Floor Statements

Mr. President, I would like to speak on a matter that has gotten a lot of attention lately, and for good reason. The rising cost of gasoline is hitting all Americans hard. Families, businesses, farmers, and truckers are all hurting as the cost escalates out of control.

With gas prices now hovering around $3 a gallon, everyone in Congress is looking for a solution or for someone to blame. Unfortunately, some have chosen to pinpoint ethanol as the culprit. However, blaming ethanol for the costs at the pump ignores the fact that crude is at near record highs, and our country is still suffering from a strained domestic refining industry.

Around the country, gasoline refiners are making a voluntary decision to remove MTBE, a gasoline additive, from the market. In its place, they are using ethanol. So, ethanol is currently being blended for the first time in many parts of the East Coast and in Texas.

Because of the new demand for ethanol, some of my colleagues have begun to argue that there is a shortage and that it is responsible for the rising cost of gasoline. They look to increased imports of ethanol, and the lifting of the import tariff, as the solution. Let me be clear: there is no shortage of ethanol. And, ethanol is a tiny fraction of cost of gasoline.

You don't have to take my word for it. Guy Caruso, Administrator of the Energy Information Administration of the Department of Energy, recently stated that the 10 percent blend of ethanol is affecting prices by ``just a few pennies.'' Ethanol's role in gasoline prices is a tiny fraction of the overall increase.

I would like to address the claim that there is a shortage of ethanol. According to the Energy Information Administration, 130,000 barrels per day of ethanol are needed to replace MTBE. Last month, 302,000 barrels of ethanol were produced each day. That seems to me like it is enough to meet the demand. There is also 25 days of ethanol supply in storage.

Have there been some transportation issues surrounding the transition from MTBE to ethanol? The answer is yes, and they're being dealt with. Sufficient supplies of ethanol are where they need to be. There is no shortage of ethanol.

If there is no shortage, what good does it do to eliminate the import tariff on imported ethanol? None. Domestic supplies are sufficient.

Lifting the tariff won't have an impact on gas prices because the only other major producer of ethanol--Brazil--simply doesn't have enough ethanol to export at significant levels at this time. I know this issue well. I was in Brazil just six weeks ago, and one thing I heard over and over was that Brazil is experiencing an ethanol shortage.

Shortages of ethanol in Brazil are being driven by strong demand for ethanol in that country. Looking at the longer term, USDA analysts in Brazil are reporting that Brazil is anticipating even higher demand for ethanol later this year and in 2007.

Given low supplies in Brazil, there has even been talk of importing ethanol into Brazil.

I would like to point out something else. Brazil and other countries can already ship duty-free ethanol to the United States. They don't have to pay the U.S. tariff. Under the Caribbean Basin Initiative, Brazilian ethanol that is merely dehydrated in a Caribbean country can enter the U.S. market duty-free up to 7 percent of the U.S. ethanol market. That's generous access, but Brazil has never even come close to hitting the 7 percent cap.

And it isn't that the Caribbean countries don't have the capacity to dehydrate more Brazilian ethanol. They do.

As we're already providing duty-free access for Brazilian ethanol shipped through Caribbean countries, and as Brazil isn't taking full advantage of this duty-free treatment, I don't know why we should bend over backwards to provide even more duty-free access for Brazilian ethanol.

I especially don't know why we should do this given Brazil's stance in the Doha Round negotiations of the World Trade Organization. Brazil is the leader of the G-20 negotiating group in the WTO negotiations, a group that is resisting our efforts to obtain improved market access for U.S. products around the world.

In addition, the Brazilian government intervenes extensively in the price and supply of ethanol in that

country. But the U.S. tariff on ethanol operates as an offset to an excise tax credit that applies to both domestically produced and imported ethanol. So by lifting the tariff, we would in effect be giving the benefits of a U.S. tax credit to subsidized Brazilian ethanol.

Providing yet more duty-free treatment for Brazilian ethanol would send the wrong signal to those Americans who are devoting their careers to help America become more energy independent. The U.S. ethanol industry is working every day to lessen our dependence on foreign oil. This is a virtue that President Bush has touted again and again.

Just last week the President restated his goal to replace oil from around the world by expanding the use of U.S. ethanol.

The President stated:

The federal government has got a role to play to encourage

new industries that will help this nation diversify away from

oil. And so we're strongly committed to corn-based ethanol

produced in America.

The President clearly understands the need to assist our domestic ethanol industry so that they can get a foothold and succeed. Why would the United States want to send a signal that we're backing away from our efforts to seek energy independence by promoting renewable fuels in the United States?

We're already dependent on foreign oil. Surely, President Bush doesn't intend for our nation to go down the path of eventually becoming dependent on foreign ethanol also. Providing yet more duty- free treatment would be a step in the wrong direction. I don't think our country should take any action that would harm the farmers and investors in rural America that have worked so hard to develop this industry. The efforts to reduce our dependence on foreign oil have only just begun.

Providing more duty-free treatment for ethanol won't increase supplies or reduce prices at the pump. It's a bad solution in search of a problem. It's a bad idea for our energy independence and our national security.

Mr. President, I ask unanimous consent to call up amendment No. 3732.

Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.

Mr. President, the supplemental appropriations bill includes $27 billion for disaster-related expenses. But, no money, other than a nominal amount for the Inspector General, was provided for the Social Security Administration. This amendment would correct this omission.

This amendment would provide $38 million to the Social Security Administration, SSA, to reimburse costs incurred as a result of Hurricane Katrina and other hurricanes of the 2005 season.

The Social Security Administration performed a remarkable job in response to these recent disasters.

They assisted more than 528,000 persons in FEMA Disaster Recovery Centers and shelters and helped many others who came to SSA field offices. Altogether these activities cost the agency $38 million: $6 million to acquire and outfit temporary space and renovate offices damaged by the storm, including costs for computers, furniture and supplies; $12 million for processing immediate payments, changing addresses, confirming Social Security numbers, and taking new claims that resulted from the hurricanes; $7 million to pay for the travel and per diem expenses for employees; $12 million for costs related to unprocessed workloads--claims, hearings, etc.--due to the storms' disruptions; $1 million for salaries of those SSA workers who volunteered to work for FEMA in the affected areas.

SSA cannot easily absorb this $38 million because its budget is already $300 million below the President's request for fiscal year 2006. SSA is already experiencing reductions and delays in service. This $38 million would allow an increase in overtime hours to begin to address these backlogs.

Finally, the cost of this amendment is offset by a $38 million reduction in the FEMA disaster relief fund. This reduction in FEMA would come from the $2.4 billion that is designated for ``other needs.'' This designation refers to money that has been made available for unspecified, potential future activities. It would not affect any specific project or activity in this bill.

I urge my colleagues to support this amendment.

Mr. President, sadly, every year over 26,000 people die in this country from the effects of drug abuse. This is a staggering and sobering statistic. Still, millions more have been devastated by this tragic loss of life and promise. Ordinary people like you and I, are left to cope with the loss of a loved one senselessly taken at the hands of drugs.

Over the years, families and friends have individually found ways to remember and honor their memory. But to date, there has been no national event to bring people together to call attention to the nature and extent of the drug problem in this country.

Now, eight families who have personally suffered the loss of a loved one because of drugs have joined together to plan a remembrance. On June 8, 2006, the first annual Vigil for Lost Promise: Remembering Those Who Have Died From Drugs will be held in Washington, DC.

This national event finally gives these and other families the opportunity to remember and honor the memory of those who have died from drugs. This event will illuminate for everyone just how pervasive and dangerous this problem is in our society.

Others sharing similar stories of loss will be joined by leaders in the drug prevention, treatment and education fields, community leaders, clergy from all faith, educators, legislators and concerned citizens as well as the Drug Enforcement Administration, the National Institute on Drug Abuse and the Partnership for a Drug Free America to raise public awareness about the terrible toll that drugs take on families, friends and society .

Today, I am pleased to submit along with my colleagues, Senator Biden and Senator Talent, a resolution to support the goals of the Vigil for Lost Promise and to designate June 8, 2006, as the day of a National Vigil for Lost Promise. It is important that these and other families who have lost of a loved one to drugs know that they are not alone. Many wonderful people have had to endure the same nightmare and this event lets everyone know that there is hope and there is help.

I encourage all my colleagues to visit www.nationalparentvigil.com to learn more about this very important event. I also want to urge my colleagues to join us in passing this resolution to demonstrate our commitment to raising awareness about drugs and to lend our support to those who have lost a loved one to drugs.

Mr. President, I am here today to speak about a brave and heroic American who gave the ultimate sacrifice in the name of freedom. SGT Daniel L. Sesker died on April 6, 2006 near Bayji, Iraq in support of Operation Iraqi Freedom. Sergeant Sesker was assigned to C Troop, 1st Squadron, 113th Calvary Regiment, 34th Infantry Division, Army National Guard based out of Le Mars, IA. I extend my deepest sympathies to his mother and stepfather, Mysty and Marvin Stumbo, his father, Dennis Sesker, his brother and sister, and his fiancee Angie.

Daniel Sesker was born in Boone, IA, and graduated from Ogden High School in 2001, where he participated in wrestling. He studied criminal law at Iowa Central Community College before enlisting in the Army National Guard. He served as part of Kosovo Force in Operation Joint Garden and had served a previous tour in Iraq. Between his two tours, Daniel worked as a counselor at the Woodward Academy and as a part-time police officer in Gowrie, IA. Sergeant Sesker received several decorations for his exemplary service, including the Bronze Star, Purple Heart, Army Commendation Medal, National Defense Medal, Iraq Campaign Medal, and Combat Action Badge.

Sergeant Sesker is remembered as having a great sense of humor. His love for his family and friends as well as his love for life will be missed by all who knew him. He was the kind of person who could light up a room with his personality and positive attitude. My thoughts and prayers are with his family and friends. We all owe Sergeant Sesker our eternal gratitude for his service and sacrifice.

Mr. President, I rise to express concern about the consideration of comprehensive immigration reform legislation. As a member of the Judiciary Committee, I have been involved in the democratic process of reviewing, amending, and voting on this year's immigration bill. I was one of six Republicans who opposed the legislation in the committee on March 27.

When the bill was brought to the floor of the U.S. Senate, a select group of Members forged a ``compromise'' that drastically changed title VI of the bill that deals with the 11 million illegal aliens currently in the United States.

The Senate had very little time to review the bill. Moreover, some Members opposed any amendment that would change the Hagel-Martinez compromise. I had numerous amendments that would have improved the bill. However, the other side of the aisle refused to let our deliberative body do its job.

As a representative of the people of Iowa, I believe amendments should be debated. Therefore, I have asked the majority leader to make me aware of any unanimous consent agreements that both sides aim to enter into before unanimous consent is agreed to. I ask unanimous consent that my letter be printed in the Record.

Mr. President, I would like to speak for 20 minutes on immigration.

Immersed in the routines of daily life, many people don't make an extra effort to track legislation as it winds through Congress. It usually takes an issue that hits close to home before it motivates people to take notice.

This issue has hit home to many. We have dived into a very passionate and emotional debate in the U. S. Senate. Our country was founded by immigrants, and continues to be a Nation of immigrants. We have benefited from the achievements of many new residents. And, today, people in foreign lands want to be a part of this great country.

Generation after generation tirelessly pursues the American Dream. We should feel privileged that people love our country and want to become Americans. We are a wonderful nation, and it is evident by the number of people who want to come here.

But it is hard to empathize with those who thumb their noses at the rule of law. Estimates say more than 11 million undocumented immigrants already live in the country. They deliberately bypassed the proper channels and broke our laws to enter the country.

