Floor Statements

Mr. President, I rise today to praise the Senate for the passage of the African Growth and Opportunity Acceleration Act of 2004 which was completed before we adjourned for the Fourth of July recess. The House of Representatives passed the legislation on June 14, 2004, and it was imperative the Senate quickly follow suit.

The passage of AGOA is great news for Africa. Since AGOA was first enacted in 2000, investment in Africa is up, and trade from Africa is up. Because of the Africa Growth and Opportunity Act, many African families can now feed their children. For the first time there is a new sense of hope in many countries. Many provisions of the Africa Growth and Opportunity Act were set to expire this year. This created an environment of uncertainty, which as leading to investment flight and lost opportunities. Passage of this bill will help people in Africa reap the full benefits of the program.

It is encouraging that this bill received such strong bipartisan support in the House and Senate. Trade can be a powerful tool of growth, and I am pleased that the majority of my colleagues share this view.

Although passage of this bill is a great step forward, there is still a lot of work to be done. For example, the United States is currently negotiating a free trade agreement with members of the Southern African Customs Union. This will include the nations of South Africa, Botswana, Lesotho, Swaziland, and Namibia. Completion of this agreement will help foster trade and investment in the region, which could lead to a new period of sustained economic growth.

For trade to work, it has to be two-way street. Foreign aid and preference programs are always a short-term answer. For long-term growth, Africans must work hand-in-hand with the United States to open markets both in Africa and around the world. History proves that the most economically advanced nations are those that embrace free trade and free markets. Too often, unduly high tariff barriers in developing countries hinder the trade and investment that is so vital to economic growth. I want to help create a climate of sustained prosperity in Africa, so we can eliminate poverty and provide hope for a better future. Passage of this bill is a good first step. I hope we can continue our work with the African people to help advance both our economies and build toward a brighter, more prosperous future.

I would now like to take a minute and thank my staff who helped bring this legislation into realization. First and foremost is my staff director and chief counsel, Kolan Davis, for his leadership and loyalty. I would like to thank Everrett Eissenstat, my chief international trade counsel, for his hard work as well as that of the rest of my trade team, including Stephen Schaefer, David Johanson, Zach Paulsen and Dan Shepherdson. I must not forget to mention Carrie Clark--now Carrie Clark-Philips--who competently covered this issue for me before leaving the Committee. And finally, I want to thank the ranking member on the Finance Committee, Senator Baucus, and his able trade staff of Tim Punke, Brian Pomper, Shara Aranoff, Sara Andrews, John Gilliland and Pascal Niedermann, for the work they did in getting this bill compelted.

I look forward to seeing the President sign this legislation into law quickly, so we can continue to work with the African nations in furthering economic progress. I thank the Senate for the bipartisan nature extended in the passage of this important legislation.

Mr. President, I ask unanimous consent the Senate proceed to immediate consideration of Calendar Nos. 585, 586, and 587, en bloc.

I ask unanimous consent the resolutions be agreed to, the preambles be agreed to, and the motions to reconsider be laid on the table, all en bloc.

I understand there is a bill at the desk that is due for its second reading.

I object to further proceedings on the measure at this time in order to place the bill on the calendar under the provisions of rule XIV.

Mr. President, I ask unanimous consent that when the Senate completes its business today, it adjourn until 9:30 a.m. on Wednesday, July 7. I further ask unanimous consent that following the prayer and the pledge, the morning hour be deemed expired, the Journal of proceedings be approved to date, the time for the two leaders be reserved for their use later in the day, and that the Senate then begin a period of morning business for up to 60 minutes with the first 30 minutes under the control of the Democratic leader or his designee, and the final 30 minutes under the control of the majority leader or his designee; provided that following morning business the Senate resume consideration of S. 2062, the class action bill.

Mr. President, tomorrow, following morning business, the Senate will resume consideration of the class action bill. The majority leader stated this morning that it is his desire to consider related amendments to the pending class action bill and finish the bill in a reasonable timeframe. It is our hope that progress can be made on the bill during tomorrow's session.

Again, to reiterate, this is a bipartisan bill, and I would encourage Senators to show restraint in offering nonrelevant amendments.

Mr. President, if there is no further business to come before the Senate, I ask unanimous consent that the Senate stand in adjournment under the previous order following the remarks of the Senator from Delaware, Mr. Carper, for as much time as he may want to Use.

Mr. President, I rise today to express my opposition to Senator Byrd's amendment to Section 1052 which would cap the number of U.S. military personnel and civilian contractors operating in Colombia at 500 and 500, respectively. I support the current committee language that increases the caps to 800 and 600, respectively, because it will enhance our efforts to help the Uribe administration stop the flow of drugs from their country and into ours.

The situation in Colombia is at a critical point. We must ensure that it continues to move in the right direction. Colombia is a strong ally and major trading partner of the United States and is critical to the stability of the Western Hemisphere. It is also the home of three major terrorist organizations that derive about 70 percent of their funding from the production and distribution of cocaine, nearly half of which ends up on our streets. Their violent activities are a result of the need to maintain their narcotics trade, which has resulted in the social and economic instability of the country and the region.

President Uribe has shown a strong commitment to ending the drug trade in Colombia by the end of his administration in 2006. I am extremely encouraged by his successes in drug eradication and his efforts to strengthen democracy and the rule of law. In 2003, coca production was down 21 percent and opium poppy was down 10 percent from the previous year. So far this year, the number of hectares of coca eradicated and the number of drug seizures are up from last year. We must continue this success that is needed to maintain domestic and international support for the eradication program.

