Floor Statements

Mr. President, a little more than 6 weeks ago, the Senate passed a supplemental appropriations bill relative to the war in Iraq. It contained provisions relating to the readiness of U.S. forces, such as ensuring U.S. military units are fully mission capable, that they are not deployed for combat beyond a year in the case of the Army, 7 months in the case of the Marines; that they are not redeployed for combat if the unit has been deployed within a year for the Army and 7 months for the Marines. The vetoed bill provided for a Presidential waiver of those limitations.

The vetoed bill also contained a very essential provision regarding troop reductions--first, a troop reduction requirement that would commence on October 1. That is the heart of the bill that was vetoed. We will commence finally to reduce the number of troops in Iraq instead of adding to the troops, instead of adding more military, instead of looking to a military solution, finally recognizing that there is no military solution, there is only a political solution in Iraq, and that it is up to the political leaders in Iraq to reach that conclusion.

We must put pressure on them, and the only way I know to put pressure on the Iraqi leaders is to tell them that the future of their country is in their hands, that we cannot save them from themselves, and for us to change the course by beginning to reduce the number of troops in a nonprecipitous way and to do that beginning in 180 days.

What that amendment did on the supplemental was also set a goal for the remainder of the troops who are going to be removed. Except for the limited missions that were set up, it set a goal to do that. It was not set in stone as to the precise moment all the troops would have to leave, and it avoided using the funding mechanism. We did that on purpose. We want to send a message to the troops that troops in Iraq, whatever they are, whatever are left, whatever are going to be removed that have not been removed at the exact moment in the Feingold amendment--troops are going to be supported.

We are going to support these troops. We are not going to use a funding mechanism to cut off funding for our troops. That was the way to go. We got 51 votes in the Senate for that approach. It was vetoed by the President.

Now we have an amendment that is pending. This amendment would provide essentially the same provisions: protecting our troops, funding our troops but also initiating the beginning of the reductions that are so essential to forcing the Iraqis to step to the plate and resolving their political differences.

This amendment that is pending, however, contains a waiver. The waiver provision in this amendment has caused some concern understandably. The only purpose for the waiver provision the President was given in this pending amendment was in order to avoid a veto, to get the funds there.

However, it will not avoid a veto. The security advisor to the President has told me that, as a matter of fact, the President still opposes it, although he has a waiver authority in this amendment. Because of that, it does not serve its purpose of avoiding a veto.

Because there is some confusion as to the waiver provision, as to whether there is any intent to weaken what we did when we passed the supplemental, I ask unanimous consent that I be allowed to withdraw my amendment. I understand it has been cleared on the other side. I ask unanimous consent to withdraw the amendment and that cloture be vitiated.

Mr. President, I come to the floor today because there is a very serious situation facing Great Lakes shipping. In Michigan, and throughout the Great Lakes, there is a significant dredging backlog. The corps estimates a backlog of 16 million cubic yards at commercial harbors, which has had very real impacts to Michigan shipping. Several freighters have gotten stuck in Great Lakes channels; ships have had to carry reduced loads, and many shipments have simply ceased altogether. This problem stems in part from the way the corps' budget is prepared using performance metrics such as cargo value, tonnage, and ship miles. Beginning in fiscal year 2005, the Office of Management and Budget and the Army corps began implementing new budget guidelines and criteria for funding the operation and maintenance of commercial harbors that relied primarily on the amount of tonnage a harbor handles. Although I do not object to using performance metrics, I am concerned that the metrics currently used do not adequately account for the situation at smaller harbors, many with economies that revolve around the harbor. I filed an amendment yesterday that would help address this very serious situation. The amendment, which is cosponsored by Senators Voinovich and Stabenow, would direct the corps to use all available data relating to economic impacts, and to not solely use the tonnage handled by a harbor.

I thank my colleagues for their recognition of the dredging crisis in the Great Lakes. I also thank Senators Boxer and Inhofe for their support of another amendment that I filed to this bill, which is cosponsored by Senators Voinovich and Stabenow, that would direct the Army corps to expedite the operation and maintenance of the Great Lakes navigation system. Although that amendment would be helpful to the overall Great Lakes commercial shipping infrastructure, I remain concerned that the corps is using budgeting criteria that simply do not reflect the reality of the Great Lakes shipping system. The Great Lakes should not be compared with ports on our coasts. Tonnage alone should not be the criteria for making budget allocation decisions. We should not have to fight for our smaller ports and harbors each and every year. These ports and harbors are of commercial importance with large economic impacts. The corps' use of an arbitrary 1 million ton cut-off for prioritizing projects is simply unfair. There are about 300 harbors in the Great Lakes that handle less than 1 million tons of cargo per year. Two-thirds of all shipping in the United States either starts or finishes at small harbors. About half of the Great Lakes corps-authorized harbors are classified as small ports. The amount of cargo handled should not be the sole factor in determining priority for funding. A small harbor may in fact have a much greater economic impact on a community than a larger harbor does. For example, Manistee Harbor on Lake Michigan is classified as a smaller harbor by the corps. It handles less than 1 million tons of cargo annually; it handles 940,000 tons. Yet, multiple companies rely on this harbor, including Morton Salt, and there are 600 jobs that rely on the freighter traffic at Manistee. For a city with a population of about 6,500 people, this translates into about 10 percent of the population that is economically dependent on this harbor. And yet the corps would classify this as a lower priority project because it handles less than 1 million tons annually. Is that what you understand the Army corps is doing?

We have a problem that urgently needs to be addressed. The corps is using a budgeting system that does not reflect the reality of the Great Lakes shipping infrastructure. I receive reports on a regular basis of how this dredging crisis is threatening our economy: The Wirt Stone Dock in Buena Vista Township, MI, reported a reduction of 25 percent in shipped tonnage. Tugboats have been needed to

turn boats around because channels have not been dredged, at a cost of $15,000 to $20,000 each week. After one freighter ran aground at Saginaw, MI, last year, the ship's rudder was torn off, and never found.

Mr. President, I am pleased that the Senate has passed the Water Resources Development Act, WRDA, of 2007, which authorizes important water projects for Michigan, the Great Lakes region, and the Nation. After waiting nearly 7 years since the last WRDA bill was passed, I am hopeful that this bill can make its way

through conference and be signed into law by the President.

I am pleased that the Senate Environment and Public Works Committee included several of my requests in the bill and accepted one of my amendments. However, I want to emphasize that this is an authorization bill. The appropriations that are needed to make these authorized projects a reality lie down the road, and have not yet been secured. The next critical step in realizing these projects is to work to secure funding for these projects, which I intend to do.

Included in the WRDA bill is a provision that I filed as an amendment to the bill, which could help address a very serious problem facing the Great Lakes shipping infrastructure. Every year, hundreds of millions of tons of goods are transported through the Great Lakes waterways, and communities throughout the Great Lakes are economically tied to waterborne commerce. Unfortunately, however, the Great Lakes shipping infrastructure is threatened by a significant dredging backlog that has been exacerbated by historically low water levels. The Army Corps of Engineers estimates a backlog of 16 million cubic yards at commercial harbors, which has had very real impacts to Michigan shipping. Several freighters have gotten stuck in Great Lakes channels; ships have had to carry reduced loads, and many shipments have simply ceased altogether. The WRDA bill works to correct this situation by directing the Secretary of the Army to expedite the operation and maintenance, including dredging, of navigation projects in the Great Lakes.

Dredging to the needed depths is critical. According to the Great Lakes Maritime Task Force, a large freighter loses the carrying capacity of 8,000 tons of cargo for each 1-inch reduction in the load draft. A capacity of 8,000 tons can carry enough steel to produce 6,000 automobiles, enough coal to provide 3 hours of electricity for greater Detroit, or enough limestone to build 24 homes. That means that every dollar that can go towards maintaining harbors and navigation channels truly matters.

