Floor Statements

Mr. President, I cannot support raising the limit on our national debt to $8.184 trillion without taking other steps to restore fiscal responsibility. The fact that this is the third debt increase in three years highlights the irresponsibility of the fiscal policies of this administration. These policies have taken the nation from two years of record surplus--when we were paying down our debt--to this administration's record deficits and debt. A crippling burden is being passed to our children and grandchildren, and the economic security of our nation is threatened as a result.

The three recent increases in the debt limit reflect an astounding increase of more than $2.2 trillion. And unless we make a significant change in our fiscal policies, the outlook for avoiding future increases doesn't look any brighter. The Congressional Budget Office, CBO, forecasts that our gross Federal debt, which includes debt the Government owes to the public plus funds owed to federal trust funds like Social Security and Medicare, will climb from its 2003 level of $6.8 trillion to $13.3 trillion in 2014. And this shocking estimate doesn't even include the costs of continued military operations in Iraq and Afghanistan that we all know are coming. Nor does it take into account the substantial cost of continuing to provide relief for middle-class families from the alternative minimum tax, which, when applied to them, produces totally unfair results.

The fiscal burden such massive debt puts on us and our children is stupendous. By 2014, each American citizen's share of the debt will be $42,903. Paying off a debt of this size will require either extraordinary tax increases or significant cuts in critical government programs like homeland security and education. Furthermore, we will have to spend an increasing amount of our precious dollars on interest payments. Even under the CBO's conservative estimates, net interest payments on the public debt will rise from $159 billion in 2004 to $348 billion in 2014. Every family who has worked to balance its own budget knows that making interest payments diverts scarce resources from other priorities. Making these interest payments means fewer resources are available for many of our national priorities, including shoring up the Social

Security and Medicare trust funds at a time when those programs' costs are about to skyrocket as members of the baby boom generation begin relying on payments from those Funds to support their retirement.

Our rampant borrowing also threatens the economic security of our Nation as we are forced to go deeper into debt to foreign countries. Since January 2001, the share of U.S. Treasury debt held by foreigners has risen to 42 percent from 30 percent, and 90 percent of the new debt has been purchased by foreigners. This large amount of foreign debt leaves our nation vulnerable to the priorities of foreign creditors. For example, if foreign investors ever decide, for economic or political reasons, to stop financing our debt, U.S. and international markets could be thrown into turmoil. This provides other countries with leverage during trade or other negotiations with us.

Our economic security is also threatened by the prospect that a larger debt will lead to higher long-term interest rates. This means it will be more expensive to buy a house, pay for college or pay off credit card debt. This threat is made more serious by the recent increase in indebtedness of American households. Since the beginning of 2001, mortgage debt has increased by 44 percent and now stands at $7 trillion. Home equity loans have jumped by 54 percent and installment debt, including credit card debt, has risen 17 percent. Americans have taken on these new debts largely in an attempt to maintain their living standards in a struggling economy. Since much of this private debt is set at variable rates, any increase in interest rates will have a severe and immediate impact on these families.

So before we raise the debt limit today, we should commit to pursuing more responsible fiscal policies to prevent the need for future increases. We should reinstate pay-as-you-go rules to require that in addition to paying for all spending, we pay for all tax cuts as well. This concept is common sense for most families, who work to live within their means by balancing what goes out with what comes in.

We should also revisit this administration's irresponsible and unfair tax cuts that have driven us so deep into this deficit ditch. It is reckless and irresponsible that the top five percent of households in our country, whose average income is over $250,000 a year, received almost half of these tax cuts. Restoring responsibility and accountability is essential to the economic and fiscal health of our nation. Simply raising the debt limit without taking other steps to restore fiscal responsibility won't lead to that result.

Mr. President, let me first suggest the absence of a quorum.

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

Mr. President, the Army's current situation is approaching crisis proportions. The Army is bearing the largest burden of the war in Iraq and of the larger war on terror worldwide as well as maintaining forward-deployed forces to deter a possible conflict in Korea. The intense operations and personnel tempo are having a severe impact on both people and equipment, and relief is currently not in sight.

There are nearly 270,000 soldiers deployed overseas in 120 countries. Soldiers make up 90,000 of the 135,000 U.S. troops in Iraq and 15,000 of the 20,000 in Afghanistan. The 495,000 active-duty soldiers have been stretched to the limit. The Army National Guard and Army Reserve soldiers have been called upon to shoulder the ever-increasing burden.

For instance, the first rotation in Iraq consisted of 75-percent active and 25-percent reserve component soldiers. In the current rotation, the Active Force has dropped to 61 percent and the Reserve Force has risen to 39 percent and the next rotation is projected to continue that trend, with about 57,000 percent active and 43 percent reserve.

This trend is simply not sustainable. Many reserve component soldiers are approaching their 24-month limit on active duty and many more will reach that limit as the war in Iraq drags on. The stress on reserve component soldiers, family members, and civilian employees will only grow worse, as Senator Reed has pointed out to this body on many occasions and in the Armed Services Committee, has already had an adverse effect on reserve component recruitment, and greater problems are predicted for the future.

Further, as reserve component units have been mobilized, personnel and equipment shortages have been addressed by tasking other units to fill those shortfalls. This is a snowballing effect as those units that were tasked to provide personnel and equipment are then alerted and deployed to subsequent rotations and have to fill ever-increasing personnel and equipment shortfalls.

Ultimately, units lose cohesion and effectiveness as they are cobbled together from disparate pieces with people who do not know each other, have not trained together, and are short of required equipment, or unfamiliar with the equipment provided.

This could have disastrous consequences, as evidenced by the leadership and performance failures witnessed in the 800th MP Brigade, a brigade formed in that manner during the Abu Ghraib incidents.

The Active component is and will be under increasing stress as the Reserve component commitments become unsustainable. The Army's 33 active combat brigades have all been deployed to Iraq or Afghanistan since those two operations began. Some units, including the 3rd Infantry, which led the initial attack into Iraq, have been alerted or deployed for a second 12-month combat tour. Two of these combat brigades had Iraq combat tours extended to 15 months last April during the Shiite uprising instigated by Moqtada Sadr. I understand that contingency plans exist to extend the combat tours of other Army brigades currently in Iraq to similarly build up troop levels prior to the Iraqi elections.

Army policy is that soldiers should have at least 12 months between combat rotations or 1 month for each month deployed. However, there are already soldiers who are returning to Iraq or Afghanistan, having left there only 9 to 10 months ago. And during those 9 to 10 months, the soldiers are working long hours to repair equipment and spending several months away from their families as they train in preparation for their unit's return to combat.