In Colombia, narcotics trafficking and terrorist acts have made it one of the most dangerous places in the world. Last year, Vice President Francisco Santos-Calderon testified before the Senate Drug Caucus that more than 8,000 acts of terror were committed against the Colombian people over the previous 5 years, including over 30,000 violent deaths during each of those years. However, since the vice president's testimony, there have been significant reductions in the numbers of homicides, assassinations, kidnappings and other terrorist acts. I am encouraged by these numbers and know that these changes are very encouraging to the people of Colombia.

Our counter-narcotics efforts in Colombia include military funding for equipment, training and education programs for Colombian military personnel. Raising the existing personnel caps will allow additional U.S. personnel to be made available to train Colombian personnel, and will enhance their ability to conduct their counter-narcotics missions. We have a window of opportunity here that we need to take advantage of. The United States must be willing to help the Colombian government reach this goal. I strongly urge my colleagues to oppose this amendment and ensure an adequate number of U.S. personnel available in Colombia.

I appreciate that my colleagues on the Senate Agriculture Committee have worked collaboratively on the Medicaid provision, which is under the jurisdiction of the Senate Finance Committee. I am pleased that we were able to work out a provision which may help more children who are eligible receive free or reduced price breakfasts and lunches. I commend my colleagues for their good work on this important legislation.

I agree with my colleagues, Senators Cochran, Harkin, and Baucus, that this Medicaid amendment will not authorize States to share Medicaid information other than that which is necessary to verify a child's participation in Medicaid or his or her family income.

USDA Interpretation of Section 32 Funding in the 2002 Farm Bill

Mr. President, in the 21st century, advances in medicine are allowing Americans to live longer than ever before. Today, the average American will live to be over 76 years old. As the collective age of society increases, so does the need for increased help, care, and support, as long-term illnesses and the frailties of age become the rule, not the exception. Faith in Action volunteers play a crucial role in ensuring that help is there for neighbors in need.

Faith in Action is a nationwide, interfaith coalition that works to help people with long-term health needs or disabilities maintain their independence by providing assistance with daily activities. Funded by the Robert Wood Johnson Foundation, Faith in Action boasts 100,000 nationwide volunteers serving over 200,000 care recipients.

Through Faith in Action, Americans of every faith--including Catholics, Protestants, Hindus, Jews and Muslims--work together to improve the lives of their neighbors in need. Faith in Action volunteers help others maintain their independence by doing simple things: watering flowers, shopping for groceries, taking people to the doctor, and simply listening. Sometimes they open doors that people can't open on their own.

In my home State of Iowa, over 2,100 dedicated volunteers work in local programs to contribute approximately 315,000 volunteer hours per year--a service valued at nearly $5.2 million.

But the value of Faith in Action is measured not by dollars and cents. Nor is the value measured by the number of volunteers, or the number of hours donated. The real value of Faith in Action is measured by the warm smiles of gratitude that line the faces of those whose lives have been enriched by the kind touch of a stranger.

Fred Jones is a man who knows firsthand the value of Faith in Action. Fred lives with his wife in the rural farmhouse where he was born, on the outskirts of Parnell, IA. Fred is, by any measure, a big man-- standing 6 feet 2 inches tall and weighing over 200 pounds. Twelve years ago, Fred had a major stroke--a stroke that left half of his body paralyzed, and left Fred confined to a wheelchair in a home not built with wheelchairs in mind.

After the stroke, Fred's wife did not want to put him in a care facility and dreaded the thought of leaving the home where he was born. So at 76 years old and without any help, Mrs. Jones assumed the burden of lifting Fred up and down the 6-inch step from the front door of their home to the sidewalk below.

When Faith in Action was notified of the situation, the dedicated staff found resources to pay for the materials and a volunteer to install a wheelchair ramp for the elderly couple. Now Mrs. Jones is able to maneuver her husband in and out of their home with ease. Fred can now go to church, enjoy the sunshine, and watch his grandchildren play.

As an Iowan and a Member of Congress, I greatly appreciate the selfless acts of charity done by Faith in Action volunteers and I look forward to even greater accomplishments in the years to come.

Mr. President, do I have 20 minutes?

There is a big problem with Senator Biden's amendment. Before I go into the problem with Senator Biden's amendment, let me say I agree with his concerns about the size of future Iraq funding packages. I am concerned about the Federal deficit we are facing on the horizon.

But we also have to realize we are in war. You do not go to war unless you go to war to win. If you go to war, you go to war to win. You put all the resources behind the men and women that it takes to win that war. You do not put their life in danger on the battlefield. It may sound like we do not care about future generations, but you don't worry about deficits.

If we worried about deficits in World War II, Hitler would have been in New York City. The Japanese would have been in California. They would not have stopped at Pearl Harbor. We decided we were going to win that war, and we put all the resources behind it.

For only the first time since Pearl Harbor, we have been attacked. On September 11, 3,000 Americans died. We decided we were going to defend America. We decided we were going to fight not on American soil, we were going to fight on the soil of the people who harbor the terrorists who attacked America on September 11. We are going to go to war to win. We are going to put the resources behind our men and women. We are not going to take any chances.

I don't find any fault with anyone who talks about deficits. Only if they are so concerned about deficits that they do not care if we win the war and protect Americans, and the Constitution gives our Government that responsibility.

We also found, as a result of the war, being attacked in America, that the economy went into the tank. Out of 2.5 million jobs supposedly lost in this recession, 1 million of those jobs were lost 3 months after September 11, 2001; not because of the economy but because of war and the public not being certain what would happen in the future.