Although the navigation provision in the bill could be helpful to the overall Great Lakes shipping infrastructure, I remain concerned that the way the Corps of Engineers budgets for dredging projects is unfair to Great Lakes navigation projects, especially smaller harbors. Beginning in fiscal year 2005, the Office of Management and Budget and the Army Corps began implementing new budget guidelines and criteria for funding the Operation and Maintenance of commercial harbors that relied primarily on the amount of tonnage a harbor handles. I raised the Great Lakes dredging situation with the bill managers, and they have agreed to work with me to address this problem in the conference committee.

The bill also includes a provision that I have been working on for many years: the improvement of Michigan's water and sewage infrastructure. The bill includes $35 million for a statewide environmental infrastructure project to correct combined sewer overflows, which is a major source of pollution in the Great Lakes and other waterbodies in Michigan. Combined sewer overflows carry both stormwater and sewage, and these can be discharged into streams, rivers, and lakes during periods of heavy rains. The $35 million provision in WRDA authorizes the Army Corps to partner with communities throughout Michigan to improve their sewer infrastructure. These improvements would not only benefit communities, but would also help protect our precious water resources.

I am also pleased that the bill also authorizes a number of specific projects in Michigan. Of importance, the bill authorizes $20 million for the environmental restoration of Lake St. Clair. In 2005, the Corps completed a report outlining the steps needed in order to restore Lake St. Clair. This bill authorizes the Corps to implement the 2005 recommendations. The plan was drafted through a collaborative process by the stakeholders in the community, which will promote efficiencies and save Federal funds.

Section 1005 of the bill, which authorizes small projects for navigation, includes six important projects for Michigan. First, the Corps is authorized to reconstruct the harbor at Northwestern Michigan College in Traverse City, MI. The renovated harbor would support the operations of the Great Lakes Maritime Academy, our Nation's only freshwater State maritime academy, and vessels associated with the program, including the federally owned and operated T/S State of Michigan. The project would include dredging, construction of an eastern arm, reconstruction of the inner harbor area, and general site improvements. Second, section 1005 authorizes the Corps to dredge the outer channel and inner harbor of Menominee Harbor. Low lake levels, which have been prevalent in recent years, and present channel depth are threatening shipping vessels' ability to make deliveries and load at the commercial and industrial sites on the inner channel. This authorization will help support commercial navigation by authorizing dredging and other navigation-related projects to accommodate access to warehousing and commercial operations, which have loading docks on the inner river channel. The additional depth would benefit deep-draft commercial vessel traffic, which has increased over the years and is expected to continue to increase. Third, section 1005 authorizes the Corps to extend and deepen the Ontonagon Channel. The channel extension at Ontonagon Harbor is necessary to allow for better access to Ontonagon's port facilities. Currently, there is only one vessel that can handle the required volume of material for Ontonagon's industrial community that will enter the harbor. Other ships have to back into the harbor to reach the dock and are unwilling to do so because of the prevailing currents at the mouth of the harbor. This authorization can help protect the vital shipping infrastructure in Ontonagon. Fourth, section 1005 authorizes the Corps to make repairs and improvements to the Sebewaing River. The north bank of the Sebewaing River has deteriorated over the years, which is resulting in excessive sedimentation being washed into the river channel from the Saginaw Bay. This project would authorize the repairs, which would result in less frequent dredging being needed. Fifth, this section authorizes the Corps to dredge the Au Sable River in the vicinity of Oscoda. This dredging is crucial so that boaters have access to local marinas, restaurants, and other businesses. Without this dredging, boaters could be prevented from accessing the river, which would be devastating for the tourism economy. Lastly, this section authorizes the Clinton River project, a navigation project that would decrease the amount of the time it would take boaters to get to Lake St. Clair.

Section 1006 authorizes a project that would improve the water quality and natural habitat of the Clinton River. The project would also examine a means to ``daylight'' the Clinton River under the city of Pontiac. In past years, the river was enclosed in a series of conduits under the city. By restoring the surface flow through the city, the river ecology can be restored, and economic development on the resulting waterfront be promoted.

Section 2037 authorizes the Corps to repair and rehabilitate the Hamilton Dam, located in the Flint River on the campus of the University of Michigan-Flint. Built in 1920, the dam is rapidly deteriorating and the prospect of dam failure and what that would mean to those living downstream continues to be a major concern. Authorizing this project is an important first step in making repairs to the dam.

Finally, section 4019 of the bill authorizes the Corps to study storm damage reduction and beach erosion protection projects along Lake Erie at Luna Pier, MI. The city of Luna Pier lies on the western end of Lake Erie in Monroe County, MI. The shoreline dike system and beach sills that were installed at Luna Pier continue to deteriorate because they are subjected to Lake Erie's severe storms. This study is a first step in making the necessary repairs at Luna Pier to provide adequate storm damage reduction, beach erosion protection, and flood prevention.

The Great Lakes are one of world's greatest natural resources, so I am very pleased that this bill takes some needed actions to protect and restore them.

First, the bill includes an extremely important provision to authorize the Corps of Engineers to complete the dispersal barrier in the Chicago Ship and

Sanitary Canal. In order to prevent aquatic invasive species, such as the Asian carp, from moving between the Mississippi River watershed and the Great Lakes, this dispersal barrier needs to be completed. Specifically, the Corps will be authorized to convert Barrier I into a permanent facility, to complete construction of Barrier II, and to operate and maintain both dispersal barriers at full Federal cost. The Corps is further authorized to study options for hydrologic separation while maintaining the movement of cargo and recreational vessels so that we can determine what a long-term solution should be.

Second, the bill reauthorizes the Great Lakes Remedial Action Plans and Sediment Remediation program and the Great Lakes Tributary Models Program. The Great Lakes Remedial Action Plans and Sediment Remediation Program has allowed the Corps to provide technical support to States and Remedial Action Plan committees so that the United States can meet international obligations. Michigan has several communities that request this assistance from the Corps every year. Using the Great Lakes Tributary Models Program, the Corps has developed computer models to simulate the erosion, transport and deposition of sediments within a watershed, and can be used to evaluate the effectiveness of soil conservation and other source control measures on the loadings of sediments and sediment contaminants to Great Lakes harbors and navigation channels.

Next, this bill brings equity to both the John Glenn Great Lakes Basin Program and the Great Lakes Fishery and Ecosystem Restoration Program so that in-kind contributions count towards the non-Federal cost-share requirements of those programs. Further, the bill clarifies that any reconnaissance studies under the Great Lakes Fishery and Ecosystem Restoration Program are to be performed at Federal expense. This was the original intent when the program was first authorized in 2000.

Lastly, this bill expands the type of beneficial use of dredge material projects eligible for inclusion under this authority. Dredging improves and maintains navigation channels in the Great Lakes and is used for other purposes such as waterfront construction, utilities placement, and environmental remediation. It only makes sense to use the dredge spoils for beneficial purposes rather than disposing of it in the middle of the lakes.

I yield the floor.

Mr. President, I am introducing today, along with Senator McCaskill, the Stop Unfair Practices in Credit Cards Act.

Credit cards are a fixture of American family life today. People use them to buy groceries, to rent a car, shop on the Internet, pay college tuition, and even pay their taxes. In 2005, the average family had five credit cards. American households used nearly 700 million

credit cards to buy goods and services worth $1.8 trillion. Credit cards fuel commerce, facilitate financial planning, help families deal with emergencies. But credit cards have also contributed to record amounts of household debt. Some credit card issuers have socked families with sky-high interest rates of 25 and 30 percent and higher. They have hit consumers with hefty fees for late payments, for exceeding a credit card limit, and other transactions. In too many cases, credit card issuers have made it all but impossible for working- class families to climb out of debt.

That is why in 2005, the Permanent Subcommittee on Investigations, which I chaired, on which Senator McCaskill serves, initiated an in- depth investigation into unfair and abusive credit card industry practices.

