Floor Statements

Madam President, the American people are counting on us to act to stabilize and revitalize the economy, and the Economic Recovery and Reinvestment Act that the Senate is considering is an essential part of that effort. It will create jobs and make investments to bolster our economy in both the short and long term.

The situation is dire. The Nation is in a deep recession. Michigan's unemployment rate is the highest in the country. Michigan has lost over half a million jobs since January 2001, and more than 300,000 of those were manufacturing jobs. In this January alone, the Nation lost 598,000 jobs, including 207,000 manufacturing jobs, and the number of first- time jobless claims was higher than any time in the past quarter century. The economy is in very bad shape, and it is getting worse.

Job creation must be our No. 1 priority as we work to turn the economy around, and jobs are the focus of this recovery plan. The provisions in this bill are designed to create jobs, including funding for infrastructure, tax cuts, and investments in critical technology. The Obama administration estimates that this plan will create or save over 3 million jobs nationwide--well over 100,000 jobs in Michigan alone--over the next 2 years, including jobs in health care, clean energy and construction.

The recovery plan includes funding for investments in technology and modernization efforts that can help us compete in the global economy.

The bill includes $2 billion in funding for the Department of Energy for grants to manufacturers of advanced batteries and battery systems, which will help provide American manufacturers the resources and the support they need to manufacture these batteries in U.S. facilities. The recovery package also includes $100 million in Defense Production Act funding, which will go toward the support of manufacturers of technologies for the next generation of vehicles used by the military. This funding is critical because battery manufacturers and other manufacturers are deciding now where to locate their production facilities, and we cannot afford to lose those facilities and the jobs located there to other countries that are willing to offer greater financial incentives than we are.

The package also includes significant measures to expand the American market for advanced technology vehicles. It increases from 250,000 to 500,000 the number of plug-in hybrid vehicles eligible for the consumer tax credit for these vehicles. And it includes funding for Federal agencies to aggressively lease alternative energy vehicles--such as hybrid vehicles--to support a wide variety of agency missions. Government leasing of these vehicles will help stimulate production of these vehicles. We cannot just preach about the need to produce these vehicles. We must lead the way in purchasing them, even though their up-front cost is greater.

Shovel-ready infrastructure projects are the most immediate way to create jobs and get the economy moving quickly. The recovery plan includes over $45 billion in funding for ready-to-go road, bridge, rail and other projects to immediately and directly create jobs. I supported an amendment that would have added further funding for such projects, which unfortunately did not pass. Michigan has over $3 billion in transportation projects that can be commenced within 180 days. Even without the additional funding, the legislation we are considering will provide Michigan with nearly $900 million in highway formula funds and $165 million in transit formula funds, allowing for significant repairs to roads and bridges and purchases of buses for our public transit authorities. There is additional funding which will hopefully result in investments in the midwest high-speed rail corridor, and improvements to Amtrak that can help bring commuter rail to Michigan. I am especially pleased that the Senate stimulus bill distributes the highway infrastructure funds using the Surface Transportation Program, STP, authorized under the current highway law. The STP formula treats Michigan and other donor States in a much fairer manner than other highway funding allocation formulas.

The legislation also provides $2 billion for the Army Corps to address river and harbor, flood and ecosystem restoration projects across our Nation. I am hopeful that a significant portion of these funds will be directed to the Great Lakes navigational system, one of our Nation's most important maritime highways, which faces a backlog

in many much-needed maintenance projects that are ready to go.

Additionally, the legislation includes $6 billion for water infrastructure investments that will immediately employ people, protect public health, improve the environment, and create a stronger economic climate. This bill will provide Michigan with over $150 million for job-creating projects to address crucial wastewater needs, and about $70 million to improve water mains, leaking pipes, water treatment plants, pumping stations, and similar projects. It also includes $200 million for environmental infrastructure projects that can create jobs while helping to mitigate the impact of combined sewer overflows, which dump harmful pollutants into the Great Lakes every year.

There are also nearly $200 million worth of projects identified in conjunction with the Great Lakes Legacy Act, which was reauthorized in 2008 in order for the EPA to clean up contaminated sediments in the Great Lakes, which are shovel ready and could be done in a few months. Last year, the Brookings Institution released a report that concluded that a Federal investment would yield economic benefits of 2\1/2\ to 1. I will continue to push for these projects to be funded promptly from the appropriations in this bill.

The recovery package also includes $100 million in competitive grants for the cleanup of brownfield sites where redevelopment is complicated because of real or potential environmental contamination. Last year, Michigan was awarded $8 million for 22 such projects, and I am hopeful that a good portion of these grants will be awarded to Michigan communities. Because most of Michigan's grants were awarded for site assessments, rather than actual cleanup projects, I joined my colleagues Senators Cardin and Voinovich in sponsoring an amendment that would allow the grants to be awarded for both assessments and cleanup projects. Both of these uses would quickly put people to work and make these sites attractive for investment and reuse, creating additional new jobs, generating additional tax revenues, and improving communities' overall quality of life.

Finally, on the infrastructure front, the bill includes about $750 million for the National Park Service to address the lengthy backlog of maintenance projects and other important needs. I am hopeful that a significant portion of these funds will be used at Michigan's four national park units and the North Country National Scenic Trail. Michigan's park and trail funding needs are great, and numerous projects have been deferred for several years. It is estimated that Michigan's parks and trails could use upwards of $35 million in funding for infrastructure investments that could be started within the next 18 months. I was concerned that the $23 million set aside for deferred maintenance of trails might exclude, for technical reasons, developing scenic trails, like the North Country Trail, which has 1,150 miles that run through Michigan. I obtained assurances on the record from Senator Feinstein, the sponsor of the trail funding language that such trails would in fact be eligible for the trail funding, and I am hopeful that many trail maintenance projects will begin soon, creating jobs and boosting the economy.

The recovery bill will provide funds investing in health information technology, computerizing health records to reduce medical errors and save billions of dollars in health care costs.

The tax provisions in this legislation will create a refundable tax credit of $500 for working individuals and $1,000 for working families, covering 95 percent of working families. Taxpayers can receive this benefit through a reduction in the amount of tax that is withheld from their paychecks, or through claiming the credit on their tax returns. This will mean direct and immediate relief for nearly 4 million Michigan workers. For many struggling families, this will help them make ends meet in these tough times. By putting extra money in families' pockets, these targeted tax cuts will offer an immediate boost to the economy.

This recovery plan includes important measures that will modernize the current unemployment benefits system which includes administrative dollars and funds to incentivize States to modernize their unemployment insurance programs. This would mean more than $90 million for the State of Michigan right off the bat. This plan will also provide a further extension of unemployment benefits which will help the approximately 162,000 unemployed workers in Michigan who are unable to find a job in these hard economic times and whose unemployment benefit will expire. Additionally, it will provide an additional $100 per month in unemployment benefits, pumping money directly into depressed economic areas. Further, the bill temporarily exempts the first $2,400 unemployment benefits from income tax, meaning more of these funds can go to recipients and help grow the economy. Providing job training in new and expanding fields will help to lower the unemployment rate and help today's workers better compete against foreign competition. The bill provides $3.4 billion for job training including State formula grants for adult, dislocated worker, and youth programs, including $1.2 billion to create up to one million summer jobs for youth. The training and employment needs of workers also will be met through dislocated worker national emergency grants, new competitive grants for worker training in high growth and emerging industry sectors, with priority consideration to ``green'' jobs and health care, and increased funds for the Job Corps and YouthBuild programs. Green jobs training will include preparing workers for activities supported by other economic recovery funds, such as retrofitting of buildings, green construction, and the production of renewable electric power. It also provides $500 million for State formula funds for vocational rehabilitation State grants to help individuals with disabilities prepare for and sustain gainful employment; and $400 million for employment services grants to match unemployed individuals to job openings through State employment service agencies and allow States to provide customized reemployment services.

