Floor Statements

If I can ask Senator Wyden to yield, that 35 minutes will be allocated by me among a number of Senators on this side.

Mr. President, first I commend Senator Murray and the Budget Committee for the plan they have presented to us. It represents an enormous step forward on an issue of huge significance to American taxpayers. It is a step toward balanced deficit reduction.

An important part of balanced deficit reduction is reducing the deficit without severely damaging important protections for and investments in American families. One way to do that is by ending unjustified tax loopholes and ending the damage they have inflicted on our budget. Senator Murray's summary of the Foundation For Growth, the budget plan before us, refers to ``the sheer magnitude of the revenue lost to off-shore tax abuse, wasteful and inefficient loopholes, and other business tax breaks.''

Many Senators have focused on this issue over the months and the years. A number of them will, I expect, be joining me on the floor over the next few minutes. For many years as chairman of the Permanent Subcommittee on Investigations I have focused on the maze of offshore schemes and complex gimmicks that are concocted to allow a privileged few to avoid paying the taxes that are rightfully owing.

Our subcommittee has, on a bipartisan basis, filled volume after volume with damning detail on how these schemes work and the damage they cause. As Senator Murray and the Budget Committee have pointed out in their blueprint, we are at a moment in history when we can remove this blight. The pressures on the Federal budget and the threat to economic growth and prosperity that they represent require action. We must close these loopholes. The relentless arithmetic of our budget situation compels it; fairness and justice demand it.

We come to the floor today in support of the revenue provisions in the budget resolution before us. We are going to outline the ways for ending these tax avoidance schemes, the preposterous contortions that too many corporations and wealthy individuals employ to avoid paying taxes. We will illustrate the huge loss in Federal revenues, the resulting rise in deficits from these contortions, and will show how that loss has contributed to a shift in the tax burden from corporations and the wealthy to middle-class families and small businesses. This is a shift that has occurred largely without the notice or the approval of the American public. We are going to demonstrate how closing these loopholes is integral to any balanced deficit reduction agreement that is built on the common good.

The case for additional revenue and for closing tax loopholes as a source of that revenue is overwhelming. Serious deficit reduction requires more revenue, as everybody from the Simpson-Bowles Commission to the Domenici-Rivlin task force to the Concord Coalition to Fix the Debt, has recognized. They have rightly concluded that without additional revenue, the deficit reduction numbers simply do not add up. Republicans have insisted that the discussion of revenue as part of our deficit-reduction approach is finished.

The other day Speaker Boehner claimed, ``The talk about raising revenue is over.'' He is mistaken. Our effort is picking up steam. These Republican protests cannot erase the fact that Federal revenue remains significantly below its historic average as a percentage of the gross domestic product of our economy, and that revenue is, and under current trends will continue to be, below the levels we have needed in the recent past to balance the budget.

In particular, the loss of corporate tax revenues is an ongoing cause of deficits. At a time when corporations enjoy record profits, the highest in half a century, revenue from corporate income taxes has fallen off as a percentage of our taxes collected.

In 2006, corporate tax revenue made up about 15 percent of all Federal revenue. In 2012, it had fallen to 10 percent. Somebody has to pick up the slack. In this case it has been average American families. Why is corporate revenue a shrinking share of our Treasury even though the U.S. corporate tax rate, at 35 percent, is one of the highest in the developed world? It is because the top tax rate doesn't tell the story. While our tax rate at the upper limit is 35 percent on corporations, the average U.S. corporate taxpayer's actual tax rate was just 12 percent in 2011, which is the lowest in generations.

A recent study by two think tanks found that 30 of our largest corporations with combined profits of more $160 billion paid no income tax, zero, from 2008 to 2010.

The Permanent Subcommittee on Investigations, which I chair, has outlined in great detail the black magic that these corporations employ to make their tax bills disappear. One major culprit is offshore tax avoidance. This is hardly a new problem, but it is receiving attention like never before--perhaps because it is simply too big to ignore any longer.

This recent edition of The Economist--just a few weeks ago--pointed out in its lead story and on its cover that tax haven abuse is now a $20 trillion problem for the global economy.

That is $20 trillion, not billion. They also have a special report on this offshore finance. The headline here--and it is an eye-popper, I hope--is that ``The Missing $20 Trillion--How To Stop Companies And People Dodging Tax.''

The Permanent Subcommittee on Investigations has been digging into these abuses for years. Last year a subcommittee report outlined how three U.S. companies--Apple, Google, and Microsoft--had used offshore gimmicks to avoid taxes on almost $80 billion in profits. Much of this tax avoidance stems from manipulation of intellectual property and other intangibles. Companies develop valuable knowledge within the United States, often using tax credits, grants, and other Federal support. They then transfer that valuable property under various legal schemes to offshore subsidiaries at bargain basement prices, thereby shifting the profit that this valuable property generates overseas where it is shielded from taxes.

Other offshore schemes involve pretzel-like twisting of tax laws. For example, the subcommittee found that Hewlett-Packard employed such a gimmick to bring home money that was held offshore--bring it back to the United States--without paying the required taxes. Here is what the law requires: When profits are brought back to the United States, the profits are taxed. The IRS allows an exemption for very short-term loans from offshore subsidiaries to their domestic parent. Hewlett- Packard exploited that exemption by concocting a rotating series of alternating loans from a pair of offshore subsidiaries to make billions of dollars in what should have been taxable repatriated income appear to be short-term loans exempt from taxation. This is a gimmick that is so blatant that even some of Hewlett-Packard's accountants questioned it.