We are a nation of laws. Our country was founded on the rule of law. And now our welcome mat is being trampled on.

I am a member of the Judiciary Committee, and I was a part of the 5- week markup session. I voted against the committee bill. But I think we made great strides on the border security and interior enforcement titles.

I supported amendments to provide more authority and resources to our State and local law enforcement. One of my amendments increased the number of ICE agents we have in each State. I supported amendments dealing with expedited removal and increased detention space.

We enhanced border security and increased our manpower to patrol the border. We reformed the L visa program and the Temporary Protected Status program. We addressed the problem with countries which don't take back their illegal citizens by denying them visas.

We did a lot of positive things. But these reforms will mean nothing if an amnesty in sheep's clothing goes forward.

Some say that our enforcement-only approach in 1996 didn't work. Let me remind my colleagues that the 1996 bill contained measures that still have not been implemented. The best example is the entry-exit system. It is not fully operational because Congress and our bureaucrats keep delaying its implementation.

The compromise before us may contain enforcement measures, but they mean nothing if Congress and the administration don't make the commitment to follow through. And our strong enforcement measures are worthless if we pardon every illegal alien.

I was here in 1986. I voted for the amnesty during the Reagan years. I know now that it was a big mistake. I have been here long enough to know the consequences of rewarding illegal behavior.

Let me take a moment to raise some concerns about the compromise before us.

The compromise provides for a three-tier system. It puts illegal aliens into three categories. Those who have been here for 5 years or more automatically get a glide path to citizenship. Those who have been here for 2 to 5 years

have to go home--at some point in the future--and re-enter through a legal channel. Those who have been here for less than 24 months are illegal aliens, and we assume that they will return to their home country.

Some have estimated that there are 7.7 to 8.5 million illegal aliens who have been here for more than 5 years. That is more than 75 percent of the illegal population. But that is not all. The compromise says that the family of the illegal alien--their spouses and children--can also apply. It doesn't say that their family has to be in this country. In fact, those back in their home countries are now getting a free pass to cross the border. They, too, are on their way to a citizenship.

Those in the second tier who are required to go home and re-enter through a legal channel won't go home. Why would they if their neighbors are getting citizenship? They will hold out for their reward. They will wait for Congress to pass another amnesty bill. We are sending a bad signal. We are saying some can get amnesty and some cannot.

I know my colleagues say this isn't amnesty, but it is. I know some say that the alien has to pay their taxes, pay a fine, have worked for 3 years, and learn English. They say that the aliens are earning their citizenship. I respectfully disagree.

Yes, an alien has to pay $2,000 to come out of the shadows. But individuals under 18 don't have to pay. And the fine probably won't cover the costs of implementing the program, nor will it cover the costs of a background check.

I have said it before, and I repeat is now: $2,000 is chump change. These same people probably paid a smuggler $15,000 to get them across the border. We are selling citizenship.

The proponents say that illegal aliens have to pay their taxes. Don't let them fool you. Sure, they have to pay all outstanding Federal and Sate taxes before their status is adjusted, but they only have to pay the taxes they owe for the 3 years that they are required to work. What about the other years? They have been here for at least 5. What about those under the age of 20 who are exempt from having to work? What if they work? Don't they have to pay their taxes?

Another point about this provision on taxes is that it is going to be a burden on the IRS. As chairman of the Finance Committee, which oversees the IRS, I can tell you that the taxman is going to have a difficult time verifying whether an individual owes any taxes. It will be impossible for the IRS to truly enforce this because they cannot audit every single person in this country. We need to place the burden on the alien, not the Federal Government. We need to require them to come forward and show us their tax returns.

When an alien applies for legal status, they have to prove that they have been working for 3 out of the last 5 years. If an illegal alien can't get their IRS records or an employer to attest to their working, then they can get a friend to attest. They can have anybody on the street sign a sworn affidavit to attest for them. That is fraud and corruption waiting to happen. Do you think the Federal Government is going to have time to check out their sources and prove their claims?

The proponents of amnesty also say that the alien is not eligible if they do not meet certain health standards. It does not say that one has to undergo a medical exam. In fact, those who fall under the second tier, who have been here for 2 to 5 years, may be required to take a medical exam.

My home State of Iowa is currently dealing with a mumps epidemic. Some speculate that the disease was brought over by a foreign student. That is the point of a medical exam. This compromise would place heavier burdens on our public health departments because we won't know what types of diseases these individuals have. They should be required to undergo a medical exam at their own expense. We need to require them upfront in order to prevent outbreaks of contagious diseases.

The English requirement is weak. It is weaker than current naturalization requirements. Under current law, an immigrant has to demonstrate an understanding of the English language and a knowledge of the fundamentals of our history and government. Under this compromise, an alien only has to prove that they are pursuing a course of study in English, history, and U.S. Government. Anybody could make that claim.

The compromise would require the Department of Homeland Security to do a background check on the illegal aliens in the United States. In fact, this compromise has placed a time limit on our Federal agents. They have 90 days to complete them. That is unrealistic. It is possible. It is a huge burden. And it is a huge expense.

Homeland Security will surely try to hurry with these background checks. They will be pressured by Congress to rush them. They will rubberstamp applications despite possible gang participation, criminal activity, terrorist ties, and other violations of our laws. This is a national security concern.

The compromise before us prohibits the Government from using the information in an application against an alien. So if an illegal alien writes in their application that they voted, or that they smuggled in drugs, or that they are related to Osama bin Laden, then our Government cannot use that information for critical investigations. In fact, the compromise would fine bureaucrats $10,000 if they use the information in an application for purposes other than adjudication.

But wait--there is more. If an alien has been ordered removed, and is sitting in jail ready to be deported, the alien still gets the chance to apply for this amnesty. The thousands of illegal aliens with orders to leave the country can apply. Their country won't take them back, so our country will give them citizenship. That doesn't make sense.

Everything that I have spoken about so far is based on the amnesty program for those who are currently in the United States. I would like to express two concerns about the future flow provisions. When we say future flow we mean those who aren't here but who can apply for legal entry through a ``temporary'' guestworker program.

First, on day 1 of their entry into the U.S., an employer can sponsor the alien for a green card. If they are not sponsored within 4 years, then the alien can petition for him or herself. Yes, this temporary program for temporary workers becomes a citizenship program for anybody and everybody.

Second, there is a numerical limit of 400,000. It is intellectually dishonest to say that this is the ceiling. The cap can be increased automatically without congressional approval if the limit is reached. It will never decrease; it can only increase.

This compromise will have enormous economic and employment implications for the Nation. If we enact it, we will sell out the middle class in America. We would also push aside the lower, uneducated class of American citizens.

Foreign workers won't have to take low-skilled jobs anymore. They won't be required to do the jobs that Americans supposedly won't do. Their spouses and children will permanently take jobs away. These aren't temporary workers anymore.

What happens when this country goes into recession? Americans will be banging on our door, asking why we did this to them.

We are allowing businesses to hire people at lower wages because they are illegal, rather than hire Americans at somewhat higher wages. Maybe this country needs to focus more on training and educating our own people, and less on how businesses can make more money by hiring illegals. By opening the floodgates for these kinds of low-skilled immigrants, we are taking away opportunities for our own.

Businesses have no problems paying under the table or paying lower wages. They also don't have problems paying CEOs and executives astronomical salaries. There is something wrong with this equation.

I have an amendment to create an Employer Verification System. This amendment, worked out between the Finance and Judiciary Committees, will require employers to check the eligibility of their workers.

It will give businesses the tools they need to be compliant with the law. Right now, the system is voluntary, but it is time to make this system a staple in the workplace. We will increase worksite enforcement and penalties, safeguards and privacy protections.

But this system needs to be in place if we are going to have a guest worker program. Employers are put on notice--we will hold them accountable, and we will penalize them if they violate the law.

We are taking a huge step here in shaping the future of our country. What we do here with immigration will impact every aspect of our daily lives.

An amnesty program for millions of people will increase the fiscal burden on our country. It will further strain our health care, education, and infrastructure systems. If these folks are not paying their taxes, then American citizens will have to pick up the tab. Americans will have to build bigger schools, and pay for the huge medical expenses of these people.

So I ask my colleagues to think twice. Read the fine print. Ask yourself this: What about fairness? What about those who waited their turn in line? What about those who abide by the rules?

I know many of my colleagues will support the compromise that was agreed to in the last day. I know they are saying to themselves: This is better than nothing. We had to do something. I ask my colleagues this: Do you think voting for this without the process of amending and debating is what we were elected to do? Voting for this bill because it is supposedly the best thing out there isn't a good enough reason.

As a U.S. Senator, I took an oath of office to honor the Constitution. I bear a fundamental allegiance to uphold the rule of law. And that is why I cannot in good conscience support granting legal status to illegal immigrants who have violated our laws. Lawbreakers should not be rewarded. The compromise sends the wrong message to millions of people around the world. If you vote for this compromise, you obviously don't respect the rule of law.

With a wink and a nod, Uncle Sam would turn America's historic welcome mat into a doormat trampled upon by millions and millions of illegal immigrants.

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

Mr. President, I ask unanimous consent to speak for 15 minutes as in morning business.

Mr. President, as chairman of the Senate Committee on Finance, I chair a committee that has jurisdiction over international trade. We find ourselves being both a participant and an observer of Doha Round negotiations under the World Trade Organization. Those negotiations are in a very determinative state; success will be made, I believe, during the month of April or the Doha Round, for all practical purposes, would end--not in the minds of the WTO or in the minds of the 148 nations other than the United States but as a practical matter. If things are not done by the end of 2006 and the President's authority for trade promotion running out in July of 2007, there will not be time for us to get something done before trade promotion authority runs out.

I would like to have trade promotion authority for the President continued beyond July 2007. I would try to promote that, but we saw very close votes on CAFTA and other trade agreements; there is a protectionist trend in the Congress--maybe not in the Nation as a whole but at least in Congress--that might keep us from getting trade promotion authority reauthorized.

I comment in these few minutes on where we are on the Doha Round and what I expect to happen and leave the message, if it does not happen very soon, this round could be dead.

As we enter the final months of the WTO Doha negotiations, I am very concerned the bright promise of a world far less burdened with often crippling, market-distorting trade barriers may be slipping from our grasp. In particular, I am very troubled by the fact that nearly 5 years after WTO members adopted the Doha ministerial declaration that launched this round of global trade talks, some of our WTO negotiating partners still seem willing to forgo this very historic opportunity that Doha represents to open highly protected agricultural markets.

We now have less than 4 weeks to go to meet the WTO's new April 30 deadline to reach agreement on what is referred to as modalities or, another way

to put it, a roadmap for how we will achieve our specific market- opening objectives in the agricultural negotiations. This deadline, similar to most of the others, also appears to be elusive.

The Doha Round is a historic opportunity because global trade rounds are relatively rare events. We have had only nine of them since the creation of the global trading regime back in 1947, what we then called the General Agreement on Tariffs and Trade, or GATT.

Agriculture, which was ignored for almost the first 40 years of GATT, was only first addressed at all during the last round, which was the eighth round, which was called the Uruguay Round because it started in Montevideo and finished and passed by Congress in 1993.

So here we are, 13 years later, trying to make some progress--but not making very much progress--toward what we would hope would be a 10th successful round since the regime started in 1947. Because many trade- distorting barriers were untouched or minimally reduced at the end of the Uruguay Round in 1993, much was left to be done, particularly in agriculture, but we are negotiating manufacturing, we are negotiating services, so a lot needs to be done.