The bill includes funding to enhance and expand education initiatives aimed at ensuring that our next generation of Americans is able to meet the challenges of a global economy. It includes a $39 billion State fiscal stabilization fund for local school districts and public colleges and universities, distributed through existing State and Federal formulas, and $7.5 billion to States as incentive grants as a reward for meeting key education performance measures. It also addresses the needs of educationally disadvantaged students served through the Title I program, including $12.4 billion to help close the achievement gap and enable these students to reach their potential. Further, the bill includes $13 billion to improve educational outcomes for children served under the Individuals with Disabilities in Education Act. This level of funding will increase the Federal share of special education services to its highest level ever. Finally, the bill adds $13.9 billion to increase the Pell grant maximum award and pay for increases in program costs resulting from increased eligibility and higher Pell grant awards. The bill supports an increased Pell Grant maximum award of $281 in the 2009-2010 academic year and $400 in the 2010-2011 academic year, which will help 7 million students pursue postsecondary education.

A provision was also included to encourage use of the low-income housing tax credit, an important tool for the development of affordable rental housing.

Together, the provisions in this bill offer significant hope for our Nation's economic future. Still, a comprehensive economic recovery effort is balanced on a three legged stool consisting of creating jobs, unfreezing credit markets, and addressing the housing crisis, including reduction in the flood of foreclosures.

I am assured that the Obama administration is moving towards prompt action on the other fronts. President Obama will soon be putting forward a significant housing measure focused on reducing foreclosures and stabilizing home values. The Treasury Department is working to reconfigure the so-called TARP funds, of which $350 billion remains, to unfreeze our Nation's credit markets. The Treasury is also establishing sensible conditions for financial institutions who receive loans

from the government so we can monitor what they do with the funds and get them to resume the flow of credit.

This recovery plan represents an essential step toward stabilizing our economy. The infrastructure projects will create Michigan jobs, the tax provisions will help Michigan families and the investments in technology and modernization will pay dividends for years to come. While I am mindful of the further challenges we must address in order to end this recession, I support the Economic Recovery and Reinvestment Act with a sense of real urgency.

Mr. President, as the Senate works to boost our ailing economy, I want to clarify that funding provided to the National Park Service for trail projects would not be limited to only certain trails. The bill provides $158 million for the operation of the National Park System, of which $23 million is recommended in the report for deferred maintenance of trails. I understand this funding could be used for any trails in the National Park System, including the eight National Scenic Trails. Is that correct?

The North Country National Scenic Trail, the longest scenic trail designed in America, traversing seven States including the State of Michigan, has great needs and could use the funding provided in this economic recovery package. In Michigan alone, the North Country National Scenic Trail has maintenance needs totaling $2.5 million that have been postponed for too many years. These trail upgrades and maintenance projects would put people to work right away and spur additional economic activity. I was concerned the report accompanying the economic recovery bill could be misinterpreted to limit this funding to so-called units of the National Park System. Only three of the eight National Scenic Trails have unit status, and limiting funding in that way would be arbitrary and unfair. I believe this funding should be available for any NPS-administered National Scenic Trail, whether designated as a unit or not, for trail construction, rehabilitation and maintenance. Is that the Senator's intent as chairman of the Interior Appropriations Subcommittee, and I believe the sponsor of the language?

I thank Chairman Feinstein for including this funding and clarifying its use.

wastewater infrastructure funding

Madam President, I move to reconsider the vote.

Mr. President, the Inhofe amendment would, in effect, prevent implementing the President's decision to close Guantanamo and undo the benefits to America's standing that have resulted from President Obama's decision.

The Executive order signed by President Obama last month requires Guantanamo be closed within 1 year.

The goal of closing Guantanamo has broad support. In this last presidential election, both candidates, then-Senator Obama and Senator McCain, supported closing Guantanamo.

Last year, five former Secretaries of State, including Colin Powell, Henry Kissinger, and James Baker, called for closing Guantanamo. President Bush has said he would support closing Guantanamo, as did his Secretary of State, Condoleezza Rice, and Secretary of Defense Robert Gates.

No one says that closing Guantanamo will be easy. To achieve this, the Executive order signed by President Obama sets up a Special Task Force to review the status of the approximately 250 detainees still held at Guantanamo and make recommendations on what to do with these individuals.

Currently about one-third of the Guantanamo detainees have been cleared for release or transfer to a third country. The State Department is in the process of trying to find countries willing to take these detainees, where they will not be subjected to torture or persecution.

For about another third of the Guantanamo detainees, the Defense Department has declared its intention to bring criminal charges and try these individuals. The military commission process is now under review, so it is not clear when these trials will resume or be completed.

But we know, right now, that for a certain number of detainees currently at Guantanamo, we will need to continue to hold these individuals beyond the 1-year deadline for closing Guantanamo. These detainees are too dangerous to be released, and yet the Government is not able to charge them criminally.

In some of these cases, the Government cannot bring charges because the evidence we have against these detainees is insufficient for purposes of a criminal prosecution. Or, we now know, in some cases the evidence may be inadmissible because it was obtained through torture or coercion. The policies of abuse approved by the Bush administration have damaged our ability to bring these individuals to justice.

Those detainees too dangerous to release but unable to be tried, will continue to be held. We will need a place to house these individuals. The Defense Department has already reportedly begun reviewing facilities at military bases in the United States for that purpose. We should await the recommendations of the Special Task Force established by President Obama's Executive order on how to handle these difficult detainees.

This amendment would undo the benefits of President Obama's action to close Guantanamo. It would harm America's standing and leave our troops less safe.

It prejudges the review of the task force. It doesn't belong in a stimulus package.

For these reasons, I urge my colleagues to oppose the Inhofe amendment.

Madam President, I thank the Senator from Montana.

Amendment No. 140

Madam President, I oppose the Feingold amendment which would require that any allocation of funds in an appropriations bill have a prior authorization. There is only one authorization bill that passes here, and that is the Defense authorization bill. There are no other authorization bills that pass.

This amendment represents a massive shift of power to the executive branch. It is not a transparency amendment. We did that last year. This is a shift-of-power amendment which should be defeated.

Under this amendment, while all earmarks identified in the President's budget could be funded in our appropriations bills without authorization and not be subject to the proposed point of order, congressional projects that are not authorized would require a supermajority vote in order to be included in the legislation. This becomes more extreme because that disparate treatment of Presidential and congressional projects even applies when a Senator seeks to offer an amendment subject to a rollcall vote during debate on the Senate floor.

