Floor Statements

Mr. President, I rise today to make an appeal to our Democratic colleagues to end this obstruction of legislation vital to our Nation. I am appealing to my Democratic colleagues to abandon this harmful, politically motivated, election year strategy of gridlock, and if I may be so bold, to suggest a different election year political strategy that will not hurt Americans.

The Democrats' obstruction strategy is no secret in Washington, although it may not be so obvious to those outside the beltway.

We have all heard of the old ``blame game.'' Well now, Congressional Democrats have taken it to a new level and created a new game. I call it the ``Block and Blame Game.''

According to a lobbyist, a few weeks ago one of the Senate's Democratic leaders gave a briefing to campaign contributors. First, all were assured, naturally, that the Democrats would take over the Senate. Second, they were told that to help secure this Democratic victory, they were implementing a strategy to block all major legislation, except for some appropriations measurers.

So how does blocking legislation elect Democrats? The answer came within days as a Senate Democrat blasted away, charging that while Republicans control the White House, the Senate and the House of Representatives, the GOP is getting nothing done. The block and blame game.

Democrats must think that as long as no one outside Washington can figure out the nuances of the legislative procedures of obstruction, then as they say, ``the proof is in the pudding,'' nothing is getting done, the Republicans are in control, and therefore the Republicans are to blame.

Who is really hurt by this strategy? Republicans? Maybe, if they are unable to explain the complicated procedures that are being used by Democrats to block the business of the Senate.

Clearly, it is the American people who are harmed. And for what reason? Simply, the interests of Americans are being sacrificed upon the altar of the selfish, political power struggle.

Please understand that I refuse to insult my Democratic colleagues by suggesting that they should not vigorously compete for control of Congress and the White House.

But they can do it in a way that helps Americans, not hurt them.

I do strongly urge them to abandon the block and blame game strategy and instead to join Republicans in making this closely divided Government work.

Let's all acknowledge that there are precious few legislative days left in the 108th Congress, that we have a large number of bills very important to our country, and that we do not have the luxury of debating and voting on each and every amendment we desire.

Let's recognize that no legislation will be perfect in everyone's mind, but let's not block it simply because we don't get everything we want.

Instead, let's work hard together to get these important bills to the President's desk to be signed into law.

And that is the basis of a better campaign strategy for Democrats, and one that will not undermine the vital interests of Americans.

Simply, Democrats could share credit for all the legislation enacted this year, but then they are free to argue with voters that had they been in control of the Congress and the White House, they would have done much, much better.

Or, Democrats might try to persuade voters that if they are elected, provisions that Democrats view as ill-conceived, will be repealed or modified.

Republicans are happy to engage Democrats in the debate this fall over the issues, our goals and our vision for our nation's future. And Democrats should be just as enthusiastic.

In short, there is no need to obstruct legislation. It makes no sense, it is totally irrational, for Democrats to be blocking critically needed legislation, crucial for their own constituents, simply because they fear that Republicans might get credit for passing and enacting legislation.

The ongoing fight over the Energy bill is a perfect case study that underscores my point of how the vital interests of Americans are being sacrificed on the alter of political ambition.

Last year, lobbyist working hard for either the medicare prescription bill or the Energy bill, were telling me that the Senate Democratic caucus was struggling with the following question: ``Which, if either bill, should we allow to pass? We definitely cannot let the President have two victories.''

Let me repeat, Congressional Democrats concluded that they could not let the President have two victories. So as it happened, Medicare was passed first, but then Democrats mounted a successful filibuster against the Energy bill.

They wanted to deny the President a victory.

Where did they get that crazy notion? What genius political consultants and pollsters are advising them?

Enacting the Energy bill would be a victory for all Americans, not just the President! It would be a victory for people of all political stripes.

There are provisions in the Energy bill that would help increase oil production, which would reduce gasoline prices.

Do you thing Americans, who drive up to the pump today, having to spend well over two dollars a gallon for gasoline, give a hoot whether or not enacting the energy bill could be considered

a victory for the President? Do you think for one moment that even the most dyed-in-the-wool Democrats living outside of Washington, DC say to themselves, ``Well, we may be paying $2.50 for gasoline, but thank goodness Congressional Democrats denied the President a legislative victory''?

Why don't Democrats do to the Energy bill, what they did to the prescription drug bill? Let it be enacted into law, and then go out and tell everyone what a terrible bill it is. Tell voters that the Energy bill is just terrible, but that Republicans are in control, and if that's their idea of good energy policy, so be it. But if you elect us, we will do this and that differently, and you will be far better off.

That type of political strategy does not undermine Americans. That strategy sets the stage for vigorous campaigns that will we won or lost based upon who have the best ideas and vision.

Perhaps, therein lies the problem for Democrats. Perhaps the block and blame game is easier to play for those who are not confident that they have better ideas and winning arguments about their goals and vision.

We came within two votes of shutting off the Democrat-led filibuster against the Energy bill. There are provisions in that bill of vital interest to virtually every part of our country, let alone establishing critically needed energy policy for our Nation as a whole.

For the upper Midwest's farm country, it contains renewable fuel provisions that will expand farm markets for corn and soybeans which in turn will increase income for farmers and rural Americans while expanding job opportunities. It contains provisions that increase our sources of oil and gas which will reduce the production costs of farmers as well as save money for all consumers throughout our country.

Each and every one of us can point to things we did not like in the bill, but instead of passing it for the greater good, it has fallen prey to the Democrat's block and blame game.

Just 3 weeks ago, Democrats sacrificed the renewable fuels section of the Energy bill to the block and blame game.

It is inconceivable that the renewable fuels amendment offered by the Democratic leader on April 27 could have been designed any better to assure its failure. It was guaranteed to fail. If you understand Senate procedures, and the importance of passing a regionally attractive, comprehensive Energy bill, it is obvious to you that this amendment was designed to fail.

Let me offer the proof.

First, everyone knows that any energy bill that has any hope of passing this Congress must be a comprehensive package that addresses a wide variety of energy issues and that draws bipartisan support from all regions of the country.

This fact has long been recognized by ethanol and farm organizations who have been working hard for approval of the renewable fuels standard. Moreover, these groups recognize that the comprehensive energy bill has provisions beyond ethanol and biodiesel that are very important to their members.

So why did the Democratic leader fail to offer instead the comprehensive energy bill, which included the renewable fuels standard, as an amendment?

He has been around here long enough to know Senators from other parts of the country, who want to pass pro-energy provisions more important to their states than ethanol, are not likely to vote to strip ethanol out. After all, such an effort would unravel the energy coalition, and thus reduce the likelihood of passing their preferred energy provisions.

So the Democratic leader offered an amendment that he knew was less likely to pass.

The second bit of evidence that this effort was part of the block and blame game, is that no pro-ethanol Republican ally was contacted in advance to help develop a strategy to assure that we secure enough votes.

We have always counted on bipartisan cooperation to support ethanol legislation, and for the first time that I can remember, neither I nor any other pro-ethanol Republican was contacted.

Third, and even more telling, the Democrat leader failed to contact the ethanol and corn grower lobbyists in advance. That, I know, has never happened. If you really want to pass renewable fuels legislation, every one of us in this body knows you better have the National Corn Growers and the Renewable Fuels Association ready and able to help you line up the votes.

Why weren't they contacted? Perhaps it is because Democrats knew they would refuse to be part of an effort to splinter the broad energy coalition, sinking all hope of passing any energy legislation this year, including that for renewable fuels.

They would not willingly let themselves become victims of the Democratic block and blame game!

The fourth bit of evidence that this amendment was designed to fail involves Senate procedure. As soon as the amendment was offered, a signed cloture petition was immediately offered by the Democratic leader to his own amendment. This cloture petition, by the way, was signed exclusively by Democrats.

The most obvious reason to invoke cloture is to cut off a filibuster. But who in the world was going to filibuster this amendment? We were trying to pass a long-overdue solution to differences that has stalled the internet tax bill. Moreover, if the Democratic leader's renewable fuels amendment was so popular, why worry about a filibuster? Let's just vote up or down on the amendment.

Although cutting off debate is the obvious, normal purpose of filing a cloture petition, there is another purpose which is not so widely understood. If cloture is invoked, all amendments to that underlying provision must be germane. If a second degree amendment is not germane, then you have constructed a hurdle requiring 60 votes to overcome.

Could it be, therefore, since no one was filibustering this amendment, that an attempt to invoke cloture was aimed at blocking the more popular, comprehensive energy legislation as a second degree amendment?

Indeed, Senator Domenici, recognizing hopes for energy legislation was being jeopardized by this block and blame game, offered the comprehensive energy bill as a second degree.

What most constituents do not know, is that had the democratic leader succeeded in gaining the 60 votes needed to invoke cloture on his amendment, the Domenici amendment would have been ruled out of order as non germane because it was far more expansive than the underlying amendment. It would have taken another 60-vote majority to overcome this ruling. That may not be impossible, but we know that some Senators vote will vote differently on a procedural question than they might on the underlying amendment. So this was another hurdle, another attempt at blocking the more popular provision that, remember, included the renewable fuels standard and had a much higher likelihood of passing.

The fifth piece of evidence that the Democratic leader's amendment was designed to fail is that he offered it to S. 150, instead of the compromise substitute amendment developed and offered by Senator McCain, the chairman of the Senate Commerce Committee.

Given the long stalemate over the internet tax bill, we all knew that Senator McCain's substitute had broken the impasse and that if anything was going to pass, it was his compromise.

But his amendment, No. 3048 was an entire substitute to the language of S. 150. We all know, therefore, that any amendment to S. 150, including amendment No. 3050 offered later by the Democratic leader, would fall when the McCain substitute was approved.

So you should offer an amendment to the substitute that will prevail. If you did not think you knew which would prevail, then you could offer two amendments--one to the underlying bill, and one to the substitute amendment.

Here is a good way to explain this. Suppose our objective is to get supplies to the space station. Do you load your supplies on the booster rocket, or do you load it into the space shuttle? The booster rocket in this case was S. 150, and the McCain substitute was the space shuttle. And we all knew that.

The next bit of evidence that the Democratic leader's ethanol amendment was designed to fail, is the very fact that he picked a bill, again, the internet tax bill, that is controlled and managed by the Senate's most out-spoken, anti-ethanol Senator.

If everything else failed to fail, adding an amendment to a bill to be taken to conference by Chairman McCain was the iron-clad guarantee it would be rejected. And in fact, that is exactly what Senator McCain stated on the floor of the Senate. He stated emphatically, and quite predictably, that if the ethanol or energy amendment passed, he would drop it in conference.

So the Democrat leader's amendment was designed in so may ways to fail, and thus, to block his own amendment. And guess who gets the blame? Republicans.

Farmers lose. All energy consumers lose. But if the block and blame game works and Republicans lose, too, then it is all worth it, because Congressional Democrats win.

The block and blame game.

An interesting exchange occurred between Chairman McCain and Senator Dorgan during the debate of this amendment. Senator McCain said, ``I am sure there may be a headline in South Dakota that says: Senator Daschle fights for ethanol.''