In light of the lack of progress in the World Trade Organization, I briefly address a few points. First, as chairman of this Senate Committee on Finance, I reaffirm, as strongly as I can, the basic elements of the Trade Act of 2002, especially the legislation crafted by this committee that renewed the President's trade promotion authority in 2002, after it had lapsed for about 7 years.

The underlying premise of our trade promotion authority legislation, which gives Congress enhanced oversight authority over trade negotiations conducted under that act, is that the United States will pursue a very ambitious, very comprehensive trade negotiation, particularly in agriculture. This was the cornerstone of the Doha Round--ambitious, comprehensive negotiations and nothing less.

The reason I fought so hard for trade promotion authority is simple. The benefits from ending decades of trade-distorting practices in the global agricultural trade are overwhelming. The U.S. Department of Agriculture has estimated getting rid of market-disrupting agricultural protection could increase the value of U.S. agricultural exports by at least 19 percent. In addition, the Department of Agriculture study also concludes that agricultural liberalization would increase global economic welfare by $56 billion each year.

I know well how vital trade is to farming families anyplace in America, but I am particularly knowledgeable about my State of Iowa because I happen to be a family farmer, farming jointly with my son Robin. Our farmers and agricultural producers sold over $3.6 billion in agricultural exports in overseas markets last year. Although importers and consumers from all over the world seek out Iowa's agricultural products, this is also true of American agriculture generally.

Moreover, more than $3 trillion of economic activity in our $12 trillion economy is derived from trade. Think of that: More than 25 percent of our economy is based upon international trade. That is why an ambitious, comprehensive result in the Doha negotiations is the only kind of result that makes sense, both for my State of Iowa and the United States.

President Bush and Ambassador Portman have done a very good job--in fact, a remarkable job, in my view,--of pursuing an ambitious, comprehensive agricultural deal, especially in the difficult period prior to and during the Hong Kong Ministerial Conference last December.

Nevertheless, some World Trade Organization members, principally the European Union, now apparently want to stop short of that ambitious, comprehensive, result-seeking agreement that was previously reached in opening Doha Round, and they particularly want to shortchange the negotiations in the area of agricultural market access. That is why, when pressed by the United States and other World Trade Organization members, the European Union appears to be changing the subject away from ambitious market access to secondary issues such as food aid, on which we are now having protracted discussions.

I am not even sure our own negotiators should be participating in something as fringe as food aid as compared to the massive discussions and decisions that need to be made in trade-distorting export subsidies by the European Union or by, in the case of the United States, production-related subsidies that we do for American agriculture, not subsidies for agriculture generally but those which are trade distorted. We find our American negotiators getting all nervous about food aid as somehow being a major item. No. What it is is an effort on the part of the European Union to detract attention from the really big export subsidies and production-oriented subsidies.

Perhaps that is because of the intense political pressure European trade and agricultural officials think they face at home. It seems to me that the European Trade Minister wants to open up and do really good trade negotiations. It seems like there is a hangup by the European Agricultural Minister. And it seems to be really a hangup by French farmers. According to one account by former European Commission officials, European farm groups described one compromise agricultural agreement as a death warrant for European farmers. However, that was in 1992, connected with the Uruguay Round negotiations, and the agricultural agreement that drew so much protest in Europe was back then, not today, when that description was made. Ultimately, of course, Europe accepted the Uruguay agreement in 1993. Now the European Union is right back where they were 13 years ago, citing that same agreement as a model for the type of agreement they would like to see today, at least in terms of linear tariff reductions.

So we have seen this type of reaction from Europe before.

Today, once again, the European Union thinks that ambitious market access too politically painful to achieve or to even thoroughly negotiate, but they got over that hurdle in Uruguay. Why can't they get over that hurdle in Doha? So we are back at the European tactic. It appears that what they are really trying to do is a minimal deal somehow being seen as a good deal. Apparently, they think it is a good result if they can get something that is marginally better than the status quo, end negotiations, declare victory, and go home.

Other WTO Members such as Brazil appear reluctant to agree to an ambitious outcome in agricultural market access because they may believe that they can achieve their objectives through other means, such as litigation. You know about the cotton case. Brazil recently was successful in that case. So it may give them false hopes that they can achieve, through legal briefs in Geneva, what they do not appear to win at the negotiating table of the Doha Round.

I would like to say a word about both of those situations.

First, a minimal deal in the Doha agricultural negotiations is not something that can be considered a victory in any sense of the term, even in a political sense. What do I mean by a minimal deal? A deal that goes just beyond the 36-percent average tariff reduction of the Uruguay Round, a deal that leaves tariff peaks in place, or a deal that undermines market access by long lists of special exemptions.

I will not try, as chairman of the Finance Committee, to spin some minimalist deal into some sort of political victory. In fact, I will not even allow it to be brought up for consideration in the Finance Committee or, if I was overruled by my own committee, I would fight it on the floor, if it ever got that far.

So let me make that as clear as I can. A bad deal for agriculture in Doha negotiations is worse than no deal. That was my position at the start of these negotiations, and that is my position now. All those people spending all their time negotiating on food aid when they ought to be negotiating on export subsidies, when they ought to be negotiating on subsidies encouraging overproduction, that is not going to take my eye off the ball.

A minimalist outcome in the Doha negotiations, after years of effort and high-level political engagement, would send a terrible message that real reform in agriculture is too hard to achieve and may set us back for decades.

It would make meaningless a key element of the agricultural component of the Doha Ministerial Declaration where WTO member countries committed themselves to ``comprehensive negotiations aimed at substantial improvement in market access.'' That is what U.S. agriculture demands for giving up our subsidies connected to production. Farmers want their income from the marketplace, not from the Federal Treasury. But we cannot do that without market access, where there are 62 percent average tariffs around the world on agriculture compared to our 12 percent. If that happened, it would reward countries such as the European Union that have big farm spending, highly inefficient production----

I ask unanimous consent for 4 more minutes.

If we went this route, it would reward countries such as the European Union that have big farm spending, highly inefficient production, and use nontariff barriers to thwart trade. And even though this round is known as the Doha Development Round because it is supposed to help poor countries, a bad deal that keeps high trade barriers in place would tell developing countries that they can forget about seeing fair opportunity to export their products.

As for World Trade Organization members that see litigation in dispute settlement--as Brazil did in the cotton case--as a practical alternative to negotiations, I would remind those who are tempted to adopt this position that litigation, even under the new, improved WTO rules, is unpredictable, costly, time-consuming, and not the way to resolve unfair trade.

Moreover, litigation is not always the most effective way to open markets and eliminate trade barriers, especially over the long haul. Historically, we have also depended on negotiations and the everyday management of trade and commercial relations as much better ways to achieve and maintain open markets.

Make no mistake, we can and will defend our interests through dispute settlement when it is necessary to do so, and we have done so as the United States in the World Trade Organization quite successfully. But substituting litigation for negotiations or for management of our commercial relations is neither practical nor desirable, nor is it the way to bolster confidence in the World Trade Organization as an effective negotiating forum.

I began by saying that this round of trade negotiations is a historic opportunity. It can be historic in the sense that we achieve a result that truly benefits the global community by increasing global prosperity, and it can be historic in the sense that we miss a great opportunity to promote prosperity and open markets throughout the world.

Unfortunately, we have made enormous mistakes before when we missed important opportunities to fight for comprehensive global trade liberalization. In the early years of the General Agreement on Tariffs and Trade, going as far back as 1947, it was the developed nations, particularly the United States, that created exceptions for agriculture, that exempted it from liberalization under the GATT regime. It has taken us decades to shift gears to try to bring agriculture under the discipline of global trade rules. That is why it is so important for us to continue to make real progress in this round of global trade talks.

Achieving real, meaningful results in these talks is something I am as strongly committed to now as ever before. It is also why I will continue to oppose any outcome in the WTO that, in my judgment, fails to accomplish these goals, even if it is a minimalist approach. Don't expect me to bring such an agreement before the Senate as chairman of the Finance Committee.

I yield the floor.

Mr. President, thank you. And I thank Senator Wyden for his leadership and the time.

Everything this body has heard the Senator from Alabama say about what is wrong with this piece of legislation is entirely inaccurate. Everything he said we need to do to study bills--to hold them up until we get a feel about everything in a bill before enactment by this body--this amendment, which brings transparency to holds, does not in any way prevent any of that from happening. All it simply says is, if you are going to put a hold on legislation, you ought to have guts enough, not be a sissy that the public might find out who you are, why you are holding something up. State for the entire country why you think this person or this bill ought to be held up in the Senate. You can hold it up for a year. You can hold it up for 1 day.

I have been putting things in the Record of why I put holds on bills, just as this amendment requires, for several years. And I can assure you, not one of my colleagues has beaten me up because they knew who I was. Not one of my colleagues has bloodied my nose. Not one of my colleagues has given me a black eye. Not one of my colleagues has done anything. It does not hurt. You can be a Senator. You can be out in the open. You can be transparent and still do the job you need to do.

But after all, this is the Senate. The public's business ought to be public. That is what this legislation is all about. But it also has something to do with the practical workings of the Senate. If somebody does not like a bill you propose, and they want to slow it up, you can sit down and talk to them. Now you do not even know who they are, in many instances. If you are going to do business, you have to know who to talk to. Being a part of a collegial body, as we are, talking to each other is how you get things done and move the ball along.

It is about open government. It is about reducing cynicism and distrust of public officials. It is about public accountability. It is about building public confidence. It is about making sure that as to what is being done here, the public knows who is doing it and why they are doing it. I do not see why there can be any opposition to this amendment.

A hold is a very powerful tool and must be used with transparency. I believe in the principle of open government. Lack of transparency in the public policy process leads to cynicism and distrust of public officials.

There is no good reason why a Senator should be able to singlehandedly block the Senate's business without any public accountability. The use of secret holds damages public confidence in the institution of the Senate.

Our amendment would establish a standing order of the Senate requiring Members to publicly disclose when they place a hold on a bill or nominee. For several years now, I have made it my practice to insert a notice in the Congressional Record whenever I place a hold.

Under our proposal, disclosing holds will be as simple as filling out a cosponsor sheet and Senators will have 3 days to do it.

This proposal was drafted with the help of Senators Lott and Byrd, who as former majority leaders know how this body operates and how disruptive secret holds can be to the Senate's business. Senator Stevens has expressed his concerns about the use of secret holds. It says a lot that the longest-serving Members of this body oppose the use of secret holds and see them as a real problem.

If Senators support the goal of the underlying bill to increase legislative transparency and accountability, then they should support this amendment.

Mr. President, I urge my colleagues to vote in favor of final passage.

Raising the debt limit is necessary to preserve the full faith and credit of the U.S. Government.

We cannot as a Congress pass spending bills and tax bills and then refuse to pay our bills.

Refusing to raise the debt limit is like refusing to pay your credit card bill--after you've used your credit card.

The time to control the deficits and debt is when we are voting on the spending bills and the tax bills that create it.

Raising the debt limit is about meeting the obligations we have already incurred.

We must meet our obligations. Vote for this bill.

Mr. President, it is beyond my understanding when the argument is made that this program is too confusing because there are too many plans, and then you add yet another plan. That is what this amendment does. They say there is too much confusion and there are too many plans, and they want to add another plan.

This amendment is going to destroy the competitive incentives and replace them with a Government-controlled regime. It puts the Government into the full-time business of setting drug prices and determining what drugs are covered. Strong competition has led to lower costs. The average premium is $25. That is 20 percent less than we expected.