Our subcommittee found that Hewlett-Packard used this offshore cash-- used it here--shielded it in taxes to help run its U.S. operations during the 2010 fiscal year. To quote from the subcommittee's description:

There does not appear to be a gap of a single day during

that period where the loaned funds of either BCC or CHCC--

The two offshore subsidiaries in question--

were not present in the United States. Moreover, a similar

pattern of continuous lending appeared to be occurring for

most of the period between 2008 and 2011.

Now they are talking about short-term loans--which I believe is 30 days or less--but they are supposed to be exempt from taxes when they are lent from an offshore subsidiary back to the parent here in the United States. This has been going on for years without a gap by using a gimmick that they found in the Tax Code, which is egregious. It is time to act.

Senator Whitehouse and I introduced a Cut Unjustified Tax Loopholes Act not too long ago. Our bill would help address some of these tax schemes, and others as well. It is a powerful weapon in our deficit- reduction arsenal if we will use it.

Today a coalition of more than two dozen national public interest groups, as well as dozens of State and local organizations, released a letter urging the Senate to adopt our Cut Loopholes Act.

Mr. President, I ask unanimous consent that this letter be printed in the Record.

I see there are a number of my colleagues who have joined me here in this effort so I will close with the following comment. Some of the people argue that they will consider closing tax loopholes but only if the resulting revenue is used to lower tax rates rather than reducing the deficit. This position is unwise for two reasons. First, the budget deficit is a significant problem for our country, and we should address it. Senator Murray's budget wisely takes the view that we need to act to reduce the deficit.

Second, the people who elected us overwhelmingly believe that reforms to end these tax schemes, which I have outlined, should contribute to deficit reduction. A recent poll shows that more than 80 percent of Americans believe that revenue we recover from closing tax loopholes should be dedicated to reducing the deficit, not to cutting rates.

Let's follow the path this budget resolution before us outlines: spending cuts, yes, but prudent, carefully considered cuts that preserve our most important priorities; Savings from reform of entitlement programs, yes, but reforms to keep the faith with seniors today and in the future. And, yes, revenue, revenue that ends the privileges of an influential few who have for far too long enjoyed unjustified tax breaks that boost corporate profits and the bank accounts of the wealthy few at the expense of ordinary Americans.

Earlier today Senators Whitehouse, McCain, and I--a bipartisan group--filed an amendment to the budget resolution suggesting the need to close tax loopholes. Our amendment makes reference to ending offshore tax abuses by large corporations. Our amendment provides that at least some of the revenue generated must be used for deficit reduction. This bipartisan amendment makes a strong statement on the momentum that is building for balanced, commonsense deficit reduction.

There is a group of Senators who have come to the floor with me so we can end these tax schemes and gimmicks. I thank Senator McCain, Senator Whitehouse, and I thank my other colleagues who are here today for the work they put into a very vitally important issue.

Mr. President, I believe Senator Whitehouse is ready to proceed. Senator Whitehouse is my principal cosponsor on this amendment, along with Senator McCain.

Mr. President, how much time do I have?

Is 9 minutes sufficient?

First let me thank Senator Whitehouse. He has been a leader in this effort for a long time. His support here is critical and will really make a difference.

How much time do I have?

I yield 7 minutes to the Senator from Connecticut.

Mr. President, first of all, let me thank Senator Blumenthal for his tremendous work in this area.

I yield the remainder of my time, which I believe is 6 or 7 minutes, to Senator Shaheen. Is that correct?

Mr. President, I will vote for the bill before us because it ensures the continued operation of government. The overall spending in the bill conforms to the Budget Control Act yet provides needed flexibility for agencies to operate as best they can while under sequestration.

I will continue to seek a comprehensive, bipartisan approach to avoid the harmful effects of sequestration. Any compromise to do so will require both prudent spending cuts and additional revenues. Considering that revenues are necessary as part of the way to alleviate the negative effects of the sequester, this bill is not the appropriate vehicle to address our current budgetary situation. I am hopeful that by passing this bill and ensuring no government shutdown occurs, we can work in a bipartisan and responsible manner to undo sequestration.

This bill does contain important funding for Michigan, including $210.5 million for Army research on combat vehicle and automotive technologies through the Army Tank and Automotive Research, Development and Engineering Center, TARDEC, in Warren. TARDEC is the Department of Defense's leading laboratory for research and development of advanced military vehicle technologies, including efforts to protect Army vehicles against rocket propelled grenades, improvised explosive devices and explosively formed projectiles; advanced materials for tactical vehicle armor; more efficient engines; fuel cell and hybrid electric vehicles; unmanned ground vehicles; computer simulations for vehicle design and training of Army personnel; and technology partnerships with the automotive industry.

The bill also includes funding for the programs of the Army's TACOM Life Cycle Management Command, LCMC, in Warren. TACOM LCMC is the Army's lead organization for the development and acquisition of ground vehicle combat, automotive and armaments technologies and systems. TACOM LCMC-managed systems include the Abrams main battle tank, Bradley Fighting Vehicle, Stryker Armored Vehicle, Mine Resistant Ambush Protected vehicle, and all Army tactical vehicles, such as the HMMWV and Family of Medium Tactical Vehicles.

The bill provides full funding for transportation programs authorized under MAP-21, the 2-year transportation bill signed into law in July that provides critically needed funding for our Nation's roads and bridges. This is a victory because the CR for the first half of the year, and the House-passed CR, do not include the full funding levels authorized in MAP 21.

The bill also provides needed support for American manufacturing. The Hollings Manufacturing Extension Partnership Program, MEP, receives level funding at $128.5 million. It is the only Federal program dedicated to providing technical support and services to small and medium-sized manufacturers. MEP is a nationwide network of proven resources that enables manufacturers to compete globally, supports greater supply chain integration, and provides access to information, training and technologies that improve efficiency, productivity, and profitability.