Senator Dorgan responded, ``Senator Daschle has not offered an amendment for the purpose of a headline in South Dakota.''

Guess what. As soon as his amendment failed, Senator Daschle did issue a press release. And not only that, the press release attacked Republicans.

The release, according to the Congressional Quarterly, was headlined, and ``Washington Republicans abandon ethanol.''

The block and blame game: hurts the farmers, hurts Americans, but helps the Democrats.

I would like to share a statement issued by the National Corn Growers following the vote:

Yesterday, during consideration of legislation dealing with

internet sales taxes, Senator Daschle offered an amendment to

create a Renewable Fuels Standard (RFS). Senator Domenici

offered S. 2095 as a second degree amendment to the Daschle

amendment. S. 2095 contains the RFS as well as other energy

provisions. NCGA will support all efforts to pass an energy

bill that contains an RFS and addresses the serious problem

our nation faces regarding energy. We again call upon

Congress to set aside partisan bickering and to pass an

energy bill.

I agree wholeheartedly with the National Corn Growers Association. We have serious problems facing our nation, and we have several very important bills aimed at addressing these problems that are falling victim to the block and blame game.

I wish that what I was told by a Democratic lobbyist, about the strategy to block everything this year . . . I wish that it were not true. I hope that the Democratic leaders will have a change of heart and a change of campaign strategy that allows vital pieces of legislation to be signed by the President this year, and then let the election be fought over who has the best ideas or who will do better if they take control of Congress or the White House.

Mr. President, I am pleased to be an original cosponsor of bipartisan legislation to authorize the modernization of the lock and dam infrastructure and enhanced environmental restoration on the Upper Mississippi and Illinois Rivers.

Modernizing the inland waterway transportation system remains a high priority for the Upper Mississippi River basin and for agricultural, commercial, and labor interests that rely on the river to transport their products. In addition to strong grassroots support for this endeavor, the State legislatures have passed resolutions endorsing lock and dam modernization, ecosystem restoration, and Congressional action.

Agriculture and related industries in Iowa and the other States on the Upper Mississippi remain competitive in world markets, despite higher production costs, because of the efficiencies inherent in river transport. More than 60 percent of all grain exports move from the Upper Mississippi, making

this competitive advantage vital to their ability to operate their business. Over 400,000 full and part-time jobs in our basin are connected to the river. Without modernization, Midwest producers will not be able to compete in anticipated world grain export growth.

Furthermore, a recent study estimates the loss of 30,000 jobs nationwide, $562 million annually in lost farm income and $185 million annually in lost State and local tax receipts if the lock and dam system is not upgraded. Providing U.S. agricultural producers every opportunity to export their products to world markets is essential for their financial well-being and future viability.

While it is important to consider economic benefits, we must also protect the ecosystem of the river. A cooperative solution can meet the needs of farmers and waterway users while at the same time improve the environment and stem the decline of the Rivers' ecosystems through enhanced authorities. Restoring the ecosystem is not mutually exclusive to lock modernization.

After 12 years and $70 million of study, we firmly believe that the time has come to take action. I urge my colleagues to support this legislation providing initial authorization to begin the modernization process and enhance the authorities to address broader ecosystem restoration. Without immediate action, the health of both the agriculture economy and river ecosystem will continue to decline.

Mr. President, I am pleased to be an original cosponsor of bipartisan legislation to authorize the modernization of the lock and dam infrastructure and enhanced environmental restoration on the Upper Mississippi and Illinois Rivers.

Modernizing the inland waterway transportation system remains a high priority for the Upper Mississippi River basin and for agricultural, commercial, and labor interests that rely on the river to transport their products. In addition to strong grassroots support for this endeavor, the State legislatures have passed resolutions endorsing lock and dam modernization, ecosystem restoration, and Congressional action.

Agriculture and related industries in Iowa and the other States on the Upper Mississippi remain competitive in world markets, despite higher production costs, because of the efficiencies inherent in river transport. More than 60 percent of all grain exports move from the Upper Mississippi, making

this competitive advantage vital to their ability to operate their business. Over 400,000 full and part-time jobs in our basin are connected to the river. Without modernization, Midwest producers will not be able to compete in anticipated world grain export growth.

Furthermore, a recent study estimates the loss of 30,000 jobs nationwide, $562 million annually in lost farm income and $185 million annually in lost State and local tax receipts if the lock and dam system is not upgraded. Providing U.S. agricultural producers every opportunity to export their products to world markets is essential for their financial well-being and future viability.

While it is important to consider economic benefits, we must also protect the ecosystem of the river. A cooperative solution can meet the needs of farmers and waterway users while at the same time improve the environment and stem the decline of the Rivers' ecosystems through enhanced authorities. Restoring the ecosystem is not mutually exclusive to lock modernization.

After 12 years and $70 million of study, we firmly believe that the time has come to take action. I urge my colleagues to support this legislation providing initial authorization to begin the modernization process and enhance the authorities to address broader ecosystem restoration. Without immediate action, the health of both the agriculture economy and river ecosystem will continue to decline.

I thank the Senator from Virginia. The IRS Free File Program is a direct result of the goal that Congress set for the IRS to have 80 percent of returns filed electronically by 2007. The partnership agreement calls for the Free File Alliance to provide free tax preparation and filing to at least 60 percent of all taxpayers or approximately 78 million individuals who file an individual tax return. Each participating software company has its own eligibility requirements. The eligibility requirements ensure that lower income, disadvantaged and under-served taxpayers benefit from the free file program with the Free File Alliance, LLC. The provision in the bill was intended to ensure that the taxpayers participating in the Free File Program were affirmatively consenting to solicitation for other products or services. I look forward to working with him to ensure that we continue to promote such public-private partnerships.

I thank the Senator from Florida for his comments. This is a provision that I have also supported. The provision included in the bill will go a long way for those seniors who live in the affected CCRCs. I also want to clarify one point with Senator Baucus. It is my understanding that the purpose of the amendment is to bring the tax treatment of those CCRCs described in section 7872(g) into alignment with the treatment that has historically been afforded to those CCRCs that are not described in section 7872(g). In other words, there is no intent to alter the treatment that the IRS has historically provided for CCRCs that are not described in section 7872(g). I am committed to working with Senator Graham as we move this legislation forward.

Mr. President, today the Senate has approved the Tax Administration Good Government Act. This legislation is the first legislation addressing tax administration since the IRS Restructuring and Reform Act of 1998.

The legislation contains five major components. First, it provides additional safeguards for taxpayers. Second, the legislation significantly simplifies the current interest and penalty regimes. Third, the act also includes the proposals passed out of the Finance Committee on April 2, 2003 and included in a bill introduced by Senators Hatch and Breaux to modernize the United States Tax Court.

Fourth, our legislation also includes several provisions, some of which were requested by the Treasury Department and the Joint Committee on Taxation, to strike an appropriate balance in protecting taxpayer confidentiality through disclosure reforms. Finally, the legislation takes an important step toward simplification of the Tax Code through the elimination of obsolete provisions and unifying the definition of child within the Tax Code.

We have worked closely with the Treasury Department, the Internal Revenue Service, the National Taxpayer Advocate, and the Joint Committee on Taxation to develop this package of proposals to promote good government in the administration of our Tax Code.

Congress's responsibility for the tax system does not stop after we pass tax law changes. We have an oversight responsibility to ensure that taxpayer rights are protected, that our tax laws are not administered counter to congressional intent, that the judicial body with primary jurisdiction over the tax laws has the tools necessary to provide independent review of controversies between taxpayers and the Internal Revenue Service, and to take steps to simplify the Tax Code whenever possible.

We are pleased to say that today, the Senate has taken a big step in that direction.

I thank the Senator from Virginia. The IRS Free File Program is a direct result of the goal that Congress set for the IRS to have 80 percent of returns filed electronically by 2007. The partnership agreement calls for the Free File Alliance to provide free tax preparation and filing to at least 60 percent of all taxpayers or approximately 78 million individuals who file an individual tax return. Each participating software company has its own eligibility requirements. The eligibility requirements ensure that lower income, disadvantaged and under-served taxpayers benefit from the free file program with the Free File Alliance, LLC. The provision in the bill was intended to ensure that the taxpayers participating in the Free File Program were affirmatively consenting to solicitation for other products or services. I look forward to working with him to ensure that we continue to promote such public-private partnerships.

I thank the Senator from Florida for his comments. This is a provision that I have also supported. The provision included in the bill will go a long way for those seniors who live in the affected CCRCs. I also want to clarify one point with Senator Baucus. It is my understanding that the purpose of the amendment is to bring the tax treatment of those CCRCs described in section 7872(g) into alignment with the treatment that has historically been afforded to those CCRCs that are not described in section 7872(g). In other words, there is no intent to alter the treatment that the IRS has historically provided for CCRCs that are not described in section 7872(g). I am committed to working with Senator Graham as we move this legislation forward.

Mr. President, I would like to congratulate the students from Central Academy in Des Moines, IA, who participated in the ``We the People: The Citizen and the Constitution'' national finals in Washington, D.C. The annual competition is the culmination of the students' extensive study of the American system of constitutional democracy. The team from Central Academy won the State competition, earning the honor of representing Iowa in the national finals on May 1- 3. I am proud to say that performance of the Central Academy students in the national finals earned them the Regional Award for the central states, which is given to the best non-finalist team in each region. I offer my sincere congratulations to these exemplary students.

I had the opportunity to meet with these students when they were in Washington. They are a remarkable group of politically engaged young people and I am proud to have had them representing Iowa during the national competition.

The ``We the People: The Citizen and the Constitution'' program, run by the Center for Civic Education with the help of Federal funding, provides an outstanding curriculum that promotes civic competence and responsibility among elementary and secondary students. Students take away a solid understanding of the origin of American constitutional democracy as well as the contemporary relevance and application of our founding documents and ideals. In short, the We the People program produces better citizens.

In closing, I would like to personally recognize the Central Academy students who participated in this program, Oliver Borzo, Andrew Dahm, Andrew Eilts, Becki Gell, Andrew Greiner, Sean Noonan, Carole Peterson, Paige Richards, Maura Walsh, Shannon Wenck, Emma White, Molly White, Christopher Woods, Ru-Huey Yen, Ru-Shyan Yen and their teacher, Michael Schaffer. They can all be very proud of their knowledge and accomplishments. I would also like to recognize the ``We the People'' district coordinator, Ivette Bender, and the State coordinator for Iowa, Linda Martin, for all their work in getting an Iowa team to the national finals.

Mr. President, I rise in support of the Gregg amendment to provide a little more equity to school districts in the often overly litigious world of special education.

Currently, IDEA only allows parents who are prevailing parties to collect attorney's fees. Even if the school district prevails in court, it must pay its attorneys out of its own budget. Under the Gregg amendment, this would still be the case in vast majority of cases.

The Gregg amendment does not cap attorney's fees allowed under IDEA and it is not even a straight ``loser pays'' provision.