The President's budget each year includes many earmarks to direct spending for targeted projects. The President uses his budget to target Federal expenditures to local areas for projects he supports, most of which are not specifically authorized. Under this amendment, Congress would have to meet a higher standard, a super majority in the Senate, in order to do the same thing.

This amendment clearly weakens Congress's power of the purse. The vast amount of funding levels for programs in appropriations bills are the same as those in the President's budget. However, this amendment provides that if an allocation of some of the program funding is rejected on point of order, the overall program funding amount will be reduced, although it is just as likely, and probably more likely, that Congress merely intended to have the relevant agency allocate that funding, thereby keeping the overall funding amount the same instead of allocating it by congressional earmark. The amendment states over and over again that if the point of order is sustained, the unauthorized appropriations shall be stricken from the bill or amendment; and ``any modification of total amounts appropriated necessary to reflect the deletion of the matter struck from the bill or amendment shall be made.''

For example, assume that $100 million is allocated in the President's budget for a State assistance grant program, and an appropriations bill includes a provision to direct that $2 million of this funding go to a specific city or project. If the $2 million allocation is stricken, only $98 million would remain, so even if it were the intent of Congress to provide $100 million for these grants, the funding would be decreased.

The requirement for prior authorization means that Congress could only allocate funds for projects if Congress were to take up every Congress authorization bills covering all Federal agencies and programs. In the absence of such authorization bills, all appropriations initiated in Congress would be ``unauthorized appropriations'' subject to a point of order. Congress would be able to appropriate funding for programs and priorities proposed by the President, but Congress would not be able to fund congressional programs or priorities that are not included in the President's budget, or even to shift funding between programs in the President's budget, because all such appropriations would be ``unauthorized.'' The result would be a serious weakening of Congress's power of the purse.

At present, the only Senate committee that enacts an authorization bill every Congress is the Armed Services Committee, which I am privileged to chair. So under this amendment, Congress would essentially severely weaken its power of the purse over all Federal agencies other than the Department of Defense.

It may be the intent of this amendment to force other Senate committees to go through the same process that the Armed Services Committee goes through to enact an authorization bill every Congress. But I want to warn my colleagues: this is not an easy process. The Armed Services Committee spends most of every year reviewing hundreds of programs and activities in the Defense budget on a line-by-line basis. Subcommittee and full committee hearings and markups take weeks. Our bill then generally consumes about 2 weeks of Senate floor time. There is nowhere near enough floor time available to enact every Congress the dozens of authorization bills that would be necessary to replicate this authorization process for all of the civilian agencies.

Moreover, as currently written, this amendment would very likely create a point of order against congressionally initiated Defense appropriations, even if those appropriations are specifically authorized in our bill. The reason is that the amendment provides that an appropriation is not considered to be authorized unless the authorization has already been enacted into law or passed by the Senate. There has not been a case in recent memory in which our Defense authorization bill has been enacted into law before the Senate took up the Defense appropriations bill.

While the amendment makes an exception for authorizations that have already passed the Senate, it makes no exception for authorizations that have already passed the House. That means that a point of order would lie against all House-initiated items, but none of the Senate funding items, in a Defense appropriations bill. If the Senate were to sustain the point of order, we would be in the position of sending a bill back to the House which funded all of our priorities and none of theirs--a bill that could not possibly be approved in the House.

The bottom line is that this amendment, if enacted, would make it difficult for Congress not only to establish its own spending priorities with regard to the civilian agencies and programs that are not subject to an annual authorization process, but even with regard to the Defense agencies and programs that are subject to such a process. This would include items on the unfunded priorities list submitted to Congress by the Joint Chiefs of Staff each year. This list, which in the past has included items like MRAPs and body armor, reflects the highest priorities of our uniformed military. Congress would place a major obstacle on itself from exercising the power of the purse, placing itself in the position of approving or disapproving programs in the President's budget without the power to establish its own priorities without a super majority.

In 2007, Congress passed meaningful ethics and lobbying reform which included strong earmark reform to ensure transparency in the process by providing greater disclosure and requiring information on earmarks to be available to the public online. These disclosures allow the public the opportunity to know where their tax dollars are being spent and will help ensure the quality of the projects which are funded.

The sponsors of this amendment have asserted that this amendment would

build on and strengthen those reforms. But this amendment goes way beyond that and places extensive hurdles for congressionally directed spending. I don't believe that the executive branch has a monopoly on the wisdom of spending Federal dollars. I believe that the elected representatives of the people in Congress are often in a better position to decide where the people's money is spent than the administration's political appointees in Washington.

This is not a transparency amendment. We brought all earmarks into the full light of day in 2007. This amendment attacks the very heart of Congress's constitutional power of the purse. I urge my colleagues to vote against this extreme and unworkable measure that would enhance the spending power of the President and weaken the congressional power of the purse. It is not a transparency measure. It is an extreme power- shifting amendment.

Amendment No. 364

Mr. President, I have been listening to this debate and I am kind of, let's say, astounded by the arguments of the proponents that somehow or other you can cite the Joint Tax Committee for how much money will come into the Treasury for the next 2 years and then trash the Joint Tax Committee for everything else they say. They are not outside economists, we are told; they are inside economists. Yet the facts that the Joint Tax Committee give us for the years 2009 and 2010 are cited as supporting the proponents' argument because it shows that money comes into the Treasury during those 2 years, but in order to sustain their position, they have to ignore all the rest of the Joint Tax's position, which is that this costs almost $30 billion in 10 years.

Is it just that the outside economists take over the Joint Tax for the last 8 years? This argument about outside economists, inside economists--there are economists who differ on things. We rely on Joint Tax. These are independent, objective economists whom we have to rely on, and do rely on, not just for some of the things they say, as some of the proponents want to have it, but for what they tell us about this amendment.

This amendment will cost us over the first 5 years, $3 billion--that is Joint Tax--over the 10 years, $28.6 billion. That is a major loss to the Treasury, and we cannot afford it. This is a tax gift to those companies that move operations overseas, and then produce overseas, and then have no tax on their profits because those taxes are deferred until they bring those profits home. Our tax structure says when you bring them home, you should pay the same tax as your competitors pay in the United States. The companies in the United States that do not move operations overseas, they pay up to a 35-percent tax.

By the way, the Senator from Nevada has an argument. The basic problem is the size of the tax that we impose on corporations. That is the fundamental issue. But what the proponents are doing is creating a competitive advantage for those companies that move operations overseas because they do not pay the 35-percent tax if they do not bring back those profits.

Then, we were told 5 years ago: Let's just, one time--we were assured just once--let them bring back this money and only hit them for 5 percent. We were assured it would be a one-time-only deal. It would not be repeated, to use the words of the conference report. Lo and behold, now the proponents--the same proponents--want to repeat this. And what has happened--and this is not just me saying this; this is the CRS saying this--is the companies wait for this opportunity believing that once again we are going to allow this kind of repatriation at a much lower rate. They hold money overseas, awaiting the time when they can bring it back at a 5-percent rate instead of paying the same tax rate their domestic competitors pay, which is up to 35 percent. So this ends up--with this kind of repatriation, when we repeat it this way--being an incentive to keep the profits overseas, waiting for the time when they can be repatriated at the lower rate.