This program has been used extensively in my home State by the Michigan Manufacturing Technology Center, which operates the Michigan's Manufacturing Extension Partnership Program. MMTC works with manufacturers around the State of Michigan to innovate so they can become more efficient and profitable in order to grow and create jobs.

The bill protects the life and safety of boaters on the Great Lakes by including a provision that denies the administration request to close the U.S. Coast Guard Seasonal Air Facilities in Muskegon. Closing the station would put at risk the large number of boaters on Lake Michigan during the summer. The Muskegon facility has been in place since 1997 and provides an important safety presence during the boating season on Lake Michigan.

During the course of consideration of the Continuing Resolution, the Senate adopted by voice vote an amendment offered by Senators Coburn and McCain that will limit the use of funds of the National Science Foundation for political science research. The amendment was modified before it was adopted under an agreement between the sponsors and Chairman Mikulski and represented a significant improvement over the original amendment. The amendment as modified allows for political science research projects to be conducted when the Director of the National Science Foundation certifies those projects as promoting the economic interests or national security of the United States. I am concerned that this amendment will restrict high quality research in critical areas beyond our national security and economic interests and creates a threshold for certifying eligible political science research projects that could eliminate very worthy projects, if it is not applied wisely and thoughtfully. I hope that a broad interpretation will avoid unnecessary restrictions of legitimate research.

I am disappointed that the continuing resolution does not provide for adequate funding for our financial markets regulators, the Securities and Exchange Commission and the Commodity Futures Trading Commission. I worked with a number of my colleagues on an amendment to improve their funding to ensure they have the resources they need to police the markets. Unfortunately that was not adopted.

On balance, while the bill does not contain sufficient funding for many programs, it also contains funding important to Michigan and ensures the continued operation of government. For this reason, I will vote for it.

Mr. President, for the Committee on Armed Services I report favorably the following nomination lists which were printed in the RECORDS 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.

Madam President, the enduring imprint of a life well lived is the positive impact one has on those closest to them. The way you live your life and the people you touch along the way speak convincingly long after we are gone. Such is the case with Lawrence Newman. By all accounts, he was a loving husband and family man; a strong Christian who devoted much of his time to his church, Hartford Memorial Baptist; and a proud Postal employee for more than 30 years. It is with this in mind that Senator Stabenow and I celebrate his life.

Lawrence Newman was a Detroiter through and through. He was born on May 22, 1935, in Detroit and spent much of his life there. He graduated from Cass Tech in Detroit in 1957 and then went on to study at the University of Detroit. Soon after, he was drafted into the Army and served his Nation honorably until his discharge in 1964.

After serving his country, Lawrence secured employment with the U.S. Postal Service. He would go on to spend three decades helping to ensure the Postal Service continues to meet its obligation to provide efficient service to the people of Detroit and Michigan. In addition to working for the Postal Service, Mr. Newman served as a member of the board of directors of the Detroit Postal Employee Credit Union and of the National Association of Postal Supervisors for many years.

It is clear Lawrence Newman held his Christian beliefs dear. He not only spent four decades as a member of Hartford Memorial, he also served on Hartford Memorial's board of trustees, eventually earning the distinction of trustee emeritus, and as the church's official photographer.

And so we take this moment to remember Lawrence Newman. He leaves behind a wonderful family, including his loving wife of 51 years, Shirley Jane, and 2 sons, David and Daryl. He will be dearly missed, and Senator Stabenow and I are honored to recognize a man who has meant so much.

Mr. President, I would like to announce for the information of the Senate and the public that the Permanent Subcommittee on Investigations of the Committee on Homeland

Security and Governmental Affairs has scheduled a hearing entitled, ``JPMorgan Chase Whale Trades: A Case History of Derivatives Risks and Abuses.'' The Subcommittee hearing will examine matters relating to credit derivative trades made by the JPMorgan Chase Chief Investment Office. The Subcommittee expects to issue a Subcommittee staff report in conjunction with the hearing summarizing its investigative findings and recommendations. Witnesses will include representatives from JPMorgan Chase and the Office of the Comptroller of the Currency. A witness list will be available Wednesday, March 13, 2013.

The Subcommittee hearing has been scheduled for Friday, March 15, 2013, at 9:30 a.m., in Room G-50 of the Dirksen Senate Office Building. For further information, please contact Elise Bean of the Permanent Subcommittee on Investigations at 224-9505.

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

Mr. President, first, I wish to thank Senator Paul, who is going to be offering his amendment in a few minutes, for allowing me to go first. I would like to spend a few minutes speaking in opposition to the Paul amendment.

I wish to talk about the Senate National Security Working Group, which will be the subject of the Paul amendment. This group, along with its predecessor organization, the Senate Arms Control Observer Group, has served a useful role in helping the Senate to fulfill its unique constitutional duty to consider treaties and to provide its advice and consent to their ratification.

The Senate National Security Working Group is a key component of the Senate's ability to provide advice on treaties before those treaties are finalized because the working group begins meeting with the administration early in the process of negotiation. This was the case for the Senate consideration of the New START treaty a few years ago. The National Security Working Group convened a series of briefings and meetings with the administration starting at the very beginning of the negotiation process, and through the group the Senate has many opportunities to learn of the progress and details of negotiations and to provide our advice and views to the administration throughout the process.

Let me first assure my colleagues that throughout the entire New START negotiation process, the members of the National Security Working Group asked a great number of questions, received answers at a number of meetings, stayed abreast of the negotiation details, and provided advice to the administration. It is a vital process that not only allows Senators to engage the administration early in the negotiation process, but it also gives the administration an opportunity to respond to Senators' concerns and questions and to guide the process in such a manner as to avoid problems during Senate consideration of the treaty ratification process. That was, in fact, the principal original purpose of the Arms Control Observer Group, which ensured early Senate engagement during the negotiation process. This process helps to ensure that there is a core of Senators who are informed on treaty matters before the Senate takes up ratification, and through those Senators the entire Senate can have a role.