So we had tax cuts to revive the economy. We have a strong economy. A strong economy produces more resources so we can fight the war and win the war. The economy is growing. Federal revenues, as a result of these tax cuts, returned to their average levels, where they have been for 50 years, 18 to 19 percent of gross domestic product. We fought the Vietnam war and the Persian Gulf war during that period of time. So 18 to 19 percent of GDP for Federal taxes seems to be a level that does not hurt the economy.

In fact, the economy grows, and it is a level of taxation that people have accepted. It is producing the results we need to bring in more revenue to close the gap so that we do not have big budget deficits in the future.

On the point of taxes and the point of the budget gap, I note that Senator Biden's amendment contains no dedication of the revenue from raising taxes to any kind of fund that is oriented toward the war. In other words, the amendment simply raises taxes for more spending. The implication is on a Defense bill it will go to defense efforts.

When we hear about sacrifice, I am not sure I hear sacrifice. Let's spend less for domestic programs so we can give more to support our men and women in uniform. In World War II there were efforts to curtail domestic expenditures. We put all of our efforts behind our men and women but not, raise taxes, more spending, bread and butter at the same time.

I also point out there are two sides to the Federal ledger. One is the revenue side. That is what we take in from the people who work in our factories, our

offices, and our farms across America. The other side of the ledger is the spending side.

My friends on the other side focus exclusively, as my good friend from Delaware has, on the tax side. They look only to taxpayers to put our fiscal house in order.

I agree with the goals of reducing the deficit, but I don't intend to hurt the economy through higher taxes and put a damper on the economy. I want the economy to grow. The economy is growing. What sort of a signal would raising taxes send? Lower taxes one year, raise them the next year. How do you get investment that way?

I disagree that it is all right to look only at the tax side of the ledger. Indeed, the Senate approved a bill a little over a month ago that included $170 billion in revenue offsets. Republicans, working with like-minded Democrats, have been willing to exercise fiscal discipline, especially when it comes to closing corporate loopholes and curtailing tax shelters.

I digress for a moment on the subject of offsets. I notice with some amusement a story in Congress Daily A.M. dated last month, May 18. The story noted the special alchemy in the Finance Committee work in formulating offsets. The article went on to quote anonymous lobbyists who were frustrated with the Finance Committee production of offsets.

As a matter of fact, the tax staff at the Finance Committee happens to be the only committee personnel putting in work to generate offsets to raise revenues, and doing it in a fair way for corporations taking the advice of big tax firms, big investment bankers, big accounting firms, working together, to think of some miraculous tax loophole that is not legal to avoid taxation. That is cheating.

We are going after the cheaters and bringing in that revenue.

The record is clear. We found plenty of revenue raisers. I ask the full Senate, who was the last Democrat to propose any savings on this spending side? All we have to do is look at Senator Santorum's ``spendometer,'' that thermometer he has of red ink that adds up every Democrat amendment being offered on budgets and otherwise. We know where the pressure to spend is.

How can we in good conscience propose those billions and billions of dollars of expenditures--mostly for domestic programs, not to win the war in Iraq--and then complain about budget deficits?

Not a single spending cut is being proposed by those on the other side. Maybe back in the mid-1990s, but we have to go back many years. All I see is spending increases.

So if those on the other side want to claim to be fiscal disciplinarians, let's see entries on the spending side of the ledger. To have credibility, you cannot just go to the American people and ask for more money. You know, if I could ever get a reasonable tax increase, and have people on the other side of the aisle tell me how high taxes had to go to satisfy their appetite to spend money, I might just scratch my head and say: Well, maybe we ought to do it if we could get a consensus that is as high as taxes are going to go, and we don't have to worry about them going any higher. But I have never seen that you could raise taxes high enough to satisfy some people in this body who want to spend money.

I am also concerned about the degree to which taxpayers finance reconstruction in Iraq on a blank-check basis. I first raised this concern almost a year ago. We ought to be very careful about the structure of future aid packages.

Now I will speak specifically about Senator Biden's amendment. He says he is seeking to offset the President's war-funding request with a tax increase. As I noted above, the text of the amendment simply raises taxes for more spending. There is no connection between taxes raised and Iraq funding.

Let's take a look at the tax increase. For 2001, the top rate was reduced to 38.6 percent. In the 2003 tax bill, we reduced the top rate to 35 percent. Senator Biden's amendment would raise that top rate back to 36 percent. The premise of the Biden amendment seems to be that taxpayers in the top bracket are solely Park Avenue millionaires. They clip coupons, bring in the money, get out their cigars, lean back in their chairs, and enjoy life. Well, the facts are somewhat different.

According to the Treasury Department, about 80 percent of the benefits of the top rate go to taxpayers with small business ownership. Now, we have had some debates about the definition of ``small business.'' Some on the other side define ``small business'' as only those businesses with taxable income below, say, $320,000.

To those folks, a local chain of shoestores, if it makes over $320,000--no matter how many folks it employs--is the same, in their category, as the Nordstroms or the J.C. Penneys.

Those of us from the heartland know that the definition of ``small business'' does not cut off at, say, $320,000. It depends upon whether the business is locally owned. It depends on whether the business finances its growth from its own earnings.

Conversely, to folks from small towns, like me, big businesses are generally the companies that finance themselves through big, massive bond borrowing or through the stock market.

The reason the distinction is important for public policy issues, such as the level of taxation, is that we value local or regionally based businesses. The folks who own those businesses are from that community. They go to the local church. They support the local Little League. Small business, as I see it, is a stabilizing yet very dynamic social force in these communities and makes America what it is today.