The Army is creating 10 additional combat brigades in an attempt to address the problems created by the high rotation rate. However, as the Army creates those additional brigades, it is reorganizing all of its brigades into brigade combat teams which are somewhat smaller than current brigades with respect to direct combat maneuver forces. Although the Army asserts that these brigade combat teams are more lethal because they have added artillery and reconnaissance assets that were previously located at the division level, it is not at all certain that the increased effectiveness that the Army expects from these redesigned brigades will make up for fewer combat troops on the ground. If more brigades than are currently deployed to Iraq and Afghanistan are then required to make up for the fewer number of combat troops in the new brigade structure, the operation and personnel tempo of the Active Force will not be much improved.

The Army is also addressing the personnel problem by imposing a stop- loss policy on soldiers in units alerted to deploy on combat rotations, forcing many to remain in the service well beyond their contracted time in the service. Additionally, the Army has had to recall over 5,600 members of the individual Ready Reserve, soldiers who have already served their contracted

Active-Duty time, for involuntary tours of duty. Clearly, many of the soldiers in the ``All-Volunteer Army'' are no longer volunteers. As several critics have pointed out, this can be considered tantamount to a ``backdoor'' draft.

The Army has also been suffering from the failure of the Department of Defense requirements generation and planning processes. The Department of Defense and the Army greatly underestimated the requirements for up-armored high-mobility multipurpose wheeled vehicles--Humvees--and individual body armor for the war in Iraq and Afghanistan, and have continually lagged behind in meeting those requirements, as well as requirements for armor for the entire truck fleet.

Similarly, the Army has had to implement a crash program to equip its helicopters with aviation survivability equipment. For instance, the requirement for individual body armor was originally limited to combat arms soldiers only, even though for years the Army has been predicting a battlefield where there would be no distinct front and rear areas and where support soldiers would also find themselves in combat situations.

The Army similarly failed to anticipate the need for armor for its trucks, again even though it had been predicting such a fluid battlefield. The Central Command requirement for up-armored Humvees was originally set at only 253. That requirement has been continually increased throughout the last year from 253 to 1,233 to 1,407 to 2,957 to 4,149 to 4,388 to 4,454, and now to 8,105. The Army and Congress have poured over a billion dollars in the last year into armor for trucks, but as of last month, the Army was still reporting a shortfall of $380 million to meet its requirement for armored trucks, and that is simply unconscionable. There is no one in this Congress who would deny the Army the funding needed to meet its requirements for force protection.

However, force protection items are not the only funding shortfalls. The Army has had $1.6 billion in equipment combat losses, $1.4 billion of which are aviation losses. Much of that loss occurred in fiscal year 2003, and much of it has not been addressed in any of the supplemental appropriations bills to date because the Department of Defense did not choose to include all of those combat losses in its requests. This does not bode well for the Army as it continues its heavy engagement in Iraq.

Similarly, Army equipment repair and replacement is not keeping up with the increased wear and tear induced by such a high operations tempo. The Army's requirement for fiscal year 2003 was $4.4 billion, of which none was funded. The cumulative requirement in fiscal year 2004 was $11.1 billion, of which only $3.4 billion was funded. If this trend continues at those emerging requirements and anticipated funding rates, by fiscal year 2007 the Army cumulative equipment repair and replacement requirement will be $28.8 billion, of which only $12.1 billion will have been funded. At that point, the Army will face a $16.7 billion maintenance backlog. This may have a severe impact on the Army's ability to sustain combat operations in the future.

Several months ago, the Army estimated that it would cost over $20 billion to create the additional 10 combat brigades and reorganize the existing 33 in the Active Force into the new modular design. No estimate was provided Congress for the cost of similarly reorganizing the Reserve component. The Army expects the new and reorganized brigades for the Active Force to be completed by the end of fiscal years 2006 and 2007 respectively, and paid for through supplemental funding. It is my understanding that the Army, having received $15 billion from the initial $25 billion fiscal year 2005 supplemental appropriation provided by Congress, will send the Department of Defense a request for an additional $45 billion, a fiscal year 2005 supplemental total of $60 billion. Of this amount, only $10 billion is expected to be for equipment. How far that will go toward meeting the Army's requirement is not clear at this time. Nor is it clear the Department of Defense will actually request that larger supplemental for the Army alone. Past history does not bode well for the Army in that regard either.

The challenges for the Army are huge, and the civilian leadership in the Department of Defense has certainly not been supportive of the Army's uniform leadership. In fact, it has often been hostile and vindictive. When General Shinseki, the former Chief of Staff, in answering my prewar hearing question concerning the troop level required for postwar stability and support, opined that it would take several hundred thousand troops, he was publicly ridiculed by the Secretary and Deputy Secretary of Defense and effectively sidelined. When Army Secretary White defended the Chief of Staff, he was fired.

Dr. Harvey, the nominee for Secretary of the Army, appears to have a wealth of industry experience but appears to have virtually no experience with regard to Army issues. In responding to questions for the record on his nomination before the Senate Armed Services Committee, Dr. Harvey answered one question concerning whether the Army had enough authorized Active-Duty end strength to sustain its commitments by saying he would use his ``independent judgment and past experience'' to determine the viability of Army initiatives to increase combat power and to ``reach conclusions and make recommendations accordingly.''

I have no reason to question his ability to make an independent judgment. I am concerned as to whether his past experience qualifies him to reach appropriate conclusions, under the circumstances which I have just outlined, with an Army which is under so much stress and strain. I also question whether he would be willing to make recommendations contrary to the known positions of the Department of Defense leadership given the treatment received by his predecessors when they did so.

In answering a question concerning the problems in the Army's requirements generation and planning processes that resulted in such a large shortfall in individual body armor, armor for trucks, and aviation survivability equipment, Dr. Harvey said that his ``current understanding is that the underestimation of the total requirement for armor protection for our Nation's service members was not the result of problems with the requirements generation process. The primary cause of the initial underestimation was a change in the hostile conditions under which military forces are now operating in Iraq.''

Dr. Harvey apparently did not realize that is exactly the kind of hostile conditions which the Army for several years has been predicting for the future operational environment. It is an example of why I am concerned about Dr. Harvey's lack of experience as to whether he would be in a position to ask the hard questions and arrive at the appropriate recommendations under the very extraordinary and difficult circumstances in which the Army finds itself.

There are numerous challenges that the Army faces, and it would be preferable that the Secretary of the Army be one more knowledgeable of the service that he will lead.

Finally, I wish to comment on the comments of my good friend, Senator Warner, about Les Brownlee. I thoroughly and totally concur with Senator Warner's thoughts and feelings about Les Brownlee. He has served this Nation extremely well. He served our committee well before he went over to be the Under Secretary and then the Acting Secretary of the Army. I add my support for his service and for him personally on the Record today, as his former boss and employer has already done so eloquently and thoughtfully. I want to let Les Brownlee know, if he is listening, but more importantly let my friend, Senator Warner, know that he was right on the mark when he expressed the thoughts he did about Les Brownlee.

I yield the floor.