I also want to mention briefly to my colleagues that the National Security Working Group is perhaps unique among Senate institutions in that it is, by design, purely bipartisan. It is actually composed of an equal number of Senators from each side of the aisle. Its decisions and actions are not controlled by the majority party; they are arrived at entirely through bipartisan agreement--something we could use more of around here. The bipartisan nature of the group, which is central to its function and its crucial role in helping the Senate fulfill its constitutional treaty role, is something we should support and continue.

We expect there are going to be some additional preliminary negotiations and discussions about those negotiations this year. It is very important that this National Security Working Group continues to have the ability to pave the way for negotiations that can be fruitful.

As I yield the floor, I again thank Senator Paul for his courtesy in allowing me to go first.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Mr. President, there is a document posted on the wall of the offices of the Senate Armed Services Committee with all of the staff listed in order of seniority, with the dates on which they started their service. The second name on the list is that of Rick DeBobes, the staff director of the committee, who joined the committee staff 24 years ago, on March 9, 1989. That record of service is all the more remarkable because Rick did not come to the Senate until after he had completed a distinguished 26-year career in the Navy. His last assignment on Active Duty was as legal advisor to Chairman of the Joint Chiefs of Staff William Crowe.

This week, Rick will retire for the second time, culminating an extraordinary record of 50 years of service to the Senate, the Navy, the men and women of our Armed Forces, and his country.

In the course of his service on the committee staff, Rick has played a key role in the enactment of 24 National Defense Authorization Acts. A proud graduate of Georgetown University, Rick received his law degree from Fordham University and a masters' degree in international law from the National Law Center at George Washington University. He has gone on to have what I am sure must be a far greater influence on international law than any of his professors or mentors could have imagined. It is no exaggeration to say that Rick DeBobes has been involved in writing or improving virtually every major piece of national security legislation to come before the Congress in the last quarter century, starting with the Goldwater-Nichols legislation that he helped shape before joining the committee staff.

For the last 10 years, Rick has served as staff director of the Senate Armed Services Committee--one of the toughest and most important jobs in the Senate. In this capacity, Rick has not only helped guide our annual National Defense Authorization Act to enactment each year, but also played a vital role in congressional oversight of our military operations in Iraq, Afghanistan, and elsewhere. His leadership of the committee staff has also seen the enactment of the Wounded Warrior Act, the Detainee Treatment Act, the Military Commissions Act of 2009, the Weapon Systems Acquisition Reform Act, TRICARE for Life, and the repeal of don't ask, don't tell, along with other major legislation. Rick's advice and counsel on all of these matters--informed by his unique background and experience--have been invaluable not only to me and to other members of the Armed Services Committee, but also to our military chiefs of staff, combatant commanders, and other senior military and civilian officials in the Department of Defense.

In the 16 years that I have served as chairman or ranking member of the Armed Services Committee, Rick has spent countless hours in my office, discussing national security matters of every kind. He has joined me on virtually every overseas trip I have taken, including more than a dozen trips to Iraq and Afghanistan. We have met together with Senators, Secretaries of Defense, chiefs of staff, and foreign heads of state. We have been through markups, floor debates, and conferences together. Through all of this, I have not only appreciated and needed Rick's wise counsel, I have enjoyed his company.

Rick's hallmark as staff director has been the composure, the steadiness, and the sound judgment that he brings to the job every single day. The committee staff often line up outside Rick's office door, bringing him one crisis after another that needs to be addressed. Whether it is early in the morning before a hearing or late at night after a ``Little 4'' meeting in conference, Rick always makes time for the staff. And I don't think any of us have ever seen Rick lose his cool--except perhaps when his beloved Georgetown Hoyas basketball team blows a late lead.

As Rick leaves us to enjoy a well-deserved retirement with his wife Margaret, his children, and his grandchildren, I know I speak for the entire Armed Services Committee--members and staff--when I say: Thanks, Rick, for a job extraordinarily well done, and best wishes for the future.

Mr. President, I believe the business before the Senate now is the vote on the reconsideration of the motion to end debate on the Hagel nomination. Is that correct?

Mr. President, I believe it is now time for us to vote on the Hagel nomination.

Of course.

MR. INHOFE. It is my understanding that we have equally divided our time between now and noon. That is about 1 hour 40 minutes. I ask unanimous consent, on the Republican side, that I be given the first 10 minutes and the last 15 minutes of our Republican time.

Mr. President, it is now time for us to vote up or down on the nomination, for many reasons.

The nomination has been before us for an adequate length of time for us to get the information our colleagues have asked for, but also there is the looming fact of sequestration. We need to have a Secretary of Defense who is not only in office but whose leadership is not in limbo but is there. Our troops need it. Their families need it. Our country needs it.

As of today we have 66,000 military personnel in harm's way in Afghanistan. The President of Afghanistan has just directed the United States to remove its special operations forces from a key Afghan province. Our military faces key decisions about the pace of the drawdown between now and the end of 2014, the size and composition of a residual force, and the terms and conditions for the ongoing presence in Afghanistan of the United States and our coalition partners after 2014.

At the same time we face new and growing threats elsewhere, including the ongoing threat posed by Iran's nuclear weapons program and the increasingly destructive civil war in Syria, with the risk that that conflict could result in the loss of control over that country's substantial stockpile of chemical weapons. There is also the growing instability in other countries affected by the Arab spring; the growth of al-Qaida affiliates in ungoverned regions, including parts of Yemen, Somalia, north Africa; and the continued unpredictable behavior of the nuclear-armed regime in North Korea.