In the fall of 2006, the Government Accountability Office, the GAO, released a report which I had requested, which for the first time in years provided a comprehensive examination of the interest rates and fees being charged by credit card companies. Following the release of that report, and continuing through today, the subcommittee has been deluged with calls and letters from Americans expressing anger and frustration at the way they have been treated by their credit card companies, and sharing stories of unfair and often abusive practices. The subcommittee has been examining those allegations of unfair treatment and has identified many troubling credit card industry practices which should be banned or restricted.

Our first hearing in March focused on industry practices involving grace periods, interest rates, and fees. It revealed a number of unfair, often little-known, and sometimes abusive credit card practices, which prey upon families experiencing financial hardships, and squeezed even consumers who pay their credit card bills on time.

The legislation we are introducing today is aimed at stopping abusive credit card practices that trap too many hard-working families in a downward spiral of debt. American families deserve to be treated honestly and fairly by their credit card companies. Our bill would help ensure that fair treatment. Here are a few things our bill would do. It would stop credit card companies from charging interest on debt that is paid on time. It would crack down on abusive fees, including repeated late fees and over-the-limit fees, and fees to pay your bill.

It would also prohibit the charging of interest on those fees. It would establish guidelines on interest rate increases, including a cap on penalty interest rate hikes at no more than 7 percent. It would require that increased interest rates apply only to future credit card debt and not the debt already incurred.

Our bill will be referred to the Senate Banking Committee, which has primary jurisdiction over credit card legislation, and which has been holding its own hearing on unfair credit card practices. Our friend, Senator Dodd, the committee chairman, has a long history of fighting credit card abuses. Senator Shelby, the ranking Republican, as well as many other members of the committee, has also expressed concern about a number of credit card problems.

It is my hope our bill and the legislative record being compiled by our Permanent Subcommittee on Investigations will help the Banking Committee in its deliberations and help build momentum to enact legislation halting the unfair credit card practices that outrage American consumers. Credit card abuse is too harmful to American families, our economy, and our economic future to let these unfair practices continue.

Let me describe the key provisions of our bill in more detail. The first section of the bill would put an end to an indefensible practice that imposes little known and unfair interest charges on many unsuspecting, responsible consumers. Most credit cards today offer what is called a grace period. Cardholders are told that, if they pay their monthly credit card bill during this grace period, they will not be charged interest on the debt for which they are being billed. What many cardholders do not realize, however, is that this grace period typically provides protection against interest charges only if their monthly credit card bill is paid in full. If the cardholder pays less than 100 percent of the monthly bill--even if the cardholder pays on time--he or she will be charged interest on the entire billed amount, including the portion that was paid by the specified due date.

An example shows why this billing practice is unfair and should be stopped. Suppose a consumer who usually pays his or her credit card account in full and owes no money as of December 1 makes a lot of purchases in December. The consumer gets a credit card bill on January 1 for $5,020, due January 15. Suppose the consumer pays that bill on time, but pays $5,000 instead of the full amount owed.

Most people assume that the next bill would be for the $20 in unpaid debt, plus interest on that $20. But that commonsense assumption is wrong. That is because current industry practice is to charge the consumer interest not only on the $20 that wasn't paid on time, but also on the $5,000 that was paid on time. Let me say that again. Industry practice is to force the consumer to pay interest on the portion of the debt that was paid on time. In other words, the consumer would pay interest on the entire $5,020 from the first day of the billing month, January 1, until the day the $5,000 payment was made on January 15, compounded daily. So much for a grace period. After that, the consumer would be charged interest on the $20 past due, compounded daily, from January 15 to the end of the month.

The end result would be a February 1 bill that more than doubles the $20 debt. Using an interest rate of 17.99 percent, for example, in just one month, the $20 debt would rack up interest charges of more than $35.

Charging $35 of interest over one month on a $20 credit card debt is indefensible, especially when applied to a consumer who paid over 90 percent of their credit card debt on time during the grace period. Our legislation would end this unfair billing practice by amending the Truth in Lending Act to prohibit the charging of interest on any portion of a credit card debt that is paid on time during a grace period. Using our example, this prohibition would bar the charging of interest on the $5,000 that was paid on time, and result in a February balance that reflects what a rational consumer would have expected: the $20 past due, plus interest on the $20 from January 1 to January 31.

The second section of our bill would address a related unfair billing practice, which I call ``trailing interest.'' Charging trailing interest on credit card debt is another widespread, but little known industry practice that squeezes responsible and largely unsuspecting consumers for still more interest charges.

Going back to our example, you might think that once the consumer gets gouged in February by receiving a bill for $55 on a $20 debt, and pays that bill on time and in full, without making any new purchase, that would be the end of that credit card debt for the consumer. But you would be wrong. It would not be the end.

Even if, on February 15, the consumer paid the February 1 bill in full and on time--all $55--the next bill would likely have an additional interest charge related to the $20 debt. In this case, the charge would reflect interest that would have accumulated on the $55 from February 1 to 15, which is the time from when the bill was sent to the day it was paid. The total interest charge in our example would be about 38 cents. While some credit card issuers will waive trailing interest if the next month's bill is less than $1, a common industry practice is to fold the 38 cents into the next bill if a consumer makes a new purchase.

Now 38 cents isn't much in the grand scheme of things. That may be why many consumers don't notice this extra interest charge or bother to fight it. Even if someone had questions about the amount of interest on a bill, most consumers would be hard pressed to understand how the amount was calculated, much less whether it was correct. But by nickel and diming tens of millions of consumer accounts with trailing interest charges, credit card issuers reap large profits.

This little known billing practice, which squeezes consumers for a few more cents on the dollar, and targets responsible cardholders who pay their bills on time and in full, goes too far.

If a consumer pays a credit card bill on time and in full--paying 100 percent of the amount specified by the date specified in the billing statement--it is unfair to charge that consumer still more interest on the debt that was just paid. Our legislation would put an end to trailing interest by prohibiting credit card issuers from adding interest charges to a credit card debt which the consumer paid on time and in full in response to a billing statement.

A third problem examined by the subcommittee involves a widespread industry practice in which credit card issuers claim the right to unilaterally change the terms of a credit card agreement at any time for any reason with only a 15-day notice to the consumer under the Truth in Lending Act.

As the National Consumer Law Center testified at our hearing, this practice means that smart shoppers who choose a credit card after comparing a variety of card options are continually vulnerable to a change-in-terms notice that alters the favorable terms they selected, and provides them with only 15 days to accept the changes or find an alternative. By asserting the right to make unilateral changes to credit card terms on short notice, credit card issuers undermine not only the bargaining power of individual consumers, but also principles of fair market competition. Such unilateral changes are particularly unfair when they alter material terms in a credit card agreement such as the interest rate applicable to extensions of credit.

That is why our bill would impose two types of limits on credit card interest rate hikes. First, for consumers who comply with the terms of their credit card agreements, the bill would prohibit a credit card issuer from unilaterally hiking an interest rate that was represented to, and included in the disclosures provided, to a consumer under the Truth in Lending Act, unless the consumer affirmatively agreed in writing to the increase at the time it is proposed. This prohibition is intended to protect responsible consumers who play by the rules from a sudden hike in their interest rate for no apparent reason--a complaint that the subcommittee has heard all too often. Under our bill, issuers would no longer be able to unilaterally hike the interest rates of cardholders who play by the rules.

The bill's second limit would apply to consumers who, for whatever reason, failed to comply with the terms of their credit card agreement, perhaps by paying late or exceeding the credit limit. In that circumstance, credit card issuers would be permitted to impose a penalty interest rate on the account, but the bill would place a cap on how high that penalty interest rate could go.

Specifically, the bill would limit any such penalty rate hike to no more than a 7 percent increase above the interest rate in effect before the penalty rate was imposed. That means a 10 percent rate could rise no higher than 17 percent, and a 15 percent rate could not exceed 22 percent. This type of interest rate limit is comparable to the caps that today operate in many adjustable mortgages. The effect of the credit card cap would be to prohibit penalty interest rates from dramatically increasing the interest rate imposed on the cardholder, as happened in cases examined by the subcommittee where credit card interest rates jumped from 10 percent or 15 percent to as much as 32 percent. Penalty interest rate hikes that double or triple existing interest rates are simply unreasonable and unfair.