Mr. President, if the Senator will yield for a unanimous consent request first. I am glad the Senator put in the Record the remarks of General Shinseki. I think they fully support what Senator Reed was saying and what I was saying. I also ask unanimous consent at this point in the Record that the reaction of Secretary Wolfowitz to those remarks be printed. We will provide those for the Record, to the effect General Shinseki was widely off the mark and that it is hard to believe it would take more troops to occupy a country than it would be to win the war. I ask those remarks be made part of the Record. We will supply those remarks to the clerk, if that meets with the agreement of the Senator.

If the Senator will yield, though, again, for a comment on that.

If there was no staff workup on that issue, it would be shocking. There surely should have been staff work on the question of how many troops it would take to secure a country after its occupation. There

have been a number of press reports to the effect that there in fact were some assessments as to how many troops, but I have never seen that assessment. If it did not exist, it would be pretty serious mismanagement, it seems to me, and if it does exist, we ought to get a copy of it.

Either way, I think General Shinseki was mistreated. He was the subject of calumny, almost, inside the civilian part of the Defense Department, for expressing an opinion.

I know my friend, the chairman, would agree with me that when a military officer is asked a question, he is required by a commitment that he makes to us when he is before us for confirmation to give us his honest professional judgment, and he was pressed by me to give us that judgment. He said he couldn't be specific, and then I pressed him to give us a range and he said: Several hundred thousand. The reaction to that amongst the civilians is that is widely off the mark. He paid a price he never should have paid for giving an honest opinion to a congressional committee.

Is there a document that supports 130,000 would be needed? I would like to see a document that supports any analysis of what would be needed. That is the problem with the failure to plan for the aftermath. It is that there was no plan for the aftermath. If there is a document that says 130,000--and maybe my good friend from Rhode Island has the document we are referring to?

We yield back the remainder of our time.

Mr. President, I voted for the Senate version of this FSC/ ETI legislation. While I had a number of misgivings about that bill, those were outweighed by my concerns over the crisis in our Nation's manufacturing sector and the sanctions being imposed as a result of the FSC/ETI regime. However, I will oppose this conference report. It fails to include too many of the important provisions from the Senate bill and has a number of added bad provisions.

The Senate bill we passed in May did a lot to crack down on tax dodgers, but the House Republican leadership, with pressure from the administration, has refused to include most of these provisions in this legislation. While men and women in our military are putting their lives on the line every day for America, too many corporations are stiffing our country by dodging their taxes. They are depriving our country of funds needed to strengthen homeland security, support our troops, care for the sick, educate kids, and more. To make things fair for our U.S. manufacturers that play by the rules, we need to close loopholes that allow the tax dodging corporations to avoid paying their fair share.

One of the most glaring of these omissions from this legislation is the provision passed by the Senate numerous times that would have required business transactions to have actual ``Economic Substance'' in order to receive tax benefits. Refusing to include this anti-abuse tool means that tax dodgers will still be able to escape paying their fair share by using phony transactions that have no business purpose other than tax avoidance. It also means we miss the opportunity to collect from these tax dodgers a much needed $15 billion over 10 years.

Another distressing decision by the House Republicans is the slashing of the penalty imposed on those who design and peddle abusive tax shelters. These abusive shelters are undermining the integrity of our tax system, robbing the Treasury of tens of billions of dollars a year, and shifting the tax burden from high-income corporations and individuals onto the backs of the middle class. The amendment Senator Coleman and I offered, which became part of the Senate bill, set the penalty on an abusive tax shelter promoter at 100 percent of the fees earned from the abusive shelter. This penalty would have ensured that the abusive tax shelter hucksters would not get to keep a single penny of their ill-gotten gains. But that provision was cut in half in this conference report, setting the penalty at 50 percent of the fees earned, meaning the promoters of abusive shelters get to keep half of their gain.

Why should anyone who pushes an illegal tax shelter that robs our Treasury of much needed revenues get to keep half of his ill-gotten gains? And what deterrent effect is created by a penalty that allows promoters to keep half of their fees if caught, and all of them if they are not? This half-hearted penalty is not tough enough to do the job that needs to be done.

And this conference report completely leaves out yet another Senate provision that is critical in the fight against abusive tax shelters. In addition to those who are considered ``promoters'' of these abusive shelters, there are the professional firms--the law firms, banks, and investment advisors--that aid and abet the use of abusive tax shelters and enable taxpayers to carry out these abusive tax schemes. For example, a law firm is often asked to write an ``opinion letter'' to help taxpayers head off IRS questioning and fines that they might otherwise confront for using an abusive shelter. Under current law, these aiders and abetters face a penalty of only $1,000, or $10,000 if the offender is a corporation. This penalty is a joke. It provides no deterrent at all, when law firms are getting $50,000 for each of these cookie-cutter opinion letters. A $1,000 fine is like a parking ticket for raking in millions illegally. With the Levin-Coleman amendment, our Senate bill upped this fine to 100 percent of the gross income derived from the prohibited activity. Unfortunately, it appears the House conferees thought it was ok to let these aiders and abetters continue to profit handsomely from their wrongdoing instead attempting to deter this behavior that robs tens of billions of dollars from the U.S. Treasury.

Another gaping tax loophole that this conference report weakened is the unfairness to the taxpayers that arises when companies renounce their citizenship, going through phony reincorporations by establishing a shell headquarters on paper in Bermuda or other tax-haven countries when, in reality, their primary offices and production or service facilities remain right here in the U.S. These corporate expatriates get all the benefits of being U.S. companies without contributing their fair share of the bill.

The Senate FSC/ETI bill had a provision that would have shut down a significant portion of this loophole. I have long preferred an even stronger fix, such as the one Senator Reid of Nevada and I put forward in S. 384, the Corporate Patriot Enforcement Act of 2003. But at least the provision passed by the Senate went much further than the one before us. The provision included in the conference report lets all the companies that used this gimmick prior to March of 2003 continue to avoid the taxes that their American-based competitors face. The Senate version would have cracked down on these tax dodgers to the tune of more than $3.1 billion over 10 years while this weak provision raises only $830 million. It is shocking that the House Republican conferees were willing to leave $2.3 billion in dodged taxes on the table when that money could have gone to implement Senator Landrieu's amendment that would offer real help to our activated guardsmen and reservists.

I understand that during the conference negotiations, the Senate conferees offered an amendment that would have reinstated many of these important curbs on tax dodges. The amendment would have raised an additional $40 billion over 10 years. But, once again the House GOP refused to accept these anti-abuse measures, and the amendment was defeated on a party line vote.

The problems with this legislation are not limited to the fact that we are letting tax dodgers off way too easy. At a time when many corporations pay no tax at all and corporate tax revenues are at historic lows, this bill is full of special interest tax breaks. It also includes new tax benefits for the offshore operations of U.S. multinational companies, such as allowing companies

with earnings held overseas to bring them back at a tax rate lower than the rate paid on domestic profits. The cost of these international provisions is estimated at $43 billion over 10 years, but this estimate is misleadingly low because some of these provisions are ``temporary'' or do not kick in until later years. While I support incentives to create and support U.S.-based manufacturing jobs, I am concerned that some of these international provisions will provide an incentive for companies to keep resources, facilities, and employees abroad, and subsidize the movement of jobs and resources overseas.