This amendment would result in higher premiums. This amendment would also have a drug safety issue with it. This amendment would force plans to keep unsafe drugs in the formulary because what is on at the first of the year has to stay on through the whole year. So if Vioxx was on in January 2004 and was found unsafe in September 2004, it would still have to be on the formulary for another 3 months.

This is a Government-run plan. It increases costs and has price controls and unsafe drugs. This is just not a good amendment.

Mr. President, today, I would like to take a few minutes to speak about the tax gap. Before I get started, I first want to thank my colleagues, the chairman and ranking member of the Budget Committee, for their interest in the tax gap. As chairman of the Finance Committee, I too have a great interest in this topic. It is my intention to close the tax gap, and I look forward to working with Senator Gregg and Senator Conrad to achieve this important goal.

The tax gap, as we all know, is the difference between the amount of tax owed by taxpayers from legal activities and the amount voluntarily paid on time. Today, specifically, I want to clarify the facts and the fiction regarding the possible solutions to this $350 billion problem.

Under my chairmanship, the Finance Committee has held at least eight hearings to address the tax gap:

No. 1, Oversight of the Internal Revenue Service, ``Taxpayer Beware: Schemes, Scams, and Cons,'' April 5, 2001; No. 2, Tax Code Complexity: New Hope for Fresh Solutions, April 26, 2001; No. 3, Taxpayer Alert: Choosing a Paid Preparer and the Pitfalls of Charitable Car Donation, April 1, 2003; No. 4, Tax Shelters: Who's Buying, Who's Selling, and What's the Government Doing About It?, October 21, 2003; No. 5, Bridging the Tax Gap, July 21, 2004; No. 6, Charities and Charitable Giving: Proposals for Reform, April 5, 2005; No. 7, The $350 Billion Question: How to Solve the Tax Gap, April 14, 2005; and No. 8, Social Security: Achieving Sustainable Solvency, May 25, 2005.

During these hearings, we learned a lot about the tax gap, including several good ideas for closing it. We heard from the Joint Committee on Taxation. We heard from the Treasury Department, including IRS and TIGTA. We heard from the Comptroller General and GAO. We heard from the Justice Department. We heard from the Taxpayer Advocate. We heard from CBO. We heard from the States. We heard from the private sector, both nonprofit and for-profit. And, of course, we heard from the American taxpayer.

From the testimony of all these hearings, and the expertise of all these witnesses, we identified several truths about the tax gap:

No. 1, the tax gap is a huge problem for the tax system; No. 2, it is easy to discuss in the abstract; No. 3, there is no easy solution to the problem; No. 4, there is no one silver bullet; the tax gap can only be solved through many small steps; No. 5, enforcement is important, but any real solution to this problem will require legislative changes, the most important being Tax Code simplification; No. 6, closing the tax gap should not place an undue burden on honest taxpayers; and No. 7, taking concrete steps to close the tax gap will require a lot of political will and bipartisan cooperation.

In the spirit of bipartisan cooperation, I look forward to working with Senator Conrad and others to solve the tax gap problem. Before we can reach a bipartisan solution, however, we first need to get on the same page regarding the facts and fiction of this issue.

A common misperception by some of my friends on the other side of the aisle is that the only thing we need to do to close the tax gap is give the IRS more money for enforcement. This myth asserts that if the IRS gets more funding for enforcement, both the $350 billion tax gap and the budget deficit will magically disappear. This myth is even being used as an offset for new spending.

The Finance Committee's tax gap hearings have emphasized the importance of IRS enforcement. In fact, this budget will provide the IRS additional resources to get the job done. However, our best estimates suggest that enforcement alone could account for only 10 percent of the tax gap, not 100 percent as purported by Senator Conrad. But even this possible 10 percent is misleading, because it doesn't accurately reflect the reality of expanded enforcement. To achieve these kinds of returns from enforcement alone would, I fear, require us to backtrack to a time when there was serious concern about the IRS overreaching and stepping on the rights of taxpayers. We must always keep a balance between taxpayer rights and enforcement.

So yes, while I support additional enforcement, we need to keep our feet on the ground and our rhetoric in check as to how much can be achieved through enforcement and the level of enforcement that can be supported.

We must also remember that it is vital that enforcement resources be targeted properly. We need to be smart in our use of enforcement. Too often the IRS has ``no-change'' audits. That is, they have spent a lot of time going through the shoebox of receipts belonging to some person and found out there were no problems. This is a waste of IRS resources and takes up the time of honest taxpayers. I been pleased to work with Senator Baucus to encourage the IRS to do the research and review that will allow them to focus their attention on the bad actors and get more bang for the buck on audits and enforcement.

Let me note, too, from my work on the Commission on Restructuring the IRS that the Commission found that taxpayer service and clarity of law are vital in encouraging compliance. So many folks want to abide by their obligations as a citizen, but they can't because the law is too confusing, and they can't get the right answer. Service and simplification must be part of any effort to deal with the tax gap. I will return to simplification later in my comments.

So if enforcement can't solve the $350 billion problem, what are our other options? Well, a little over a year ago, the Joint Committee on Taxation, at the Finance Committee's request, issued a report.

This is the report right here. It is titled ``Options to Improve Tax Compliance and Reform Tax Expenditures,'' otherwise known as the ``White Book.''

This report provided about $190 billion over 5 years with some very controversial items. Let me give you some examples:

Repeal the mortgage interest deduction for home equity loans. Subject State and local workers to the Medicare tax. Apply the payroll tax to most fringe benefits. Allow the offshore activities of U.S. companies to be exempt from U.S. tax.

These are clearly controversial proposals, and I am sure there are not many in the Senate who would line up to endorse them today.

Some other ideas came out of the Finance Committee's examination of the payroll tax gap last spring. The Joint Committee on Taxation and the Treasury Department testified on the leakage in the payroll tax system. To fix this leak, we heard some of the following ideas:

Modify the determination of amounts subject to employment tax for partners and S Corporation shareholders. Provide consistent FICA treatment of salary reduction amounts. Remove the employment tax cap.

Again, many of these and other comprehensive payroll tax proposals, all which would have improved Social Security solvency, were too controversial to stand on their own.

With the lack of bipartisan cooperation on Social Security, we did not have an environment to consider these important, but controversial proposals. Perhaps, if there had been bipartisan cooperation on addressing the Social Security problem, we could have made headway on the payroll tax gap.

In addition, no discussion of methods to close the tax gap can be complete without identifying the single most important one, which is Tax Code simplification. Our tax code is just too complex. Complex laws lead to inadvertent errors as well as opportunities for intentional noncompliance. Complexity in the Tax Code also contributes heavily to taxpayer confusion and real or perceived unfairness in the tax system. And studies have shown that if taxpayers feel they are being treated unfairly by the tax system, they are less likely to be compliant. Any real effort to close the tax gap cannot be taken seriously unless Tax Code simplification is part of the proposal.

Finally, I also want to alert my colleagues to the fact that we have measures in the tax relief reconciliation bill that aim at some aspects of the tax gap. In particular, some of these are

dealing with problems we are seeing in tax-exempt entities--charitable donations and abuses of tax-exempt organizations. We have reforms of two types of charitable entities--donor advised funds and supporting organizations. Too often, people have been making donations to these organizations but retaining control and seeing an inappropriate benefit going to themselves and their family, rather than to the community and those in need.

Let my colleagues understand, the issues of donor advised funds and supporting organizations are not minor as it relates to the tax gap. The IRS recently released its ``dirty dozen'' tax scams for 2006, and throughout the thousands of pages of Tax Code and regulations, abuse of donor advised funds and supporting organizations was targeted as one of the top dozen problems.

Two years ago, the Commissioner of the IRS, in a letter to me, highlighted the abuse of donor advised funds and supporting organizations as the No. 1 problem IRS was seeing in tax-exempt entities.

I think the public would view the Finance Committee as neglecting its work if it didn't seek to shut down such abuses. The Finance Committee didn't turn a blind eye; we worked on addressing these problems and drafting reforms. These reforms of donor advised funds and supporting organizations have been drafted on a bipartisan basis and with significant comment and input from the charity sector, particularly the Nonprofit Panel. I am pleased that these measures are now in tax reconciliation and conference. I think it is important that we take steps in addressing these problems here and now.

But my point is that here is something--problems of donor advised funds and supporting organizations--labeled as one of the most dirty abuses in the entire Code, and yet I still have a few colleagues who come to me with this complaint, this change, this concern about what we are doing to stop the abuses. If the road is so full of potholes on dealing with these areas of clear abuse and relatively small dollars, I think we need to recognize the real problems ahead in dealing with the big issues in the tax gap. Unfortunately, all too often I find that the tax gap is an issue in which everyone shouts for solving in the abstract, while many of those same voices are stilled when it comes to the particulars.

In closing, I want to re-emphasize the importance of this debate. Today, I have just scratched the surface on this topic. I praise the Treasury and IRS for taking some initial steps. I applaud the chairman and ranking member of the Budget Committee for their interest in closing the tax gap, and I welcome input from other Senators as well. I will eagerly entertain any specific ideas to close the tax gap as long as they go beyond ``more money for IRS enforcement,'' and as long as they do not place an undue burden on honest taxpayers. The solution to this problem needs to be bipartisan, and it needs to be legislative. Let's sit down at the table, separate the facts from the fiction, and work together to solve this tax gap problem.

But, the bottom line for the discussion today is that the minority's point that closing the tax gap can be done just through enforcement just doesn't have merit. And, the $35 billion--and that is stretching it--that may be gotten through enforcement doesn't come close to paying for the over $100 billion in new spending that the Democrat leadership is pushing.

Mr. President, virtually all Democratic Members have had a common theme in their purported offsets for their amendments to this resolution--they would close tax loopholes to pay for whatever popular spending program is proposed. Closing corporate tax loopholes is the common refrain to pay for spending. Several Members have referred to the raisers in Senator Conrad's substitute amendment to the tax relief reconciliation bill--and they keep trying to spend that same money over and over again.

Of the raisers in Senator Conrad's substitute amendment, $30 billion of those are included in the Senate tax relief reconciliation bill that is now in conference between the House and Senate. Many of the proponents of these amendments that have been offered on the other side of the aisle, using tax loophole closers, were among the small minority of Members who opposed the tax relief reconciliation bill that contained offsets.

This brings me then to the amendments that have been proposed. The sponsors say they have offset the costs of the amendments by closing tax loopholes. Senator Conrad's amendment contains the known universe of revenue raisers supported by those on the other side. If we assume that the raisers in Senator Conrad's amendment would have raised approximately $89 billion over 10 years that is still a far cry from the cumulative demands of the amendments that have already been offered from the other side. The amendments that have been offered that propose to use those tax loophole closers as offsets total $319 in new spending. That total is as of 3:30 p.m. this afternoon. We don't have a tally for all of the additional amendments that have been proposed since then. That new spending, by the way occurs over the budget period--5 years. That means we will have to find $319 more in revenue raisers just to cover those new spending items.

Now, if you use a loophole closer that is already called for in the tax relief package that is in conference, we will also need to find another $30 billion in raisers to cover the tax reconciliation bill unless my colleagues on the other side of the aisle have decided that they are no longer interested in the tuition deduction and the low income savers credit and the work opportunity tax credit and the deduction for teacher expenses and small business expensing and, oh yes, AMT relief for nearly 20 million Americans. The Finance Committee staff hopes to use the full $30 billion that is already in conference in the Senate tax relief reconciliation bill for those important tax relief provisions.