If a credit card account were opened with a low introductory interest rate followed by a higher interest rate after a specified period of time, it is intended that the penalty rate cap proposed in the bill would apply to each of those disclosed rates individually. For example, suppose the credit card account had a 0 percent introductory rate for 6 months and a 12 percent rate after that. Suppose further that, during the 6-month introductory period, the cardholder exceeded the credit limit. The bill would allow the card issuer to impose a penalty interest rate of up to 7 percent for the rest of the 6 month period. Once the 6-month period ended, it is intended that the 12 percent rate would take effect. If the consumer were to again exceed the limit, it is intended that any penalty rate imposed upon the account be no greater than 19 percent.

If a card issuer were to analyze an account and conclude that a penalty rate increase of up to 7 percent would be insufficient to protect against the risk of default on the account, the issuer could choose to reduce the credit limit on the account or cancel the account altogether. If the card issuer chose to cancel the account, it is intended that the consumer would retain the right to pay off any debt on the account using the interest rate that was in effect when the debt was incurred.

The point of the bill's penalty interest rate cap is to stop penalty interest rate hikes which are disproportional; which too often stick families with sky-high interest rates of 25 percent, 30 percent, and even 32 percent; and which too often make it virtually impossible for working American families to climb out of debt.

Still another troubling practice involving credit card interest rate hikes is the problem of retroactive application. Industry practice today is to apply an increased interest rate not only to new debt incurred by the cardholder, but also to previously incurred debt.

Retroactive application of a higher interest rate means that pre- existing credit card debt suddenly costs a consumer much more to repay. Take, for example, a $3,000 credit card debt that a consumer was paying down each month with timely payments. Suddenly, the cardholder falls ill, misses a payment or pays it late, and the card issuer increases the interest rate from 15 percent to 22 percent. If applied to the existing $3,000 debt, that higher rate would require the cardholder to make a much steeper minimum monthly payment and pay much more interest than originally planned. That is often enough to sink a working family into a deepening spiral of debt from which they cannot recover.

By making it a common practice to institute after-the-fact interest rate hikes for existing credit card debt--in effect unilaterally changing the terms of an existing loan--the credit card industry has unfairly positioned itself to reap greater profits at consumers' expense. Our bill would fight back by limiting the retroactive application of interest rate hikes to lessen the financial impact on American households. Specifically, our bill would provide that interest rate hikes could be applied only to future credit card debt and not to any credit card debt incurred prior to the rate increase. Instead, any earlier debt would continue to accrue interest at the rate previously in effect.

The first set of provisions in our bill addresses unfair practices related to interest rates. The next set of provisions targets unfair practices related to fees imposed on cardholders by credit card companies.

The need for proconsumer fee protections is illustrated by the story of Wes Wannemacher of Ohio, a witness featured at the subcommittee's March hearing. In 2001 and 2002, Mr. Wannemacher charged about $3,200 on a new Chase credit card to pay for expenses mostly related to his wedding. Over the next 6 years, he paid about $6,300 toward that debt, yet in February 2007, Chase said that he still owed them about $4,400.

How could Mr. Wannemacher pay nearly double his original credit card debt and still owe $4,400? As he explained in his testimony, in addition to repaying the original debt of $3,200, Mr. Wannemacher was socked with $4,900 in interest charges, $1,100 in late fees, and 47 over-limit fees totaling $1,500, despite going over his $3,000 credit limit by a total of $200. These facts show that Mr. Wannemacher paid $2,600 in fees on a $3,200 debt. In addition, those fees were added to his outstanding credit card balance, and he was charged interest on the fee amounts, increasing his debt by hundreds if not thousands of additional dollars. There is something so wrong with this picture, that Chase didn't even defend its treatment of the account at the subcommittee hearing; instead, Chase forgave the $4,400 debt that it said was still owing on the Wannemacher credit card.

It is no secret that credit card companies are making a great deal of money off the fees they are imposing on consumers. According to GAO, fee income now produces about 10 percent of all income obtained by credit card issuers. The GAO report which I commissioned on this subject identified a

host of different fees that have become common practice, including fees for transferring balances, making a late payment, exceeding a credit limit, paying a bill by telephone, and exchanging foreign currency. According to GAO, late fees now average $34 per month and over-limit fees average $31 per month, with some of these fees climbing as high as $39 per month. As Mr. Wannemacher discovered, these hefty fees are not only added to the credit card's outstanding balance, they also incur interest. The higher the fees climb, the higher the balances owed, and the higher the interest charges on top of that.

Charging interest on money borrowed is certainly justified, but squeezing additional dollars from consumers by charging interest on transaction fees goes too far. Steep fees already deepen household debt from credit cards; those fees should not also generate interest income for the credit card issuer. Our bill would ban this industrywide practice by prohibiting credit card issuers from charging or collecting interest on the fees imposed on consumers.

Mr. Wannemacher exceeded the $3,000 limit on his credit card on three occasions in 2001 and 2002 for a total of $200. Over the following 6 years, however, he was charged over-the-limit fees on 47 occasions totaling about $1,500. In other words, Chase tried to collect over-the- limit fees from Mr. Wannemacher that were seven times larger than the amount he went over the limit.

At our March hearing, Chase did not attempt to defend the 47 over- the-limit fees it imposed; instead, it announced that it was changing its policy and would join with others in the industry in imposing no more than three over-the-limit fees in a row on a credit card account with an outstanding balance that exceeded the credit limit. While Chase's voluntary change in policy is welcome, it doesn't go far enough in curbing abusive practices related to over-the-limit fees.

First, if a credit card issuer approves the extension of credit that allows the cardholder to exceed the account's established credit limit, the issuer should be allowed to impose only one over-the-limit fee for that credit extension. One fee for one violation--especially when the card issuer facilitated the violation by approving the excess credit charge.

Second, the fee should be imposed only if the account balance is over the credit limit at the end of the billing cycle. If a cardholder exceeds the limit in the middle of the billing cycle and then takes prompt action to reduce the balance below the limit, perhaps by making a payment or obtaining a credit for returning a purchase, there is no injury to the creditor and no justification for an over-the-limit fee.

Third, a credit card issuer should impose an over-the-limit fee only when an action taken by the cardholder causes the credit limit to be exceeded, and not when a penalty imposed by the card issuer causes the excess charge. The card issuer should not be able to pile penalty upon penalty, such as by assessing a late fee on an account and then, if the late fee pushes the credit card balance over the credit limit, also imposing an over-the-limit fee.

In addition, the bill would require credit card issuers to offer consumers the option of establishing a true credit limit on their account--a credit limit that could not be exceeded, because the account would be programmed to refuse approval of any extension of credit over the established limit. In too many cases, credit card issuers no longer provide consumers with the option of having a fixed credit limit, preferring instead to enable all of their cardholders to exceed their credit limits only to be penalized by a hefty fee, added interest, and, possibly, a penalty interest rate.

There is more. Another unfair but common fee is what I call the ``pay-to-pay fee.'' It is the $5 to $15 fee that many issuers charge consumers to pay their credit card bill on time by using the telephone. To me, charging folks a fee to pay their bills is a travesty. My bill would prohibit a credit card issuer from charging a separate fee to allow a credit cardholder to pay all or part of a credit card balance.

Another fee that has raised eyebrows is the one charged by credit card issuers to exchange dollars into or from a foreign currency. A number of issuers today charge an amount equal to 2 percent of the amount of currency being exchanged in addition to a 1-percent ``conversion fee'' charged by Visa or Master Card, for a total of 3 percent Our bill responds by requiring foreign currency exchange fees to reasonably reflect the actual costs incurred by the creditor to perform the currency exchange, and requiring regulators to ensure compliance with that standard.