Furthermore, while the official cost estimate of this bill says that it is essentially budget neutral over the next 10 years, this paints a deceptively optimistic picture. Throughout the measure there are many gimmicks to keep the numbers even, like phasing in some of the tax cuts and setting up others as ``temporary.'' According to the Center on Budget and Policy Priorities, just extending the ``temporary'' provisions would reduce revenues by nearly $80 billion over the next 10 years.

I am also troubled by the elimination of provisions pertaining to regulation of tobacco by the Food and Drug Administration, FDA. According to a recent report by the Surgeon General, tobacco consumption by America's youth is one of our country's leading health risks. The Senate passed strong bipartisan provisions that would deal with both the FDA and tobacco regulation: provisions that would give the FDA sweeping authority to prevent overt marketing of tobacco products to children under the age of 18; provisions that would allow the FDA to regulate prior approval of statements on tobacco products; and provisions that allow the FDA to restrict the sale, distribution and promotion of tobacco if they are deemed to be a danger to public health. These provisions are essential to protecting our children from the dangers of smoking, but the House conferees have killed any chance in the near future to give the FDA the tools it needs in this critical area.

I am also troubled by the exclusion of Senator Harkin's overtime amendment that would keep essential overtime protections for middle class working Americans. And finally, it seems unfathomable that in this $137 billion bill the conference committee would leave out the Senate provision sponsored by Senator Landrieu that would have helped the large number of our activated Guardsmen and Reservists who face a reduction in their salaries during activation by assisting those civilian employers who continue to pay these employees after they have been called up.

While this legislation includes some provisions which I support, overall it falls far short of the bill which the Senate sent to conference, and I cannot support it.

Mr. President, this evening on the campus of Michigan State University in Lansing I will be speaking on U.S. policy in Iraq.

My conclusion is that just as it took a new administration to extract the United States from Vietnam, it will take a new administration to extract us from Iraq in a way which leaves that country stable and democratic. We cannot leave Iraq as we did Vietnam.

Nor can we just continue a western occupation of a Muslim nation that is the target and magnet for violence and terror, and that has become more destabilizing than stabilizing. We must change course in Iraq--or else Iraq's future is not likely to be stability and democracy, and the legacy to the world of the Iraq war is likely to be greater turmoil and terror.

I ask unanimous consent that the remarks I will be making this evening be included in full at this point in the Record.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Mr. President, I am pleased to join the Chairman of the Senate Armed Services Committee and my good friend, Senator Warner, in urging the adoption of the conference report on H.R. 4200, the National Defense Authorization Act for Fiscal Year 2005. We began work on this bill with our mark-up in early May. Since that time, we have spent 5 weeks on the Senate floor and nearly 4 months in conference. This conference agreement would not have been possible without the strength and perseverance of Senator Warner.

This conference report will promote the national defense, improve the quality of life of our men and women in uniform, and make the investments we need to meet the challenges of the 21st century. First and foremost, the bill before us continues the increases in compensation and quality of life that our service men and women and their families deserve as they face the hardships imposed by continuing military operations around the world.

Mr. President, we all know that our Armed Forces today are deployed in harms' way around the world. As we stand on the Senate floor today, more than 130,000 soldiers, sailors, airmen and marines are engaged in taking on an aggressive insurgency and winning the peace in Iraq, with tens of thousands more supporting the war effort

from outside the country. At the same time, our military continues to bear the brunt of the continuing effort to stabilize and rebuild Afghanistan, keep the peace in Bosnia, Kosovo, and the Sinai, and contain the threat of North Korea--while also preparing to execute other missions in support of the national military strategy.

It has been clear to many of us for some time now that the Army and Marine Corps are simply stretched too thin, and that additional troops are badly needed to meet our worldwide commitments. I am pleased that this bill takes an important step toward that objective by increasing the active duty end strength of the Army by 20,000 and the active duty end strength of the Marine Corps by 3,000.

I am also pleased that the bill before us contains much of the amendment offered on the Senate floor by Senator Daschle and Senator Graham to provide expanded TRICARE benefits for the National Guard and Reserve members who have made so many sacrifices and contributed so much to our nation over the last three years. In particular, the conference report would:

Make permanent the temporary authority for free TRICARE health care coverage for National Guard and Reserve members and their families up to 90 days before a mobilized service member reports for active duty and for 180 days after release from active duty; and

Authorize a new TRICARE benefit for Guard and Reserve members and their families when the member is not on active duty.

Under this provision, National Guard and Reserve members who are mobilized would be authorized, upon release from active duty, to enroll in TRICARE Prime for 1 year for every 90 days spent on active duty. This is the least that we can do for these brave men and women.

The bill would take a number of other important steps to improve the lives of our men and women in uniform. For example, the bill would:

Authorize a 3.5 percent across-the-board pay raise for military personnel;

Authorize a permanent increase in the rate of special pay for duty subject to hostile fire or imminent danger;

Authorize a permanent increase in the rate of the family separation allowance;

Improve the Survivor Benefit Plan by eliminating the reduction in SBP benefits for surviving spouses over age 62, phased in over 3\1/2\ years;

Ensure fair treatment of our disabled veterans by repealing the phase-in of concurrent receipt of retired pay and VA disability pay to military retirees with service-connected disabilities rated as 100 percent; and

Authorized a new program of educational assistance to members of the Selective Reserve, based on the GI Bill.

The bill would also directly address a number of specific problems and issues that have arisen in the course of our continuing operations in Iraq and Afghanistan.

First, the bill would provide our Armed Forces new flexibility to respond to changing circumstances on the ground by authorizing the use of up to $300 million for the Commanders' Emergency Response Program in Iraq and Afghanistan, under which commanders may use funds for small humanitarian and reconstruction projects; authorizing the use of up to $500 million for assistance to Iraq and Afghanistan military or security forces to enhance their ability to combat terrorism and support U.S. or coalition military operations in Iraq and Afghanistan; and authorizing the Special Operations Command to expend up to $25 million of existing funds to provide support to foreign forces, irregular forces, groups, or individuals, engaged in supporting or facilitating ongoing military operations by the United States special operations forces to combat terrorism; establishing a new rapid acquisition program to enable the Department of Defense to quickly acquire equipment needed by a combatant commander to eliminate deficiencies in equipment that have resulted in combat fatalities; and raising the thresholds for the use of streamlined acquisition procedures outside the United States in support of contingency operations.