So, if we leave the $30 billion in raisers that are in tax reconciliation out of it, we will have $59 billion in net new revenue raisers available that are supported by those on the other side. Keep in mind, I'm giving the other side a break here because I'm using 10 year numbers for the offsets. The 5 year numbers are probably less than half of the net $59 billion they could claim they are raising. If you subtract the $59 billion from the $319 billion in new spending proposed, it means the other side's amendments were short by $260 billion. That's $260 billion, Mr. President.

Now, that $260 billion needs to come from some place. It wipes out all the tax relief in the package. That means no extension of the child tax credit, marginal rate relief, marriage penalty relief, retirement security relief, or education tax relief when those provisions expire in 2011.

It also means no extension of the Alternative Minimum Tax relief ``patch'' and other extenders like the research and development tax credit.

You can't have it both ways, Mr. President.

Either the other side, if they had prevailed, would have added $260 billion in deficit spending or they would've gutted the tax relief they claim to support.

Budgets are about choices. In this case, the choices are clear. If the Democratic leadership were in control of the Senate, we would have no tax relief left in this budget or we would have added $269 billion in deficit spending. That deficit spending would be $269 billion higher than the deficits in the budget that the other side criticizes. Neither choice would be the right choice for the American people.

I yield the floor.

Mr. President, I have some points I would like to make. Before I do that, I will respond to a couple of points that the Senator from Florida made. One was his speaking about the bewilderment among seniors about the program. I would say that a great deal of the bewilderment comes from the confusion that people have because of the rhetoric of people who don't like this plan and have tried to kill it with rhetoric because they didn't have the votes on the floor of the Senate. That has not created a very good environment.

On the other hand, I can say that at my town meetings--I held 16, Monday through Thursday, during our last break--people who came expressed some wonderment about exactly what program to get into. But people who also had already selected a program gave very positive comments about the benefit of the program to them.

The other point I would like to make, Mr. President, is the point that was made that maybe the cost is coming in

less than what was anticipated because not enough seniors are coming in. I think it is very clear that the reason this is costing $8 billion less than what 3 years ago CBO estimated it would be for this year is because of the competition. As a conferee, as I was going through ironing out the differences between the House and Senate on this bill, we were very nervous that our anticipation of the premium being $37 a month, on average, might end up being much higher. And we, as writers of this legislation, would be embarrassed about that.

Competition has brought that premium down to $25. Instead of $37, the average premium is $25. We were estimating that there would be all sorts of savings from competition because we were patterning this program after what the Federal Employees Health Benefits Plan had been for 4 years. It worked so well for Federal employees, we felt it would work very well for seniors, and it is working very well in this respect for seniors. But we estimated there would be certain savings.

Quite frankly, we were nervous about whether these savings would materialize. But they did materialize--to the point of adding up to that $8 billion that I have referred to. But with specific drugs--we have drugs and pharmacists coming in under these plans--brand-name drugs are coming in on an average of 18 percent less than otherwise in a pharmacy. If it is mail order, it is about 26 percent less. In the case of generics bought at a pharmacy, it is 55 percent less, and for mail order it is 66 percent less.

So I suggest to the Senator from Florida that enrollment has nothing to do with it. The savings are coming because competition is working.

Now, another confession we have to make is that as we were writing this bill, we wondered whether we would have enough plans sign up so we would have this competition that works so well in the Federal Employees Health Benefits Plan--even to the point where we decided we needed a backup plan. Just in case only one plan signed up, we would make sure the Government set up a competitive plan so that there would be some choice for our seniors. We ended up with lots of plans, and we hear from the other side there are too many plans. Well, the marketplace brought plans in and drove down the price. Some of these plans are going to get out because the marketplace is going to drive them out. Hopefully, we still have plenty of choice when this all happens. But competition is working.

Now, also, I hear the rhetoric about too many plans being confusing. I just read in the newspaper in a whole other area, but to throw it out for comparison, I heard that in regard to people signing up for health savings accounts--HSAs--you have to have a catastrophic insurance policy go with it. There are 96 companies selling catastrophic policies. Yet we have had 3 million Americans sign up in less than a year for catastrophic policies. I don't know whether it is confusing to them or not, but they are joining. That is twice as many plans that are available. We don't hear people complaining about too many plans out there for health savings accounts.

So I don't know why--except for rhetoric to gain political advantage--we talk about too many plans out there for seniors. The more plans, the more choice.

Do you think Congress has the ability to write one plan that is going to fit the needs of 44 million seniors and disabled people? First of all, if you did that, it would have to be mandatory. If you make it mandatory, it would be evidence that you never learned a lesson from the last time we tried to extend Medicare and make it mandatory when we put a catastrophic program in in 1988 or 1989, which passed this body-- I don't know--it was a closer vote than it was repealed.

But when you go home to the grassroots of Iowa, and every other State in the Nation, there is an uproar because it was mandatory and people had to pay for something they didn't want to use. And in a year or two it was almost unanimously repealed by this body. So we believed it ought to be voluntary, and it is voluntary. So if you don't want to join, you don't have to join.

But if you want to join, everybody has different needs and desires and you ought to have some choice, just like Federal employees have. If it has worked 40 years for Federal employees, it seems to me that it is a pattern that we ought to have enough respect for the seniors of America to give to them.

Mr. President, I would like to go to the issue before us, an issue that we have discussed before, not an issue that I entirely disagree with the Senator from Florida on because I don't know what the situation is going to be by May 15. But I know if you had an amendment up to extend the deadline for filing income tax on April 15 and you moved it to May 15, everybody would be going to the post office on May 15 to drop in their income tax forms, and I would be one of them. Americans procrastinate until the last minute. Some are going to procrastinate until the last minute on joining one of these plans.

The extent to which people benefit from this plan, particularly lower income people, because it is highly subsidized--up to 98 percent--it seems to me the extent to which you want to give them more leeway, you are not being very humane to them if they can benefit from the program today instead of tomorrow.

So you may be right, but today you are not right. You may be right on May 1. Maybe your timing is off. Maybe I am conceding too much. My staff will probably tell me when I am done I was too good to you, that you are too right. But there are other ways of doing what you want to do, and I am going to suggest a way. You are probably going to disagree with it.

Before I get to that point, I want to give some background. The amendment by Senator Nelson is going to extend the open enrollment period. Information on the Medicare prescription drug benefits first became available last October, and then the open enrollment period began November 15. So today the open enrollment period has been going on for 4 months, and there are still 2 months left before open enrollment ends on May 15.

I personally think that enrollment is going well. About a quarter million people--250,000 beneficiaries, in other words--enroll each week. Enrollment in stand-alone plans in my State of Iowa increased by 71 percent between January and February. At this rate, Medicare is on a track to reach the goal of 28 million to 30 million beneficiaries with coverage by May 15.

I think making decisions about one's health care can, in fact, be difficult. That is why information about the available plans went out way back in October. That is why beneficiaries have 6 months to make a decision. That is why there are many resources to help beneficiaries learn about their options and make their decisions. That is why beneficiaries can change their plan choice once before May 15. But that said, I know there is concern that beneficiaries may need more time. So the amendment I am offering would grant the Secretary of Health and Human Services the authority to extend the enrollment period. We are just 2\1/2\ months into this new benefit--the first expansion of Medicare in 40 years.

Personally, I think it is premature to change this date. So I offer this amendment as a compromise. The amendment would grant the Secretary definitive authority to extend the enrollment period. It would waive the application of the late enrollment penalty, and it would extend beneficiaries' rights to change their plan, and to change it once. Despite the rhetoric that we constantly hear around here, I hope everyone wants this benefit to be successful.

I know there have been some disappointing startup problems, especially for some of our Nation's most frail and vulnerable beneficiaries. But what would you expect when, on January 1, you have 44 million people rushing into a brand new Government program? There are obviously going to be some roadblocks, when people sign up on December 31 and go to the drugstore on January 2 to get drugs under a plan that you are trying to squeeze 44 million Americans into. It is quite obvious that there would be some problems.

I think the administration has made great progress in getting these problems solved. The Secretary of HHS has sat down with our committee on three occasions to hear both Republicans and Democrats, to listen to what the problems are.

I think it is mutually agreed that there were about seven areas where there were problems. The question I

asked three times was: Is there any change in law that is necessary for the Secretary of HHS in order to grapple with these problems? And the Secretary said, no, he had ample authority to do that. He pointed out to us the seven problems. He pointed out to us how he was going to solve those problems. Between meetings, he gave us updates on progress being made toward solving those problems.

So I think we have a Secretary of Health and Human Services and we have a director of CMS who are working more than full time, and a lot of these problems, quite frankly, are simply the technicians it takes to make sure the computer software is working right.

What is the problem?

Mr. President, I think we have a Secretary who is working hard on it. There are problems, but at the same time, we are writing a million prescriptions a day without incident. Beneficiaries are saving a lot of money.

I spoke with the Senator from Florida about how the average premium is now $25 a month, 20 percent lower than we first projected. I spoke with the Senator from Florida about the lower drug costs, saving the taxpayers dollars as well. Just this year, the benefit, as I said, will cost $8 billion less than originally thought. The 10-year cost has dropped by $180 billion.

I heard from a couple in Iowa who are saving nearly $2,800 a year. Another Iowan is saving $1,750 a year. And here is another one. A person from Massachusetts is saving $17,000--$17,000--a year on medicine because they are participating in this program.

Getting this level of savings depends on strong competition among the plans, and we have that. Many people will remember the skepticism on whether many plans would participate at all. Some would say that we have too many choices and that is why beneficiaries need more time. Those choices, in fact--let me put it this way: It is not just choices, but because of choice, we have competition keeping premiums low, and they are letting people pick the plan that best suits their medical needs.

My amendment strikes an effective compromise, I believe, to Senator Nelson's amendment, which is before us. Senator Nelson's amendment calls for a unilateral extension of the enrollment deadline right now, and it would extend it until the end of the year and into the enrollment period of next year.

As I said, I think it is premature to make that decision now. Some people think 6 months is not enough time to make a decision on a plan. Yet millions are enrolling even now.

Many people are also concerned about the late enrollment penalty. This penalty is modeled after the way Medicare Part B has worked since its origination in 1966. There is a late enrollment penalty in Part B that anybody who doesn't sign up for it when they get to be 65 will pay, and that is there to encourage people to enroll early and to think of Part B as not some Government program, just a Government program, but to see all of this--whether it is Part B or it is Part D, as in drugs--as an insurance policy.

People who are 65 today thinking about signing up for the Part D drug program under Medicare may be very healthy and may think they have never taken a pill in their life and that they will never take a pill, but that is today when they are 65. They are not going to know what their health needs are when they are 70 and maybe get sick and have to take a lot of medication.

It is a little bit as if you were never going to have a car accident, you would never buy car insurance. If you were never going to have a fire in your house, you would never buy fire insurance. But Americans see insurance as a very useful tool, a necessary tool to manage their risks, and our seniors and disabled people ought to see this as an insurance policy, maybe not needed today, but that will be needed some day, and they ought to be enrolled.

Obviously, if you didn't have that penalty in Part B and now in Part D, the drug part, then who would ever sign up until the day before they have to buy their first pill, just as you would not buy your car insurance policy until the day before you were going to have a car accident.

So I hope people see it as a good investment, as an insurance policy, as it has been for Federal employees for the last 40 years.

The late enrollment penalty is designed to encourage enrollment, and as with other coverage of insurance, it spreads these costs across many enrollees. The more people enroll, the lower the costs are for everyone.