In addition to unfair practices involving interest rates and fees, the subcommittee investigation uncovered several unfair industry practices involving how credit cardholder payments are applied to satisfy finance charges and other credit card debt. One such practice that has caught the subcommittee's attention is the industrywide practice of applying consumer payments first to the balances with the lowest interest rates.

Right now, a single credit card account often carries balances subject to multiple interest rates. Credit cards typically use one interest rate for purchases, another for cash advances, and a third for balance transfers. Many card issuers also offer new customers low introductory interest rates, such as 0 or 1 percent, but limit these ``come on'' rates to a short time period or to a balance transferred from another card. Moreover, many of these interest rates may vary over time, since it is a common practice to offer variable interest rates that rise and fall according to a specified rate or index.

When a consumer payment is made, credit card issuers currently have complete discretion on how to apply that payment to the various balances bearing different interest rates. Consumers are typically given no option to direct where their payments are applied. Today, virtually all credit card issuers apply a consumer payment first to the balance with the lowest interest rate. After that balance is paid off, card issuers apply the payment to the balance with the next lowest interest rate, and so on.

This payment practice clearly favors creditors over consumers. It allows the card issuers to direct payments first to the balances that provide them with the lowest returns, and minimize payments to the balances bearing the highest interest rates so those balances can accumulate more interest for a longer period. Consumers who want to pay off a cash advance bearing a 20 percent interest rate, for example, are told that they cannot make that payment until they first pay off all other balances with a lower interest rate.

Our bill would replace this unfair industrywide practice with a proconsumer approach. Reversing current industry practice, the bill would require cardholder payments to be applied first to the balance bearing the highest interest rate, and then to each successive balance bearing the next highest rate, until the payment is used up. The bill would also require credit card issuers to apply cardholder payments in the most effective way to minimize the imposition of any fees or interest charges to the account.

In addition, the bill would prohibit credit card issuers from imposing late fees on consumers if the issuer was itself responsible for the delay in crediting the payment. For example, if a card issuer changed the mailing address for payments, had to shut down its mail sorting equipment for repairs, or mistakenly routed a consumer payment to the wrong department, the issuer would not be allowed to assess a late fee on the cardholder for the resulting late payment. Instead, if the card issuer caused the late payment, it would be barred from assessing a late fee on the consumer.

In addition to provisions to improve practices related to interest rates, fees, and consumer payments, the bill would add two new definitions to the Truth in Lending Act, intended to further address concerns related to unfair credit card practices.

The first definition involves use of the term, ``prime rate.'' Many credit card issuers today use variable interest rates that are linked to the ``prime rate'' or ``prime interest rate'' and vary over time. For example, a disclosure may indicate that a credit card will bear an interest rate equal to the prime rate plus a specified number of percentage points. Since the 1950s, the term ``prime rate'' has been commonly understood to mean the lowest interest rate offered by U.S. banks to their

most creditworthy borrowers. That is how the term is defined, for example, in Webster's Collegiate Dictionary.

The problem, however, is that no current statute or regulation defines the prime rate referenced in credit card disclosures under the Truth in Lending Act, and some card issuers have stated expressly that the prime rate used in credit card agreements does not necessarily match the lowest interest rates they provide to their most creditworthy borrowers. Litigation has also arisen between cardholders and card issuers as to what is meant by the term and whether cardholders are being misled. A cite is Lum v. Bank of America, 361 F.3d 217 (3d Cir. 2004).

To remedy this gap in the law, the bill would require credit card disclosures under the Truth in Lending Act that reference the prime rate to use the bank prime loan rate published by the Federal Reserve Board. This published rate is widely accepted in the financial community as an accurate depiction of the lowest interest rate offered by U.S. banks to their most creditworthy borrowers, and the rate is readily available to the public on the Federal Reserve Web site. By mandating use of this published rate, the bill will ensure that consumers are not deceived by a credit card issuer using a misleading definition of the commonly used term ``prime rate.''

The second definition added by the bill to the Truth in Lending Act involves specifying the ``primary federal regulator'' of a credit card issuer. Today, many credit card issuers are federally chartered or regulated banks subject to one or more Federal bank regulators. The bill would make it clear that when a card issuer is a Federal bank, its primary Federal regulator is the same primary regulator assigned to the bank under Federal banking law. The provision would also make it clear that the primary Federal regulator is responsible for overseeing the bank's credit card operations, ensuring compliance with credit card statutes and regulations, and enforcing the prohibition against unfair or deceptive acts or practices in the Federal Trade Commission Act. Another provision in the bill would make it clear that Federal regulators are expected to conduct at least annual audits to ensure card issuer compliance with the statutes and regulations seeking to ensure fair and effective credit card operations.

The next section of the bill would improve current credit card data collection efforts. Right now, credit card issuers file periodic reports with the Federal Reserve providing information about credit card interest rates and profits. This data plays a critical role in credit card oversight efforts, as well as financial and economic analyses related to consumer spending and household debt. The bill would strengthen current data collection efforts by requiring more specific information on interest rates and fees. For example, current data reports cannot be used to determine how many credit card accounts have interest rates of 25 percent or greater, what types of fees are imposed on consumers, or how many cardholders are affected by such interest rates and fees. The new bill would ensure that regulators, credit card users, and the public have the information needed to answer those basic questions.

The bill would also require the development of credit card industrywide estimates of the approximate relative income derived from interest rates, fees imposed on cardholders, fees imposed on merchants, and any other material source of income. GAO provided this information for the first time in its 2006 report, estimating that the credit card industry now derives about 70 percent of its income from interest charges, 20 percent from interchange fees imposed on merchants, and 10 percent from fees imposed on consumers. This valuable information should continue to be collected so that regulators, credit card users, and the public gain a more informed understanding of the credit card industry.

The bill's data collection requirements are largely modeled upon and intended to replicate key interest rate, fee, and revenue data presented by GAO in its 2006 report, ``Credit Cards: Increased Complexity in Rates and Fees Heightens Need for More Effective Disclosures to Consumers.'' Credit card experts were also consulted to determine what information would be most helpful to strengthen credit card oversight.

The final provision in the bill would provide a 6-month transition period for credit card issuers to implement the bill's provisions.

Credit card issuers like to say that they are engaged in a risky business, lending unsecured debt to millions of consumers, and that's why they have to set interest rates so high and impose so many fees. But the data shows that, typically, 95 to 97 percent of U.S. cardholders pay their bills. And it is clear that credit card operations are enormously profitable. For the last decade, credit card issuers have reported year after year of solid profits, maintained their position as the most profitable sector in the consumer lending field, and reported consistently higher rates of return than commercial banks. Credit card issuers make such a hefty profit that they sent out 8 billion pieces of mail last year soliciting people to sign up.

With profits like those, credit card issuers can afford to stop treating American families unfairly. They can give up charging interest on debt that was paid on time, give up charging consumers a fee to pay their bills, give up hiking interest rates from 15 percent to 32 percent, and give up imposing repeated over-the-limit fees for a single over-the-limit purchase. As one Michigan businessman expressed it to the subcommittee, ``I don't blame the credit card issuers for putting me into debt, but I do blame them for keeping me there.''

Some argue that Congress doesn't need to ban unfair credit card practices; they contend that improved disclosure alone will empower consumers to seek out better deals. Sunlight can be a powerful disinfectant, which is why I have strongly urged the Federal Reserve Board to expedite its regulatory effort to strengthen credit card disclosure and help consumers understand and compare how various credit cards work. But credit cards have become such complex financial products that even improved disclosure will frequently not be enough to curb the abuses--first because some practices are so complex that consumers can't easily understand them, and second because better disclosure does not always lead to greater market competition, especially when virtually an entire industry is using and benefiting from practices that disadvantage consumers.

