep the agricultural disaster package in the Homeland Security bill through the conference committee, because we have some people who do not want that to happen. I would say to those people: There is not a difference between the reimbursement for a crop that was lost in northern Florida or a crop that was lost in northern North Dakota due to a weather- related disaster. They both occur in counties that are disaster counties. They both occur in a way that is devastating to the family farmer and will injure that family in an irreparable way unless this country says, We are here to help you.

I want to tell those who are saying this cannot be done: this must be done. We will help those folks who have been injured by the four hurricanes, but we will also insist on helping others across a wide band of this country who were injured by torrential rains and by a protracted drought in the heartland and parts of the West. There is a broad consensus in the Senate that disaster aid must be helpful also to family farmers in other parts of America. We cannot allow this to be dropped. We must continue to impress upon those who would not include this assistance that when we provide disaster aid, it must include all of those who have been affected and devastated by weather-related disasters.

If I might mention one additional point. We are currently dealing with homeland security and terrorism in the Senate. I commend the managers of the bill on both the Republican and Democrat side. I have watched the debate and the discussion. I think it has been wonderfully done, very professionally handled.

National Registry Of Convicted Sex Offenders

Mr. President, terrorism comes in many forms. Within our country, one form of terror is perpetrated by sex offenders.

I have introduced a piece of legislation to deal with this problem. I would like to describe why it is important that the Senate Judiciary Committee act on this legislation. And let me, at the outset, thank Senator Hatch, the Chairman of the Judiciary Committee, for his support of it.

Not quite one year ago, a young coed at the University of North Dakota was working at a shopping center in Grand Forks, ND. At about 5 in the afternoon, she left her job to walk out to her car. She was abducted and brutally murdered.

The alleged murderer is now in jail. He will be standing trial. This man had been incarcerated 23 years for violent sex offenses in Minnesota, and then let out of prison. He was considered a high-risk offender, but he was let out of prison to go back on the streets, with no monitoring of any sort.

That afternoon, when this young woman named Dru Sjodin walked out of that shopping center, her assailant was free to roam that parking lot, to abduct her and to brutally murder her.

After this tragic crime, I found out that there was a serious flaw in the way that sex offenders are tracked in this country. If you were living, for example, in Grand Forks, ND, as this young college coed was, and you checked the North Dakota sex offender registry, you would not know that violent sex offenders had been let out of jail in Minnesota and were living in your area, just a few miles across the state line.

I think there ought to be a publicly available national database of convicted sex offenders who are released from prison, so people are able to get a meaningful list of sex offenders in their area, including offenders across state lines.

I also think when a high-risk sex offender is about to be released from prison, the local State attorney ought to be notified, to determine whether to seek further incarceration for the protection of the public.

Third, if a high-risk sex offender is, in fact, released from prison, then there ought to be intensive monitoring following that person's release, for a period of at least one year.

In this case, a high-risk, dangerous offender was released from prison after

23 years. He was under zero supervision. A wonderful young coed from the University of North Dakota walked out of a shopping center. She was abducted at knifepoint and then brutally murdered.

Maybe we save some lives with a bill, which would be known as Dru's Law, that would require a national database to be made available to the American public through the internet.

Maybe we can avoid future circumstances where high-risk sex offenders are turned loose with zero supervision.

I thank Senator Hatch and Senator Leahy. They have both reviewed this legislation, and both think it has merit. It is not something that would cost very much. It is something that has a great deal of common sense to it. I also thank Senators Dayton, Coleman, Conrad, Johnson, Lugar, and Durbin, who on a bipartisan basis have cosponsored this legislation.

I passed a piece of legislation very much like this about 2 years ago. A young woman named Jeanna North, who was 11 years old, was murdered in Fargo, ND, by a man named Kyle Bell. He was being hauled around the country by a private company that was contracted by the State to haul prisoners from one facility to another.

I do not think a convicted murderer should ever leave the arms of law enforcement, and turned over to a private company. But I found out it is done all the time. If they are going to haul a convicted murderer, a violent offender, they will often contract with a private company.

It turns out, they contracted with a company that took this man named Kyle Bell, this murderer, and hauled him around the country. They stopped for gas. One guard was asleep, the other was in buying a cheeseburger, and Kyle Bell crawled out of the bus and walked into a parking lot of a shopping center, wearing his street clothes, mind you.

That will never happen again. There is now a law on the books. It says if you are a private company hauling violent offenders, then there are certain responsibilities with respect to the restraints to be used, the clothing the prisoners must wear while being transported--bright orange clothing--and the Justice Department of the United States must establish consistent rules.

So what happened with Kyle Bell, the fellow who murdered young Jeanna North, is not going to happen again. Someone is not going to walk into a shopping center in street clothes because a private contracting company was transporting a convicted murderer and one was asleep in the van and the other was buying a cheeseburger and the convicted murderer walks off. That is not going to happen again.

Sometimes it is just a matter of common sense. It seems to me with respect to this issue of Dru's Law, dealing with high-risk convicted sex offenders, we can do much, much more, and we should do much, much more.

I, once again, say to Senator Hatch and Senator Leahy, thank you for your cooperation. I know you have been working to see how we might move this legislation. I am looking forward to having it a part of other legislation that moves from the Judiciary Committee.

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