The Gregg amendment simply provides that State or local education agencies may be awarded attorney's fees, at the judges discretion, only in those very limited cases where the parent's case is--``frivolous, unreasonable, or without foundation, or the parent continued to litigate even after it became clear that the case was frivolous'' or-- if the parent's complaint was ``presented for any improper purpose.''

This is a very strict standard and is based on existing laws and precedents.

This strikes me as a very limited, reasonable amendment.

I should mention that in Iowa, we do not have a great many due process hearings and they rarely go to court. In fact, Iowa is a model of dispute resolution in the area of special education. It also helps that Iowa schools generally provide an excellent education to all students.

However, I have heard from many Iowa educators that the Federal IDEA law is too litigious. School districts often find themselves at a disadvantage when trying to prove that they have done right by a child. School districts find that it is usually easier and cheaper to give in to parents' demands rather than to go to court, even if school officials are convinced they have acted properly.

I am not suggesting we tip the scales the other way so that parents of disabled children are less able to advocate for the education they feel their children need.

The standard in the Gregg amendment is strict enough that it would still be to the advantage of school districts to settle all but the most egregious, frivolous complaints.

This amendment would not discourage any parent from pursuing any legitimate complaint, even if the parent might ultimately lose the case.

Parents must be able to defend the right of their child to a free, appropriate public education, even in court if necessary. However, frivolous due process complaints under IDEA abuse the rights of parents and hurt children.

When a school district must spend money to defend against frivolous cases, it drains funds away from needed services for other disabled children.

This amendment also protects parents from unscrupulous attorneys who would prey on parents when they are most vulnerable by encouraging them to litigate or prolong litigation in order to collect fees.

The law should protect children, not the pockets of trial lawyers.

Again, this amendment would in no way limit or discourage parents from pursuing legitimate complaints against a school district if they feel their child's school has not provided a free, appropriate public education. It would simply give school districts a little relief from abuses of the due process rights found in IDEA and ensure that our taxpayer dollars go toward educating children, not lining the pockets of unscrupulous trial lawyers.

Mr. GREGG. Mr. President, IDEA currently allows only parents who are ``prevailing parties'' in disputes to collect attorney's fees, in the court's discretion. The law does not permit school districts that prevail in a case to recover their attorney's fees. In most cases, this is the right policy, as we do no want to discourage parents from seeking redress when they believe their child is not getting what is promised under IDEA.

However, there are sometimes cases where the parent's case was frivolous, unreasonable, or without foundation, or the parent continued to litigate the case even after it became clear that the case was frivolous. Or, there are sometimes situations where a parent or their attorney files a number of complaints and requests for due process hearings, triggering the school district to spring into action to prepare for the hearing. The parent subsequently drops the complaint, but the school has spent considerable time and money preparing for the hearing; a closer look at the facts reveals that the complaints were not filed for any proper purpose, but instead were done to harass or retaliate against the school district.

In these limited instances, school districts should be able to recover their attorney's fees.

This amendment makes such a change to the law. The amendment provides that a court, in its discretion, may award reasonable attorney's fees to a school district if the parent's complaint or subsequent cause of action is frivolous, unreasonable, or without foundation, or the parent continued to litigate after it clearly became so, or was presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.

The legal standards in this amendment are not new concepts, but are based upon well-established laws.

The first part of the amendment comes from the U.S. Supreme Court case of Christiansburg Garment Co. v. EEOC 1978, which involved an employment discrimination claim under title vii of the civil rights act of 1964. Christiansburg held that a plaintiff which brings an action that is frivolous, unreasonable, or without foundation may be held liable for the prevailing defendant's attorney's fees. It is fair to apply this same standard in IDEA. In fact, a 1985 senate labor and human resources committee report on the predecessor of idea stated the committee's intent

to adopt the policy of christiansburg garment company v.

eeoc, which is that a party which brings an action that is

`frivolous, unreasonable, or without foundation' may be held

liable for the prevailing defendant's attorney fees.

It is important to note that this is a very high standard and prevailing defendants are rarely able to meet it and obtain a reimbursement of their attorney's fees. The Supreme Court has said: to award attorney fees to defendants in a civil rights suit, the plaintiff's action must be meritless in the sense that it is groundless or without foundation; the fact that plaintiff may ultimately lose his case is not in itself sufficient justification for fee award.

Finally, case law directs courts to consider the financial resources of the plaintiff in awarding attorney's fees to a prevailing defendant.

The second provision in the amendment--that relates to bringing lawsuits for an improper purpose, such as to harass or cause unnecessary delay or needless increase in the cost of litigation--comes from another well-established Federal law: Federal Rule of Civil Procedure 11.

In interpreting this language from Rule 11, courts must apply an objective standard of reasonableness to the facts of the case.

Let me give you some examples of frivolous or improper lawsuits, where the school districts had no recourse.

In DeLeon Indepen. Sch. Dist. v. Seth B., 4:CV-00-1770-Y (N.D. Tex. 2001), a school district asked for injunctive relief against a parent who had filed seven requests for due process hearings over the course of 2 years. The school district asserted that the parent required the school district to convene at least 20 IEP meetings during that time, and claimed that the parent had abused her entitlements under IDEA by filing repeated requests for hearings and later canceling or refusing to attend. The school district further alleged that it had spent over $154,000 in attorney's fees and costs to defend the parents' filings. The court held that the IDEA law did not give the court subject matter jurisdiction to provide the school's requested relief.

We heard from a small district with an annual budget of $10,000,000. At the end of the 2001 school year an IEP student graduated and failed to pass an exam for entrance into a postsecondary trade school. The parents sued the district demanding among other things $1 million in lost future wages because the school had allegedly failed to address his learning needs sufficiently for him to get into the trade school. The district believed that it followed all legal requirements properly for full parent cooperation and agreement during the child's years in school. A decision was made to settle for $140,000 spread over four years partially in fear of consequences if a court battle ended in favor of the parents. A demand of one million dollars would have the effect putting the district into a negative fund balances and the risk of no longer being able to function.

A director of pupil personnel with special education responsibility reports:

Next month I will go to Federal court with an attorney who

is seeking fees for a recent Due Process Hearing. The

District prevailed on 100 percent of the issues, not even a

hand slap was given to the District. Why are we going to

Federal Court? Because the attorney wants fees and the only

way he can get them is threaten Federal court and hope we

settle the fees versus the cost of Federal court.

She described the situation as blackmail.

One principal says:

Attorneys that drag out a hearing for weeks, do so because

once the attorney fees equal the post of the placement, the

case gets resolved. I was involved in a case 9 years ago in

which an aggressive attorney insisted on a 10 day evidentiary

hearing. When it was clear the hearing officer had no control

over the hearing, the district caved to the parents' position

and wrote a settlement agreement.

But the worst example of egregious conduct comes from a suburban school

district with over 33,000 students and 1,600 teachers. I will come to that in a minute.

Mr. President, we need to have a mechanism to protect schools in the rare instances in which the complaint filed against them is frivolous, or when litigation is being used to harass or retaliate against the school district.

This amendment is fair and reasonable. It would apply established legal principles and standards to protect defendants from burdensome litigation having no legal or factual basis.

The intent of this amendment is not to discourage parents from using the procedural safeguards under IDEA to bring complaints against school districts. And I don't believe this amendment will do that.

However, other Federal attorney fee statutes--(e.g., title vii of the civil rights act and section 1983 claims)--allow prevailing defendants to ask for attorneys' fees in egregious instances. Why can't we allow for the same mechanism under IDEA?

We want Government dollars targeted for IDEA to go to special education services for children with disabilities--not for school districts to pay attorney's fees to defend themselves in frivolous law suits.

This amendment will not chill representation--it does not put a new dollar limit on attorney's fees. Rather, this amendment is intended to give school districts some relief in those rare situations where a parent has abused their due process rights.

Let me tell you about the most egregious example of frivolous, groundless behavior against a school.

I know of a suburban school district with over 33,000 students and 1,600 teachers. Noted for excellence, student performance, and distinguished programs, this district has received local, State, and national recognition.

Within this district, ``Mrs. X,'' as I will call her for privacy reasons, has two children attending the schools in the district: a high school-age son, identified as a special education student, and a middle school regular education daughter.

In May of 1998, the district settled a playground injury claim brought by Mrs. X resulting from her daughter's fall from monkey bars. That incident has been followed by the most egregious and long-standing abuse of every form of complaint, fair hearing, and litigation processes.

In summary, Mrs. X has filed complaints with the office of civil rights, tort liability suits, and multiple district internal personnel complaints--ranging from senior district personnel ``dishonesty'' to a substitute teacher leaving the door open in her son's room. Mrs. X currently has six suits filed in Federal Court against the district-- the Board of Education Trustees, the Assistant Superintendent, the Executive Director of Special Education, the Program Specialist, the Director of Special Education, the Deputy Superintendent, the Superintendent, the Attorney retained by the district; nine hearing officers; the U.S. Department of Education Office for Civil Rights, Region IX; and the California Department of Education Superintendent of Schools.

As difficult and vexatious as these proceedings may be, by far the most expensive and draining of all of Mrs. X's actions are those resulting from her rights under the IDEA. Since June 1998, she has filed 15 complaints and fair hearing requests. These demands are accompanied by a daily barrage of letters, faxes, and telephone voice messages left for various District employees. Because of IDEA requirements, these need a timely response.

The District has spent $195,000 on attorney's fees to defend against these cases.

In November 2001, the District office began a log these communications so that the level of harassment and disruptions to the organization could be documented. Since that time, 828 communications have been sent to District personnel, representing well over 2,440 pages.

Currently, one of the District's program specialists devotes the majority of her time handling the issues generated by this one parent. This detracts from the District's ability to deal with the urgent and legitimate special education needs of students and parents.

Here is the list of the due process filings by Mrs. X. I ask unanimous consent it be printed in the Record.

Mr. President, Senator McCain has filed a motion to strike all of the Energy tax provisions from the JOBS bill. Senator McCain has a right to his opinion, but I overwhelmingly disagree with his opinion and I urge all of my fellow Senators to vote ``No'' on this amendment.

In order to secure our country's economic and national security, we need to have a balanced energy plan that protects the environment, supports the needs of our growing economy, and reduces our dependence on foreign sources of energy.

Every man, woman and child in the United States is a stakeholder when it comes to developing a responsible, balanced, stable, long-term energy policy.

The events of September 11 have made very clear to Americans how important it is to enhance our energy independence. We can no longer afford to allow our dangerous reliance on foreign sources of oil to continue.

But ``wait'' we do, and we do it well. It has been over 10 years since we have passed energy legislation.

And if we wait until we get that ``perfect'' bill, the wait will be forever.

Today, we have the opportunity to correct that because we have added all of the Energy Tax provisions to this JOBS bill. Our energy tax provisions obviously are not perfect. And to those who complain about various provisions, I say, so what do we do? Do nothing? Wait for the ``perfect'' bill?

These provisions may not be perfect but let me tell you what we do have. We have energy tax provisions that were crafted from inception in a bipartisan manner. From the beginning, both Democrat and Republican staffs from both Finance and Energy Committees worked side by side to craft a fair and balanced energy tax package.