So when I talk about small business, I am not going to use any artificially low level of taxable income. I am going to use a commonsense definition of what small business is. There is too much at stake to demagog the definition.

When we are considering tax policy, and specifically the tax rate applicable to business, we have really two categories. The first category is the regular big corporation. Virtually all big businesses, that is, publicly traded companies, are taxed under the regular corporate rate schedule.

Small business income is generally taxed at the individual or personal level. In most cases, the owner of the small business puts the income of the small business on his or her personal tax return.

As a practical matter, then, the individual tax rate is the rate paid by that small business. The corporate tax rate, with some exceptions in the case of some older, smaller corporations, generally applies to big business. The relationship between the top individual rate and the top corporate rate has a bearing on our policy toward small business. If the top individual marginal rate is higher than the top corporate marginal rate, then we as a society are sending a very bad and negative signal about small business, and even to small businesses that exist.

Before 2001, the top marginal rate for small business was 39.6 percent. Guess what. If you were a big corporation, the top rate was 35 percent. We had a penalty against small business. When you look at the difference, it was a 15-percent penalty against small business--before we changed the tax law last year. So it was a 15-percent small business penalty. That was the law. That was our Federal tax policy bias against small business.

In 2001, a bipartisan majority of this Senate, including almost one- fourth of the Democrats voting with us, voted to gradually equalize the top marginal rate between small business and big business, recognizing that penalty as being unfair, being anti-entrepreneurial.

Starting last year, for the first time in many years, the top rate, 35 percent, is the same for Fortune 500s as it is for successful small businesses. Senator Biden's amendment would take the first step to restore and perhaps even enhance the 15-percent penalty on small business. With all the appetite for taxing and spending around here, rest assured, small business would be facing even higher taxes in the future because, as I said, you cannot raise taxes high enough on the other side of the aisle to satisfy the appetite to spend money.

I do not quarrel with the notion that taxpayers in the top bracket make incomes starting in the range that has been stated of $320,000. A lot of these successful small business owners make figures like that. But keep in mind, that figure represents the total net income of those small businesses. Successful small businesses are those that

purchase the equipment and hire the new workers.

I would ask my friends on the other side, those friends who are so eager to raise taxes--and not all are--why they are all so reluctant to cut spending and eager to increase spending, to focus on the effects of their policy on small business, the effects of their policy on entrepreneurship in America, because small business creates 80 percent of the jobs in this country. Why, at this time, with a recovering job market--1.2 million jobs created this year--would we want to put a damper on the economic recovery by raising taxes on the very people, the very businesses, the very small businesses, that create 80 percent of the new jobs?

Last month, the Senate, by a vote of 92 to 5, approved a bill designed to cut the top marginal tax rate for small business manufacturers yet again to 32 percent. Senator Biden's amendment would go the other way and hammer our small business manufacturers.

Anyone voting for Senator Biden's amendment is, in effect, saying they support raising taxes on small business manufacturers. A vote for the Biden amendment is a vote to raise the top marginal tax rate on small business manufacturing from the 32 percent in the JOBS bill that we just passed to 36 percent. That is a tax increase on small business of 13 percent--13 percent. Is that the direction we want to go in a recovering economy, in a job-creating economy? Is there something wrong with the economy that is growing now, with 1.2 million jobs in the last 6 months? Why would you want to dampen that?

Finally, I do not want you to take my word for this. I am just a public official. I would like to have you listen to what small business folks are saying.

I would like to have you take a look at this chart. The chart is a copy of a letter from the three principal small business grassroots organizations. The first organization is the National Federation of Independent Business or NFIB. The second one is the Small Business Legislative Council, and the third organization is the Small Business Survival Committee.

I ask unanimous consent for 3 more minutes.

I am going to read the second paragraph of this letter.

Accelerating income tax relief: Approximately 85 percent of

small businesses file their tax returns as individuals. An

increase in tax refunds means small firms will have more

resources and more capital to put back into growing their

businesses. A series of studies by four top tax economists

examined the effect of tax rate cuts on sole proprietors.

Their results indicate that a 5 percent point cut in rates

would increase capital investment by about 10 percent. And,

they found that dropping the top tax rate from 39.6 percent--

--

Where it was up until the year 2001----

to 33.2 percent would increase hiring by 12.1 percent.

What these small business groups said was their tax policy priorities included a reduction in the top marginal rate. It is right there in their letter.

Now let's think about this. As the small business folks say in their letter, there is a link between tax relief, economic growth, and jobs. We have seen the evidence of that linkage over the last year or so. Check out the economic statistics. The tax relief kicked in, the economy started growing, and jobs started coming back--1.2 million jobs in the last 5 or 6 months.

Why would we want to reverse the course? Some would speculate that for the minority party, it is good politics for the economy to go into the tank. Raise taxes as the economy is coming back, and you stifle economic growth. If economic growth is stifled, then jobs disappear. If jobs disappear, then voters will throw out the President and his party.

I am not that cynical. I don't believe some of the opposition would want to put short-term political advantages over the economic well- being of their constituents. But it does make you wonder.

To sum up, a vote for the Biden amendment is, clearly and simply, a tax increase. How high do taxes have to go to satisfy the appetite on the other side of the aisle to spend money? I don't know. But this is a start. It is a tax increase during an economic recovery. It is a tax increase on the folks who create the jobs in America, our hard-working small business owners.

For those reasons, I obviously ask Members to reject the Biden amendment.

I yield the floor.

Mr. President, I yield myself such time as I might consume.