So when we find credit card practices that are inherently unfair, consumers are often best served, not by greater disclosure, but by stopping the unfair practices that take advantage of them. Among those practices identified in this bill are unfair interest charges that squeeze consumers who pay their credit card debt on time; unilateral and retroactive interest rate hikes that deepen and prolong credit card debt; unreasonable fees; and payment allocation practices that prevent consumers from paying off the credit card debts bearing the highest interest rates first.

Congress needs to enact proconsumer legislation that puts an end to unfair credit card practices. I am afraid that these practices are too entrenched, too profitable to the credit card companies, and too immune to consumer pressure for the companies to change them on their own. Our bill offers measures that would combat a host of unfair practices that plague consumers and unfairly deepen and prolong their debt. I look forward to working with my colleagues to address these problems.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, in order to get a handle on today's gun violence among students, we must increase our awareness on the issue. Last week, the Brady Center to Prevent Gun Violence released a report that draws attention to the gun lobby's efforts over the past few years to change college campus rules that prohibit firearms. The report details the gun lobby's efforts in multiple States to pressure colleges to allow the possession and use of firearms by students and others on campus.

The report, ``No Gun Left Behind: The Gun Lobby's Campaign to Push Guns into Colleges and Schools,'' reveals a letter addressed to a Maine legislator from the National Rifle Association Institute for Legislative Action on April 2, 2007, emphatically opposing legislation to ``allow any college or university to regulate the possession of firearms on the property of the college or university.'' It also describes the gun lobby's support for a law passed in Utah that expressly prohibits public school districts, public schools, and State institutions of higher education from keeping guns off campuses. Similar legislation was proposed in Virginia last year.

``Our schools should be sanctuaries, not armed camps,'' stated Paul Helmke, President of the Brady Center. ``Institutions of higher education already have chosen policies either banning or tightly controlling guns on campus. That is as it should be. These institutions are responsible for the safety of their students and the security of their campuses and should continue to have the right to control firearms.''

No Gun Left Behind also details some of the reasons bringing guns onto campus increases the danger to students and faculty alike. Every year approximately 1,100 college students commit suicide, with an additional 24,000 attempting suicide. Roughly 90 percent of those who attempt suicide with a firearm are successful. And, there is a significant danger of guns being stolen in the dorm setting.

As Congress considers sensible gun legislation, I urge my colleagues to read this important report.

Mr. President, often discussions about combating gun violence center around preventing criminal access to dangerous firearms. Another important component of the issue is the ability of our children and teenagers to access firearms. Most fatal firearm incidences occur when children and teens discover loaded and unsecured firearms in their homes. Over the years, accidental shootings and suicides have claimed the lives of thousands of young people. Sadly, many of these tragedies could have been prevented through common sense gun legislation.

On April 14, two 14-year-old boys were playing in one of their homes in Iosco Township, MI, when they found an unlocked .45-caliber handgun. After playing with it for a short time, the gun went off. The two boys were home alone, so no adult was aware of what happened until one of the boys called 911 and uttered the words, ``I shot him.'' The other boy was pronounced dead after being airlifted to the University of Michigan Medical Center.

The very next day not far away in Battle Creek, MI, a 19-year-old accidentally shot and killed his 17-year-old best friend and cousin. The two were sitting on a couch in the living room, playing with an unregistered gun. They had removed the gun's clip but were not aware of the single bullet remaining in the chamber.

These are two examples of the misery gun violence can inflict. The Centers for Disease Control and Prevention have released some staggering statistics on gun-related deaths among young people:

In 2002 a child or teen was killed in a firearm-related accident or suicide every 9 hours.

On average, four children died every day in non-homicide firearm incidents between 1999-2002.

From 1997-2002, more than 1,324 children were killed in firearm accidents.

In 2004, 13,846 kids were injured by a firearm.

Over the last 10 years, an average of 1,213 kids committed suicide with a firearm each year; on average more than 135 each year were under the age of 15.

The overall firearm-related death rate among U.S. children under the age of 15 was nearly 12 times higher than among children in 25 other industrialized countries combined.

As adults, parents and grandparents, we have a responsibility to protect our children from gun-related deaths. Trigger locks and other sensible gun safety measures can have a significant impact. I urge my colleagues to wait no longer to act on such measures.

Mr. President, I join today with my colleagues, Senator Coleman and Senator McCaskill, in introducing the Medicare Provider Accountability Act. This bill targets Medicare, a program which is indispensable to the health of our citizens, because some Medicare service providers are profiting from the program while abusing the federal tax system. The facts show that, while the vast majority of Medicare health care providers are honest, tax-paying citizens, others are getting paid with taxpayer dollars while, at the same time, failing to pay their taxes.

Legislation to stop this abuse is a product of the work of the Permanent Subcommittee on Investigations, on which I serve as Chairman and Senator Coleman serves as the Ranking Member. On March 20, 2007, a Subcommittee hearing presented testimony from the Government Accountability Office (GAO) showing that about 21,000 Medicare Part B health care providers, including doctors, ambulance companies, and medical laboratories, collectively owe more than $1 billion in delinquent taxes. GAO also determined that, despite this pending tax debt, during the first 9 months of 2005 alone, these health care providers had received payments on Medicare claims totaling around $140 million. In other words, these providers were stuffing taxpayer dollars in their pockets at the same time they were stiffing Uncle Sam by not paying their taxes.

Federal programs exist to stop this type of abuse. One key program is the Federal Payment Levy Program, which was established about ten years ago to enable the Federal government to identify federal payments being made to tax delinquents, and authorize the withholding of a portion of those taxpayer dollars to apply to the person's tax debt. That program has successfully collected taxes from federal payments made through the Treasury Department and by agencies like the Defense Department who screen their own payments to contractors through Treasury's Financial Management Service.

As our March hearing demonstrated, however, despite a legal requirement to do so, The Centers for Medicare and Medicaid Services (CMS) have never participated in the tax levy program with respect to Medicare Part A and B payments. This failure means that, year after year, as much as $300 billion in Federal Medicare payments have not been screened for unpaid taxes. The first substantive provision of our bill would redress this situation by mandating CMS to bring all Medicare part A and B payments into the Federal Payment Levy Program over the next two years.

The second part of our bill would enable CMS to participate in a similar automated program, known as the Treasury Offset Program, to collect non-tax debt, such as unpaid student loans and child support. GAO has determined that certain Medicare health care providers collectively owe hundreds of millions of dollars in student loans, child support, and unpaid state taxes that could be collected through administrative offsets.

The third and final part of our bill would eliminate a barrier to including a large part of IRS's uncollected tax assessments in the Federal Payment Levy Program for collection from Medicare provider payments, as well as other federal contractor payments. Right now, for a variety of legal and technical reasons, only 45 percent of the tax debt assessed but still uncollected in 2006 was actually made subject to levy under the federal program. In 2006, over half of this assessed tax debt--some $67 billion--was never ``turned on'' for actual collection under the tax levy program. Now, $67 billion is a big number, even by Washington standards.

One key reason that this tax debt was not ``turned on'' for collection by levy is that many of the accounts had not reached the stage in their processing where the required notice of intent to levy had been sent to the taxpayer. Until that notice is sent and the taxpayer has exhausted all rights of appeal available under the tax law, the

IRS is currently barred from placing a tax levy on the taxpayer's property. In the case of Medicare providers and other federal contractors, that means federal dollars continue to go into their pockets, without any withholding, despite their unpaid taxes.

While it may be appropriate to delay tax levies on most types of taxpayer property until a taxpayer's appeals are exhausted, it makes no sense to keep sending taxpayer dollars to a tax delinquent Medicare provider or other federal contractor while they are appealing the tax assessment. Withholding should be allowed when it is taxpayer dollars that are being paid to the tax delinquent. That's why our bill would create a special rule for federal payments, allowing a tax levy to be initiated and continue in effect, while the taxpayer's appeal goes forward. The taxpayer would retain the same due process rights, but a tax levy would be allowed to begin earlier in the administrative process; it would no longer have to wait until all of the taxpayer's appeal rights were exhausted. For property other than federal payments, the bill would maintain the current system, requiring a pre-levy notice and exhausted appeal rights before the property could be levied.