Now, I want to quote some other inside economists since the distinction seems to be important to the proponents, and they are in the CRS. What does the CRS say about the 2004 repatriation package that was passed? The chairman of the Finance Committee has quoted the CRS for some of the data, and I am not going to repeat that. It is pretty powerful as to the lack of impact in terms of jobs and in terms of investments from that repatriation. They are inside economists, yes, but objective economists, independent economists not paid by anybody else to make a study. You can get economists, I am sure, who are going to reach different conclusions on this issue. But these objective, independent economists, whom we rely upon--frankly, I rely on much more than outside economists who have all kinds of connections to all kinds of organizations, and no one knows exactly on whose payroll they are when they make studies--the Congressional Research Service, with independent, objective economists, what does it say about that 2004 bill?

They say: Imperial evidence is unable to show a corresponding increase in domestic investment or employment, that the repatriations did not increase domestic investment or employment. That is what they say. You cannot show any empirical evidence. Or put it this way--this is their conclusion, not mine--their conclusion: That empirical evidence does not show an increase in domestic investment or employment from what we did last time. Little evidence, they say, exists that new investment was spurred.

Some outside economists, Foley, Forbes, wrote the following: Repatriations--they are talking about in 2004--did not lead to an increase in investment, employment, or R&D, even for the firms that lobbied for the tax holiday stating those intentions. Instead, a one- dollar increase in repatriations was associated with an increase of approximately one dollar in payouts to shareholders.

Those are outside economists, for what that distinction is worth. When companies move jobs offshore and they make profits overseas, they have a competitive advantage frequently because labor might be cheaper, and that is something we should not encourage, that movement of jobs. Our Tax Code should not give an incentive to the movement of jobs overseas. It does right now because you defer the profit you make overseas and don't pay tax on it. That is already an incentive in the Tax Code which, frankly, I don't like, and there may be, hopefully, some effort to correct that with this administration and in this body. But at least when they bring back the profits, they ought to pay the same tax their competitors pay.

The argument is made that they are not going to bring back the profits, that we lose money to the Treasury. They, the proponents, cite a study--and I believe they are relying on a calculation from the Grant Thornton firm, although I am not sure; that name has not been used here. But I think this is the assessment that is being relied upon. Here is what Joint Tax said about that calculation:

It ignored the fact that a significant part of the $18

billion in revenues that it attributed to that 2004 Act would

have been collected by Treasury in any event as dividends

were paid in the ordinary course of business over the 10-year

budget window. Thus, the calculation--

And this is Joint Tax speaking--

is not a revenue estimate at all.

When the Joint Committee on Taxation issued its revenue estimate in 2004 on the impacts of the 2004 repatriation--a projection of how much additional tax revenue would be generated or lost by that proposal--it projected $2.8 billion in additional revenue would be generated the first year, but the Joint Committee estimated that for the 5-year budget cycle, 2005 through 2009, the repatriation proposal would cost the Treasury money--a loss of $2 billion, to be exact. The revenue estimate for the 10-year budget cycle of 2005 through 2014 was estimated by the

Joint Committee on Taxation to be a loss of $3.3 billion.

We have to rely on these independent experts. They may be in-house, they may be ours, we appoint them, but we have to rely on them. This distinction between inside and outside economists, it seems to me, if anything, should work to the advantage of the independent, objective, inside economists on whom we rely. These are nonpartisan experts we put in place to give us the very projections which we have in front of us tonight. Those projections are mighty clear. Those projections show, yes, year 1 and 2, there is going to be additional money coming into the Treasury, but then we start losing money big time, and we cannot afford to do that.

Finally, a lot has been said here about the fact that there are going to be audits of this--and, indeed, the amendment does provide for audits--to try to determine whether the money which comes back into the treasuries of these companies is spent for the purposes that are stated in the amendment. But what the amendment does not do is require that those funds be spent. There is no time limit saying that the funds must be spent in year 1 or year 2. What it does say is that if they are spent, an auditor is going to try to determine that they are spent for the enumerated purposes. But what it doesn't do is provide the requirement that those funds be spent in years 1 and 2, and that is the purpose of the stimulus package. The purpose of the stimulus package is to try to get money spent on job creation, and the amendment fails in that very fundamental way. It does not require the funds that are brought back to be spent for the identified purposes. It says if they are spent, it must be for those purposes, but it doesn't require that they be spent in year 1 or year 2 or year 3 or year 4 or whenever. When they are spent, they will be audited. That is an effort on the part of the proponents to avoid the problems discovered the last time we did this, but it doesn't address the fundamental purpose of a stimulus package.

So it costs us money--that is Joint Tax. The last time we did this, which was supposed to be the last time we would do this, according to CRS, it did not stimulate the creation of jobs, and it fails to pass the fundamental test that it is not required to be spent for the enumerated purposes.

I yield the floor.

Reserving the right to object, I believe a point of order lies against this amendment. Does that preclude----

Mr. President, I commend to the attention of my colleagues the Congressional Research Service report R40178, ``Tax Cuts on Repatriation Earnings as Economic Stimulus: An Economic Analysis,'' that indicates what little evidence there was about new investments from the 2004 decision, which is available at www.crs.gov.

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

Mr. President, I ask unanimous consent that Senator Dorgan be recognized for 5 minutes and then Senator Grassley, who I expect will be here at that time, be recognized for up to 10 minutes, and then I will be recognized for up to 10 minutes.

Mr. President, I yield the floor.

Mr. President, Americans are fortunate to have access to some of the best medical facilities and services in the world. Yet, shamefully, 2007 U.S. Census data demonstrated that there are 45.7 million uninsured people in our country, of which, 8.7 million are children, who do not have the access they need to these services. Unfortunately, these numbers will likely increase as the Nation continues to lose more jobs and the ranks of the unemployed continue to rise.

How to provide everyone in America access to affordable, quality health care is the subject of extensive debate. Over the years, though, we have made some progress in making sure that the most vulnerable members of our communities--including children--can receive basic medical services.

The State Children's Health Insurance Program was created in the Balanced Budget Act of 1997 in recognition of the need to provide medical services for children from middle-income to lower income families and has been widely hailed as a successful program. In the past 12 years, we have seen that CHIP coverage leads to better access to preventative and primary care services, better quality of care, better health outcome and improved performance in school. CHIP currently provides health care benefits to more than 7.4 million children, of which more than 90 percent are from families with incomes below $35,000 a year for a family of three, or 200 percent below the Federal poverty level.

Michigan's CHIP program, called MIChild, has had impressive results: Michigan currently has the second lowest rate of uninsured children in the Nation, trailing only Massachusetts, which provides universal health care coverage.

While CHIP has been a successful program nationwide, many children who qualify for the program are unable to receive insurance because of inadequate funding. In Michigan, approximately 50,000 children are covered under CHIP every month, but there are still 158,000 uninsured children in my home State, and more than 8 million uninsured children nationwide.

To help address this problem, I am pleased that the Senate is taking up a bipartisan bill--the Children's Health Insurance Program Reauthorization Act of 2009--that would increase funding for the program by approximately $32.8 billion over 4\1/2\ years. This bill will allow more than 4 million additional children to enroll beyond the 7.4 million children already in CHIP. For Michigan, this means that more than an estimated 80,000 more Michigan children would have access to much needed health insurance.