When the author of this amendment finished, he spoke about my being inconsistent; that I want to close tax loopholes. He says that takes money out of the economy, so it is inconsistent when I say that it is wrong for him to take money out of the economy.

I think the thing for him to remember about closing these tax loopholes, we are taking in money from dishonest taxpayers, whereas he is taking money away from honest taxpayers by raising the marginal tax rate. He would say I am inconsistent in complaining about his taking money out of the economy and running it through Government, whereas I am taking money out of the economy by closing the tax loopholes of dishonest taxpayers.

When I close those loopholes, have dishonest taxpayers pay taxes they ought to be paying anyway--except for the fact that they buy tax shelters put together by big corporate lawyers, big accounting firms, and big investment bankers--I am getting money from dishonest taxpayers. But in the bill that I referred to, the JOBS bill, we reduce taxes in America so that companies that do manufacture in the United States will pay less corporate tax as an incentive to create jobs in America.

We are taking money from dishonest taxpayers, but we are putting it right back into the economy in the private sector by reduced taxes for people who do manufacturing in America to create jobs. So I think I am totally consistent. I think having dishonest taxpayers pay what they would otherwise pay if they hadn't been buying these tax shelters is the right policy.

I think the Biden amendment reducing marginal tax rates and hurting small business is the wrong policy. It is the right policy to have dishonest taxpayers who use tax shelters pay their taxes, and I think it is all right to give tax relief to companies that manufacture in America--not those that manufacture overseas but create jobs in America. That bill passed 92 to 5, and I presume with the support of the Senator from Delaware.

I believe we are doing the right thing. I believe he is doing the wrong thing. I believe we encourage job creation and entrepreneurship, particularly among small business. I believe his amendment will actually discourage it.

I believe his amendment is the first step towards what Senator Kerry is campaigning for in his campaign for the Presidency--that, if he is elected, he made it very clear he is going to raise the top marginal tax rate not just to 36 percent as the Senator from Delaware would, but raise it to 39.6 percent.

Do you think that is the end? There is not enough money there to do all the things Senator Kerry is campaigning on. Pretty soon it is not just 39.6. Pretty soon it is taking away deductions so that the top marginal tax rate might say 39.6, but it is effectively 42, or, in the case of subchapter S, 45 as it used to be. Pretty soon there is not enough money there. Pretty soon you are taxing middle-income people to a greater extent. Who knows where that all ends?

I think sometime there has to be a decision made that the Government will only take so much out of the economy; that 535 Members of Congress will only spend so much money. That amount of money is not satisfactory to people on the other side of the aisle, but I decided that where it has been for 50 years--17 to 19 percent of GNP--is where it ought to be, and the tax reductions we passed in 2001 and in 2003 to stimulate the economy, to get us out of the recession, out of the joblessness that came as a result of the September 11 attack on America by terrorism, and to revive the economy, is about right. These tax bills were at their highest level since World War II. We ought to bring it back to where it was for 50 years--17 to 19 percent--for two reasons.

No. 1: The economy has grown at that level of taxation very well over that 50 years. It hasn't done any harm to the economy.

No. 2: It is a level of taxation that is accepted by the people of this country.

There is a basic philosophical difference between that side of the aisle and this side of the aisle. They believe we should bring the money into Washington and let 535 Members of Congress decide how to divide up the goods and services of this country. There is a philosophy we have on this side of the aisle that it is better to leave the money in the pockets of the taxpayers because having 130 million people decide how the goods and services of this country ought to be expended or invested results in a more dynamic economy than if 535 Members elected to the Congress of the United States make that decision for 270 million Americans.

When we enacted the individual tax cuts in 2001, the Treasury Department estimated that roughly three out of four taxpayers affected by the 35 percent bracket filed returns with small business activity involving a sole proprietorship, S-corporation, partnership, or a farm.

Advocates of tax increases now claim that only 2 percent of small businesses are impacted by the top rates.

I would like to address their criticism that a very small percentage of all small businesses are affected by the top brackets.

This statistic merely states the obvious. Only about 2 percent of all taxpayers have incomes above $200,000 per year, so it is not surprising that the distribution of small business owners follows roughly the same pattern.

Let's consider the impact of this tax increase on small business.

A soon-to-be-released study by the Tax Foundation concludes that most high-income taxpayers are active business owners rather than ``passive'' investors.

The Tax Foundation study combines IRS data with demographic Census data, and finds that high-income taxpayers are mostly in ``active'' business occupations--such as construction, manufacturing, and retail trade--rather than in passive occupations such as banking, finance, and securities.

What is significant about the Tax Foundation report is that, overall, about 74 percent of those hit by the highest marginal rate have active business activity.

This business activity comes in three basic forms: Schedule C, for sole proprietorships; Schedule E, for S-corporations, royalties, and partnerships; and Schedule F, farm income. The most common of these are Schedule E.

Of those taxpayers hit by the 35 percent rate, nearly two-thirds-- 62.7 percent--have Schedule E income from an S-corporation, royalty, or partnership.

It is likely that most of these taxpayers are shareholders in S- corporations.

The Tax Foundation data shows that these high-income taxpayers receive about 37 percent of their overall income from salaries and wages which, when combined with their Schedule C, E, and F income, would bring their total amount of business income to 65 percent of their total adjusted gross income.

This figure does not include other ways in which a business owner may take profits out of the firm.

For example, an entrepreneur who capitalized his business with a loan, may receive regular interest in return.

Taxable interest and dividends account for roughly 9 percent of the overall income for high-income taxpayers.

While most of this interest and dividend income is likely from traditional investments, a portion could be ``business income'' taken as interest or dividends from their small business.