I may not personally believe in every one of these provisions, but the process has worked to craft an energy tax package that is good for all 50 States and all forms of energy production, both renewables and traditional oil and gas and conservation and energy efficiency.

Some of the amendments pending on this bill suggest the energy tax provisions will pick winners and losers. Is that true? Am I OK with that?

The answer is a definite ``yes.'' Remember, the winners we pick in this bill are all Americans, all of whom have a stake in reducing our dependence upon foreign energy. We do this by favoring domestic producers over foreign producers.

It is well past time to get serious about implementing energy efficiency and conservation efforts, investing in alternative, renewable fuels and improving domestic production of traditional resources.

As you know, Mr. President, I support a comprehensive energy policy consisting of conservation efforts, development of renewable and alternative energy resources, and domestic production of traditional sources of energy.

And we will have an opportunity under Senator Domenici's leadership to address the energy policy issues at a later date, but for now we will only be considering the energy tax provisions.

As my colleagues well know, I have long been a supporter of alternative and renewable sources of energy as a way of protecting our environment and increasing our energy independence.

I strongly support the production of renewable domestic fuels, particularly ethanol and biodiesel. As domestic, renewable sources of energy, ethanol and biodiesel can increase fuel supplies, reduce our dependence on foreign oil, and increase our national and economic security.

As Chairman of the Senate Finance Committee, I continue to work closely with the ranking member, Senator Baucus, to defend an energy tax title that strikes a good balance between conventional energy sources, alternative and renewable energy, and conservation.

Among others, it includes provisions for the development of renewable sources of energy such as wind and biomass, incentives for energy efficient appliances and homes, and incentives for the production of non-conventional sources of traditional oil and gas.

I believe the energy tax provisions included in the JOBS bill does a good job to address our Nation's energy security in a balanced and comprehensive way.

I am also pleased that with the JOBS bill we have finally gotten to a point to address this important issue that has such a direct impact on our national and economic security.

For the sake of our children and our grandchildren, we must implement conservation efforts, invest in alternative and renewable energy, and improve development and production of domestic oil and natural gas resources. And we need all of the energy tax provisions to be included in the JOBS bill. I urge you to vote ``no'' on Senator McCain's effort.

Mr. President, the press and some in this body have unfairly defined this legislation as a ``porky'' tax bill. There have been articles in all the major papers following that line of attack.

One Member of the leadership on the other side said on April 20 he is worried that the sheer amount of tax breaks in the bill could end up impeding its progress. ``They've loaded this truck up and the tires are about to explode,'' he said, calling the efforts to pile sweeteners onto the bill ``haphazard.''

That Member went on and cautioned, ``any time you load it up as vigorously as they have, you create as many problems as you solve.''

Well, let's talk about the so-called ``porky'' provisions in this bill. It is a bit irritating that the complaints come from folks who say they support the bill. Every provision in the bill is the result of a joint recommendation of myself and Senator Baucus. We responded to requests from every Senator, including those who are critical of the bill.

I guess I would ask anyone, including the critics a question. That question would be, ``Are you willing to throw aside the provision you asked us to put in the bill?'' Are you willing to go back to your constituents and tell them you don't think their interest has merit?

I don't think I will hear any of the critics respond yes. I haven't had any takers yet and don't think I will by the time the bill's done.

Let's look at the bigger picture.

This bill has about $60 billion dedicated to the replacement of the FSC/ETI benefit. This bill has another $40 billion dedicated to international tax reforms to make our domestic manufacturers more competitive overseas.

There is another roughly $20 billion in domestic manufacturing incentives, including the research and development tax credit.

Some of that package deals with issues such as the unfair tax on bows and arrows which has a domestic job impact. There's another $8 billion dealing with the extenders, including a permanent tax credit directed at hiring hard-to-place workers. There's another $10 billion dealing with housing, rural areas, hard hit urban areas, Indian tribes, and other sectors of our economy. We're directing resources at economic development, plain and simple.

Finally, there's another almost $20 billion for the bipartisan Finance Committee energy incentives package which has passed the Senate twice.

All of this is offset with corporate loophole closers and measures aimed at curtailing tax shelters. The dollars involved in the much- criticized provisions are very small--perhaps less than 3 percent of the total cost of the bill. Members and the ``big city'' press need to keep their eyes on the ball: ending the euro tax and helping domestic manufacturers.

Senator Daniel Patrick Moynihan responded to the New York Times regarding the 1997 bipartisan tax relief bill. The press had made much of a few narrow provisions, such as a provision to provide tax relief for parachuter trainees. There is an excise tax on air travel. The tax is meant to apply to commercial travel. Read literally, the tax applied to parachute training flights even though those flights are not commercial transportation.

Senator Moynihan described the Finance Committee provisions that were designed to deal with these inequities this way: ``You will never see representative government more specific than in the Senate Finance Committee . . . It's a form of accommodation, and in between you think about the national interest, because there are things we all share.''

Like the 1997 tax relief bill, the bill before us includes a number of provisions that, at face value, may seem to be trivial. It is important to keep in mind, however, that each of these provisions was added in response to specific requests from fellow Senators who are looking out for the vital interests of their constituents. That is what representative government is all about.

The Federal tax system is vast. It touches virtually every aspect of life. From birth to grave. There are excise taxes to fund our airports and highways. There is a corporate and individual income tax to fund defense and general welfare. There are payroll taxes to fund Social Security and Medicare benefits. There is an unemployment payroll tax to fund unemployment benefits.

Now, when you go through this bill, you can find some provisions that involve animal manure or windmills. If you don't look beyond the superficial humor of the subject matter, you can have a lot of fun. Of course, big city papers like to make fun of these rural provisions. I always have to remind these folks that food doesn't grow in supermarkets. It grows on farms. The byproducts of those farms can give us clean energy. What's so bad about that?

Part of what we hear out in the heartland is get us some insurance that jobs are coming back. Especially, they say, in the area of manufacturing. The economy is coming back. The U.S. economy, the mightiest in the history of the planet, is adding jobs at a healthy rate. The people want an insurance policy.

Growing jobs in our diverse economy is not a cookie cutter exercise. This bill has general policies for the most part. Some are proactive, like the manufacturing deduction. Others are reactive, like responding to the Euro tax. Still others are particular. They may relate to small isolated communities or a single industry. When you take a look you'll find a common thread through nearly all of them: job creation.

That is what this bill is all about. Creating jobs, plain and simple.

Mr. President, I ask unanimous consent that all time be yielded.

I ask for the yeas and nays.

Mr. President, I ask unanimous consent that following the disposition of the Hollings amendment, the next amendments to be offered are the following in the order provided: Senator Kyl, No. 3127, 60 minutes equally divided; Senator Landrieu, 60 minutes equally divided; Senator Levin, 20 minutes equally divided; further, that there be no second-degree amendments in order to the amendments prior to the vote.

Mr. President, I ask unanimous consent that the Senators from Pennsylvania, the senior and the junior Senators, have 5 minutes apiece to discuss something very personal to their State.

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

Senator Hollings asks us to take $39 billion of international reforms and put it towards more domestic manufacturing relief.

I have told my colleagues so many times I shouldn't have to repeat it. But this bill is all about encouraging domestic manufacturing.

The level of spending in this bill is already over three to one in favor of domestic issues. We dedicate over $75 billion to domestic manufacturing relief.

FSC/ETI currently benefits manufacturing by $50 billion. Obviously, you can see this bill is a much stronger

commitment to manufacturing than the old FSC/ETI bill we are replacing. We have already accelerated the phase-in of the manufacturing tax rate. That is thanks to a bipartisan amendment by Senator Bunning and Senator Stabenow. We have modified the transition rules to provide stronger relief in transition for manufacturing companies which presently get the old FSC/ETI benefits this bill replaces.

I hope it is easy for my colleagues to conclude that there is very little to be gained by the amendment proposed by the Senator from South Carolina.

It is time we had our rational discussion of the international reforms in this JOBS bill because we have been spending so much time on nongermane amendments. The amendment before us is not one of those nongermane amendments but it has kept us from discussing so much which is very basic with this legislation. Maybe people think there is no reason to discuss it because this bill was built from the ground up in a bipartisan way, coming out of our committee on a very overwhelming vote of 9 to 2.

I think Members will be surprised to learn that some of our international tax rules actually harm the domestic operations of U.S. companies. When foreign income is brought home, the United States allows an offset against U.S. tax for any foreign taxes paid on that income. That is why it is called the foreign tax credit. Foreign tax credits ensure that we do not double tax foreign earnings. Accordingly, the foreign tax credit plays a vital role in preserving the international competitiveness of our companies.

In the Tax Reform Act of 1986, Congress enacted a provision that causes foreign tax credits to expire every 5 years. That was done for a reason that is not very well justified because it is often used around here--to make that 1986 tax bill revenue neutral.

Some claim this is a good rule because it forces foreign earnings to be repatriated within 5 years. But that conclusion does not comport with reality. The reason companies don't bring back foreign earnings is because of double taxation. That is what occurs with foreign tax credits expiring.

I will give you an example. A U.S. company sets up new operations in Poland to serve Eastern Europe at this time when Eastern Europe is being integrated with the European Union. That happened last week. For the next 8 years in this hypothetical--quite reasonably--it takes all of the capital generated by the Polish subsidiary to expand the company's presence in Eastern Europe. At the end of 8 years, it finally has some extra cash which it can send home.

What happens? It discovers the taxes it paid to Poland from years 1 through 3 are no longer eligible for the foreign tax credit because they are more than 5 years old. The Polish tax rate is 28 percent. This means if a company repatriates those early earnings, it will pay combined Polish and U.S. taxes of 63 percent. It is really almost confiscatory. That means, of course, the money is not coming home for reinvestment in the United States. We lose the benefit.

If those early tax credits had not expired, the United States would actually pick up some tax revenues. The subsidiary would owe the difference between the 28-percent Polish rate and the 35-percent U.S. rate. That happens to be a gain of 7 percentage points of taxation into our U.S. Treasury from that company.

To ensure that double taxation no longer occurs, our JOBS bill extends the carry-forward period for foreign tax credits from 5 years to 20 years. Twenty years is the amount of time companies have to utilize net operating losses. It is only appropriate, then, that the key mechanism for avoiding double taxation should have the same shelf life.

Our JOBS bill mostly fixes problems in the foreign tax credit area. The only time a company benefits from a foreign tax credit is when it brings that money home.

To repeat a very elementary point, foreign tax credits are a benefit to that company only when that company brings foreign earnings home for reinvestment. When the credit expires, this impedes capital mobility because of double taxation, and it blocks reinvestment of foreign earnings in the United States.

Another example of guaranteed double taxation is our rule that only allows 90 percent of a company's AMT to be offset with foreign tax credits. This rule guarantees that the company will be double taxed on 10 percent of the alternative minimum tax. The JOBS bill allows what is common sense--a 100-percent offset.