So if the Senator from Florida wants to keep these costs continually low, get more people under the umbrella, sell an insurance policy, as he has been so successful selling people on the importance of keeping Senator Nelson in the Senate.

The open enrollment creates an enrollment deadline. The deadline that is involved in the open enrollment period encourages people to act, to get the protection against unexpected drug costs. We all know that people sometimes wait until they need coverage to get it. It would be the same as if only people with a burning house get fire insurance. If you waited until the day before your house was going to burn down to buy fire insurance, fire insurance would be awfully expensive. That leads to higher costs for everyone.

For the same reasons then, there is an enrollment period and a late enrollment penalty under Medicare Part B, not at all a new idea. The premise of the Nelson amendment is that Congress needs to override that 6-month open enrollment period and make it even longer. The Nelson amendment would do that today even though enrollment is on track. It would extend the open enrollment period now even though we don't know whether it will be necessary 2 months from now. It presupposes a bad outcome to the enrollment of Part D of Medicare. It plans for failure, and I think this plan, particularly with how successful the competition is, for failure is wrong.

Frankly, I think Senator Nelson's amendment has the potential to do more harm than good, regardless of his good intentions. Without the pressure of that May 15 deadline, many beneficiaries may forgo savings by putting off their decision.

Now, it may turn out that the enrollment period needs to be extended, as I said in my first remark to my colleague from Florida. And if that is the case, then my amendment would give the Secretary the authority to do that right away. No further congressional action would be needed.

Under my amendment, if in 2 months the Secretary determines the enrollment period should be extended, if enrollment is lagging, for example, then he has clear authority to do that.

My amendment would also automatically delay the late enrollment penalty if the enrollment period is extended by the Secretary of HHS.

My amendment would provide the funding needed to continue the open enrollment period. This funding is needed to continue the round-the- clock operations of the 1-800 Medicare number, and the expanded operations for that open enrollment period.

I close this debate by reading an editorial from the New York Times in 1966. This was an editorial about the implementation of the original Medicare Program we have had on the books since 1966. A quote from the New York Times:

But as Medicare gets underway, the danger is that the

strains on it will generate pressures for unsound change.

They will come from those who will be disappointed because

they have been led to expect too much as well as from those

who see failure in every shortcoming. Changes will come in

time, but they should be made on the basis of Medicare's own

experience. This great new experiment must be given ample

time to get over its growing pains.

Those growing pains for Part D Medicare are now just 2\1/2\ months old. So I go back to the first sentence, for the consideration of my friend from Florida, ``that the strains on the system will generate pressures for unsound change.'' I think his is an unsound change. This quote speaks volumes about our current situation with Part D Medicare.

I urge my colleagues to support my amendment and to oppose the Nelson amendment.

Mr. President, do I have to ask to have a previous amendment set aside

in order to send my amendment to the desk?

You mean the time I used off the bill.

Mr. President, I ask unanimous consent that time be charged to my amendment.

I send my amendment to the desk.

Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.

Let me get a copy of my amendment.

Mr. President, I will yield to whatever the Senator wants me to listen to.

Mr. President, to the Senator from Florida, Mr. Nelson, if the Secretary extends the period, it automatically then waives the penalty for that period of time.

The purpose of my amendment is--I think I am answering the Senator's question. Let's say May 14 comes and the Secretary decides we need more time and he makes a decision to extend that period of time. Let's say he extends it from May 15 to September 15. During the period of May 15 to September 15, there would be no penalty.

Mr. President, I have 35 seconds?

Mr. President, I only want to clarify two things. One, if I said there were no complaints at my town meetings about the program, there were, but I found a great deal of people who had enrolled very satisfied and also satisfied with the process.

The second thing is, it has to be a policy decision by Congress to do what I want to do, so it is still up to Congress to make this decision. I would be willing to make this decision if it was made first, but your amendment is up today. So it is still a choice we are making.

I yield the floor.

Madam President, here we are again. Today's discussion, as the famous words go, is deja vu all over again.

First of all, we heard the words ``sweetheart deal'' for drug companies. If drug companies had their way, they would want no formularies, which is what the Wyden amendment would require. These drug companies would want all drugs covered regardless of cost. So don't tell me this is a sweetheart deal. If we didn't have formularies like we would have if the Wyden amendment is adopted, then all drugs would be covered regardless of cost. Then they would not have to compete. But this legislation requires competition building upon the practices that we have used for the Federal employee health plan for 40 years. We patterned this legislation after that because that is what saves money.

I am beginning to lose count of the number of times that this issue has come before us. So I have to keep repeating--but it doesn't seem to sink in--that the Medicare Modernization Act does not prohibit negotiations with drug companies. Nothing could be further from the truth. But hearing the last speech, one couldn't come to that conclusion. In fact, the law requires Medicare plans to negotiate with drugmakers for better prices. These negotiations are at the heart of the Medicare drug program.

It is an absurd claim that the Government will not be negotiating with drugmakers comes from the noninterference clause in the Medicare law. The noninterference clause does not prohibit Medicare from negotiating with drugmakers. What it does is it prohibits the Center for Medicare Services from interfering with these negotiations.

To be clear, the noninterference clause is at the heart of the bill's structure for delivering prescription drug coverage. This clause ensures those savings will result from market competition rather than through Government price fixing. The average beneficiary premium is $25. That is $12 less than the $37 that was estimated less than 12 months ago, going back to July of last year. That clearly demonstrates that the law's structure is accomplishing that objective and then some; otherwise, we would have $37-a-month premiums or more instead of the average $25 premiums that we have.

This year's cost to the Government then is $8 billion less than what we thought it would be last July. The 10-

year cost has dropped by $180 billion, as we tried to estimate ahead what programs might cost 10 years into the future.

The Center for Medicare Services and the Consumers Union have reported that beneficiaries are getting substantial savings under this drug benefit. These plain and simple facts ought to take the wind out of the sails of the argument that private companies can't deliver an affordable benefit for our beneficiaries and even for the taxpayers. These plans can deliver, and they are delivering. That is competition, not something that they set out to do. That is the market forces bringing down prices.

Some might say: Well, if the plans can do that, imagine what the big bureaucracy of the Federal Government can do. To those folks, I urge a word of caution. First, the Government doesn't have such a great track record when it comes to price negotiation. When we considered the Medicare Modernization Act, the Center for Medicare Services' actuary reported that drugs in Part B:

Were reimbursed at rates that, in many instances, were

substantially greater than the prevailing price levels.

Even The Washington Post editorial of February 17, 2004, said:

Governments are notoriously bad at setting prices, and the

U.S. Government is notoriously bad at setting prices in the

medical realm.

My second point is beneficiaries don't have one-size-fits-all prescription drug needs. They need choices. Forty-four million different Americans have 44 million different solutions--or you can't have one plan fits all, I guess is what I should say. The companies offering the drug benefit must offer coverage for a wide array of brand and generic drugs. The companies also are offering plans with lower or even no deductible. Many are offering additional coverage so that there is no doughnut hole.

The bottom line is the approach taken in the Medicare Modernization Act has resulted in affordable choices for beneficiaries while saving the taxpayers money.

When we crafted this act, the Congressional Budget Office concluded that the market-based approach would result in better prescription drug cost management for Medicare than any other approach that was being considered at that time by the Congress. Here is what the Congressional Budget Office said about eliminating the noninterference clause in a letter last year:

The Secretary would not be able to negotiate prices that

further reduce Federal spending to a significant degree.

The Congressional Budget Office went on to say:

CBO estimates that substantial savings will be obtained by

the private plans.

That estimate is now a reality.

We also had an analysis from the chief actuary for the Medicare program.

The chief actuary for the Medicare program, who is required by law to provide independent actuarial analysis on issues facing Medicare, concluded that he does not:

believe that the current Administration or future ones would

be willing and able to impose price concessions that

significantly exceed those that can be achieved in a

competitive market.

In fact, more astonishingly, the chief actuary pointed out that if Medicare establishes drug price levels it will reduce competition not increase it.

The report stated that the

establishment of drug price levels for Medicare by the

Federal government would eliminate the largest factor that

prescription drug plans could otherwise use to compete

against each other.

So let's be clear, direct Government negotiation is not the answer. The Government does not negotiate drug prices. The Government sets prices and it does not do a very good job at it.

The law's entire approach is to get beneficiaries the best deal through vigorous market competition, not price controls.

The new Medicare drug benefit creates consumer choices among competing, at-risk private plans.

It is abundantly clear that Medicare plans have leveraged the buying power of millions of beneficiaries to lower drug prices.

I urge my colleagues to oppose efforts to change the law and oppose efforts to get the Government involved in setting drug prices.

It is a prescription for higher costs and fewer choices for beneficiaries.

Madam President, two speakers ago, the Senate heard the Senator from North Dakota say that the drug bill says that the Secretary cannot negotiate. It doesn't say that anywhere in the law. It doesn't say it anyplace. They made that up. I don't know what sort of political points they want to make, but keeping the speeches to what the law says, and not what somebody thinks it says, seems to be very important to intellectually honest debate.

To the Senator from Oregon, drug companies want cash-paying customers with no coverage because those people, as we all know, pay the highest prices. The drug companies don't have to negotiate with anyone when seniors don't have any drug coverage, such as they didn't have before this law went into effect. Part D provides that drug coverage, and now the drug companies have to compete to offer lower prices and to get plans to put their drugs on their preferred drug list. It is very necessary. They would like to have the environment that you want: No formulary. Then they have everything the way they want it. That is how negotiations work, to drive down prices, to get your plan approved, and that is how competition works to reduce prices, and that is what we see after 2\1/2\ months of the operation of this legislation. Don't give the drug companies what they want: no formulary.

I don't think I am going to use more time than has been allotted on this amendment, but just in case, I hope the manager would give me a minute or two off the bill.

Madam President, I wish to speak through the Chair to the Senator from West Virginia. I am going to speak not specifically against your amendment, but you have identified closing corporate tax loopholes as one way of raising revenue to offset yours. I am going to take advantage of my time against your amendment to speak because Members on your side of the aisle have used this approach in the past, and I want to say how there are some problems doing that.

Virtually all Democratic Members had a common theme in their amendments--raising taxes for more spending. The purported offset for each of these amendments--several yesterday and more today--would close tax loopholes to pay for whatever popular spending program is proposed. The Senate tax relief reconciliation bill that is now in conference between the House and Senate--and that is a reconciliation bill left over from last year's budget resolution, some of the unfinished business of last year that we have to get worked out this spring--this conference's bills already include $20 to $30 billion of loophole closers. Ironically, many of the proponents of these amendments that have been offered on the other side of the aisle, using tax loophole closers, were among the small minority of Members who opposed the tax relief reconciliation bill that contained offsets. In some cases, the proponents have acknowledged that the Finance Committee, which I chair, has already used these loophole closers. The Finance Committee will be responsible, then, if these amendments are adopted, for creating new loophole closers.

That is not a problem. I don't consider that a problem because I am looking to close abusive uses of the Tax Code. My Finance Committee staff has proven itself quite effective in the past in identifying offsets. Just in the period of time since 2001, our committee has raised around $200 billion in new revenues by shutting down tax shelters, by closing inversions, and other abusive tax schemes.

In the year 2004 alone, the Finance Committee fully offset a $137 billion tax bill at no expense to the American taxpayers. This was what was known at that time as the FSC-ETI repeal bill. So I think the Finance Committee, since 2001--or using the year 2004 alone--has a pretty good handle on what is possible in the ``raisers'' category. So, implied, do the Democrats who are proposing closing tax loopholes know it is not necessarily an easy job, a job we have been working on, a job we have been successful at, but the more of this you do, the less there is to take care of what they are trying to bring us to do, closing tax loopholes?