A hardworking mother from Royal Oak, Michigan, wrote: ``As a single working mother, I could not afford the family insurance that my employer offered, and definitely could not afford private [insurance]. Without this insurance I do not know what I would have done. [CHIP] offered us options, doctors instead of emergency rooms, less time missed at work and school.''

We have a moral obligation to provide Americans access to affordable and high quality health care. No person, young or old, should be denied access to adequate health care, and the expanded and improved Children's Health Insurance Program is an important step toward achieving that goal.

Mr. President, in the 4 years since the federal ban on assault weapons was allowed to expire, hundreds of people in this country have died and been injured by previously banned weapons. The Brady Center to Prevent Gun Violence report, ``Assault Weapons: Massed Produced Mayhem,'' details the deaths of 165 people and the injury of 185 people by assault weapons since the ban expired. This includes the death and injury of 38 police officers. The simple fact is, our communities are less safe than they were 4 years ago.

The Bureau of Alcohol, Tobacco, Firearms and Explosives described assault weapons in their Assault Weapons Profile as weapons ``designed for rapid fire and close quarter shooting at human beings. That is why they were put together the way they were. You will not find these guns in a duck blind or at the Olympics. They are mass produced mayhem.'' Unlike semiautomatic hunting rifles, which are designed to be fired from the shoulder and rely on the accuracy of a precisely aimed projectile, assault weapons are designed to be fired at the hip and to maximize their ability to rapidly shoot multiple human targets.

The report also outlines the dangerous weapons race law enforcement officers have been forced to enter in an effort to counter the increasing likelihood that they will be confronted by a criminal wielding an assault weapon. In addition to the common criminal, assault weapons are highly attractive weapons for terrorists. The ease with which they can currently be purchased, combined with their designed ability to inflict as much damage as possible, make them ideal tools for conspiring terrorists. Just last year five men were arrested in New Jersey with a stockpile of assault weapons, while planning to attack the U.S. States Army base at Fort Dix.

Despite the overwhelming support of the law enforcement community, the ongoing threat of terrorism and bipartisan support in the Senate, the assault weapons ban was not allowed to expire. Now, 4 years later, 19 previously banned military-style assault weapons, some capable of firing up to 600 rounds per minute, are once again pervading our streets and neighborhoods. This Congress we must take up and pass sensible gun safety legislation, including reinstating the assault weapons ban.

Mr. President, history has proven time and time again that the markets are not self-policing. Today's financial crisis is due in part to the Government's failure to regulate key market participants, including hedge funds that have become unregulated financial heavyweights in the U.S. economy. So I am joining today with my colleague Senator Grassley of Iowa to introduce the Hedge Fund Transparency Act, and I thank Senator Grassley for his leadership on this and in so many other areas involving oversight of our financial institutions.

Hedge funds sound complicated, but they are simply private investment funds in which investors have agreed to pool their money under the control of an investment manager. What distinguishes them from other investment funds is that hedge funds are typically open only to ``qualified purchasers,'' an SEC term referring to institutional investors such as pension funds and wealthy individuals with assets over a

specified minimum amount. In addition, most hedge funds have 100 or fewer beneficial owners. By limiting the number of their beneficial owners and accepting funds only from investors of means, hedge funds have been able to qualify for the statutory exclusions provided in the Investment Company Act and avoid the obligation to comply with that law's statutory and regulatory requirements. In short, hedge funds have been able to operate outside of the reach of the Securities and Exchange Commission.

The primary argument for allowing these funds to operate outside SEC regulation and oversight is that because their investors are generally more experienced than the general public, they need fewer government protections and their investment funds should be permitted to take greater risks than investment funds open to the investing public which need greater SEC protection. Indeed, the ability of hedge funds to take on more risk is the very reason that many individuals and institutions choose to invest in them. These investors accept more risk because that might lead to bigger rewards.

The compensation system employed by most hedge funds encourages that risk taking. Typically, investors agree to pay hedge fund investment managers a management fee of 2 percent of the fund's total assets, plus 20 percent of the fund's profits. The hedge fund managers profit enormously if a fund does well, but due to the guaranteed management fee, get a hefty payment even when the fund underperforms or fails. The analysis up to now has been that if wealthy people want to take big risks with their money, all else being equal, they should be allowed to do so without the safeguards normally required for the general public.

So what is the problem with allowing their investment funds to operate outside of Federal regulation and oversight? The problem is that hedge funds have gotten so big and are so entrenched in U.S. financial markets that their actions can now significantly impact market prices, damage other market participants, and can even endanger the U.S. financial system and the economy as a whole.

The systemic risks posed by hedge funds first became obvious 10 years ago. Back then, Long-Term Capital Management--or LTCM--was a hedge fund that, at its peak, had more than $125 billion in assets under management and, due to massive borrowing, a total market position of $1.3 trillion. When it began to falter, the Federal Reserve worried that it might unload its assets in a rush, drive down prices, and end up damaging not only other firms but U.S. markets as a whole. To prevent a financial meltdown, the Federal Reserve worked with the private sector to engineer a rescue package.

That was just over a decade ago. Since then, according to a recent report issued by the Congressional Research Service, the hedge fund industry has expanded roughly tenfold. In 2006, the SEC testified that hedge funds represented 5 percent of all U.S. assets under management and 30 percent of all equity trading volume in the United States. By 2007, an estimated 8,000 hedge funds were managing assets totaling roughly $1.5 trillion. The most current estimate is that 10,000 hedge funds are managing approximately $1.8 trillion in assets, after suffering losses over the last year of over $1 trillion.

In addition, over the last 10 years, billions of dollars being managed by hedge funds have been provided by pension plans. A 2007 report by the U.S. Government Accountability Office found that the amount of money that defined benefit pension plans have invested in hedge funds has risen from about $3.2 billion in 2000 to more than $50 billion in the year 2006. That total is probably much higher now. And while most individual pension funds invest only a small slice of their money in hedge funds, a few go farther. For example, according to the GAO report, as of September 2006, the Missouri State Employees Retirement System had invested over 30 percent of its assets in hedge funds. Universities and charities have also directed significant assets to hedge funds. The result is that hedge fund losses threaten every economic sector in America, from the wealthy to the working class relying on pensions, to our institutions of higher learning, to our nonprofit charities.

A third key developed is that over the last 10 years, some of the largest U.S. banks and security firms have set up their own hedge funds and used them to invest not only client funds but also their own cash. In some cases, these hedge funds have commingled client and institutional funds and linked the fate of both to high-risk investment strategies. These hedge fund affiliates are typically owned by the same holding companies that own federally insured banks or federally regulated broker-dealers. Because of their ownership, their size and reach, their clientele, and the high-risk nature of their investments, the failure of hedge funds today can imperil not only their direct investors, but also the financial institutions that own them, that lent them money, or did business with them. From there, the effects can ripple through the markets and impact the entire economy.

It is time for Congress to step into the breach and establish clear authority for Federal regulation and oversight of hedge funds. That is the backdrop for the introduction of the Grassley-Levin Hedge Fund Transparency Act.