We face these challenges at a time when the Department of Defense budget is under unique pressure as a result of cuts previously agreed upon by Congress, the budgeting by continuing resolution, and the impending threat of a sequester. These across-the-board cuts will affect Defense and just about every other agency we have. Those cuts are going to be disastrous in many ways. I hope we can still find ways to avoid them, but as of right now the threat of a sequester is a real one. It is within a few days.

The Department of Defense has already instituted civilian hiring freezes, reduced or eliminated temporary and term employees, deferred facilities maintenance, and begun canceling or postponing the maintenance of ships, aircraft, and ground vehicles. In the next few days, the Department will begin to implement additional actions, including furloughs for most civilian employees, cutbacks in flying hours, steaming hours and other military training, and cancellation of contracts. And those contracts, when they are cancelled, have major costs to the Treasury. Those are not savings, except in the short term, perhaps. But in

the long term, we not only lose the equipment and the product of the contracts, but we also have these cancellation costs which will hit the Treasury.

The result of these looming cuts is truly devastating and it is serious. For example, the Army informs us that if sequestration continues through the end of the fiscal year, two-thirds of its brigade combat teams will fall below acceptable readiness levels. The Air Force says it will not be able to support requirements outside of Afghanistan and will experience significant degradation in its airdrop and refueling capabilities. The Navy says the Nimitz and the George H.W. Bush carrier strike groups will not be ready for scheduled deployments later this year, resulting in an indefinite extension of the Truman and Eisenhower deployments, with the resulting impact on morale and retention.

Hundreds of Department of Defense investment programs, acquisition programs, and research and development projects may become unexecutable because we have insufficient funds to enter needed contracts. By the end of the summer, the Department of Defense says it will be unable to pay its TRICARE bills and will be in a position of having to deny that critical health care service to military members, families, and retirees.

Our men and women in uniform need a Secretary of Defense to lead them through these difficult challenges. They need a Secretary of Defense to defend their interests in the budget battles we know are about to come. They need a Secretary of Defense to speak out and ensure that Congress and the country understand the consequences of sequester and, if the sequester cannot be avoided, to help them avoid the worst of those consequences and to end the impacts as quickly as possible. Now, as much as anytime in the recent past, is not a time when we can afford to leave the Department of Defense with leadership that is in limbo.

Information has been requested, appropriately, by colleagues about the nominee. Information has been provided to the best of the nominee's ability. This information falls into two categories: requests for Senator Hagel's speeches and requests for additional financial disclosure.

With regard to the speeches, Senator Hagel and his team have conducted an exhaustive review and have provided us with all of the speeches available to them--not only the prepared statements requested in our committee questionnaire but also transcripts and even videos of speeches he has been able to obtain from outside sources. Before the recess, I placed in the Record links to several other speeches that had surfaced on the Internet.

In recent days, Senator Hagel has received additional requests for speeches in the exclusive control of the Washington Speakers Bureau and for access to his senatorial archives at the University of Nebraska.

On the first point, the Washington Speakers Bureau has informed Senator Hagel and the Department of Defense that all speeches given under its auspices are ``private, off the record, and not recorded''-- except in rare cases where a customer requests that a recording be kept for archival purposes only. Further, the Department of Defense informs us that the Washington Speakers Bureau will not provide any recordings of speeches that were given by Senator Hagel or even confirm which of its clients may have recorded speeches. Since neither Senator Hagel nor the Department of Defense has access to these speeches, they cannot be provided to the Senate.

On the second point, the University of Nebraska holds title to Senator Hagel's archives. The University has publicly stated that once the archives are processed and indexed according to the standards of the Society of American Archivists, they will be open to the public. Until that time, the archives will not be open to the public. Again, since neither Senator Hagel nor DOD has access to these materials, they cannot provide them to us. It is also worth noting that these archives cover the period of Senator Hagel's service in the Senate. Senator Hagel has an extensive record of speeches and votes during this period that are readily accessible to the Senate and the public through the Congressional Record and other official documents.

With regard to financial disclosure, Senator Hagel has complied with the same disclosure requirements and conflict of interest rules that have applied to at least the last eight Secretaries of Defense and to hundreds of other nominees for senior DOD positions over the course of the last five administrations.

Despite his compliance with the same disclosure rules that apply to everybody else, we have heard innuendos that Senator Hagel is trying to hide something. Senator Hagel serves with a number of distinguished individuals on the Board of Advisors of a private equity firm. We had one Senator suggest, without any evidence, that ``it is, at a minimum, relevant to know'' if the fees that Senator Hagel received for his service on this Board ``came directly from Saudi Arabia, [or] . . . from North Korea.'' Another Senator suggested that we should postpone a vote on the nomination because ``FOX News is going to run a story tomorrow regarding some speeches . . . which were made and paid for by foreign governments . . . [that] may not be friendly to us.'' This story apparently died before it was aired, because it was apparently based on a hoax.

These are unfair innuendos and they have been answered even though they are unfair.

Senator Hagel has an extensive record of service to his country. As a young man, he enlisted in the Army and served with distinction in Vietnam. He served as the head of the USO, and as the Deputy Administrator of the VA during the Reagan Administration. He was a businessman. Many of us served with him during his two terms in the Senate. Since he left the Senate, he has continued to serve, as co- chairman of the President's Foreign Intelligence Advisory Board, a member of the Defense Policy Board, and a member of the Energy Department's Blue Ribbon Commission on America's Nuclear Future.