I might imply that maybe they are taking the easy way out because of using the term ``loophole closers.'' That may not be such an easy way out for those of us who have to do it.

This brings me then to the amendments that have been proposed. The sponsors say they have offset the costs of the amendments by closing tax loopholes. I wish to know what loopholes they have in mind. If we use the inventory of Senate-acceptable offsets, we can raise about $11 billion over 5 years. But that $11 billion, even if we accomplish it, is a far cry from the cumulative demands of the amendments that have already been offered from the other side and probably will be offered yet today and tomorrow. We are probably going to have to find more revenue raisers just to cover the items that Members say they support in the tax relief agenda that is out there that everybody wants me to get passed.

The Finance Committee staff hopes to use the full $30 billion that is already in conference in the Senate tax relief reconciliation bill. Some have referred to the recent ``tax gap'' report of the Joint Committee. But this is also going to be a heavy lift. When Members try to use some unidentified loophole closers--and these have all been unidentified--to pay for their amendments, what they are saying is that we should use something out of the $30 billion that has been set by the Finance Committee staff that we are considering in conference committee right now. So, in fact, the proponents' amendment is going to displace something covered by the resolution. That point has to be made crystal clear, because this is the crux of the problem. If you use a loophole closer that is already called for in the tax relief package that is in conference, it means that something in the tax cut package will have to be taken out.

What do my colleagues, who are using loophole closers, suggest that we take out that most of them think ought to be law because they voted for it in the first place? The tax relief reconciliation bill covers a number of items that Members on the other side do support. For example, it covers, through the year 2010, provisions that they support such as tuition deduction, such as low-income savers credit, small business expensing. These are sunsetted. They have to be reenacted to keep existing tax policy. You have to have offsets for them.

Also covered are 1-year provisions that they say they support, such as business extenders like research and development. Several States have sales taxes that will not be deductible anymore if we don't pass this bill. The alternative minimum tax hold harmless----

Could I have 1 more minute?

There is the alternative minimum tax hold harmless, so that 22 million more Americans do not get hit by the alternative minimum income tax. Middle-income people who were never intended to pay it will if we don't get this bill out of conference with these offsets in it. Everybody on the other side of the aisle doesn't want an alternative minimum tax to hit middle-income people, so they are going to take those revenue raisers, those tax loophole closers that we are using for this to use for something such as Amtrak, now before us, as an example.

There are other provisions.

The reconciliation number covers these items. Yet this amendment would tear away the revenue offsets needed to pay for these items.

You can't say you are for these items and not provide room for the tax cut that is in the reconciliation bill in conference. You can't use the offsets for something else without providing for those items. You can't have it both ways, in other words.

What is the loophole closer you would use, I ask them. There are none of them identified. Will it be taken from the $30 billion reconciliation already accounted for in that bill or is there a new issue we haven't seen? If you have a secret revenue loophole closer out there, I want to know about it. A loophole closer actually has to raise money. Members need to know that some of the leftover items from last year may not raise any money in the current year when they want to spend it. You can't rely on raisers that were done in the past.

We also need to remember that many of these leftover offsets were rejected by the House.

It is not enough to call for ``more loophole closers.'' The amendment's sponsor needs to tell us where the money is coming from; otherwise the call for offsets is just a call for ``funny money,'' in a sense.

Members need to know that the till is empty. A fictitious offset will not suffice. We have a lot of heavy lifting to do under this resolution as written. If you want to add more weight to the problem, you need to tell us where the money is going to come from.

I ask you to vote against these amendments because they are not identifying loophole closers.

Mr. President, is there any time left on my side?

Mr. President, what the Secretary said was that this was a decision by the Congress. We are involved in that decision, a decision today to give the Secretary authority to do it if it needs to be done, and do it not until it needs to be done, rather than sending a signal that you can procrastinate again for another 6 months.

The Nelson amendment is the wrong idea at the wrong time. The amendment doesn't even provide the resources for enrolling people afterwards. We did in the amendment just adopted. How are we going to get people to enroll if the administration doesn't have the resources to do it? It is too early to make a decision, when we don't have final enrollment numbers yet. Right now enrollment is going very well. A quarter of a million people sign up every week. Many who are calling for delay in the enrollment deadline didn't support the legislation 2 or 3 years ago. They have admitted that. They have been encouraging citizens not to enroll. Extending the deadline until the end of the year is a cynical attempt to tell seniors not to enroll this year. The other side says May 15 is an arbitrary deadline. Americans live with deadlines every day.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Mr. President, one of the things on this issue that is so misleading is the impression that this legislation does not allow Medicare to negotiate. The opposite is true.

This legislation requires negotiation. That is what the plans are doing all the time to drive down the price of drugs--what it does to drive down the price of the premium way below what we thought it would be. Again, everything is backward when they talk about this. In the real world, there are choices. Wherever you want to go for any consumer products, those stores negotiate prices to get good prices. It is just a way to get the job done. Statistics that have come in on this show that competition is driving down the price of drugs--the 25 leading drugs--by 35 percent on average this ought to show that this process is working.

Mr. President, in a debate earlier today, the senior Senator from North Dakota responded to my challenge to point out a new corporate loophole closer that is not included in the tax relief reconciliation conference.

The ranking Democratic member of the Budget Committee discussed a proposal developed by the Finance Committee Democratic staff that would repeal ``deferral'' for controlled foreign corporations doing business in tax haven countries.

I share the senior Senator from North Dakota's concerns about the ability of large corporations to manipulate the Tax Code to shift large amounts of profits offshore. But this provision isn't the right way to address those concerns. It is both overbroad and inadequate.

It is overbroad because it would harm the competitiveness of U.S. multinationals by repealing deferral for holding company structures that allow them to efficiently allocate active foreign-generated resources among their foreign operations without incurring U.S. tax on entirely foreign transactions.

It is inadequate because it applies only to subsidiaries in black- listed countries. Companies that use tax havens for abusive purposes could easily avoid this rule by locating in a low-tax country that is not on the list, like Ireland, where we have read press reports that companies are shifting huge profits. Treasury would have authority to add countries to the list, but does anyone think Ireland, with whom we have a tax treaty, would be added to a black list?

The way to deal with those cases is through effective transfer pricing policy and enforcement, not by curtailing deferral.

This proposal was included in the Democratic alternative to the Finance Committee bipartisan tax relief plan. When we considered the House tax relief reconciliation bill, the Democratic alternative was defeated.

Even if the tax haven proposal were viable in the Senate, it would yield only a fraction of the revenue needed to offset the cumulative effect of the many Democratic amendments to increase spending.

The effect of using such proposals, which aren't viable in the Senate, even if successful, would be to drive down the tax relief number.

The result of a lower net tax relief number is that we would lack the necessary tax relief in the budget to accommodate tax relief proposals supported on both sides of the aisle.

Mr. President, the issue of the increase in the debt limit has come before the Senate as an agreement between the two leaders, and as the committee of jurisdiction, as chairman of the Finance Committee, I speak in support of House Joint Resolution 47, a bill that increases the Federal debt limit. I support this increase because it is necessary to preserve the full faith and credit of the Government. Without an increase in the debt limit, our Government will face a choice that we should not make and we would not want to make: a choice between breaking the law by exceeding the statutory debt limit or breaking faith with the public by defaulting on our debt. I hope everyone would agree that neither choice is acceptable.

To understand why we are here today seeking to increase the debt limit, it is necessary to explain a few points about the Federal debt.

Under current law, there is a statutory limit on the amount of debt that can be issued by the Federal Government. This limit, which now stands at $8.184 trillion, applies to virtually all the debt issued by the Government. There is only one debt limit, but there are, in fact, two types of debt within that figure: debt held by the public--meaning you and I as private citizens buying Government bonds, owning Treasury bills--and then, of course, on the other hand, the debt held by various Government trust funds. An example would be the surplus that is invested in the Social Security surplus payroll that is not being paid out for benefits, being invested in Government debt with that debt owed to the trust fund with the interest accumulating to the trust fund.

The amount of Federal debt held by the public is determined by the Government's annual cash flow. When total spending exceeds total taxes, the Government has a budget deficit. To finance this deficit, the Government borrows from the public by selling debt, such as Treasury bills, Treasury notes, and Treasury bonds. We will hear a lot of criticism that President Bush's tax cuts are responsible for our rising public debt, but the facts show otherwise.

When President Bush took office in 2001, the Federal debt limit was $5.95 trillion, almost $6 trillion. The debt limit was increased to $6.4 trillion in 2002, $7.3 trillion in 2003, and now the present $8.1 trillion in 2005.

Assuming we increase the debt limit today, it will be $8.965 trillion. Thus, the Federal debt limit will have increased by $3.015 trillion since President Bush took office in 2001.

However, the tax cuts that have been enacted since 2001 total roughly $900 billion through the end of the most recent fiscal year. That includes interest costs as well. Thus, the President's tax cuts account for about 30 percent of the increase in the Federal debt. The rest of this increase in the public debt is due to the recession, the war in Iraq, and the increased spending on homeland security, also related to the war on terror.

In addition to the debt held by the public, the Federal debt limit also applies, as I said before, to the debt held by various Government trust funds, such as Social Security and Medicare. Whenever a trust fund program collects more than it spends, the surplus is invested in special issue Treasury securities. These special securities count toward the debt limit. However, it is important to understand that the amount of debt held by the trust funds does not reflect the Government's unfunded obligations.

For example, the Treasury Department reports that the total amount of Federal debt held by all the trust fund programs is about $3.5 trillion. However, the Social Security and Medicare trustees report that the unfunded obligation of Social Security and Medicare is more than $81 trillion.

Given these facts, it should be obvious to everyone that the Federal debt provides a misleading and inaccurate picture of the Government's future liabilities. Efforts to use the statutory debt limit to control Government debt and deficits cannot succeed because it ignores the long-term budget problems.

Indeed, even former Federal Reserve Chairman Greenspan has suggested the debt limit has outlived its usefulness and should be replaced with a more accurate and useful alternative. I would welcome the opportunity to work with my colleagues to develop such an alternative. It may never happen, but it ought to happen. This is not quite a very intellectual way to decide what the Government is doing in a fiscal way because, quite obviously, every day Congress is appropriating money and every day we are spending money and every day if that exceeds the taxes that are coming in and we get to the debt limit, the debt is going to increase or is going to shut down the Government.

As a Republican, that was part of our strategy during the Clinton administration. But let me tell you, it didn't work. It didn't work because it wasn't good policy, and it ended up not being very good politics. I hope we do not have an extended debate and a lot of breast beating about the issue of increasing the national debt because, quite frankly, if we spend and we spend up to that limit, we are not going to shut down the Government, if we learned the lesson, as I hope I learned the lesson, and we move on. It ought to be very pro forma.

There will be a lot of debate about it, a lot of political points trying to be made, but the point is we have to keep the business of Government going. I would relish the opportunities to have those days when we paid down $550 billion on the national debt during the fiscal years of, I think, 1997, 1998, 1999, and 2000, I believe it was. It was about $558 billion I believe that we paid down on the national debt. I am glad we did. But now we have the war on terror, we had 3,000 Americans killed in New York City because of terrorist attacks, and we are fighting a war to make sure terrorism doesn't happen again, at least on the soil in the United States of America.