The purpose of this bill is to institute a reasonable and practical regulatory regime for hedge funds. The bill contains four basic requirements to make hedge funds subject to SEC regulation and oversight.

It requires them to register with the SEC, to file an annual disclosure form with basic information that will be made publicly available, to maintain books and records required by the SEC, and to cooperate with any SEC information request or examination.

In addition, the bill directs Treasury to issue a final rule requiring hedge funds to establish anti-money laundering programs and, in particular, to guard against allowing suspect offshore funds into the U.S. financial system. The Bush Administration issued a proposed anti-money laundering rule for hedge funds seven years ago, in 2002, but never finalized it. A 2006 investigation by the Permanent Subcommittee on Investigations, which I chair, showed how two hedge funds brought millions of dollars in suspect funds into the United States, without any U.S. controls or reporting obligations, and called on a bipartisan basis for the proposed hedge fund anti-money laundering regulations to be finalized, but no action was taken. Hedge funds are the last major U.S. financial players without anti-money laundering obligations, and it is time for this unacceptable regulatory gap to be eliminated.

Our bill imposes a set of basic disclosure obligations on hedge funds and makes it clear they are subject to full SEC oversight while, at the same time, exempting them from many of the obligations that the Investment Company Act imposes on other types of investment companies, such as mutual funds that are open for investment by all members of the public. The bill imposes a more limited set of obligations on hedge funds in recognition of the fact that hedge funds do not open their doors to all members of the public, but limit themselves to investors of means. The bill also, however, gives the SEC the authority it needs to impose additional regulatory obligations and exercise the level of oversight it sees fit over hedge funds to protect investors, other financial institutions, and the U.S. financial system as a whole.

The bill imposes these requirements on all entities that rely on Sections 80a-3(c)(1) or (7) to avoid compliance with the full set of the Investment Company Act requirements. A wide variety of entities invoke those sections to avoid those requirements and SEC oversight, and they refer to themselves by a wide variety of terms--hedge funds, private equity funds, venture capitalists, small investment banks, and so forth. Rather than attempt a futile exercise of trying to define the specific set of companies covered by the bill and thereby invite future claims by parties that they are outside the definitions and thus outside the SEC's authority, the bill applies to any investment company that has at least $50 million in assets or assets under its management and relies on Sections 80a-3(1) or (7) to avoid compliance with the full set of Investment Company Act requirements. Instead, those companies under the bill have to comply with a reduced set of obligations, which include filing an annual public disclosure

form, maintaining books and records specified by the SEC, and cooperating with any SEC information request or examination.

Finally, our bill makes an important technical change. It moves paragraphs (c)(1) and (7)--the two paragraphs that hedge companies use to avoid complying with the full set of Investment Act Company requirements--from Section 80a-3 to Section 80a-6 of the Investment Company Act. While our bill preserves both paragraphs and makes no substantive changes to them, it moves them from the part of the bill that defines ``investment company'' to the part of the bill that exempts certain investment companies from the Investment Company Act's full set of requirements.

The bill makes this technical change to make it clear that hedge funds really are investment companies, and they are not excluded from the coverage of the Investment Company Act. Instead, they are being given an exemption from many of that law's requirements, because they are investment companies which voluntarily limited themselves to one hundred or fewer beneficial owner accepting funds only from investors of means. Under current law, the two paragraphs allow hedge funds to claim they are excluded from the Investment Company Act--they are not investment companies at all and are outside the SEC's reach. Under our bill, the hedge funds would qualify as investment companies--which they plainly are--but would qualify for exemptions from many of the Act's requirements by meeting certain criteria.

It is time to bring hedge funds under the federal regulatory umbrella. With their massive investments, entanglements with U.S. banks, securities firms, pension funds, and other large investors, and their potential impact on market equilibrium, we cannot afford to allow these financial heavyweights to continue to operate free of government regulation and oversight.

When asked at a recent hearing of the Senate Homeland Security and Government Affairs Committee whether hedge funds should be regulated, two expert witnesses gave the exact same one-word answer: ``Yes.'' One law professor, after noting that disclosure requirements don't apply to hedge funds, told the Committee: ``If you asked a regulator what . . . role did hedge funds play in the current financial crisis, I think they would look at you like a deer in the headlights, because we just don't know.'' It is essential that federal financial regulators know what hedge funds are doing and that they have the authority to prevent missteps and misconduct.

The Hedge Fund Transparency Act will protect investors, and it will help protect our financial system. I hope our colleagues will join us in support of this bill and its inclusion in the regulatory reform efforts that Congress will be undertaking later this year.

Mr. President, history has proven time and time again that the markets are not self-policing. Today's financial crisis is due in part to the Government's failure to regulate key market participants, including hedge funds that have become unregulated financial heavyweights in the U.S. economy. So I am joining today with my colleague Senator Grassley of Iowa to introduce the Hedge Fund Transparency Act, and I thank Senator Grassley for his leadership on this and in so many other areas involving oversight of our financial institutions.

Hedge funds sound complicated, but they are simply private investment funds in which investors have agreed to pool their money under the control of an investment manager. What distinguishes them from other investment funds is that hedge funds are typically open only to ``qualified purchasers,'' an SEC term referring to institutional investors such as pension funds and wealthy individuals with assets over a

specified minimum amount. In addition, most hedge funds have 100 or fewer beneficial owners. By limiting the number of their beneficial owners and accepting funds only from investors of means, hedge funds have been able to qualify for the statutory exclusions provided in the Investment Company Act and avoid the obligation to comply with that law's statutory and regulatory requirements. In short, hedge funds have been able to operate outside of the reach of the Securities and Exchange Commission.

The primary argument for allowing these funds to operate outside SEC regulation and oversight is that because their investors are generally more experienced than the general public, they need fewer government protections and their investment funds should be permitted to take greater risks than investment funds open to the investing public which need greater SEC protection. Indeed, the ability of hedge funds to take on more risk is the very reason that many individuals and institutions choose to invest in them. These investors accept more risk because that might lead to bigger rewards.

The compensation system employed by most hedge funds encourages that risk taking. Typically, investors agree to pay hedge fund investment managers a management fee of 2 percent of the fund's total assets, plus 20 percent of the fund's profits. The hedge fund managers profit enormously if a fund does well, but due to the guaranteed management fee, get a hefty payment even when the fund underperforms or fails. The analysis up to now has been that if wealthy people want to take big risks with their money, all else being equal, they should be allowed to do so without the safeguards normally required for the general public.

So what is the problem with allowing their investment funds to operate outside of Federal regulation and oversight? The problem is that hedge funds have gotten so big and are so entrenched in U.S. financial markets that their actions can now significantly impact market prices, damage other market participants, and can even endanger the U.S. financial system and the economy as a whole.

The systemic risks posed by hedge funds first became obvious 10 years ago. Back then, Long-Term Capital Management--or LTCM--was a hedge fund that, at its peak, had more than $125 billion in assets under management and, due to massive borrowing, a total market position of $1.3 trillion. When it began to falter, the Federal Reserve worried that it might unload its assets in a rush, drive down prices, and end up damaging not only other firms but U.S. markets as a whole. To prevent a financial meltdown, the Federal Reserve worked with the private sector to engineer a rescue package.