The Tax Foundation was able to isolate the occupations and industries that these high-income individuals are engaged in. They did this by combining IRS data with demographic Census data.

They found that high-income taxpayers are engaged in a wide variety of active business industries and occupations throughout the economy.

The largest single category of 31.5 percent is ``executive, administration & managerial''--the most likely category that the president or CEO of a firm would choose.

By contrast, physicians, lawyers, and judges comprise just 11.4 percent of these individuals.

Another analysis shows that high-income taxpayers are engaged across all industries.

The one category in which passive investors would most likely be found is within the ``securities, brokerage, and investment companies.'' But only about 4 percent of high-income taxpayers are found in this industry.

By contrast, 4.9 percent of these taxpayers are found in the construction industry, 8.1 percent are in manufacture durable goods, 5 percent are in retail trades, and 6 percent are in business services such as computers and data processing.

High-income taxpayers engaged in legal services comprise just 3.2 percent of these high-income taxpayers.

The data clearly shows that a very large proportion of high-income taxpayers are engaged in some form of active business operation--not clipping coupons and resting back in their rocking chairs smoking their cigars, the image of a lot of rich people.

The only conclusion from these findings is that raising taxes on these high-income taxpayers would ripple through every industry, not just passive investors.

And as the U.S. Chamber of Commerce says in their letter, it will kill job growth in small businesses.

The 1997 economic census--the most recent available--shows that S- corps, proprietorships, and partnerships employed over 30 million people that year.

It seems unlikely that 30 million jobs cold be created by ``shell'' companies owned by passive investors.

The stakes of this debate are high because there has been an explosion of individual-owned businesses over the past two decades.

Between 1980 and 2000, for example, the total number of sole proprietorships, partnerships, and S-corporations more than doubled, from 10.8 million in 1980 to 22.8 million in 2000.

S-corps alone grew 424 percent, from 545,389 in 1980, to 2.86 million in 2000, and now far exceed the number of conventional C-corporations.

This year, the IRS estimates that nearly 58 percent of all corporate tax returns will be S corporation returns. If you are prepared to vote for a tax increase on small business job growth, then Members should vote for the amendment before the Senate by the Senator from Delaware. If Members care about sustaining the job growth that we have experienced over the past several months, I urge Members not to vote against that growth by increasing taxes on the important small business sector.

There is also another problem with the bill. Senator Biden would have Members believe the world is filled with wealthy, passive investors. The truth is, however, that people continually move in and out of high tax rate categories, most likely because they have sold a business or a major asset.

The IRS recently released a study of 400 of the highest individual income tax returns for the years 1990 through 2000. That study shows less than 25 percent of those returns appeared in the top 400 more than once and less than 13 percent appeared more than twice, which shows high-income people are not high income through their livee.

I could add that low-income people are not always low income throughout their lives because we have a dynamic society, a dynamic economy. Some people improve their lot and some people do not improve their lot. Some people end up in a lower level.

What does this mean? The top taxpayers are not a fixed group of people. People move in and out of this group according to economic fluctuations or maybe because of major events. So we are probably looking at a large number of business owners who are selling their businesses or selling their farm. If members think they are voting for a tax increase on a class of idle rich, think again. These are not coupon-clipping people who get their money, smoke their cigars, and lean back in their rocking chairs. These are people that create jobs, probably never retire, keeping that small business going by reinvesting their earnings.

If Members vote for this amendment, I am not sure they will know whose taxes they are increasing.

How much time remains on this side?

I yield the floor.

My time has expired.

Madam President, I rise to speak in support of the amendment offered by Senators Bunning and Bingaman. This amendment, of which I am a cosponsor, makes significant and much needed reforms to the Energy Employees Occupational Illness Compensation Act of 2000.

Congress passed this law to provide timely, uniform, and adequate compensation to sick nuclear workers. These Department of Energy employees or contractors were made sick from exposure to toxic substances or radiation while assembling our nuclear deterrent. This law required DOE to help these former workers compile employment and medical records to assist in the filing of State workers compensation.

There are two facilities in Iowa that are covered under this law. Over 600 claims have been filed by former workers of the Iowa Army Ammunition Plant located in Middletown, IA. These patriots served on our Nation's homefront during the cold war, putting themselves at risk building nuclear weapons. The least our Government can do is provide the necessary assistance to ensure that those eligible for compensation receive it.

However, one thing has been made perfectly clear. The Department of Energy does not have the capability or expertise to fulfill their responsibilities under this act. I began to question DOE's ability to process these claims in April of 2003, when I noticed they had received over 15,000 claims and only a handful had been fully processed.

I questioned Secretary Abraham on this point. I followed up with Under Secretary Card a few months later. I was told on both occasions that all DOE needed was more time and more money. I was skeptical, to say the least.

Then, last fall, the General Accounting Office confirmed my suspicions. Their conclusions, in a report I had requested, were stunning. Of the more than 19,000 claims filed with the Department of Energy, only 6 percent had been completely processed, and over 50 percent remained untouched. Even more, GAO concluded that more money alone would not result in more timely processing.

Becasue it was clear that DOE had a substandard operation in place to implement this important program, Senator Lisa Murkowski and I took action. We offered and had accepted an amendment to the Energy and Water appropriations bill to transfer the claims processing from DOE to the Department of Labor.

We knew at the time that DOE was not on the right track, and that DOL had the experience and expertise to handle this compensation program. While we were successful in the Senate, the Department of Energy and their contract had their way, and our amendment was stripped in conference.