Senator Hagel has been endorsed by five former Secretaries of Defense, three former Secretaries of State, and six former National Security Advisors, who served under both Democratic and Republican Presidents. He has been endorsed by the Veterans of Foreign Wars, the Iraq and Afghanistan Veterans of America, AMVETS, Vietnam Veterans of America, and the American Legion. He has received the support of the Military Officers Association of America, the Foreign Area Officers Association, and the Non Commissioned Officers Association.

Last month, Senator Hagel was endorsed in a letter signed by six former U.S. Ambassadors to Israel, along with dozens of other retired senior diplomats. The letter stated:

We support, strongly and without qualification, President

Obama's nomination of Chuck Hagel to be the next Secretary of

Defense. Most of us have known the Senator for a decade or

more and consistently have found him to be one of the best

informed leaders in the U.S. Congress on national security

issues.

Senator Hagel's political courage has impressed us all. He

has stood and argued publicly for what he believes is best

for the United States. Time and again, he has chosen to take

the path of standing up for our nation, rather than the path

of political expediency. He has always supported the pillars

of American foreign policy: a strong military; a robust

Atlantic partnership; a commitment to the security of Israel,

as a friend and ally; a determination to stop the

proliferation of nuclear weapons; and the defense of human

rights as a core principle of America's role in the world. .

. .

We urge speedy confirmation of this outstanding American

patriot to be the next Secretary of Defense.

If confirmed, Senator Hagel would be the first former enlisted man, and the first veteran of the Vietnam War, to serve as Secretary of Defense. This background gives Senator Hagel an invaluable perspective not only with respect to the difficult decisions and recommendations that a Secretary of Defense must make regarding the use of force and the commitment of U.S. troops overseas, but also with respect to the day-to-day decisions a Secretary must make to ensure that our men and women in uniform and their families receive the support and assistance that they need and deserve. It would be a positive message for our soldiers, sailors, airmen, and marines in harm's way around the world to know that one of their own holds the highest office in the Department of Defense.

The President needs to have a Secretary of Defense in whom he has trust, who will give him independent advice,

a person of integrity and one who has a personal understanding of the consequences of decisions relative to the use of military force. Senator Hagel certainly has those critically important qualifications and he is well-qualified to lead the Department of Defense.

The vote which is coming at noon is a vote to invoke cloture to end the debate so we can finally, later on today, hopefully, but at some future hour, finally vote on this important nomination and end the situation where this nominee is in limbo and the leadership of the Department of Defense is uncertain and in limbo as well. The time has come to vote on the nomination of Senator Hagel, and to do that we must end debate and invoke cloture.

I yield the floor.

I have no objection after the Senator from Illinois is recognized.

Yes.

Mr. President, may I inquire how much time remains on both sides?

First, on the question of whether this is a filibuster, under our rules Senators have a right to speak and debate as long as they want until 60 Senators decide it is time to end debate. That is the definition, under our rules, of a filibuster. And that is the right of Senators to engage in. That is not the issue, as to whether it is right; the issue is whether it is now time to end debate. Under our rules, in order to bring debate to an end, where Senators insist on continuing a debate unless 60 Senators vote to end it, this is what this vote will be about at noon--whether we want to bring this debate to an end. Why? Well, first of all, we need a Secretary of Defense. But before we can get a Secretary of Defense, there has to be a vote on the nomination itself. The vote at noon will be a vote as to whether we want to bring this debate to an end so that we can, at a later time-- hopefully today--then vote on the nomination itself. That is a majority vote, not 60 votes. In fact, the final vote on either a nominee or on a bill is always a majority vote. The 60 votes comes into play when Senators say: We are not going to end debate. We have a right to talk as long as we want in the Senate until 60 Senators vote to end it. And we demand that vote of 60 Senators takes place to see if there are 60 Senators who want to end debate. That is called cloture. That is what we will be voting on at noon. That is the very definition of a filibuster, under our rules.

So it is not unusual, as the Senator from Oklahoma says, for there to be a demand for a cloture vote on positions in the Cabinet. That has happened before. But what has never happened is that that has been insisted upon for a nomination to be Secretary of Defense. That is what is unusual.

It seems to me it is essential now that we get to the vote on the nomination itself, which will come later on today--again, I hope--and the only way to do that is if we vote to end the debate on this nomination, which is what will take place at noon. Whether there will be 60 votes, we will find out at noon, but hopefully there will be because this is a position which needs to be filled.

There have been many misstatements about quotes of Senator

Hagel. Obviously, not all of the statements that have been attributed to him are misstatements, but some of them are. Just one of them we heard earlier this morning was about the fact that he has talked about the sickening slaughter by the Israelis in the case of Lebanon. So here is the quote, and it was a full speech. It was on C-SPAN. The quote is--and this involves the issue of Lebanon--``The sickening slaughter on both sides must end.'' So what Senator Hagel was bemoaning was the loss of lives on both sides. I would hope that decent people everywhere would bemoan the massive loss of lives on both sides that occurred during those events in Lebanon. I was there, and I saw what happened-- the huge loss of life. So he was bemoaning the sickening slaughter on both sides and saying it must end and calling on President Bush to call for an immediate cease-fire. I find nothing reprehensible about such a call.

This has been a debate which has raised a lot of issues, but, to me, some of the most compelling arguments have been made by former Secretaries of Defense and State urging that we approve and confirm Senator Hagel.

Mr. President, I ask unanimous consent to have printed in the Record letters of support to which I will refer. At an earlier time, they were made part of the Record, but it is important that they be made a part of the Record of today's debate and not just previous debates.

The first letter is a letter of 11 Ambassadors, including four former Ambassadors to Israel, in which these Ambassadors say that Senator Hagel ``has always supported the pillars of American foreign policy--such as a strong NATO and Atlantic partnership; a commitment to the security of Israel, as a friend and ally . . . ''

The second letter is from 13 former Secretaries of Defense, State, and National Security Advisers, including a number of Republicans who served in Republican administrations. Part of their letter reads as follows:

His approach to national security and debates about the use

of American power is marked by a disciplined habit of

thoughtfulness that is sorely needed.