To give you a real-life example of how these two changes will help U.S. operations make investments in America and create jobs in America, the largest American manufacturer in this example of a particular automobile part is bringing dividends back from its profitable foreign operations to cover losses in its U.S. operations. Their U.S. losses, when combined with the foreign dividends to fund the U.S. operations, has created huge unused foreign tax credits with a 5-year expiration period. Because of their ongoing U.S. losses, it is unlikely these credits will be used within those 5 years.

This company also has a growing alternative minimum tax because their foreign tax credits can only be offset by 95 percent of their AMT liability.

The limit is creating an annual alternative minimum tax liability because the additional 10 percent of the AMT cannot be offset with the foreign taxes that have already been paid on that income. The company is guaranteed to incur double tax on foreign earnings brought back to support the U.S. operation. This may be unbelievable to anyone listening, but this is actually happening under U.S. tax laws.

The company's foreign competitors in the United States are not equally hindered in the same way by the 90-percent alternative minimum tax, foreign tax credit limit. If a foreign competitor loses money, they get a 20-year U.S. net operating loss compared to the 5-year foreign tax credit carryforward. Our Tax Code, then, is harming a company that has operations in all 50 States and employs 38,000 people in 16 different manufacturing facilities.

This example shows why the 20-year foreign tax credit carryforward and the repeal of the 90-percent AMT foreign tax credit limits are in this very important jobs in manufacturing bill. The current rules harm U.S. operations and we need to fix it.

I also have some comments on another provision, the interest allocation provisions, to give another example of how our international rules harm U.S. operations. As I said earlier, foreign tax credits can only offset foreign income; they cannot offset income from U.S. activities. In determining the amount of foreign income, certain U.S. expenses, such as interest expense, are partially allocated to foreign income. This is used in calculating the amount of foreign tax credit a U.S. company is allowed to claim on its return. The United States arbitrarily allocates U.S. interest expense to foreign earnings, but the foreign government does not recognize that interest expense for its tax purposes. It is as if the interest expense somehow disappears into the clear air.

The interest allocation rules artificially reduce the foreign tax credits that can be used, and when the credits cannot be used the credits expire. It may surprise many Senators to hear that our interest allocation rules create a competitive disadvantage for U.S. multinationals that try to expand their operations into the United States and maybe do not get expanded here.

A portion of the interest expense on debt incurred to invest in the United States is allocated to foreign source income. A foreign corporation making the same U.S. investment is not impacted by these interest allocation rules. It gets to fully deduct the interest costs within the United States and thereby has a lower cost of capital than a U.S. company making that same investment. Therefore, the interest allocation rules actually work against U.S. multinational companies that invest in the United States. It has put some at a competitive disadvantage with foreign companies operating in the United States. I hope this is very clear, that this is not the right thing for the U.S. Tax Code to do to foreign manufacturers. Why should we encourage international competition in the United States against our own domestic manufacturer?

We have Senators demonizing the JOBS bill international provisions. This gives me an opportunity to emphasize once again how anything gets done in the Senate--only in a bipartisan way. This is a bipartisan bill.

Democrats and Republicans agree to everything in this bill, and the international provisions we agreed to were provisions that actually help U.S. job creation and help our own economic growth.

I ask the Senate to support Senator Baucus and this Senator in this bipartisan bill. I hope Members will not buy the distortion. None of the international changes caused jobs to go offshore. Just the opposite. These were selected to bring the foreign money back for real investment in the United States, creating jobs in the United States, creating manufacturing jobs in the United States because this is a manufacturing bill. These changes level the playing field between the United States and foreign companies operating inside the United States. They were specifically selected because they tend to help U.S.-based manufacturers more than other sectors of our economy.

The entire JOBS bill is geared towards creating jobs in manufacturing--jobs in the United States, not overseas--because American manufacturing overseas does not benefit from this bill.

It is quite simple. These are the only kinds of international provisions we could ever get bipartisan agreement on because it is so obvious. It is so obvious, it came 19-2 out of our committee. We should not allow international rules to remain in place if they harm U.S. operation. Once again, we are talking about commonsense international tax reform. In fact, if anyone wants to condemn this bill, it is that maybe we do not do anything radical in this bill. We just fix problems. We fix problems with current law. We fix problems with current law that happens to be harming U.S. domestic interests.

So I ask Members to vote against the amendment of the distinguished Senator from South Carolina.

I yield the floor.

Mr. President, I say to the Senator, if you do not have any more time, then I will yield back my time and we can then vote.

Is that OK?

Mr. President, I yield back all time on this side.

Mr. President, I move to reconsider the vote.

Mr. President, I ask unanimous consent that the Senator from Texas, Mrs. Hutchison, have 2 minutes for an amendment that she wants to offer.

Madam President, I can comment very positively about the motivation behind the amendment, and the good policy of giving equity to people who are called away from jobs and away from family to go to a far-off land to defend America in a war against terrorism and doing it in a way that has never been done for guardsmen and reservists to this extent, I think going back to the Korean war. What we are doing now has not been done for a long period of time.

The Senator from Louisiana needs to be complimented on her efforts to recognize that and, particularly, to recognize that through employers who show very patriotic fervor in cooperating in this whole program.

I can say that very positively about the amendment of the Senator from Louisiana. She is asking me to predict what might happen in conference. It is very difficult to do that. I have a reputation for defending the position of the Senate and working as best I can to work through this. Obviously, I cannot make any promises to the Senator from Louisiana.

I ask unanimous consent Senators Hatch and Pryor be added as cosponsors to the Hutchison amendment.

I move to lay the motions on the table en bloc.

The motions to lay on the table en bloc were agreed to.

I promised the Senator from South Carolina we would have a little colloquy on an issue he was concerned about. Could we do that right now?

I ask the Senator from South Carolina be recognized.

As Chairman of the Senate Finance Committee, I join my colleague from South Carolina in expressing concern about the way in which the Chinese currency is valued. I certainly agree that it is a serious problem that needs to be taken seriously. A fairly valued currency is in China's own long-term interests, and is key for moving to a market driven economy. I was pleased to hear that Secretary Snow was assured that interim steps are being taken and that progress in this area will continue.

I do appreciate the importance of this issue. If we do not see substantial progress toward adoption of a market-based currency valuation system, I would support Senate hearings at the appropriate time.

Mr. President, I would like to thank the Senator from Pennsylvania for his commitment to the Section 29 extension to new coke facilities. Although I am supportive of the provision, the most appropriate time to address it is during the conference. I look forward to working with Senator Santorum and the two Senators from Ohio to include this amendment in the conference report.

privacy

I would be pleased to engage in a colloquy with the Senator from Oregon.

The Senator is correct. It is my intent to urge my colleagues to minimize this penalty in the final bill that is sent to the President for his signature.

income forecast method provision

I am happy to confirm the understanding of the distinguished Senator from Louisiana. The provision was adopted to provide needed clarifications in order to eliminate the uncertainties that have arisen regarding the proper application of the income forecast method. I believe the disputes that have arisen regarding the mechanics of the income forecast formula are extremely unproductive and an inefficient use of both taxpayer and limited tax administration resources. By adopting these clarifications, I believe the committee intended to end any disputes and prevent any further waste of both taxpayer and Government resources in resolving these disputes. Any existing disputes should be resolved expeditiously in a manner consistent with the clarifications included in the bill.

Yes.

I agree with the Senator from Tennessee that such an exception to the ``kiddie tax'' would be

good public policy. I commit to you that my staff will work with the Treasury Department, the Social Security Administration and your staff during conference negotiations to craft language that addresses Mr. Domm's concerns but also contains solid anti-abuse language. My hope is that we could place such language in the final version of S. 1637 or another appropriate tax bill.

Mr. President, I want to assure Senator Lincoln that I will continue to work with her to make sure adequate incentives for LFG are included in any final package from the upcoming House-Senate conference. Her concerns are my concerns as well. She has stated them well and I will devote my best efforts to resolving them as we move forward on discussions and deliberations with the House of Representatives.

car provision

I agree with your concerns, Senator Baucus, and I also am in favor of giving Treasury this expanded authority.

Madam President, Senators Kyl and Nickles say that a lower rate just for manufacturing is ``bad tax policy and is virtually without precedent in our history.''

Well, this is just wrong and the evidence is staring them in the face. FSC/ETI itself is a tax cut for manufacturing. FSC/ETI keeps U.S. manufacturing competitive by lowering tax rates on exports. Manufacturers could lower their rates by 3 to 8 points.

The Joint Committee on Taxation says that 89 percent of all FSC/ETI benefits go to manufacturing companies. The Kyl-Nickles Treasury proposal would take money from FSC/ETI and spread it to other industry sectors.

Kyl-Nickles will be a $50 billion tax increase on manufacturing. It will not send the FSC/ETI repeal money back to manufacturing. It is mathematically impossible for their proposal to work any other way.

We know that tax increases do not create jobs. So why would Senator Kyl and Nickles increase manufacturing taxes by $50 billion?

There are other reasons why we did not go the route of the Kyl- Nickles approach. First, their top-level rate cut would only go to the biggest corporations in America. It would not go to family-held S corporations, partnerships, or smaller corporations.

Under the Finance Committee bill, all manufacturers in America, regardless of size, get a 3-point rate cut, including S corporations and partnerships.

S corporations and partnerships benefit under current FSC/ETI law, so the Kyl-Nickles bill takes a benefit away from them and gives it to large corporations.

Kyl-Nickles claim that a manufacturing tax cut ``penalizes all other U.S. businesses.'' I think just the opposite is true. The manufacturing sector should not be a revenue offset to give investment bankers a tax cut. Kyl-Nickles claim that our definition of manufacturing is too difficult to understand. But the definition we use in the JOBS Act is the same definition used for both FSC and ETI. It covers property that is manufactured, produced, grown or extracted within the United States.

This definition is 20 years old, but suddenly no one understands what it means. We did confirm that manufacturing includes computer software, films, and processed agricultural goods. Kyl-Nickles claim that these are special interest definitions of manufacturing. However, all of these activities qualified as manufacturing under the FSC/ETI rules, which have been in place for 20 years.

We also ensured that farm co-ops get the same benefit that they do under current law.

In response to our energy crisis, we provided that refining oil pulled from American wells would qualify as manufacturing.

They claim it is too difficult to allocate income and expenses in determining the amount of manufacturing income. But for 20 years, Treasury has had administrative pricing rules on its books that tell taxpayers how to allocate expenses in figuring FSCETI benefits. Our JOBS bill grants Treasury broad latitude to revise the cost allocation rules, based on existing tax principles.

Kyl-Nickles also claims that Canada recently gave up a similar manufacturing rate cut because it did not work. This is not correct. For many years, Canada had a special lower rate for their manufacturing sector. Canada created their manufacturing rate cut in reaction to the U.S. creating FSC back in 1982. They reduced their rate on manufacturing so they could stay competitive with the U.S. Canada recently repealed that provision because they reduced all their corporate rates to the lower manufacturing rate.

Canada did not repeal their manufacturing rate cut because of its complications. Canada ended their manufacturing regime because it worked so well, that they extended it to all sectors. But when Canada reduced their overall tax rates, they did not do so at the expense of their manufacturing sector.