That was just over a decade ago. Since then, according to a recent report issued by the Congressional Research Service, the hedge fund industry has expanded roughly tenfold. In 2006, the SEC testified that hedge funds represented 5 percent of all U.S. assets under management and 30 percent of all equity trading volume in the United States. By 2007, an estimated 8,000 hedge funds were managing assets totaling roughly $1.5 trillion. The most current estimate is that 10,000 hedge funds are managing approximately $1.8 trillion in assets, after suffering losses over the last year of over $1 trillion.

In addition, over the last 10 years, billions of dollars being managed by hedge funds have been provided by pension plans. A 2007 report by the U.S. Government Accountability Office found that the amount of money that defined benefit pension plans have invested in hedge funds has risen from about $3.2 billion in 2000 to more than $50 billion in the year 2006. That total is probably much higher now. And while most individual pension funds invest only a small slice of their money in hedge funds, a few go farther. For example, according to the GAO report, as of September 2006, the Missouri State Employees Retirement System had invested over 30 percent of its assets in hedge funds. Universities and charities have also directed significant assets to hedge funds. The result is that hedge fund losses threaten every economic sector in America, from the wealthy to the working class relying on pensions, to our institutions of higher learning, to our nonprofit charities.

A third key developed is that over the last 10 years, some of the largest U.S. banks and security firms have set up their own hedge funds and used them to invest not only client funds but also their own cash. In some cases, these hedge funds have commingled client and institutional funds and linked the fate of both to high-risk investment strategies. These hedge fund affiliates are typically owned by the same holding companies that own federally insured banks or federally regulated broker-dealers. Because of their ownership, their size and reach, their clientele, and the high-risk nature of their investments, the failure of hedge funds today can imperil not only their direct investors, but also the financial institutions that own them, that lent them money, or did business with them. From there, the effects can ripple through the markets and impact the entire economy.

It is time for Congress to step into the breach and establish clear authority for Federal regulation and oversight of hedge funds. That is the backdrop for the introduction of the Grassley-Levin Hedge Fund Transparency Act.

The purpose of this bill is to institute a reasonable and practical regulatory regime for hedge funds. The bill contains four basic requirements to make hedge funds subject to SEC regulation and oversight.

It requires them to register with the SEC, to file an annual disclosure form with basic information that will be made publicly available, to maintain books and records required by the SEC, and to cooperate with any SEC information request or examination.

In addition, the bill directs Treasury to issue a final rule requiring hedge funds to establish anti-money laundering programs and, in particular, to guard against allowing suspect offshore funds into the U.S. financial system. The Bush Administration issued a proposed anti-money laundering rule for hedge funds seven years ago, in 2002, but never finalized it. A 2006 investigation by the Permanent Subcommittee on Investigations, which I chair, showed how two hedge funds brought millions of dollars in suspect funds into the United States, without any U.S. controls or reporting obligations, and called on a bipartisan basis for the proposed hedge fund anti-money laundering regulations to be finalized, but no action was taken. Hedge funds are the last major U.S. financial players without anti-money laundering obligations, and it is time for this unacceptable regulatory gap to be eliminated.

Our bill imposes a set of basic disclosure obligations on hedge funds and makes it clear they are subject to full SEC oversight while, at the same time, exempting them from many of the obligations that the Investment Company Act imposes on other types of investment companies, such as mutual funds that are open for investment by all members of the public. The bill imposes a more limited set of obligations on hedge funds in recognition of the fact that hedge funds do not open their doors to all members of the public, but limit themselves to investors of means. The bill also, however, gives the SEC the authority it needs to impose additional regulatory obligations and exercise the level of oversight it sees fit over hedge funds to protect investors, other financial institutions, and the U.S. financial system as a whole.

The bill imposes these requirements on all entities that rely on Sections 80a-3(c)(1) or (7) to avoid compliance with the full set of the Investment Company Act requirements. A wide variety of entities invoke those sections to avoid those requirements and SEC oversight, and they refer to themselves by a wide variety of terms--hedge funds, private equity funds, venture capitalists, small investment banks, and so forth. Rather than attempt a futile exercise of trying to define the specific set of companies covered by the bill and thereby invite future claims by parties that they are outside the definitions and thus outside the SEC's authority, the bill applies to any investment company that has at least $50 million in assets or assets under its management and relies on Sections 80a-3(1) or (7) to avoid compliance with the full set of Investment Company Act requirements. Instead, those companies under the bill have to comply with a reduced set of obligations, which include filing an annual public disclosure

form, maintaining books and records specified by the SEC, and cooperating with any SEC information request or examination.

Finally, our bill makes an important technical change. It moves paragraphs (c)(1) and (7)--the two paragraphs that hedge companies use to avoid complying with the full set of Investment Act Company requirements--from Section 80a-3 to Section 80a-6 of the Investment Company Act. While our bill preserves both paragraphs and makes no substantive changes to them, it moves them from the part of the bill that defines ``investment company'' to the part of the bill that exempts certain investment companies from the Investment Company Act's full set of requirements.

The bill makes this technical change to make it clear that hedge funds really are investment companies, and they are not excluded from the coverage of the Investment Company Act. Instead, they are being given an exemption from many of that law's requirements, because they are investment companies which voluntarily limited themselves to one hundred or fewer beneficial owner accepting funds only from investors of means. Under current law, the two paragraphs allow hedge funds to claim they are excluded from the Investment Company Act--they are not investment companies at all and are outside the SEC's reach. Under our bill, the hedge funds would qualify as investment companies--which they plainly are--but would qualify for exemptions from many of the Act's requirements by meeting certain criteria.

It is time to bring hedge funds under the federal regulatory umbrella. With their massive investments, entanglements with U.S. banks, securities firms, pension funds, and other large investors, and their potential impact on market equilibrium, we cannot afford to allow these financial heavyweights to continue to operate free of government regulation and oversight.

When asked at a recent hearing of the Senate Homeland Security and Government Affairs Committee whether hedge funds should be regulated, two expert witnesses gave the exact same one-word answer: ``Yes.'' One law professor, after noting that disclosure requirements don't apply to hedge funds, told the Committee: ``If you asked a regulator what . . . role did hedge funds play in the current financial crisis, I think they would look at you like a deer in the headlights, because we just don't know.'' It is essential that federal financial regulators know what hedge funds are doing and that they have the authority to prevent missteps and misconduct.

The Hedge Fund Transparency Act will protect investors, and it will help protect our financial system. I hope our colleagues will join us in support of this bill and its inclusion in the regulatory reform efforts that Congress will be undertaking later this year.

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

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, there is no question that our Nation's next Treasury Secretary will have a heavy burden: deregulation run rampant has shaken the foundation of our financial system and reverberated through our economy with devastating impact. I will support Timothy Geithner because I believe he has the expertise to meet the enormous challenges posed by this financial crisis and years of regulatory neglect.