It also says:

Our extensive experience working with Senator Hagel over

the years has left us confident that he has the necessary

background to succeed in the job of leading the Department of

Defense.

These, again, are 13 former Secretaries of Defense.

Then there is a series of letters that came in from veterans organizations. These are elegant pleas for Senator Hagel to be confirmed.

This is from the Non Commissioned Officers Association of the United States:

Senator Hagel has championed personnel issues relating to

combat dwell time, force protection, transition issues

including electronic medical issues, preparation for future

employment and training . . . He also recognizes the value

and sacrifice of families of the men and women who serve in

this Nation's Uniformed Services.

This is from AMVETS:

AMVETS fully supports President Obama's nomination of Chuck

Hagel for the future Secretary of Defense. As a veterans

service organization, AMVETS' main mission is to serve as an

advocate for veterans, their families and the community in

which they live. I am confident that former Senator Hagel

will utilize his experience and understanding of America's

military to lead this nation's troops and the Department of

Defense.

In terms of Israel and in terms of Iran, I wish to read a couple of statements of Senator Hagel and about Senator Hagel--first in terms of his statements about Iran. In his 2008 book, he said:

At its core, there will always be a special and historic

bond with Israel, exemplified by our continued commitment to

Israel's defense.

And this is a statement made by an Israeli Deputy Foreign Minister whose name is Danny Ayalon. This is what he said just recently:

Senator Hagel believes in the natural partnership between

Israel and the United States. Senator Hagel is proud of the

volume of defense relations between Israel and the United

States, which are so important for both countries. Hagel is a

true American Patriot and the support America gives Israel is

in America's interest, so I am optimistic.

Relative to Iran, this is what Senator Hagel has said about Iran:

Iran poses a significant threat to the United States, our

allies and partners, and our interests in the region and

globally. Iran continues to pursue an illicit nuclear program

that threatens to provoke a regional arms race and undermine

the global nonproliferation regime. Iran is one of the main

state sponsors of terrorism and could spark conflict,

including against U.S. personnel and interests.

He has also said that he is ``fully committed to President Obama's goal of preventing Iran from obtaining a nuclear weapon,'' and he has said that ``all options must be on the table to achieve that goal.'' He specifically said that his policy will be that of the President's policy--one of prevention and not containment.

Relative to sequestration--and we are facing sequestration--Senator Hagel has said the following, which is also what Secretary Panetta has said.

Sequestration, if allowed to occur, would damage our

readiness, our people and our military families. It would

result in the grounding of aircraft and returning ships to

port, reducing the Department's global presence and ability

to rapidly respond to contingencies. Vital training would be

reduced by half of current plans and the Department would be

unable to reset equipment from Afghanistan in a timely

manner. The Department would reduce training and maintenance

for nondeploying units and would be forced to reduce

procurement of vital weapon systems and suffer the subsequent

schedule delays and price increases. Civilian employees would

be furloughed. All these effects negatively impact long-term

readiness as well. It would send a terrible signal to our

military and our civilian workforce, to those we hope to

recruit, and to both our allies and adversaries around the

world.

Mr. President, we must end this uncertainty about this position. It is time for us to end this debate, and that is what we will be voting on now. Later on there will be a vote on whether to confirm Senator Hagel. The vote now is whether to bring this debate to an end. I hope we will do so and get on to the nomination vote.

I yield the floor, as I think it is noon and time for a vote.

Before Senator Sanders leaves, let me commend him. I didn't hear all his remarks, but I know the subject of his address, his remarks, was the fact corporations now contribute about 10 percent of the total revenue which comes into Uncle Sam. Years ago, it was about 50 percent, and then gradually it has come down to about where it is now.

The reason for that, mainly, is that there are a whole bunch of gimmicks and loopholes which have been inserted into our tax laws which need to be closed. If they can be closed, we would be able to avoid sequestration. That is how big the loopholes are.

I am not talking about deductions, which most people would say serve a useful purpose. Whether people agree with that purpose, at least deductions, as we generally understand deductions, serve some kind of a productive purpose. For instance, corporations get accelerated depreciation when they buy equipment. That serves a very important purpose. It gives an incentive to buy equipment.

Even the oil and gas credit, which I don't support, nonetheless, the purpose of it is to give an incentive to explore and drill for oil and gas. Whether one agrees with that purpose, at least it is a purpose. When it comes to these loopholes and gimmicks which are used to shift revenues to tax havens, there is no useful purpose. The only purpose is taxable. Those are the loopholes which we can close, and those are the loopholes which it seems to me there ought to be broad bipartisan support to close. If we can close them, we can avoid sequestration. Again, that is how big these loopholes are.

I very much appreciate the reference by the Senator from Vermont to our Permanent Subcommittee on Investigations and the work we have been doing, and I very much appreciate the energy he brings to this effort. It ought to be bipartisan. Again, these kinds of loopholes are not what most people consider to be legitimate deductions but are a kind of tax- avoidance scheme that should not be in the law even if we had no deficit. I guess one of the critical differences between these kinds of tax-avoidance gimmicks and the ordinary deductions corporations take is the fact that the use of these and the abuse of these should be eliminated on a bipartisan basis.

So I would like to thank my friend. I wish I had caught the early part of his remarks, but that was not to be.

Mr. President, is the remainder of the time reserved for the Hagel nomination or is it just open?

And the vote is to take place at 4:30?

And the time is evenly divided?