We put together a strong bipartisan bill, with a 19-to-2 vote out of committee, that will cut our manufacturing tax rate this very year. There is no purpose in blocking such a strong bipartisan bill. These days, is it rare that we can reach such strong agreement on anything.

Mr. President, the CBO report says the flat corporate rate cut would yield slightly more long-term growth than the JOBS bill. But the reason has nothing to do with our manufacturing tax cut.

CBO says the antitax shelter provisions and Senator Smith's and Senator Ensign's homeland reinvestment provisions are the cause.

CBO says that because we shut down shelters, corporations' taxes won't be as low and, therefore, their long-term growth is not as high.

CBO also concludes that Senators Smith's and Ensign's temporary 1- year rate cut won't help in the long-term.

The CBO concludes that a flat rate cut could be more ``efficient'' than a manufacturing rate cut. So what do they mean by ``efficient''? They said it means that a manufacturing rate cut would cause more capital to flow into the manufacturing sector.

So I have to ask, what is the problem?

I thought tax cuts were designed to increase capital investment. Isn't that what we want for manufacturing?

If we increase taxes on manufacturing, then capital should flow out of the manufacturing sector. Is that what we want?

I urge adoption of the Levin-Coleman modified amendment.

Mr. President, I move to reconsider the vote.

I suggest the absence of a quorum.

Mr. President, I ask unanimous consent to call up amendment No. 3133 and ask for its immediate consideration.

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

Mr. President, I move to reconsider the vote.

Mr. President, I think this is going pretty well now. We expect a vote around 6:30.

I suggest the absence of a quorum.

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

Mr. President, on behalf of Senator Nickles, I call up amendment No. 3040 and send a modification to the desk.

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

On this side, too.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

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

Mr. President, I send an amendment to the desk and ask for its immediate consideration.

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

I ask for consideration of the amendment.

I move to reconsider the vote.

Mr. President, now that this bill has finally passed the Senate, I take the opportunity to thank several people.

First and foremost, I thank Senator Baucus. I am very certain we would not be here without his good work and his cooperation. In fact, as I have said so many times in speeches, this whole effort started when Senator Baucus was chairman of the committee in the last Congress. He held hearings and started this process going. He has not only cooperated and put in good work during this Congress, but it all started under his leadership.

I also need to thank all the other members of the Finance Committee for their time and energy in making this bill a reality. I thank my staff on the Finance Committee: Mark Prater, chief tax counsel, and the other tax counsels, Ed McClellan, Elizabeth Paris, Dean Zerbe, Christy Mistr, and John O'Neill as well as John's predecessor, Diann Howland. These individuals, along with Adam Freed, the staff assistant for the tax team, have been real workhorses for the committee, keeping the lights burning long into the night to make this bill possible.

For the record, as evidence of the work effort, this bill was introduced on the day Hurricane Isabel blew into town. Because of hard work, the markup of the bill occurred in a calm environment.

I also thank the trade staff, particularly Everett Eissenstat, chief Trade Counsel, and his team of David Johanson, Stephen Schaefer, Daniel Shepherdson, and Zach Paulsen. I also thank Carrie Clark who recently left our trade staff. Thanks also needs to be paid to our administrative staff, including Carla Martin, Amber Williams, Geoff Burrell, and Mark Blair. From my personal staff, I thank Sherry Kuntz and Leah Shimp. Also helpful were our Finance Committee press team of Jill Kozeny and Jill Gerber, known around the committee as the ``Jills.'' Lastly, on my side, I thank Kolan Davis and Ted Totman, the Committee's staff director and deputy staff director for riding herd on all this work.

In addition, this bipartisan bill would not have been possible without close work and cooperation at the staff level. I appreciate and thank the minority staff for their good work. I particularly note Russ Sullivan, Democratic Staff Director, as well as Pat Heck, Democratic Chief Tax Counsel, Matt Stokes, Matt Jones, Matt Genasci, Judy Miller, Jon Selib, Liz Leibschutz, Matt Stanton, Dawn Levy, and Anita Horn Rizek. In addition, I thank Tim Punke and his trade team, along with John Angell, Bill Dauster, and Mike Evans, former Deputy Staff Director, for their time and energy.

I extend my thanks also to George Yin and his staff at the Joint Committee on Taxation for providing their extensive knowledge and guidance to this effort. I particularly point out the good work of Ray Beeman, David Noren, and Brian Meighan. Brian recently left Joint Tax for the private sector.

I also thank Acting Assistant Secretary for Tax Policy, Gregory Jenner, and his staff for their assistance on the so-called SILOs tax shelter provision of this bill.

I thank the majority leader, Senator Bill Frist, and his leadership staff for all their assistance. The majority leader backed me and Senator Baucus all the way on this bill. We would not have the result today but for the majority leader's patience, determination, and dedication. It was tough going at times, but he and I knew we would get the right result. From Senator Frist's staff, I thank Lee Rawls, Eric Ueland, Rohit Kumar, and Libby Jarvis.

I also thank our Senate leadership team and their staffs, especially our able whip, Senator McConnell.

Finally, my thanks go to Jim Fransen, Mark Mathiesen, Mark McGunagle, and their capable staff at Legislative Counsel for taking our ideas and drafting them into statutory language.

I would like to tell them all to go home and get a good night's rest because the bill has been a very long time working its way through the Senate.

Now, I urge our friends in the other body to pass a companion bill. Hopefully, when that bill passes the House, our friends in the Senate Democratic leadership will not resist our efforts to go to conference. Every month of delay is another month where the Euro tax ratchets up another percentage point on our products going to Europe.

I thank everyone for their cooperation in allowing us to get to this point this evening. This, of course, is not the final step in the process. The House has

not passed their version of the FSC legislation. I anticipate the House will send a bill to the Senate at some point. When that happens, I hope we will be able to proceed to conference so that we are able to get a final product.

I appreciate the assistance of Senator Baucus throughout this process and hope we will be able to send a bill to committee.

Order Of Procedure

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

I yield the floor.

I suggest the absence of a quorum.

Mr. President, I ask unanimous consent, notwithstanding the adoption of amendment No. 3143, that the modification which is at the desk be agreed to.

Mr. President, today I rise to acknowledge women in Iowa who are taking a stand against heart disease and stroke. Many people assume that cardiovascular disease is a man's disease. The truth is, it has claimed more lives of women since 1984.

Nationwide, 8 million women are living with heart disease. Thirteen percent of women age 45 and over have had a heart attack.

As a survivor of breast cancer, my wife Barbara knows the fears of many women. Heart disease, just like cancer, is scary and real. It is up to women around the world to educate their friends, mothers, and sisters about the disease. Women in Iowa are doing it this week.

I commend every woman in Iowa for being an advocate for a very good cause. The campaign to educate all women about the major risk factors of heart disease and about heart-healthy behavior will positively impact the lives of many families. Women in Iowa should not underestimate their personal risk, and they should know what they can do to beat the disease.

In Congress, I have worked to increase funding for the National Institutes of Health. The NIH is one of the world's foremost medical research centers, and the Federal focal point for medical research in the United States.

I am keenly aware of the overall benefits of biomedical research to the health care system, and to those with heart disease.

In fact, the NIH has set out to develop a national public awareness and outreach campaign to convey the message that heart disease is the number one killer of American women and that it can be successfully prevented and treated.

Six years ago, we set out to double the funding for the NIH. We followed through with our promise. As a result, the NIH now funds nearly 10,000 more research grants and can support the training of over 1,500 more scientists each year.

This is good news for women everywhere. The increase in funding is a step in the right direction, but we can't give up. It will take all of us to stop the leading cause of death in our state.

Mr. President, I ask unanimous consent the Senate proceed to the immediate consideration of Calendar No. 295, S. 622.

Mr. President, today, I come to the floor to talk about a bill of great significance to me. The Family Opportunity Act is a bill that I first introduced with Senator Kennedy in the 106th Congress.

This bill promotes family, work, and opportunity. Every day, across the country, thousands of families struggle to obtain affordable and appropriate health care coverage for children with special health care needs, including children with conditions such as autism, mental retardation, cerebral palsy, developmental delays, or mental illness. Over the course of the last three Congresses, this bill has enjoyed strong bipartisan support.

Low and middle income parents who have employer sponsored family health care coverage and children with disabilities often find that their private insurance does not adequately cover the array of services that are critical to their child's well-being, such as mental health services, personal care services, durable medical equipment, special nutritional supplements, and respite care. Because Medicaid, our Nation's health care program for low-income individuals, offers the type of comprehensive care that best meets the needs of children with disabilities, it can become a lifeline on which many parents depend. Yet, Medicaid is a safety net program and one must be impoverished in order to be eligible. This presents a terrible choice for many low and middle income families who have a

child with special health care needs: they must choose between work or impoverishment. Or, in the worst cases, parents consider the devastating choice of relinquishing custody for an out-of-home placement so their child can obtain services they so desperately need.

The Family Opportunity Act helps families to address the needs of children with disabilities. Some Members of the Senate have voiced concerns over the years about the cost of this bill and the expansion of the Medicaid program. Senator Nickles and I have had many long discussions about the goals of this legislation. I greatly respect his position and I appreciate the thoughtful and productive debate that I have been able to have with him. This bill would never have gotten to this point without his help and I whole-heartedly thank him for his willingness to work through his concerns with me. The Family Opportunity Act will cover families up to 250 percent of the Federal poverty level. This is less than coverage up to 600 percent of the Federal poverty level in my original bill. Senator Nickles and I have worked over the years to reach this compromise.

At Senator Nickles request, language has been added to this bill that clearly conveys the intention of Senator Kennedy and me that States who choose the FOA optional eligibility category will receive Medicaid match and not S-CHIP match for children covered under the Family Opportunity Act. The legislation before us allows States the option of having families eligible for FOA pay up to 7.5 percent of their income for their premium. These family contributions are affordable and help to insure that children with disabilities have the access that they need.

Senator Nickles expressed to me another concern. While States will have the option to cover families above 250 percent of the Federal poverty level with 100 percent State dollars, States need to decide how they want to spend their dollars. They should also be aware that it is not the role of the Federal Government to help them when times are financially tough. Last May, the Congress provided States with $20 billion in State fiscal relief. Ten billion went directly to Medicaid to address the rising costs in Medicaid. Over 60 percent of the spending in Medicaid is for optional services. The Family Opportunity Act is an optional service, and as much as I want States to take up this Medicaid option for children with disabilities, I want to let States know that they need to be responsible when expanding their Medicaid programs in good and bad budget times.

Senator Nickles and I have reached a good and fair compromise and I thank him for traveling this long road with me. As he can tell you, the Family Opportunity Act is one of my highest priorities. Over the past 4 years, I have worked closely with Senator Kennedy and Representative Pete Sessions to advance this important legislation on behalf of thousands of families who need our help. I thank them both for their efforts along with the thousands of children and families who have been tireless advocates for this legislation.

Mr. President, I ask unanimous consent the substitute amendment at the desk be agreed to, the committee-reported substitute as amended be agreed to, the bill as amended be read a third time and passed, the motions to reconsider be laid upon the table en bloc, and that any statements be printed in the Record.