Second, the bill contains important language from amendments offered by Senators Durbin and Leahy on the Senate floor, reaffirming the prohibition against subjecting any person in the custody or under the physical control of the United States to ``torture or cruel, inhuman, or degrading treatment or punishment that is prohibited by the Constitution, laws, or treaties of the United States.'' These provisions send an important message to the world that the United States will not permit, condone, tolerate, or encourage the kind of behavior so graphically depicted in the photographs from Abu Ghraib prison in Iraq. We all know that the abuses that occurred at Abu Ghraib and elsewhere have undermined the hard work and sacrifices of our military and tarnished the image of our armed forces. The provisions included in the conference report reaffirm that we are a Nation of laws and send the message that Congress will not accept mixed messages or ambiguous statements on the fundamental issue of human rights and dignity.

The bill contains several other important provisions addressing ongoing operations in Iraq and Afghanistan. These include:

A provision originally written by Senator Dodd, which authorizes reimbursement of service members and their families for purchases of body armor and other protective equipment at a time when the Department of Defense did not have sufficient protective gear in Iraq to protect our men and women in uniform; a provision addressing deficiencies in the oversight and management of contractors on the ground in Iraq, and requiring the issuance of specific guidance and regulations to enhance the safety of contractor employees and improve coordination between our armed forces and the contractors who are there to support their rebuilding efforts; and a provision reauthorizing and extending the CPA Inspector General to ensure that we have continuing oversight over fraud, waste and abuse in the expenditure of funds for the rebuilding of Iraq.

The conference report also includes a number of provisions that will help improve the management of the Department of Defense and other federal agencies. These include: the Collins-Levin amendment permitting federal employees to be heard, for the first time, in bid protests appealing the results of public-private competitions; a provision that would extend the authority for energy savings performance contracts for an additional 2 years, enabling federal agencies to save hundreds of millions of dollars through improved energy efficiency; a provision that should help resolve the controversy over the Air Force's proposed lease of tanker aircraft by prohibiting the Air Force from entering a lease and instead requiring the use of a traditional multi-year contract; a provision that would require the Department of Defense to develop and implement a business enterprise architecture to gain better control over its finances; and a provision directing the Secretary of Defense to develop policies and regulations to discourage other countries from imposing ``offset agreements'' in defense trade, and thereby undermining our defense industrial base.

Finally, I am pleased that the conference report contains a series of provisions that will establish a workers' compensation-like program for nuclear workers who have cancers and other occupational-related injuries. The program will be administered by the Department of Labor and establishes a compensation scheme for both employees and survivors. Covered employees would receive the compensation benefits, as well as medical benefits under the provisions. The total amount of compensation under the provision would be capped at $250,000. Also included are provisions that would extend to uranium miners the opportunity to seek this workers' compensation-like benefit. Employees can elect to apply for this benefit or they may choose to remain in their individual state's workers' compensation system.

Mr. President, this is a good conference report, but no conference report is perfect.

I strongly disagree with a provision in the bill that would attempt to transfer from the Department of Defense to the Treasury the responsibility to provide the funding for military health care. Programs do not become ``free'' just because they are moved outside the Defense budget. That is why this provision was strongly opposed by the

chairman and ranking member of the Senate Budget Committee.

I am deeply disappointed that the House conferees refused to accept important Senate provisions addressing hate crimes. Acts of violence and bigotry based on factors like race, religion, national origin, gender, sexual orientation, or disability can undermine our nation's fabric by placing in question our continuing commitment to acceptance and diversity. The Kennedy-Smith hate crimes bill would address this problem head-on. The Senate has now passed the hate crimes bill on two separate occasions, and each time, the House has refused even to consider the provision on the merits.

I am equally disappointed that the House refused to include the Boxer amendment on abortion. Under the law as it stands today, Medicare funds may be used for abortions in cases of rape or incest, but Department of Defense funds may not. This kind of discrimination against women who put their lives on the line for their country is incomprehensible to me.

I am disappointed that, faced with a veto threat, we were able to get less than half of the provisions that we wanted to codify sound practices in public-private competition of work currently performed by government employees.

Finally, I am disappointed that this conference report includes a House provision reducing the authority of the base closure commission to address bases not recommended for closure or realignment by the Secretary of Defense.

Despite my concerns about these issues, I will vote for this bill because it contains so many other provisions that are so important for our national defense and for our men and women and uniform. At a time when our armed forces are under hostile fire in Iraq and Afghanistan, it is vitally important that we enact a defense authorization bill that provides the training and equipment that our military needs and the compensation and benefits that they deserve.

I would like to thank the chairman of the Armed Services Committee, Senator Warner, once again for the effective leadership that he provided in bringing this bill through conference and back to the Senate floor. Senator Warner's inclusiveness and openness in the way he manages the Committee and the conference have resulted in a far better bill than we would otherwise have had.

I would also like to thank the minority members of our Committee for the able work that they have done in support of this bill throughout the past year, starting with hearings in the Spring, and continuing through mark-up, floor deliberation, and conference. We have a truly talented group of members, whose dedication to the national defense shows in their work.

I would be remiss if I did not also mention the work of our dedicated committee staff, on both sides of the aisle. It is the hard work of this staff--under the able leadership of Judy Ansley and Rick DeBobes-- that has made this bill possible. Rick and Judy and the staff have been working literally around the clock for the last month to put this conference report, and I think that the Senate owes a debt of gratitude to every one of them.

On the Majority staff Judy Ansley, Chuck Alsup, June Borawski, Leah Brewer, Alison Brill, Jennifer Cave, David Cherington, Marie Dickenson, Regine Dubey, Andy Florell, Brian Green, Bill Greenwalt, Bruce Hock, Gary Howard, Jennifer Key, Greg Kiley, Tom MacKenzie, Elaine McCusker, Lucian Niemeyer, Stan O'Connor, Cindy Pearson, Paula Philbin, Ben Rubin, Lynn Rusten, Katie Sendak, Joe Sixeas, Rob Soofer, Diana Tabler, Dick Walsh, Bridget Ward, Nick West, and Kelley Wilson.

On the Minority staff Rick DeBobes, Chris Cowart, Dan Cox, Madelyn Creedon, Mitch Crosswait, Brie Eisen, Evelyn Farkas, Richard Fieldhouse, Creighton Greene, Bridget Higgins, Mike Kuiken, Maren Leed, Gary Leeling, Peter Levine, Mike McCord, Bill Monahan, and Arun Seraphin.

Mr. President, I urge my colleagues to join me in supporting this bill.

Mr. President, I would like to take a moment to celebrate the 40th anniversary of the Oakland Livingston Human Services Agency. The mission of this agency is to help low-income, elderly and disabled individuals become self-sufficient, and OLHSA

has been extremely successful in this pursuit. With over 70 programs, OLHSA has assisted over 30,000 low-income, elderly and disabled individuals living in Oakland and Livingston counties become more self- reliant, thereby improving their quality of life. Over the last forty years, the efforts of OLHSA have improved the lives and livelihoods of Michigan citizens across the two counties.