Mr. President, 5 weeks ago Senator Hagel was warmly introduced at his nomination hearing by two former chairmen of the Senate Armed Services Committee, Senator Sam Nunn and Senator John Warner, who represent the best bipartisan tradition of the Senate and our committee. As a matter of fact, the Presiding Officer, Senator Manchin, was present at the time when that presentation was made by Senators Nunn and Warner, and he was a witness to how powerful their testimony in support of Senator Hagel was.

Senator Nunn told the committee:

I believe that our Nation is fortunate to have a nominee

for Secretary of Defense with the character, the experience,

the courage, and the leadership that Chuck Hagel would bring

to this position.

He said:

There are many essential characteristics and values that a

Secretary of Defense should possess in our dangerous and

challenging world.

And he named a few of them, including someone who sets aside fixed ideology and biases to evaluate all options and then provides his or her candid judgment to the President and to the Congress. He also named this characteristic: someone who pays attention to people with the best ideas regardless of their party affiliation.

And then Senator Warner said:

Folks, there is an old saying in the combat Army infantry

and Marine Corps. ``Certain men are asked to take the

point,'' which means to get out and lead in the face of the

enemy. Chuck Hagel did that as a sergeant in Vietnam. If

confirmed, Chuck Hagel will do it again, this time not before

a platoon, but before every man and woman and their families

in the Armed Services.

Facing Senator Hagel, he said this:

You will lead them. And they will know in their hearts we

have one of our own.

Earlier today the Senate acted in a bipartisan fashion in voting to end the filibuster of this nomination by a very substantial vote.

If confirmed, Senator Hagel would be the first former enlisted man and the first veteran of the Vietnam war to serve as Secretary of Defense. This background gives Senator Hagel an invaluable perspective not only with respect to the difficult decisions and recommendations a Secretary of Defense must make regarding the use of force and the commitment of U.S. troops overseas but also with respect to the day-to- day decisions a Secretary must make to ensure that our men and women in uniform and their families receive the support and assistance they need and deserve.

Our country faces major challenges. Abroad, we face challenges from Afghanistan, where the Department of Defense faces key decisions about the pace of the drawdown between now and the end of 2014, decisions about the size and the composition of a residual force, and decisions about the terms and conditions for our ongoing presence in Afghanistan after 2014.

Elsewhere overseas, we face the ongoing threat of Iran's nuclear weapons program, the destruction and instability caused by Syria's civil war, and the outgrowth of al-Qaida affiliates in ungoverned regions, including Yemen, Somalia, and north Africa.

We also face extremely difficult issues here at home. We have been warned that sequestration and a yearlong continuing resolution risk creating a hollow force and could confront our military leaders with the untenable choice between sending troops into harm's way without adequate training and equipment or being unable to take on certain missions at all. The Chairman of the Joint Chiefs of Staff has described the impact of this budget crisis on the Department of Defense as a 10 on a scale of 1 to 10.

Now as much as anytime in the recent past, our men and women in uniform need a Secretary of Defense to guide them through difficult situations around the world and to defend their interests here at home. The President needs a Secretary of Defense in whom he has trust, who will give him unvarnished advice, a person of integrity and one who has a personal understanding of the consequences of decisions relative to the use of military force.

It is time to end the uncertainty relative to the leadership at the Pentagon. The time has come to now confirm Chuck Hagel as our next Secretary of Defense, and I hope the Senate will, on a bipartisan basis, soon do exactly that.

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

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

Mr. President, I ask for the yeas and nays.

Madam President, pursuant to the requirements of paragraph 2 of Rule XXVI of the Standing Rules of the Senate, I ask unanimous consent to have printed in the Record the rules of the Committee on Armed Services.

Mr. President, for the Committee on Armed Services I report favorably the following nomination lists which were printed in the Records 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, I ask unanimous consent that the Committee on Agriculture, Nutrition, and Forestry be authorized to meet during the session of the Senate on February 26, 2013, at 11:50 a.m. in room S-219 of the Capitol.

Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on February 26, 2013, at 10 a.m.

Mr. President, I ask unanimous consent that the Committee on Environment and Public Works be authorized to meet during the session of the Senate on February 26, 2013.

Mr. President, I ask unanimous consent that the Committee on Finance be authorized to meet during the session of the Senate on February 26, 2013.

Mr. President, I ask unanimous consent that the Committee on Finance be authorized to meet during the session of the Senate on February 26, 2013, at 10 a.m., in room 215 of the Dirksen Senate Office Building, to conduct a hearing entitled ``The Budget and Economic Outlook: Fiscal Years 2013 to 2023.''

Mr. President, I ask unanimous consent that the Committee on Health, Education, Labor, and Pensions be authorized to meet, during the session of the Senate, to conduct a hearing entitled ``State Leadership and Innovation in Disability Employment'' on February 26, 2013, at 2:30 p.m., in room G50 of the Dirksen Senate Office Building.

Mr. President, I ask unanimous consent that the Committee on Homeland Security and Governmental Affairs be authorized to meet during the session of the Senate on February 26, 2013, at 3:45 p.m.

Mr. President, I ask unanimous consent that the Committee on Indian Affairs be authorized to meet during the session of the Senate on February 26, 2013, in room SD-628 of the Dirksen Senate Office Building, at 3 p.m.

Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet during the session of the Senate, on February 26, 2013.

Mr. President, I ask unanimous consent that the Committee on Veterans' Affairs be authorized to meet during the session of the Senate on February 26, 2013. The Committee will meet in room 345 of the Cannon House Office Building at 2 p.m.

Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on February 26, 2013, at 2:30 p.m.

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

Mr. President, I ask unanimous consent that the Senate proceed to a period of morning business, with Senators permitted to speak for up to 10 minutes each.