Mr. President, I am going to address issues about the Medicare discount card, and I particularly want to respond to criticism that we heard yesterday from the other side.

Listening yesterday, as I did, and then listening today to the criticism about the high price of gasoline, I have come to the conclusion that over the last several days members of the other party have a guilt complex about some of the votes they have cast in recent months. For instance, only 13 out of 49 Democrats voted to break the filibuster on the national energy policy. If we had a national energy policy, they would not have any worry about high gasoline prices.

Then, of course, all but about 12 of them voted against the drug discount card to give seniors reasonably priced prescription drugs. So they come in and trash the bill we passed in a bipartisan way. I hope they realize they made big mistakes on some of their votes last year and suck it up and move on.

In regard to what was said yesterday about Medicare, first, yesterday was a very historic day for Medicare beneficiaries in my home State of Iowa and all the other 49 States. Before then, many beneficiaries paid some of the highest prices for drugs. Now they can begin shopping for a Medicare-approved discount card that will help them pay less, a lot less.

With discounts taking effect June 1, this program will provide Medicare beneficiaries with immediate savings on their medicines until the comprehensive Medicare drug benefit begins in 2006. According to the Centers for Medicare and Medicaid Services, beneficiaries will save $4 billion to $5 billion over the next year and a half on drugs. That is not chickenfeed. That is saving a lot of money for our seniors.

Older Americans and individuals with disabilities can choose a card that gets them the lowest prices on drugs they need.

Finding the best card could not be simpler. Contrary to what one of the Senators told us yesterday about how complicated this process is, they are hoping the seniors, whom they consider their political property, will believe them that it is complicated and they will not bother to look at it because it is too complicated. Do the seniors of America need to have Democrats scare them more?

This is how simple it is: Call 1-800-MEDICARE any time, 24 hours a day. They can call their State Health Insurance Information Program, SHIP as it is called, and get counselors at the local level. Most of them are very well-trained volunteers to help seniors decide. They can go online themselves if they want to, or with a family member, to compare prices offered by different cards.

They can find low or no-cost cards that include their neighborhood pharmacies, all by making one telephone call any time in a 24-hour day to a 1-800-MEDICARE number.

Using their Medicare-approved drug discount card, beneficiaries will save at least 10 to 25 percent on the cost of their drugs.

Like the drug benefit itself, the Medicare-approved drug discount card targets assistance to those most in need. Beneficiaries with low incomes, that is less than $12,600 for an individual and $16,900 for a married couple, will qualify for a $600 credit this year, another new $600 credit next year. If there are two in the family, that is $1,200 this year and $1,200 next year. If they do not carry it all this year, it can carry over to next year. If they do not use it all up before the new insurance program for prescription drugs is put in place, they can carry it over into 2006 until it is used up.

Some people have said these cards will not offer good discounts. That is what we heard yesterday. So I did some checking. To give an example, let us take a woman enrolled in Medicare in the largest city close to my farm, in Iowa, with an income of $12,000 a year. Let us call her Helen, to be short. Helen needs to fill prescriptions for Celebrex, Norvasc, and Zocor. With no discounts, she would pay $7,297 at her local pharmacies for these drugs from June of this year until the end of 2005. Helen goes to this pharmacy because she knows and trusts this pharmacy. She does not want to order her drugs through the mail.

With a basic discount card offered by this legislation, she would save $1,213--that is 17 percent--off of her drugs. Now the $1,200 by itself is a pretty big savings, but that is like giving her the drugstore.com price at her local pharmacy.

Helen has a fixed income of $1,000 a month. This means she also qualifies for the transitional assistance and does not have to pay an enrollment fee. By applying for the card and qualifying for the $600 credit, she also learns she is eligible for other assistance programs, such as those offered by drug manufacturers. With the $600 on her card in both 2004 and 2005, combined with these additional discounts, she will save $6,894.

I will repeat that because that is very significant. She will be saving almost $6,900 off of her drug bill. That is a 95-percent savings for her.

I ask the people who were criticizing this program yesterday if they consider that chickenfeed. For someone living on a fixed income, what a relief that is going to be. About a third of her income will be freed up for other priorities.

Since enrollment began Monday, May 3, we have heard some Members come to this Chamber to criticize the drug discount card. That is a shame. The discount card program will mean real savings for beneficiaries, especially with low incomes. Seniors have been waiting a long time to get relief from high prescription drug costs. This legislation delivers that relief.

I know this is an election year, but this is not the time or the issue to play politics at their expense and to scare the seniors of America. More than 300 organizations--I wish these people on the other side of the aisle would put this in their pipe and smoke it--endorse this legislation. They will say this drug discount card is a first step toward making drugs more affordable for all Medicare beneficiaries.

The president of the National Council on Aging described the new Medicare law as the single most important opportunity to help low- income Medicare beneficiaries to have emerged in the past 35 years.

This is what the president, Robert Hayes, said:

(Low-income) people should run--not walk to sign up.

This is especially true for the estimated 4.3 million low-income beneficiaries who will see immediate relief with a combined $1,200 this year and the next which they can use to buy their lifesaving prescription drugs.

What I find alarming is that some would try to score political points rather than help low-income beneficiaries get some much needed help with their drugs. So my colleagues voted against this bill last year. Suck it up and move on.

I was personally involved in the negotiations last year. I can tell my colleagues that during the Medicare conference, both Republicans and Democrats--that is bipartisan--strongly supported the creation of a drug discount card.

While some would like people to believe otherwise, this Medicare- approved drug discount card is a good deal. Since January of this year, I have held 39 town meetings throughout Iowa to tell my constituents about this drug discount card program and what it does. As Members of Congress, we should use this opportunity to educate beneficiaries and to tell them about the $600 credit. I am concerned about a political environment that confuses and misleads Medicare beneficiaries and that in the end causes more harm than good. They deserve better than that.

I want to address a couple of criticisms that people have been making. First, some have said that prices are going to change every week. Drug card sponsors can only increase the price if there is a change in the sponsor's cost. Card sponsors can lower prices at any time, which will have a positive impact.

I have been assured that CMS will aggressively monitor the prices charged by card sponsors to make sure that they treat beneficiaries fairly.

CMS will track any changes made in drug prices and complaints received by 1-800-MEDICARE and other sources. They also will ``mystery shop'' to make sure that sponsors are not falsely advertising.

If CMS finds that a card sponsor is taking advantage of seniors, they can freeze enrollment, impose fines or kick the sponsor out of the program entirely.

Lastly, some have been saying that prices on the Medicare Web site are inaccurate. CMS has assured me that the prices are the right ones. Prices on the Web site are the best prices that the cards can guarantee. So they cannot be higher, but they could be lower.

I said this last week and I will say it again: We should move on and not lose sight of what really matters. And that is helping beneficiaries like Helen from Waterloo and the millions like her get drugs at lower prices. The bottom line is that the discount card program is a really good deal for our Nation's Medicare beneficiaries.

Mr. President, before I respond in a specific way to the amendment before us, everything Senator Graham said about Ottumwa, IA, is accurate, I believe. Obviously, when anyone in America loses a job, it is a very personal hurt to that individual, particularly if they liked their job and if they had been in that job for a long period of time, and particularly if they were older people and not looking to retrain or even spend the time and investment in retraining.

So considering those personal hurts, and not without proper regard for the economic consequences of people hurt by being laid off, it is a simple matter, not only in the United States but all over the world, that there are less jobs in manufacturing than previously. It is mostly because of the enhanced productivity in manufacturing. When people can get machines to do work that individuals do, obviously, that enhances productivity and it is done for the sole purpose of being more accurate and cutting down on the number of jobs--also, not to denigrate productivity, because productivity being enhanced is the only way in America or anyplace else in the world you are going to increase the standard of living of Americans.

When you increase productivity, people become more productive, they earn more money, and their standard of living goes up. We want that for everybody. So enhancing productivity is very basic to the increasing of the standard of living.

Now, there are fewer jobs in manufacturing today than there have ever been. But manufacturing is still a very major component of our economy. It is still around 15, 16 percent of our economy, I believe. If you go back 40 or 50 years, it was probably 20 or 21 percent of the economy. But there was a period of time when we lost 2 million jobs in manufacturing during the 1980s, and we still had manufacturing as 20 percent of the economy. So manufacturing is very important, but it is maintaining its importance with less jobs doing the work that needs to be done to manufacture whatever we want in America.

Now, several times on this issue I have quoted former Secretary of Labor Reich from the Clinton administration. He is now a professor at Harvard, I believe. He wrote on December 26 of last year in the Wall Street Journal about the problems of manufacturing and declining employment in manufacturing. Secretary Reich pointed out that, yes, America has 10-percent fewer jobs in manufacturing now than they did in the previous benchmark. But he also pointed out during that same period of time, whereas the United States lost 10 percent of their manufacturing jobs, China had lost 15 percent of their jobs in manufacturing. So you see, even though we are legitimately concerned about outsourcing of manufacturing going to China, we are also seeing China finding ways to be more efficient in their manufacturing.

It is quite obvious, if you look at this historically, that this is progress: enhancing productivity to raise wages to raise the standard of living.

This is not the era of Luddites, when people are going to go into factories and smash machinery because they think it is taking jobs away from people. If the Luddite philosophy were legitimate, we would still be making the common pin by hand.

We are producing by machine so we can enhance productivity to enhance wages to enhance the standard of living. The American people would not be satisfied today with 96 percent of the American population being on farms, as it was in 1790 when this country was a brand new country. Today about 2 percent of the people in the United States are producing the food for the

other 98 percent, and each farmer produces for 145 people. The United States exports about 40 percent of its food and farm products, because we cannot consume it domestically.

Whether it is in manufacturing or whether it is in farming, if 5 percent of the market is the American people, then we are not going to have a very high standard of living. The other 95 percent of the market are the people outside the United States of America. If we still had 96 percent of the people in America involved in farming, we would have a subsistence level of livelihood.

We have to accept the fact that every month in America, 7 million jobs go out of existence and 7 million new jobs come into existence. In that process, people are more productive, make higher wages, and have a higher standard of living, and not just for some of our people but for all of our people.

The only people in America who might not have a higher standard of living are those we have kept down, and this Congress is responsible for keeping welfare recipients down, keeping them out of mind, out of sight to the edge of society. But we established a principle of welfare reform in 1996 to move people from the edge of society in welfare to the world of work, to the mainstream of American society, because it is in the world of work where they have opportunities for enhanced productivity, for enhanced wages that will raise their standard of living. Except for welfare recipients, people in the world of work are producing more now than before to enhance their standard of living.

It seems to me that when we have 7 million jobs going out of existence 1 month and 7 million new jobs coming into existence in the same month, it says better than anything I can say about how rapidly our economy is changing, much more rapidly today than ever in the history of our country. It might even change more rapidly in the future.