Elderly citizens in Southeastern Michigan can turn to OLHSA for a variety of resources and services. Senior centers, located in Pontiac and Novi, provide facilities for older adults to eat nutritious meals, attend exercise classes and socialize. The Senior AIDES program provides employment and training opportunities for older adults, opening the door to career options that would otherwise be unavailable because of their age and/or inexperience. Volunteers are dispatched to homes around the community to assist elderly individuals with household chores and yard work that they can no longer perform themselves.

The Oakland Livingston Human Services Agency also provides support and advocacy to low-income families and other struggling individuals. If a family or an individual is in an emergency situation, they can turn to OLHSA for immediate help. OLHSA provides the necessary assistance to those in need through food banks, emergency utility assistance and emergency housing. In addition, the Oakland Livingston Human Services Agency provides long-term aid to the surrounding community. OLHSA's Financial Education Program offers informational classes on money management, tax law, insurance options and a variety of other topics. It also provides counseling on childcare, nutrition and other problems that face the community. Those who take advantage of these classes and counseling sessions acquire the knowledge and skills they need to make it on their own and overcome their problems. OLHSA has worked consistently to reduce the causes and consequences of poverty in Oakland and Livingston counties, and I know I can speak for my constituents when I say the people of Michigan sincerely appreciate the good work they have done.

I know my Senate colleagues will join me in offering congratulations to the Oakland Livingston Human Services Agency on its 40th anniversary. We recognize and thank the dedicated staff and volunteers who have made the organization successful over the years, and I wish them many more years of service to the community.

Yes.

Mr. President, I do not support the McCain amendment to grant appropriation powers, in addition to oversight powers, on intelligence matters to the Senate Intelligence Committee.

I am a member of the Intelligence Committee and I support the effort in this resolution to strengthen the oversight capabilities of the Senate Intelligence Committee. However, I cannot support this amendment. Because much of the work done by the Intelligence Committee is necessarily done in closed session, it is all the more important to have the checks and balances of additional committees involved in the review and funding decisions concerning intelligence activities. Intelligence matters, by their nature, require secrecy. However, democracy works best with active and open debate. For this reason, it is critical that this process, while secret, involve more than a small number of Senators.

Mr. President, it has been nearly a month since Republican congressional leadership and the President allowed the assault weapons ban to expire. This lack of action made it potentially easier for criminals and terrorists to acquire 19 previously banned assault weapons that could be used to harm innocent Americans. Adding insult to injury, the House of Representatives last week passed legislation that would make families in the Nation's capital even more susceptible to gun crime.

The misnamed District of Columbia Personal Protection Act, which passed the House last week, would repeal a local law in Washington, DC that bans the sale and possession of unregistered firearms, requires firearm registration, imposes commonsense safe storage requirements, and bans semiautomatic weapons in the District. Should this bill become law, tourists and especially those who live and work in our Nation's capital will face a considerably greater threat of gun violence.

According to the Brady Campaign To Prevent Gun Violence, this bill would roll back gun laws in D.C. to a point that it would be legal to possess a loaded assault rifle on city streets without a permit. Over the strong objections of local leaders, the Republican-controlled House made the unwise decision to take up and pass this legislation even as we face the increased threat of terrorism. Hopefully the Senate will not make the same mistake.

Unfortunately, instead of making progress on the issue of gun safety, we seem to be retreating. Instead of strengthening laws that would help prevent future gun crimes and terrorist attacks, they are being weakened giving potential criminals and terrorists easier access to weapons that have no place on our streets. I will continue to work toward reversing this course and toward passing sensible gun safety legislation that will make our communities more, instead of less, safe.

I would like to join my colleagues in supporting the need for the Chicago Sanitary and Ship Canal dispersal barrier and pledge to work with my Great Lakes colleagues and Senator Jeffords to address the invasive species problems in Lake Champlain through the authorization of a dispersal barrier. I also am pleased to join my colleagues in our pledge to move the National Aquatic Invasive Species Act forward in the next Congress.

Madam President, military personnel comprise an important part of the national intelligence community. Managing military personnel is the appropriate function of the Secretary of Defense and the military departments.

The bill, as drafted, would permit the transfer of military personnel within the national intelligence program. This amendment strikes that language and does not permit the transfer of the military personnel within the national intelligence program.

The second-degree amendment makes it clear that the positions, of course, cannot be transferred. In other words, providing that the people who are in those positions are not transferred by the national intelligence director, if it is just the money for the positions, which providing it falls within the scope of reprogramming, for instance, and can be done in any event; providing it is the positions or the money attached to the positions that are transferred from one part of the intelligence community to another, that we do not prevent. It is the transfer of uniformed people that cannot be accepted, and this amendment would prevent that from happening.

So if we are in a situation, for instance, where the national intelligence director says, I want those five people from a particular agency, and if these are uniform military personnel, that would not be possible when my amendment is adopted. The national intelligence director would be able to transfer positions, or the money, and say

$400,000 or $1 million or whatever, providing, again, it is within or below the limit that is established, which would require programming approval by the Congress; providing it is below that limit, the NID continues to have that authority, which he would have in any event, to transfer funds or positions from one place to another. So we don't touch the money or the positions.

However, we maintain a chain of command. We maintain military careers. These are uniform military careers, and we do not have an outside civilian person changing that career by transferring a uniform military person from one place to another.

I thank my colleagues, the managers of the bill, for working out this language with us. It is a very important change in terms of military careers, in terms of military personnel, in terms of the management of military personnel, in terms of morale. But it does not disturb, again, the budgetary power or the shifting around of budgets--or billets, as we call them--or positions, providing, again, they are underneath and within the limits established by the reprogramming procedures that have been established, where individual agency heads are allowed to transfer money from one place to another. If it is above that limit, it is established by the reprogramming procedures, then, of course, they have to go through the normal reprogramming process before money can be transferred from one place to another.

Madam President, my thanks to the managers, not just for their work on this amendment, but their work generally on this bill. It has been exemplary and a model to all of us in this Senate as to how we can achieve things on a bipartisan basis. They worked together beautifully, and I commend them for it.

I move to reconsider the vote.

Mr. President, I ask unanimous consent that following the remarks of the Senator from Virginia and I be recognized to offer a Warner-Levin amendment which which has now been worked out and cleared. I think Senator Warner is somewhere nearby. If there is no objection, I ask unanimous consent to put us next in line with that amendment, which is a modified amendment and has been agreed to.

Mr. President, my concern about the definition of intelligence programs that the budget execution authority would be transferred to relates to the definition in the bill

that, in turn, relates to the Defense Intelligence Agency.

There are a number of Defense Intelligence Agency programs which, in my judgment, should not have their budget execution authority transferred to the new national intelligence program. Specifically, there are three programs. These are a small set of DIA programs but, nonetheless, there are three in particular to which I refer.

First is the intelligence staff of the Joint Chiefs of Staff. Second is the intelligence staff of the combatant commanders. Third is certain sensitive communications systems which support the Department of Defense command structure.