The vast majority of Medicare providers render valuable services to their patients, and they do so while paying their taxes. These honest health care providers are put at a competitive disadvantage by the Medicare tax cheats who reduce their operating costs by failing to pay taxes. Besides hurting honest businesses, this type of tax dodging hurts our country by undermining the fairness of our tax system and by forcing honest taxpayers to make up the shortfall needed to pay for basic federal protections--like health care. When these tax delinquents also receive large payments of federal funds, it adds insult to injury. We must force these tax dodgers to pay their tax debt, and a key tool is to subject any federal payments they receive to an effective tax levy program.

The Medicare Providers Accountability Act would target those tax dodgers by strengthening the tax levy program and subjecting additional hundreds of billions of dollars in federal payments each year to screening for unpaid taxes. An improved tax levy program would, in turn, strengthen federal tax enforcement, take a load off the shoulders of honest taxpayers, and reduce the tax gap. I urge my colleagues to join us in supporting the bill's enactment.

I ask unanimous consent that my remarks follow those of Senator Coleman in today's Congressional Record.

Mr. President, I join today with my colleagues, Senator Coleman and Senator McCaskill, in introducing the Medicare Provider Accountability Act. This bill targets Medicare, a program which is indispensable to the health of our citizens, because some Medicare service providers are profiting from the program while abusing the federal tax system. The facts show that, while the vast majority of Medicare health care providers are honest, tax-paying citizens, others are getting paid with taxpayer dollars while, at the same time, failing to pay their taxes.

Legislation to stop this abuse is a product of the work of the Permanent Subcommittee on Investigations, on which I serve as Chairman and Senator Coleman serves as the Ranking Member. On March 20, 2007, a Subcommittee hearing presented testimony from the Government Accountability Office (GAO) showing that about 21,000 Medicare Part B health care providers, including doctors, ambulance companies, and medical laboratories, collectively owe more than $1 billion in delinquent taxes. GAO also determined that, despite this pending tax debt, during the first 9 months of 2005 alone, these health care providers had received payments on Medicare claims totaling around $140 million. In other words, these providers were stuffing taxpayer dollars in their pockets at the same time they were stiffing Uncle Sam by not paying their taxes.

Federal programs exist to stop this type of abuse. One key program is the Federal Payment Levy Program, which was established about ten years ago to enable the Federal government to identify federal payments being made to tax delinquents, and authorize the withholding of a portion of those taxpayer dollars to apply to the person's tax debt. That program has successfully collected taxes from federal payments made through the Treasury Department and by agencies like the Defense Department who screen their own payments to contractors through Treasury's Financial Management Service.

As our March hearing demonstrated, however, despite a legal requirement to do so, The Centers for Medicare and Medicaid Services (CMS) have never participated in the tax levy program with respect to Medicare Part A and B payments. This failure means that, year after year, as much as $300 billion in Federal Medicare payments have not been screened for unpaid taxes. The first substantive provision of our bill would redress this situation by mandating CMS to bring all Medicare part A and B payments into the Federal Payment Levy Program over the next two years.

The second part of our bill would enable CMS to participate in a similar automated program, known as the Treasury Offset Program, to collect non-tax debt, such as unpaid student loans and child support. GAO has determined that certain Medicare health care providers collectively owe hundreds of millions of dollars in student loans, child support, and unpaid state taxes that could be collected through administrative offsets.

The third and final part of our bill would eliminate a barrier to including a large part of IRS's uncollected tax assessments in the Federal Payment Levy Program for collection from Medicare provider payments, as well as other federal contractor payments. Right now, for a variety of legal and technical reasons, only 45 percent of the tax debt assessed but still uncollected in 2006 was actually made subject to levy under the federal program. In 2006, over half of this assessed tax debt--some $67 billion--was never ``turned on'' for actual collection under the tax levy program. Now, $67 billion is a big number, even by Washington standards.

One key reason that this tax debt was not ``turned on'' for collection by levy is that many of the accounts had not reached the stage in their processing where the required notice of intent to levy had been sent to the taxpayer. Until that notice is sent and the taxpayer has exhausted all rights of appeal available under the tax law, the

IRS is currently barred from placing a tax levy on the taxpayer's property. In the case of Medicare providers and other federal contractors, that means federal dollars continue to go into their pockets, without any withholding, despite their unpaid taxes.

While it may be appropriate to delay tax levies on most types of taxpayer property until a taxpayer's appeals are exhausted, it makes no sense to keep sending taxpayer dollars to a tax delinquent Medicare provider or other federal contractor while they are appealing the tax assessment. Withholding should be allowed when it is taxpayer dollars that are being paid to the tax delinquent. That's why our bill would create a special rule for federal payments, allowing a tax levy to be initiated and continue in effect, while the taxpayer's appeal goes forward. The taxpayer would retain the same due process rights, but a tax levy would be allowed to begin earlier in the administrative process; it would no longer have to wait until all of the taxpayer's appeal rights were exhausted. For property other than federal payments, the bill would maintain the current system, requiring a pre-levy notice and exhausted appeal rights before the property could be levied.

The vast majority of Medicare providers render valuable services to their patients, and they do so while paying their taxes. These honest health care providers are put at a competitive disadvantage by the Medicare tax cheats who reduce their operating costs by failing to pay taxes. Besides hurting honest businesses, this type of tax dodging hurts our country by undermining the fairness of our tax system and by forcing honest taxpayers to make up the shortfall needed to pay for basic federal protections--like health care. When these tax delinquents also receive large payments of federal funds, it adds insult to injury. We must force these tax dodgers to pay their tax debt, and a key tool is to subject any federal payments they receive to an effective tax levy program.

The Medicare Providers Accountability Act would target those tax dodgers by strengthening the tax levy program and subjecting additional hundreds of billions of dollars in federal payments each year to screening for unpaid taxes. An improved tax levy program would, in turn, strengthen federal tax enforcement, take a load off the shoulders of honest taxpayers, and reduce the tax gap. I urge my colleagues to join us in supporting the bill's enactment.

I ask unanimous consent that my remarks follow those of Senator Coleman in today's Congressional Record.

Mr. President, are we under controlled time at this point?

Mr. President, I yield myself 8 minutes.

Mr. President, our opening prayer this morning was delivered by Rev. John Koski, an associate pastor at the Dearborn Assembly of God in Dearborn, MI. I am delighted that Chaplain Black was able to include him in our schedule of guest Chaplains.

Reverend Koski has served as a pastor on a Native American reservation in Montana, as a Christian school administrator in Colorado, and as a Bible College professor in Louisiana. He has conducted a bicycling ministry for 4 years in southeast Asia, traveling 20,000 miles on his bicycle.

I know my colleague Senator Stabenow joins me in thanking Reverend Koski for delivering our opening prayer this morning and wishing him all the best in his ministries in the future.

Mr. President, relative to the conference report that is before the Senate, this emergency supplemental appropriations bill includes $95 billion for the Department of Defense, primarily to fund military operations in Iraq and Afghanistan. That is approximately $4 billion more than the President requested for the Department of Defense, including $2.2 billion above the President's request for health care for our service men and women and their families.

When the military forces are in harm's way, it is our solemn duty to provide the equipment they need and the health care they deserve, and we are meeting that duty with this bill. We also owe it to our troops to give them the best chance to succeed. In the case of Iraq, a majority of the Members of the Congress and a majority of Americans believe a change in course in Iraq will provide the best chance of success. That is at the heart of the debate here in Washington.

There is at least a broad, if not universal, consensus that the war in Iraq will not be won militarily and that a political settlement by the Iraqi leaders is required to end the sectarian violence and defeat the insurgency. General Petraeus made that point in a press conference in Baghdad on March 8 when he said:

Any student of history recognizes that there is no military

solution to a problem like Iraq.