Last week, Mr. Geithner provided responses to detailed questions that I submitted to him as part of the confirmation process. His answers reflect some important new priorities and policy advances, including placing a priority on ending offshore tax abuses; preserving strong U.S. accounting rules; reinvigorating international anti-money laundering efforts; and imposing a 1-year cooling off period before financial regulators can take a job with a company they regulated. He also recognizes the need to overhaul our financial regulatory structure, including by strengthening regulation of hedge funds, derivative traders, and the over-the-counter derivatives markets; and strengthening capital and liquidity requirements for financial institutions.

Despite these positive indicators, I do have some reservations. Mr. Geithner is a strong nominee because of his extensive experience, but while he now indicates support for some regulation of swaps, he has been reluctant to acknowledge that prohibiting regulation of those instruments was a mistake in 2000, and has offered only tepid support for some of the strong regulatory controls needed. Mr. Geithner has also been a key decisionmaker in the flawed financial rescue effort which has failed to track the use of TARP funds and failed to mandate lending of those funds to creditworthy businesses and to addressing the foreclosure flood. He has been reluctant to support requiring TARP fund recipients to track and report on their use of taxpayer dollars and requiring those who receive more than $1 billion in taxpayer assistance to provide written viability plans on how they intend to regain financial stability and repay the funds. Still, Mr. Geithner's apparent willingness to listen to and work with Congress and his openness to compromise is promising for future progress in these and other areas.

The job that awaits Mr. Geithner pending his confirmation is an extremely tough one. I hope that he is confirmed, and that he lives up to the promise of the Obama administration, including implementing the transparent, pragmatic, and thoughtful policymaking that is a hallmark of President Obama's approach to government.

Our Nation's economic recovery requires nothing less.

Assume that on January 1, 2007, a new employee is hired and knows that she will be paid less because she is a woman. She also knows that she is receiving less pay than a male who was hired on the same day for the same job, but she needs the job and is afraid to file suit. Two years go by and on January 15, 2009, she decides to fight the discrimination and files a complaint. Under current law, can she recover the lost 2007-2008 pay?

Under S. 181, would she be able to recover the 2007-2008 lost wages?

Who has the burden of proof in intentional discrimination cases as to whether and when an act of discrimination occurred?

Mr. President, I support the Lilly Ledbetter Fair Pay Act. This legislation is important to ensure that Americans from all walks of life have a realistic opportunity for recourse if they are victims of pay discrimination. We are considering this bill because of the Supreme Court's interpretation, in Ledbetter vs. Goodyear Tire & Rubber Co., of title VII of the Civil Rights Act of 1964. The Court's 5 to 4 ruling makes it almost impossible for many victims of pay discrimination to find an adequate legal remedy under the Civil Rights Act. The legislation we are considering today will correct that.

The Civil Rights Act established the Equal Employment Opportunity Commission, EEOC, to enforce title VII. The EEOC is empowered to protect against employment discrimination based on sex, race, national origin, religion and disability by receiving complaints of discrimination, investigating discrimination, conducting mediations to settle complaints and filing law suits on behalf of employees.

Despite the efforts of the EEOC, the United States still suffers from significant pay iniquities. Numerous studies using census data and controlling for work patterns and socioeconomic factors found that half or more of the wage gap between males and females is due to gender alone, demonstrating that discrimination based on gender is all too common in American work places. Over the past decade, the EEOC has averaged more than 24,400 complaints of sex-based discrimination each year.

One of those complaints was filed in 1998 by a woman named Lilly Ledbetter. She alleged that she was the victim of a sex-based pay disparity during her nearly 20-year career at Goodyear. Ledbetter sued Goodyear, and a jury awarded her back pay and damages after finding, among other things, that Ledbetter was being paid $550 to $1550 less per month than her male counterparts who were doing the same work. For almost her entire tenure at Goodyear, Letbetter was not aware that she was being discriminated against because the pay levels of her coworkers were kept strictly confidential. In fact, she only learned that she was making less than males doing the same job as her because of an anonymous tip that she received shortly before her retirement.

Congress's intent in passing the Civil Rights Act and in passing subsequent updates to the Civil Rights Act in 1991 a bill which I supported was to help remedy the sort of discrimination that Lilly Ledbetter fell victim to. Although the validity of claims of pay discrimination filed within 180 days of receiving a paycheck reflecting discriminatory policies has been recognized by countless lower courts and was explicitly accepted under EEOC guidelines and by previous EEOC administrative decisions, the Supreme Court ruled that Ledbetter's claim of discrimination was not actionable under title VII. Their opinion stated that Ledbetter's claim was not filed within 180 days of the discriminatory act against her.

In ruling against Ledbetter, the majority's opinion stated that ``it is not [the Supreme Court's] prerogative to change the way in which title VII balances the interests of the aggrieved

employees against the interest in encouraging the prompt processing of all charges of employment discrimination.''' The majority concluded that ``Ledbetter's policy arguments for giving special treatment to pay claims find no support in the statute'' and that the Supreme Court must apply ``the statute as written, and this means that any unlawful employment practice including those involving compensation, must be presented to the EEOC within the period prescribed in the statute.''

The dissenters rightly characterize the majority opinion as ``parsimonious.'' I believe that the majority put forth a misguided interpretation of unlawful employment practices, and in doing so incorrectly found that Lilly Ledbetter's claim did not fall within title VII of the Civil Rights Act. I also believe that the opinion of the Court required an unreasonable interpretation of Congress's intent in title VII. Their finding would make it next to impossible to file a successful claim of discriminatory pay, given the challenges in detecting such discrimination. The Supreme Court interpreted Congressional intent in a civil rights law in a way that is restrictive of peoples' civil rights and available remedies.

But the issue for us to decide is not what a previous Congress intended. We are to decide what the law should be, and what is right. This legislation determines that each discriminatory paycheck will qualify as an unlawful employment practice under title VII. Equitable remedies defendants can raise, including laches, are not disturbed by this bill.

The Lilly Ledbetter Fair Pay Act will restore the protections against discriminatory pay that Congress and the courts have previously endorsed, and provide a reasonable route through the EEOC and the court system for people like Lilly Ledbetter to have pay discrimination corrected and remedied.

Mr. President, today, the Committee on Armed Services unanimously passed a committee resolution to express its appreciation to Margaret Tyler and to commend her for her many years of faithful and outstanding service to the men and women of the U.S. Army, to their families, and to the Senate of the United States.

Margaret Tyler has worked for the Federal Government for 57 years. She has served 45 of those 57 years in the Army Liaison Office--38 of those years in the Army Senate Liaison Office.

Through all those years, Mrs. Tyler has dedicated herself to helping those in need and in solving problems affecting the U.S. Army. She has always been professional, efficient, and effective in her work. Over the years, Senators and staff have learned that when they have a problem involving the Army the first step in solving the problem is calling Margaret Tyler. To many in the Senate family, she is affectionately known as the Army's Angel.

The men and women of our Armed Forces deserve the best support and assistance we in Congress can give them. Day in and day out, for the past 45 years, Margaret has helped us support the men and women of the U.S. Army and their families to the best of her ability. Thousands of soldiers and their families have been touched by her dedicated, professional, and personal care.

On behalf of all the members of the Committee on Armed Services, I ask unanimous consent that our committee's resolution commending Margaret Tyler on her service to the men and women of the U.S. Army, to their families, and to the Senate of the United States be printed in the Record.