The principal purpose of those programs is to support joint or tactical military operations, and I think it would be a mistake to transfer the budget execution authority for those three programs to the national intelligence director. They are just simply too deeply embedded in supporting joint or tactical military operations for that to make sense.

However, rather than trying to resolve that debate here and rather than having the bill transfer the budget execution to the national intelligence program, what we have arrived at is a compromise which does the same thing relative to these programs, as Senator Warner just outlined, relative to a number of other programs; that is, we assign and task the new national intelligence director and the Secretary of Defense to review these DIA programs, then to make a recommendation as to where the budget execution ought to rest, whether it should be in the national intelligence program or in the Department of Defense, and then to make a recommendation to the Office of Management and Budget and then to the President who would make the decision on this issue.

The review would be an expedited review. It would not take more than 60 days. But it would make it possible to have this decision in review based on the facts relating to this program rather than to make an abstract judgment about all programs in the Defense Intelligence Agency in this bill.

During this period of review, we have agreed that nothing would be done to prejudice the outcome of this review. With the adoption of this amendment, assuming it is adopted, then my amendment No. 3810 will be withdrawn because that is the purpose of this amendment.

Again, as I did with another amendment earlier today, I thank the managers of the bill for working with us to make this possible. It is a very rational approach, as well as a good compromise to a very complicated situation. We want to avoid--we want lines to be clear, but we do not want them to be arbitrary in a way which will force budget execution of programs to be where they logically should not be.

I also thank Senator Warner for his leadership on a very related issue. The way in which we have addressed these two issues is similar but not exactly the same. It just makes a lot of sense.

I thank the managers for their willingness to work with us on this matter.

The Senator can take his time.

Yes.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

I want to thank our colleagues and managers of the bill and, as always, thank Senator Warner. The managers have worked so well with us, and I want to thank them for that, and also thank them for the way they worked with each other.

Amendment No. 3810, Withdrawn

I ask unanimous consent that amendment No. 3810 now be withdrawn since that was covered in the amendment which was just adopted.

Mr. President, I will not vote to invoke cloture on the National Intelligence reform bill at this time.

This legislation reforming the intelligence agencies of our Government is a critical step in strengthening our national defense and our homeland security. If this cloture vote succeeds, it will prematurely cut off debate and prevent relevant amendments which could improve this legislation from being considered by the Senate. There are about 57 amendments currently pending before the Senate on this bill and perhaps half will be prevented from even being considered if cloture is invoked.

This is far-reaching and complex legislation which reorganizes the basic elements of our intelligence community. We cannot afford to get it wrong or we will end up making us less secure. We owe it to our constituents and the Nation, if necessary, to stay a few days longer in Washington and finish the job right. Frustrating the right of Senators to offer relevant amendments aimed at improving this legislation is unwise.

Madam President, I have a unanimous consent request, and I think I am following a pattern, at least I hope so. If not, I will withdraw. I ask unanimous consent that three amendments be called up and then be set aside so that they are in advance of cloture. I ask unanimous consent that amendment No. 3825 be called up and set aside. I also send to the desk a modified version of amendment No. 3809, which has been approved by the Democratic leader, which I understand the process is the modification and then that modified amendment will be set aside. Also, I ask unanimous consent that amendment No. 3810 be called up and set aside.

I very much thank my dear friend from West Virginia, and I thank the managers.

Mr. President, I support much of what is contained in amendment No. 3845, offered by Senator Byrd. However, I will vote against the amendment because it strikes from the underlying bill section 224(b)(3), a provision included in an amendment I offered during markup of the bill in the Government Affairs Committee. Section 224 requires that the NID, the Director of the NCTC, and the Director of any other intelligence center make intelligence information available upon the request of committees of Congress with jurisdiction over the subject matter to which the information relates, or upon the request of the chairman or ranking member of the House or Senate Intelligence Committees. Too much information and too many documents have been withheld from congressional committees by the CIA. If we are going to prevent a stronger national intelligence direction from becoming a stronger ``yes man'' and stronger political arm of a White House, there must be strong oversight from Congress.

The intention of section 224(b)(3) is to limit the amount of intelligence information that the executive branch can legally withhold from the Congress. The requirement to provide information to Congress exists unless the President asserts a Constitutionally-based privilege. Senator Byrd and I both agree that the Congress should have broad access to intelligence information. I disagree, however, with that part of the Byrd amendment which strikes section 224(b)(3).

Mr. President, I thank the managers of the intelligence reform bill, S. 2845, for accepting an amendment offered by myself and Senator Coleman on the issue of terrorist financing. This amendment, amendment No. 3867, was developed in coordination with Senators Collins and Lieberman of the Governmental Affairs Committee and Senators Shelby and Sarbanes of the Banking Committee. I thank each of my colleagues for their guidance and assistance which has enabled us to fashion a good amendment with bipartisan support and offer it to the bill today.

This amendment is the result of an extensive investigation by the Permanent Subcommittee on Investigations, initiated at my request, into money laundering allegations involving Riggs Bank, a nationally chartered bank located right here in the Nation's Capital. Our investigation found a bank which routinely allowed highly questionable transactions with few questions asked. Some of these transactions involved millions of dollars in cash or suspicious wire transfers; others have raised serious concerns about possible terrorist financing.

We live in a post-9/11 world. After the attack on America, we strengthened our antimoney laundering laws, in part, because Osama bin Laden boasted that his modern new recruits knew the ``cracks'' in ``Western financial systems'' like they knew the ``lines in their hands.'' That chilling statement helped fuel a new effort to strengthen our defenses against terrorists, corrupt dictators, and others who would use our financial systems against us. Part of that effort was Congress' enactment of the PATRIOT Act which, in title III, strengthened U.S. laws to stop money laundering, foreign corruption, and terrorist financing.

Even before the PATRIOT Act, we had laws and regulations to stop money laundering. In fact, since 1987, the Office of the Comptroller of the

Currency, OCC, has required nationally chartered banks to establish anti-money laundering programs to ensure the banking system is not misused by criminals. The PATRIOT Act was intended to build on that existing foundation to further strengthen our defenses against money launderers.

Our investigation found that Riggs Bank ignored its antimoney laundering obligations before the PATRIOT Act, and continued to ignore them afterward. We found that the bank didn't get serious in part because, in the past, when bank regulators pointed out problems with Riggs' antimoney laundering controls, if the bank promised to do better, the regulators let it go. The regulators tolerated the bank's weak antimoney laundering program, continued to accept excuses when deficiencies were not corrected, and continued to hold off on tough enforcement measures.