Iraq's own Prime Minister Maliki noted 5 months ago that:

The crisis is political, and the ones who can stop the

cycle of aggravation and bloodletting of innocents are the

[Iraqi] politicians.

The debate, then, is how best to bring about the political settlement that must take place. There are some who say security, particularly in Baghdad, is the key, and if Baghdad can be made secure, the Iraqi politicians will have breathing room to reach the agreements and pass the legislation that will lead to reconciliation.

Others, including this Senator, believe the Iraqis must be pressured to take responsibility for their own future, and the best way to do that is to convince them our military presence is not open-ended.

The emergency supplemental before us is designed to do just that. It forces the Iraqi leaders to take responsibility for their own country by ending the open-ended commitment to provide a U.S. security blanket. Instead, it would require the beginning of a partial reduction of U.S. troops, leaving time for the Iraqis to make the political compromises they promised to make months ago.

The bill calls for a change in mission for our forces in Iraq, from policing a civil war to a limited support mission, so that the Iraqis can finally realize our military presence in Iraq is not open-ended; that the future of their country is in their hands, not ours.

The present course in Iraq is failing. The Iraqis are no closer to political reconciliation today than they were when the surge began. Instead of Prime Minister Maliki's government becoming stronger, it appears it is weaker. Disagreements in the Government have prevented proposals for debaathification and oil revenue sharing legislation from even being forwarded to the Council of Representatives for consideration.

The committee considering amendments to the Iraqi constitution appears to be as far from completing its work as it has always been. Meanwhile, the Iraqi Assembly is apparently planning to go on a 2-month recess at the end of June. Now, let me repeat that since it is so unbelievable. The Iraqi Council of Representatives is apparently planning to go on a 2-month recess at the end of June.

Incredibly enough, a man named Hasan Suneid, who is a lawmaker and the adviser to Prime Minister Maliki, was quoted in the paper the other day as saying, ``Time is irrelevant.''

Well, time is plenty relevant to us, to our troops, and to their families. Baghdad is burning while the politicians in Iraq avoid responsibility for their own country's future. Even the detonation of a suicide bomb within the Green Zone killing Iraqi parliamentarians has failed to change the political situation. It appears the Iraqi factions are content to seek vengeance rather than reconciliation.

Senior administration officials, including Secretary Gates, Secretary Rice, and Ambassador Khalilzad have, in fact, wisely used this debate in Congress in an attempt to pressure the Iraqis to achieve political reconciliation.

Secretary Gates said the week before last in Jordan:

The debate in Congress has been helpful in demonstrating to

the Iraqis that American patience is limited. The strong

feelings expressed in the Congress about the timetable

probably has had a positive impact . . . in terms of

communicating to the Iraqis that it is not an open-ended

commitment.

Secretary Gates told a press conference just last Thursday:

I think one of the ancillary benefits of the debate on the

Hill is that the Iraqis have to know that this isn't an open-

ended commitment. The President has said that our patience is

not unlimited. I don't think we've been very stubborn in

communicating these messages to the Iraqis.

That is what Secretary Gates said: ``I don't think we've been very stubborn in communicating these messages to the Iraqis'' that our patience is not unlimited. Well, we need to change course in Iraq. We need to stubbornly communicate our message to the Iraqis. Voting for this bill will help to send that message.

I yield the floor.

Mr. President, yesterday I voted to table Senator Coburn's sense-of-the-Senate amendment that would have called for a requirement that all newly authorized programs be offset by deauthorizing something else. I support eliminating programs which are wasteful or unneeded whether or not we are authorizing a new program.

The Coburn amendment was offered to an authorization bill which spends no money. It targets the authorizing process, not the appropriations process by which Congress allocates funds and determines priorities among authorized programs. The Coburn amendment also fails to address tax cuts which dig us into a deeper and deeper deficit ditch.

I support fiscal responsibility and have supported a number of strong budget tools this year like the provision which reestablishes a strong pay-go rule, which would require any new spending or tax cuts be paid for elsewhere in the budget or receive a supermajority of at least 60 votes in the Senate. The amendment offered by Senator Coburn takes the wrong approach.

I yield the floor.

Madam President, I voted against Senator Coburn's amendment, No. 922, because it will place a difficult burden on grant activities of the National Oceanic and Atmospheric Administration, NOAA. The amendment as drafted has disturbing privacy implications. The inspector general's audits must be posted on the Web within 60 days without any safeguards for proprietary information. Further, the amendment is drafted so broadly that some reasonable uses of grant awards would be jeopardized. Researchers might be restrained from attending peer conferences which are a part of the scientific process. NOAA awards grants throughout Michigan in order to protect and restore the Great Lakes, and I want to ensure that this amendment does not interfere with NOAA's mission in the Great Lakes and our Nation's waters. I support the goal of the amendment to provide for accountability and transparency, and I hope that my concerns with the amendment will be addressed in conference so that I can support the provision in the conference report.

Nanotechnology in the Schools

Madam President, I had intended to call up amendment No. 969 which sets forth authorization levels for the Advanced Technology Program, ATP, to restore the ATP program to its historic funding levels. The Senate's defeat of the Coburn amendment expresses the will of the Senate to support the ATP program. I am also confident that the chairman and the committee can accomplish in conference what this amendment intended to do.

Again, by defeating the Coburn amendment to repeal the authorization for the Advanced Technology Program, ATP, the Senate has again expressed its support for ATP.

This body understands the importance of this program. In the past the Senate has, on numerous occasions, supported amendments to the budget resolution to provide for ATP. Every time we have had an appropriations vote on this program we have retained funding for ATP.

We have lost 3 million manufacturing jobs since January 2001. In the face of these losses and strong global economic competition, we should be doing all we can to promote programs that help create jobs and strengthen the technological innovation of American companies.

The ATP is one of the key Federal programs available to help U.S. manufacturers remain competitive in a global economy.

I have spoken with the chairman of the Senate Energy Committee and I am confident he will support strong funding for the ATP program in conference.

Mr. President, the Brady law requires prospective gun purchasers to undergo a criminal background check before they are able to obtain a firearm from a federally licensed firearm dealer. It was created to prevent felons, fugitives, domestic abusers, and other prohibited persons from gaining access to guns. However, there are significant holes in this legislation that permit exploitation by those who wish to avoid criminal background checks and still obtain guns.

In 1993, President Clinton signed the Brady bill into law. This law required a waiting period for handgun sales until records were available to instantly check criminal background of prospective gun purchasers. Once the National Instant Check System, NICS, became operational in 1998, the Justice Department maintained background check records on approved purchases for 6 months in order to ensure that felons and other prohibited buyers were not mistakenly approved. In 2001, the Justice Department shortened this record retention period to 90 days, the actual amount of time it takes to ensure proper audits of

Mr. President, for the Committee on Armed Services I report favorably the following nomination lists which were printed in the Record on the dates indicated, and ask unanimous consent, to save the expense of reprinting on the Executive Calendar that these nominations lie at the Secretary's desk for the information of Senators.

Mr. President, on Monday America was devastated by the deadliest shooting rampage in our Nation's history. A gunman using two semi-automatic handguns, shot and killed 32 students and teachers and injured several dozen others before turning one of his guns on himself. Witnesses described scenes of chaos and grief, with students jumping from second-story windows to escape gunfire, while others heroically blocked their classroom doors to shield them from the gunman.

Many of us watched this tragedy unfold on the news, finding it difficult to grasp the true magnitude of it. Parents and grandparents across America were thinking about the horror of one's child being caught in the middle of such chaos. There is little that could be worse for a parent than sending a child off to college, only to lose them to a senseless act of gun violence.

I express condolences to the family, friends, and community touched by the tragedy at Virginia Tech. I know I reflect the feelings of the people of Michigan when I say that our thoughts and prayers are with them in this hour of pain and grief.