The No. 1 obligation of our Government under the Constitution is for the national defense. Protecting our people from further terrorist attacks is very basic to it. We voted, in a bipartisan way, to send men and women to the battlefield in Afghanistan and Iraq, and if we do that, we have an obligation to appropriate the money to give them the tools to do the job when they put their life on the line for our freedom and our liberty and to make sure that 3,000 Americans don't get killed again. These all create situations wherein we have annual debt or annual deficits, and you increase the national debt on a cumulative basis when you do that. So there will probably be almost 50 votes, maybe, against this resolution when we vote on it tomorrow. I would ask the people who vote against it, do you want to shut down Government? Or if you don't want to shut down Government, you don't want to increase the national debt, why did you vote for the money we spent that brings us to the point of a necessity of increasing the national debt? We should pass this resolution for the sound operation of our Government. Shutting down Government, we found out, ended up costing the taxpayers more than if Government had operated.

There are a lot of conservatives listening who see a conservative like Chuck Grassley saying that, and they say: Grassley, what planet did you come from? If we shut down Government, you ought to save money. But we didn't end up saving money. So you learn from history, or you are destined to repeat it. That is why this ought to pass unanimously. It won't, but it ought to.

I yield the floor.

Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet during the session of the Senate on March 15, 2006, at 9:30 a.m., in open session to continue to receive testimony on the Joint Strike Fighter F136 Alternative Engine Program in review of the Defense Authorization request for fiscal year 2007 and the future years Defense Program.

Mr. President, I ask unanimous consent that the Committee on Commerce, Science, and Transportation be authorized to meet on Wednesday, March 15, 2006, at 1:30 p.m., on Innovation and Competitiveness.

Mr. President, I ask unanimous consent that the Committee on Energy and Natural Resources be authorized to meet during the session of the Senate on Wednesday, March 15 at 11:30 a.m. The purpose of this meeting is to consider pending nominations and any other pending calendar business of the Committee which may be ready for consideration.

Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Wednesday, March 15, 2006, at 9:30 a.m. to hold a hearing on Post-Palestinian Election Challenges in the Middle East.

Mr. Enzi. Mr. President, I ask unanimous consent that the Committee on Health, Education, Labor and Pensions be authorized to meet on Wednesday, March 15, 2006, at 9 a.m. on legislative items.

Mr. President, I ask unanimous consent that the Committee on Indian Affairs be authorized to meet on Wednesday, March 15, 2006, at 9:30 a.m. in Room 485 of the Russell Senate Office Building to conduct a hearing on S. 1899, the Indian Child Protection and Family Violence Prevention Act Amendments of 2005.

Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet to conduct a markup on Wednesday, March 15, 2006, at 9 a.m. in The Mansfield Room, S-207 The Capitol.

Agenda

I. Nominations: Norman Randy Smith, to be U.S. Circuit Judge for the Ninth Circuit; Patrick J. Schiltz, to be U.S. District Court Judge for the District of Minnesota; Steven G. Bradbury, to be an Assistant Attorney General for the Office of Legal Counsel; John F. Clark, to be Director of the United States Marshals Service.

II. Bills: S. , Comprehensive Immigration Reform; Chairman's Mark; S. 1768, A bill to permit the televising of Supreme Court proceedings: Specter, Leahy, Cornyn, Grassley, Schumer, Feingold, Durbin; S. 829, Sunshine in the Courtroom Act of 2005: Grassley, Schumer, Cornyn, Leahy, Feingold, Durbin, Graham, DeWine, Specter; S. 489, Federal Consent Decree Fairness Act: Alexander, Kyl, Cornyn, Graham, Hatch; S. 2039, Prosecutors and Defenders Incentive Act of 2005: Durbin, Specter, DeWine, Leahy, Kennedy, Feinstein, Feingold; S. 2292, A bill to provide relief for the Federal judiciary from excessive rent charges: Specter, Leahy, Cornyn, Feinstein, Biden.

III. Matters: S.J. Res. 1, Marriage Protection Amendment: Allard, Sessions, Kyl, Hatch, Cornyn, Coburn, Brownback.

Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on March 15, 2006 at 2:30 p.m. to hold a closed briefing.

Mr. President, I ask unanimous consent that the Special Committee on Aging be authorized to meet tomorrow, March 15, 2006 from 10 a.m.-12 p.m. in Dirksen 106 for the purpose of conducting a hearing.

Mr. President, I ask unanimous consent that the Subcommittee on Antitrust, Competition Policy and Consumer Rights be authorized to meet on Wednesday, March 15, 2006 at 2:30 p.m. to conduct a hearing on ``Hospital Group Purchasing: Are the Industry's Reforms Sufficient to Ensure Competition?'' in Room 226 of the Dirksen Senate Office Building.

Witness List

Panel I: Richard J. Bednar, Coordinator, Healthcare Group Purchasing Industry Initiative, Washington, DC; Mark B. Leahey, Executive Director, Medical Device Manufacturers Association, Washington, DC; S. Prakash Sethi, Professor, Baruch College, The City University of New York, New York, NY; and Mina Ubbing, President and CEO, Fairfield Medical Center, Lancaster, OH.

Mr. President, I ask unanimous consent that the Subcommittee on Oversight of Government Management, the Federal Workforce and the District of Columbia be authorized to meet on Wednesday, March 15, 2006, at 2:30 p.m., for a hearing entitled, ``The GAO High-Risk List: An Update.''

Mr. President, I ask unanimous consent that the Subcommittee on Readiness and Management Support be authorized to meet during the session of the Senate on March 15, 2006, at 9:30 a.m., in open session to receive testimony on ground forces readiness in review of the Defense authorization request for fiscal year 2007.

Mr. President, I rise to speak in support of a bill that I am introducing today, the Combating Money Laundering and Terrorist Financing Act of 2006.

I first introduced the Combating Money Laundering and Terrorist Financing Act in 2003 to address what I saw as a significant threat to the security of our Nation. Money laundering is an issue of profound importance to our national security because it undermines financial stability by infiltrating and using legitimate financial institutions to hide the illegitimate source of these funds. Money laundering also affects our national security simply because money is the motivating factor for so much of the criminal activities that affect our daily lives, from shoplifting and petty theft to drug trafficking and multi- million dollar stock frauds.

We also know that money laundering is a key tool for terrorist groups because it fuels their ability to spread murder, fear and destruction throughout the world. One of the 9/11 Commission Report recommendations stated that, ``Vigorous efforts to track terrorist financing must remain front and center in the U.S. counter-terrorism efforts.'' The Commission expressed its concerns about terrorist financing and ``the need to crack down on terrorist organizations and curtail their funding.'' I strongly share the Commission's concerns and support their recommendations that they provided in their final report.

However, I am very concerned about the 9/11 Commission's Final Report Card, released on December 5, 2005, which gave the U.S. Government an A- for our ``vigorous efforts against terror financing.'' After the release of the 9/11 Commission Report and nearly 4 years after the terrorist attacks on the World Trade Center and the Pentagon, our Government is still too ill-equipped and fraught with in-fighting to rate an A- for its efforts. While we have made significant strides in identifying the methods used to earn, store and move this money, we are still far behind the curve on shutting down the flow of illicit financing permanently.

Billions of dollars continue to be funneled to terrorist and criminal organizations after being laundered for these organizations around the world. Therefore, we must continue to increase the pressure we put on these organizations until we reach the point where their ever-changing money laundering methods are no longer convenient, profitable or effective.

The legislation I am introducing today includes several provisions that will strengthen our current money laundering laws by streamlining a number of statutes, clarifying language in the current law and closing loopholes that are often exploited by criminal organizations. As our new anti-money laundering laws have proven to be effective and make money laundering through traditional financial institutions more difficult, criminals are

forced to shift methods to launder their illegally gained funds. As these criminals change their tactics, so must we. Allow me to tell you about some of the key changes that this bill includes to meet these challenges.

To begin with, under current law there are over 200 ``specified unlawful activities'' or ``SUA's'' that serve as predicate offenses for money laundering charges. As criminals continue to alter their methods of laundering illegal funds, this list of required ``SUA's'' is sure to grow. My legislation will eliminate the need to continually update the statutes by consolidating the growing list of ``specified unlawful activities'' to include all offenses punishable by imprisonment for more than 1 year. This legislation also recognizes the global aspect of money laundering by including foreign offenses that would be illegal money laundering offenses had they occurred within U.S. jurisdiction.

This bill also simplifies current law by allowing the government to charge money laundering acts as a ``course of conduct.'' Currently, in most circuits, courts are required to charge each money laundering transaction as a separate count. This legislation allows, but does not require, courts to charge a series of money laundering offenses as a ``course of conduct.'' This change would reduce the time and expense currently incurred by courts that are required to charge and prosecute each separate violation of the money laundering laws.

As new laws have made money laundering through traditional financial institutions more difficult, criminals are turning to riskier methods of moving their money. One growing area is bulk cash smuggling, and as such, this bill increases the penalty for bulk cash smuggling to 10 years.

In addition, many ``money service businesses,'' or ``MSB's'' have also come under increased scrutiny because of their suspected role in moving funds from the United States to terrorist organizations throughout the world. Another provision of my legislation amends Section 373 of the USA PATRIOT Act regarding money service businesses to read ``illegal'' instead of ``unlicensed'' to ensure that the law covers any money service business that promotes unlawful activity as a course of business.

Another money laundering technique is for couriers to carry checks that are complete except for the dollar amount. Under this approach the couriers attempt to avoid U.S. Customs reporting requirements through the movement of monetary instruments that are in bearer form and are worth over $10,000. Even though the blank checks are in bearer form, they argue that the value being left blank is not over $10,000 and does not need to be reported. Once they and the blank check reach their destination, all they need to do is to fill in the amount, whatever that may be, and have it negotiated. This legislation removes any confusion as to whether this act is a violation of the reporting requirement. This bill would resolve this issue by clarifying that a check in bearer form, with an amount left blank shall be deemed to have a value equal to the highest amount in the bank account that it is drawn upon while the check was being transported, or when the blank check is cashed or intended to be cashed.

My legislation eliminates confusion or ambiguity about the definition of ``commingled funds,'' and structured transactions. ``Commingling of funds'' is a method often used by criminals to disguise illegal money from legal money by mixing the funds together in one account. ``Structured transactions'' is a method used to circumvent our monetary transaction reporting requirements by breaking monetary transactions into several smaller dollar amounts so as to avoid a Government reporting requirement if the transaction had been only one transaction with a value over $10,000. Plus, this legislation clarifies extraterritorial jurisdiction to include money laundering acts that have an effect in the United States.

Often, money couriers are intercepted before they reach the collection point but are released because they claim that they didn't know that the money was derived illegally. My bill ensures that the courier can no longer be released from responsibility in the money laundering chain by claiming ignorance about how the money was derived, which means the law enforcement agency can get both the courier and the money off the street.

Finally, this bill updates counterfeiting statutes to keep them current with new technology and devices, such as holograms, that are used to produce counterfeits of U.S. obligations and securities.

The battle against terrorism and organized criminal groups must be fought on many fronts--including the financial front. We know that we have made strides in this area as evidenced by the money launderers' use of different techniques. As important as it is to learn what techniques these criminals use, it is just as important to act upon this knowledge. If we can shut down the flow of illegal money, whether generated by drug sales or in support of terrorist activities, I believe we will make a significant impact on the demise of these criminal and terrorist groups. This bill is important to identifying particular criminal and terrorist financing operations and putting them out of business. I urge my colleagues to support my legislation and strengthen our national efforts against the continued threat of terrorist financing and financial crimes.

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

Mr. President, I ask unanimous consent that the text of a bill introduced by me today that may be cited as the ``Alternative Energy Extender Act'' be printed in the Record.