We were particularly surprised to learn that the OCC examiner-in- charge who oversaw Riggs Bank for 4 years, from 1998 to 2002, appeared to function at times as more of an advocate for the bank than an arms- length regulator. The investigation found, for example, that in 2001, the examiner-in-charge advised more senior OCC personnel against taking a formal enforcement action against Riggs for its lax antimoney laundering program, because the bank had promised to do better. In 2002, after subordinate examiners had uncovered troubling transactions and bank accounts involving Augusto Pinochet, the former President of Chile, and actions by Riggs to hide those accounts from the OCC for 2 years, the examiner-in-charge ordered the examination materials not to be included in the OCC's electronic database, even though such materials are normally placed in that database. The examination materials were instead saved in paper form, making it much more difficult for subsequent examiners to learn about the Pinochet examination. About a month after giving this order, that same Examiner- in-Charge was offered a job at Riggs. He later retired from the OCC and 3 days after retiring, took a senior position with Riggs.

These actions--advising against a formal enforcement action, suppressing the Pinochet examination materials, and accepting a job offer at the bank he regulated, among others--raise serious conflict of interest concerns. Federal bank examiners are our first line of defense against money laundering and terrorist financing at U.S. banks, and we can't allow their independence to be undermined by the lure of a job at the banks they oversee.

The 9/11 Commission report notes the important role that stopping terrorist financing plays in our counterterrorism efforts. It explicitly recommends that U.S. antiterrorist financing programs remain ``front and center in U.S. counterterrorism efforts.'' Subcommittee hearings and a report released by my staff in July of this year support that recommendation and offer a detailed legislative record demonstrating the need for new measures to further strengthen federal oversight of the antimoney laundering programs at our financial institutions.

The Levin-Coleman amendment would strengthen U.S. anti-terrorist financing efforts in two ways. First, it would require the President, through the Treasury Secretary, to take a hard look at the current state of U.S. efforts to combat terrorist financing and issue a report in 6 months with recommendations for reforms. One of the most important issues to be addressed is improving our process for setting priorities and coordinating U.S. agency efforts to detect, track, disrupt, and stop terrorist financing. It is far from clear today, when it comes to combating terrorist financing, what U.S. agency official, if any, has primary responsibility for developing priorities, assigning tasks to agencies, and monitoring the implementation of policy and operations.

Secondly, the amendment would impose a 1-year cooling off period before a senior Federal examiner may take a job with a financial institution that he or she was responsible for overseeing. This cooling off period is similar to one already in place for Federal procurement officials under 41 U.S. 423(d). Members of Congress, Congressional staff, and many other Federal employees already operate under cooling off periods, which have been in place for years and have had a beneficial effect. Our amendment would apply a new cooling off period to senior federal bank examiners like the OCC examiner who oversaw Riggs.

John D. Hawke, Jr., U.S. Comptroller of the Currency and head of the OCC, which served as the primary regulator of Riggs, has expressed strong support for legislation imposing a 1-year cooling off period for senior Federal examiners, stating in a memorandum to OCC staff that ``when an OCC examiner, with no break in continuity, takes employment with a bank he or she has been supervising, there are inevitably questions that will be asked and suspicions raised.'' He apparently wanted to impose a cooling off period on OCC examiners 4 years ago but was advised that he lacked the statutory authority to do so. The report released by my subcommittee staff in July also recommends enacting a 1- year cooling off period for bank examiners. Similar legislation, introduced in the House of Representatives by Rep. Luis Gutierrez, D- Ill., and Rep. Sue Kelly, R-NY, was recently approved by the House Financial Services Committee for inclusion in the House intelligence reform bill.

The Levin-Coleman amendment would close the revolving door and eliminate potential and actual conflicts of interest for our federal examiners. It would also provide a fresh look at our country's antiterrorist financing efforts. I thank my colleagues on both sides of the aisle for supporting this amendment.

A brief section-by-section explanation of the amendment follows.

Subsection (a) directs the Treasury Department to prepare a report within 6 months evaluating the current state of U.S. efforts to curtail the international financing of terrorism. The report is required to address the effectiveness and efficiency of current Federal programs to detect, track, disrupt, and stop terrorist financing; the relationship between terrorist financing and money laundering; the nature, effectiveness and efficiency of current efforts to coordinate intelligence and agency operations related to terrorist financing, including identifying which agency official, if any, has primary responsibility to develop priorities, assign tasks to agencies and monitor the implementation of policy and operations related to terrorism; the effectiveness and efficiency of efforts to protect the critical infrastructure of the U.S. financial system; ways to improve the effectiveness of financial institutions; ways to improve multilateral and international governmental cooperation on terrorist financing; and recommendations for reforms.

Subsection (b) imposes a 1-year cooling off period on senior examiners at the OCC, Federal Reserve Banks, Federal Deposit Insurance Corporation, Office of Thrift Supervision, and National Credit Union Administration before a senior examiner can take a job at a financial institution that he or she oversaw. The subsection does so by establishing a new subsection (k) in the statutes applicable to these agencies.

The new subsection (k) contains language that was drawn from two sets of postemployment provisions now in the federal code, the provisions in section 207 of title 18 applicable to a variety of senior federal employees and the provisions in section 423(d) of title 41 applicable to senior Federal procurement officials. For example, the new subsection (k) draws on the ``knowing'' standard used in the section 207 provisions, and the ``compensation'' language that appears in section 423(d).

The new subsection (k) is intended to apply only to senior examiners who have a meaningful relationship with a financial institution, such as an examiner-in-charge or a senior examiner with dedicated responsibility to oversee a particular institution. It is not intended to apply to less senior examiners who may examine or inspect dozens of financial institutions in a single year without developing a sustained relationship with any one institution. It is also not intended to apply to persons holding supervisory positions that do not involve routine interactions with an institution for purposes of examining or inspecting the institution's books or operations. The provision may apply to more than one senior examiner at the same financial institution, and is not limited to examiners with an

office at the site of the financial institution or to examiners who spend 100 percent of their time on a single institution.

Each Federal banking agency is directed to issue rules, regulations, and guidance to delineate the personnel to which this postemployment restriction applies. Each agency head also has authority, on a case-by- case basis, to waive the postemployment restriction for a particular individual if the waiver would not hurt the integrity of the agency's supervisory program. It is intended that the agency head issue these waivers personally, without delegating the waiver authority to another official, to ensure careful usage.

The new subsection (k) authorizes two types of penalties for senior examiners who violate the 1-year cooling off period. These two penalties are in addition to any other administrative, civil, or criminal remedy or penalty that may be available to the United States or any other person for the same conduct. The first penalty is an industry-wide employment ban which requires the relevant agency to remove the affected individual from the financial institution and prohibit them from employment at any insured financial institution for up to 5 years. The second penalty authorizes the agency to impose a civil monetary fine on the individual of up to $250,000. This fine would have to be imposed either in a Federal court proceeding or in an administrative proceeding that accords with the agency's administrative rules for imposing civil monetary penalties. The provision also authorizes the Attorney General to impose a civil monetary penalty if an agency does not, but prohibits both from doing so.

The requirement for a 1-year cooling off period is intended to become effective one year after the date of the enactment of this act, whether or not any agency issues implementing regulations to carry out the act's requirements.