Since that time, I have testified before Chairman Domenici's Energy Committee twice to outline the abysmal performance of the Department of Energy. It was at the second hearing where I shared information I had uncovered about the contractor that DOE had hired to do this work.

While only 6 percent of claims had been fully processed, DOE believed it was perfectly reasonable to pay the program manager of their hired contractor $401,000 annually. The head of DOE's contractor costs the taxpayer more than the salaries of Secretary Abraham and Secretary Chao combined.

Today's bipartisan amendment is a comprehensive approach to finally put an end to the perpetual delay in claims processing and address the lack of a willing payor to pay valid claims in Iowa.

It is my understanding that the administration opposes our amendment because they believe it will create an unworkable process and delay the processing of claims. This is precisely the same position they held last October when Senator Murkowski and I pushed similar reforms.

It is unfortunate that the administration hasn't realized during this time that the unworkable process and unnecessary delay is not a result of our efforts here in Congress but the result of 4 years of ineffectiveness at the Department of Energy. This amendment simply makes the original law work.

I hope my colleagues can support our efforts on behalf of the thousands of sick nuclear workers across the Nation. Through this amendment, these sick workers will finally receive the compensation they so richly deserve.

Mr. President, I am pleased to be joined by my colleague Senator Feinstein in support of amendment No. 3402 to S. 2400, the Department of Defense Reauthorization bill. We hope this resolution expressing Congress's expectations will encourage the Department to do more to address narcotics trafficking in Afghanistan.

This resolution calls upon the President to make the elimination of drug trafficking in Afghanistan a priority in the global war on terror; encourages the Secretary of Defense to increase cooperation and coordination with the Government of Afghanistan and our allies to assist in providing a secure environment for counterdrug personnel operating in Afghanistan; and calls upon the Armed Forces to work with our allies against the regional illicit narcotics trade.

These are not original observations. In testimony before both committees in both Chambers, several officials from the Department of Defense have affirmed that there is a strong, direct connection between terrorism and drug trafficking. We know from this testimony and other evidence that some of the profits generated by narcotics trafficking support terrorists.

This resolution is needed, because there is some inconsistency between the direction that we are providing to our troops in Afghanistan and the narco-terrorist connection. I do not believe that we will see long-term success in the global war on terror until the financial underpinnings of terrorists are eliminated, and I do not believe that Afghanistan can avoid becoming a narco-state if the drug trafficking there is not addressed. To avoid these potential pitfalls, we must step up our counter-narcotics activities in Afghanistan. I hope the administration, and particularly the Department of Defense, will heed this resolution.

Narcotic trafficking is not only a source of funding for terrorist organizations, but its production poses a threat to the future stability of Afghanistan. President Karzai has stated repeatedly that he believes opium production poses a significant threat to the future of Afghanistan. His concerns are echoed by the United Nations Office on Drugs and Crime, which recently warned that Afghanistan is at risk of again becoming a failed state if strong actions are not taken against narcotics. If we are going to assist the people of Afghanistan in their efforts to create a stable country, we cannot ignore their pleas for greater action against the narco-terrorists operating in the region.

Mr. President, I believe that our current policy in Afghanistan does not square with these observations about the threat that narcotics pose to the future of Afghanistan. Attempts are being made to separate anti- terror operations from anti-drug operations, despite the acknowledged link between the two. We know that drug trafficking is a war industry of terrorism. If we are going to be successful, we must eliminate the financial underpinnings of terrorism just as effectively as the organizations themselves.

Those who sell and trade opium in Afghanistan are narco-terrorists. They support terrorists and insurgents who oppose the legitimate government. By supporting terrorists and insurgents, they become legitimate targets for the Combined Forces Command-Afghanistan. Just as ball bearing factories in Nazi Germany were important military targets during World War II, drug labs, and those who facilitate the drug trade, should also be considered viable military targets as we prosecute the War on Terror.

I believe that the United States should treat narcotics traffickers no different than others suspected of cooperating with terrorists. The connection is real, and cannot be ignored. I urge my colleagues to join us in supporting this resolution.

Mr. President, at sunset last Friday, the 40th President of the United States was laid to rest on a hill overlooking the Pacific Ocean. The consummate optimist, who etched the promise of a ``shining city upon a

hill'' into the Nation's conscience, leaves behind a legacy that beckons us to stay true to the American spirit.

Whether folks agree with his political philosophy or not, the actor- turned-politician-turned-statesman from the Midwest helped usher in the dawn of a new day for millions of jobless Americans and to those living in oppression behind the Iron Curtain.

Through bold, buoyant leadership, Ronald Wilson Reagan, 1911-2004, persuaded his fellow citizens that it was ``morning again in America'' by restoring the promise of peace and prosperity.

The outpouring of support during last week's remembrance for the former President reflects Reagan's ability to bring out the best in people and unite America.

The pageantry evoked patriotism. The solemnity of the events underscored the public's appreciation and respect for this leader who championed the cause of freedom all around the world. For 8 years, he served as a beacon of hope for those cast under the dark shadows of totalitarianism.

The ``Great Communicator'' arrived in the Oval Office when America was licking wounds left by Watergate and Vietnam. Stifled by a sinking economy, joblessness and sky-high inflation, the national mood also wavered under the uncertainty of the Cold War. Americans yearned for brighter days.

Elected to his first term in November 1980, President Reagan exuded optimism, charm and kinship with ordinary Americans. His good-natured disposition, self-deprecating humor and can-do attitude launched a new era in American politics. Like Reagan, I won an upset victory over an incumbent in that election.

He and I shared a conservative political philosophy rooted in core beliefs spelled out by the Nation's Founders and agreed much more often than not. Now 24 years after the ``Reagan Revolution,'' I am privileged to continue advancing our shared principles: Big ideas instead of big government. Deregulation to foster free enterprise. Tax relief that encourages productivity, growth and individual ingenuity. Self-reliance rather than self-pity.

Reagan's policies proved that economic and political freedom bring about peace and prosperity. As Reagan said in his 1989 farewell address to the Nation: ``Democracy, the profoundly good, is also the profoundly productive.''

Many people grossly underestimated the strength of Reagan's convictions and the foot soldiers who helped sweep him into office. With a steely determination coupled with folksy charm, Reagan masterminded the efforts that liberated Eastern Europe in 1989.

Eight years earlier, he had predicted the end of Communism as the ``sad, bizarre chapter in human history whose last pages are even now being written.'' Reagan's leadership helped change the course of history for the better.

On June 5, 2004, Reagan lost his 10-year battle with the Alzheimer's disease. A decade earlier, in a hand-written note to the American people, Reagan again looked on the bright side: ``When the Lord calls me home, whenever that day may be, I will leave with the greatest love for this country of ours and eternal optimism for its future.''

President Reagan valued the gift of life. He used his to expand human freedom. His legacy shapes America's character and lights our way as we continue the ``march to freedom'' against evil in the world.

Mr. President, every half hour, somewhere in this country somebody is killed as a result of an alcohol related traffic accident. This is a sobering statistic. Thanks in part to a massive national response, nearly 1.5 million people are arrested and taken off the road each year for driving under the influence of alcohol, undoubtedly saving lives. But, there is an equally dangerous and potentially devastating problem lurking on our Nation's highways that is going largely undetected.

In 2002, nearly 11 million people drove under the influence of illegal drugs, according to the National Survey on Drug Use and Health Report. While the effort to reduce drunk driving is making progress, those using illegal drugs like marijuana, cocaine, methamphetamine, and opiates continue to get behind the wheel, putting each of us at risk everyday.

According to the National Highway Traffic Safety Administration, drugs are used by approximately 10 to 22 percent of all drivers involved in fatal motor vehicle crashes. In 2003, a study conducted at the Shock Trauma Center at the University of Maryland Hospital in Baltimore found that testing for alcohol alone would have identified less than 30 percent of all the substance abusing drivers admitted to the trauma unit as a result of a motor vehicle accident. Drugged driving is clearly a serious problem.

While it is illegal in all 50 States to drive a motor vehicle under the influence of alcohol or drugs, there is no consistency in the way the States approach drug impaired drivers. In fact, existing laws often hinder the prosecution of drugged drivers. Adding further difficulty, there currently is no road side test to detect the presence of a controlled substance in a driver's body.

In response to these challenges, today I am pleased to be joined by Senator Feinstein in introducing legislation designed to encourage States to develop and carry out drug impaired driving traffic safety programs. By adopting a model statute, States become eligible for grants that would assist drivers in need of drug treatment, as well as grants that would enhance the training of law enforcement and prosecutors. Furthermore, in an effort to keep drug impaired drivers off the road, passage of this legislation will advance the research and development of a roadside testing mechanism.

Clearly there is a need to strengthen efforts to identify, prosecute, and treat drugged drivers. Just as the coordinated efforts to prevent drunk driving have saved lives, so too can the devastating consequences of drugged driving be prevented. I encourage my colleagues to join in support of this legislation.

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

Mr. President, I would like to pay tribute to Petty Officer 2nd Class Trace Dossett who valiantly gave his life for his country on Sunday, May 2, 2004. Petty Officer Dossett was one of five Navy Seabees from Naval Mobile Construction Battalion 14 killed during a mortar attack on the Ramadi Marine base in Iraq. I offer my deepest sympathy to his wife, Angela, their two daughters, Cassidie and Raimi, and his parents, Larry and Cheryl of Wapello, IA.

Petty Officer Dossett was a 1985 graduate of Wapello High School in Wapello, IA. He was respected in the community for his strong mind and sense of devotion to serve our country. Trace joined the Navy shortly after graduating from high school and ended his six year tour in the early 1990s. He joined the Naval Reserve a year ago and was activated in January. I am proud of the patriotism displayed by Petty Officer Trace Dossett and his exemplary commitment to defending America. I offer my condolences to his family and close with the words of his wife, ``Trace died a hero and he would have had it no other way.''

PFC Brandon Chauncy Sturdy

Mr. President, I rise today to pay tribute to PFC Brandon Chauncy Sturdy, the fourteenth Iowan to be killed in Iraq in brave service to our country. PFC Sturdy was a machine gunner in the 2nd Battalion of the 1st Marine Regiment in the 1st Marine Division. I offer my deepest sympathy to his parents, Shelly Rivera and David Sturdy and his fiance, Tricia Johnson.

PFC Sturdy was killed by the explosion of a homemade bomb in Iraq on Thursday, May 13 in the Al Anbar Province near Fallujah. I thank him for his patriotic duty to his country and am proud to honor the courage he boldly displayed as a Marine. PFC Sturdy was a 2003 graduate of Urbandale High School in Urbandale, IA. A statement released by Brandon's family describes him as ``the best of the best'' who ``set the bar high for us to reach for''. He was a top notch Marine who had already been awarded the

National Defense Medal and a Purple Heart. Brandon Sturdy died a hero fighting to preserve freedom. He was a brave patriot whose presence will be missed. I am proud of the model of service he provided to Iowans and I again offer my condolences to his family.

Maj. William E. Burchett