For people who abhor the fact that we are losing manufacturing jobs, then you have to ask, what do we do to maintain those manufacturing jobs? The basic bill we are dealing with, the jobs and manufacturing bill, tries to do it two ways: one, to staunch the bleeding in jobs leaving manufacturing. It is enhanced now because we have a European tax on our exports to Europe so that our manufacturers cannot be competitive in Europe and, hence, people are being laid off.

That European tax on our exports is legal and started in March. We started debating this bill in March. We could have had this bill passed in March. We could have had the European tax behind us because once we pass this legislation, there is no legal basis for their putting the tax on our exports to their country.

In the same vein, the jobs a manufacturing bill will reduce the level of taxation on corporations from 35 percent down to 32 percent. One of the reasons we lose jobs in manufacturing to the global competition is that our cost to capital is very high in relationship to our global competition. So in reducing the corporate tax by 3 percent and doing it in a revenue-neutral way so it does not worsen the deficit, we have an opportunity to create jobs in manufacturing, make what jobs we have more secure, and continue to enhance the productivity of workers in America.

I hope we remember that we do have a rapidly changing society. Our people welcome an enhanced standard of living that comes from increased wages, which comes from increased productivity. And they want that to continue. That is why I am concerned about the amendment of the Senator from Florida that is before us. That is why I am going to ask my colleagues to consider my views on this amendment and, hopefully, disagree with Senator Graham and defeat the amendment and move on and get this bill passed. That 5-percent tax put on in March, increased to 6 percent in April, and it is 7 percent now in May. It is going to be 12 percent by election time. Are we going to continue to have an environment where people can be laid off?

Senator Graham may have an idea that is legitimate to discuss, but right now in the environment we are in, in which there is an increasing burden put on our exports to Europe, it seems to me we ought to forgo this discussion, which ought to come at another time when Senator Graham's amendment could fit in. We need to get this legislation passed. This legislation is a bipartisan bill. Not often do we get this bipartisan cooperation in the Senate. We ought to take it and run with it.

His amendment proposes to enact a new wage tax credit and pay for it by striking the manufacturing rate cut--that cut from 35 percent down to 32 percent about which I just spoke--and he would also strike all of the international provisions that are in this bill, international provisions to which we try to bring a more rational approach to the taxation of American business in international trade.

Evidently, the Senator from Florida believes a payroll tax credit that reduces employer contributions to the Social Security trust fund will create more jobs than a manufacturing rate cut. Payroll tax credits have long been controversial. I always thought market demand and the ability to compete in that market is what created jobs. If an employer sees an opportunity and goes after that opportunity, then they will add employees to meet demand, but I do not see how a tax credit creates market opportunity.

I thought that tax relief, tax reductions, and the lower burden imposed by having the Government as a silent business partner is what enhances a company's competitiveness, which then in turn would lead to more opportunity.

This JOBS bill before us now contains a 3-point reduction in corporate tax for manufacturing, not across the board. The chart behind me shows the corporate tax rates on manufacturing income for the European Union and for the United States. I thought this chart would be interesting for comparison since the United States and the European Union are both highly developed wage and skilled countries.

This chart shows that on average the European Union tax rate on manufacturing is 21 percent, while that in the United States is 24 percent. That is averages. So do not get that confused with the 35 down to the 32 I am talking about.

It is necessary to pass this 3-point reduction in corporate tax rates which is in this JOBS bill to keep the United States even with these European countries. So being a believer that competitiveness breeds job growth, I fail to see how a wage credit in lieu of a tax cut can produce more jobs if U.S. manufacturers remain burdened with a significantly higher rate of tax than their main competitors.

After arriving on the Senate floor, I received a copy of a ``dear colleague'' letter from Senator Graham of Florida and Senator Dayton of Minnesota. That letter says production outsourced to a foreign country qualifies for manufacturing deduction.

That is not right. Our bill does not do that. The 3-point rate cut only applies to income from U.S.-based manufacturing. It does not apply to foreign manufacturing of any type. So the fundamental premise of the Graham amendment is in error.

Senator Graham also implies contract manufacturing qualifies for the manufacturing deduction. This is not correct. We specifically rejected allowing a company to take a deduction for manufacturing that someone else does for them, regardless of whether the contract manufacturer is located in the United States or offshore.

If we allowed contract manufacturing to qualify, it would be a double dip. We were lobbied on this and we rejected that. So, again, a fundamental assumption of the amendment is in error.

The Senator from Florida also criticizes the wage limitation. This limit is there to ensure manufacturing jobs are created. If they do not grow jobs, then their manufacturing deduction is diminished. If their assembly lines are filled with robots instead of people, then the deduction is limited. So if one wants more hiring, this is the way to get it done. That is what the wage limit accomplishes.

All of the fundamentals underlying his amendment are in error. I think they are a mischaracterization of the underlying bill.

There is, however, an even more disturbing aspect of the amendment before us. Senators have heard me come to the floor many times to talk about the bipartisan development of the JOBS bill. Its construction began when Senator Baucus was chairman of the Senate Finance Committee. Senator

Baucus held hearings in July 2002 to address the FSC/ETI controversy within the World Trade Organization.

During this hearing, Senator Graham of Florida, now on the Senate floor with us, and Senator Hatch as well, expressed concern about how our international tax laws were impairing the competitiveness of U.S. companies. After some discussion on forming a blue ribbon commission to study this problem, we all decided decisive action was more important than setting up a commission.

During that hearing, Chairman Baucus formed an international tax working group that was joined by Senator Graham, Senator Hatch, and this Senator. This bipartisan Finance Committee working group formed the basis for the bill that is now before us.

There is not one provision in this JOBS bill that was not agreed to by both Republicans and Democrats, not one. But today a member of that bipartisan working group offers an amendment that would destroy this bipartisan consensus on the provisions of the JOBS bill.

Why? The JOBS bill includes the international tax simplification measures that were recommended in the Joint Committee on Taxation April 2001 report on tax simplification. There was no constituency for these simplifications. No governmental affairs representative came to our office to advocate for them.

No, the person who asked for them was the Senator from Florida. Senator Graham emphasized the desire to include these simplification measures in the bill, and we did that. The Senator from Florida preferred simplification over restructuring and wanted the emphasis of our bill to be on foreign tax credit reforms. We honored his views because that is what our bill does in the bipartisan spirit of this legislation.

That Senator expressed concern about the 90-percent foreign tax credit limit on AMT, the alternative minimum tax, and he wanted the 10- 50 basket problems solved. We did both of these things in this bill.

The Senator from Florida even sought reductions on a number of foreign tax credit baskets, but the working group decided that was too significant of an international change to be accepted by the full Senate. I hope when we vote on this amendment the Senator will back up our decision on that because this bill was reported out of committee on a bipartisan 19-to-2 vote. The Senator from Florida voted for this bill in the Finance Committee.

Today, these priorities are no longer important. To me, this is very confusing and it is quite a difficult development for me to understand.

As I have said before, we acted in the best of faith to produce a bill that protects American manufacturing jobs and ensures our companies remain the global competitors we want them to be. We did this in a fully bipartisan manner. That is what the American people expect us to do on such an important issue as manufacturing jobs and our national economic health.

As a practical matter, the only way to get a bill through this Senate is to do it in a bipartisan way. But these efforts are apparently not enough or we would not have this amendment before us.

I hope we can defeat this amendment and move on because Senator Baucus and I have a real sense of optimism that this week there is very definitely an optimistic point of view, particularly from the other side, that this legislation needs to be passed and that considering the fact we spent considerable time on it in March, and some time on it in April, and we have had these European taxes going on our exports, growing 1 percent a month. It is a bad situation.

We hope the optimism we sensed yesterday will be repeated today, and one way to help us along is to help us defeat this amendment.

I yield the floor.

I yield to the Senator from Montana whatever time he might consume. I have not asked other people on my side if they want time.

I yield whatever time the Senator may consume.

Mr. President, I suggest the absence of a quorum.

I yield the Senator from Montana whatever time he might consume.

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

Mr. President, I yield 3 minutes of my time to the Senator from Nevada and 2 minutes to the Senator from California, Mrs. Boxer.

Mr. President, I want to speak against the Dorgan amendment. I yield myself such time as I might consume. Before I speak specifically to the amendment, since I heard the Senator from North Dakota express his concerns--and legitimate concerns--about jobs going overseas, I think there might be some suggestion in this amendment that this bill doesn't deal with moving jobs overseas.

This amendment is all about preserving manufacturing jobs in America and creating more manufacturing jobs in America, because the basis for this legislation is that there is no benefit in this bill from the reduction of the corporate tax from 35 percent down to 32 percent for any organization that doesn't manufacture in the United States. So it applies to domestic manufacturers that are manufacturing in the United States, not domestic manufacturers that manufacture overseas. It also applies to companies overseas--foreign companies--that would come to the United States and invest here, create jobs here, and hire people in America to manufacture here.

There is a lot of concern expressed about moving jobs overseas. I don't denigrate any of those concerns. But that is what the debate on this legislation has been all about for 1 whole week during the month of March, a few days during April, and now again this week. During that period of time of stalling, we have had a 5-percent European tax put on our exports to Europe--a percent again in April, and now a third movement of 1 more percent. That is going to go on every month. Even if we pass this bill this very minute, this bill probably won't be signed by the President for another month or so. We are going to continue to have this terrible European tax put on our exports there.

I emphasize for listeners who ask, how can they do that? Well, it is legal under international trade agreements. The reason it is legal is because we are trying to change our tax laws to conform with our international agreements--international agreements that this body has already adopted.

So we are dealing with these amendments--probably very legitimate ones--but we have had amendments put before this bill that have kept this bill long enough on the agenda so that we are already 77 percent less competitive than we used to be with our global competition doing business in Europe.

So why are we here? We are here with this underlying piece of legislation to preserve and create more jobs in America.

We have heard the Senator from North Dakota make a very impassioned case for American workers whose jobs have been lost when U.S. plants move overseas. We have all witnessed this heart-wrenching event. I know that my home State of Iowa has had plant closings or some parts of production move overseas. Unfortunately, this amendment will not do one doggone thing to bring those jobs back. In fact, it could very well cost even more U.S. jobs.

I will explain my concerns by first examining his amendment. This amendment repeals deferral for property imported into the U.S. by foreign subsidiaries of U.S. companies, even without regard to whether that property was ever previously produced, manufactured, or grown in the United States. This means the amendment doesn't focus on their primary complaint that U.S. companies are shutting their plants, moving production offshore, and selling back into the United States.

The bill does not focus on this scenario. Instead, it overshoots the mark by hitting all goods sold into the United States by U.S. companies, even if it is impossible for those goods to first be produced in the United States.

I will give an example. If a produce company sets up a banana farm in Costa Rica to import bananas into the United States and around the world, the income from sales to the United States are not eligible for deferral. I may be mistaken, but I am not aware of too many banana farmers in Texas or Florida. So I do not see how deferring taxes on a banana farm in Costa Rica is going to cost the United States jobs.

Similarly, if a U.S. company wanted to start a mining operation in some far away land to extract a new and exotic mineral that is not found here at home, they can sell that anywhere in the world, but they could not and cannot import that back into the United States without triggering this amendment.

How about coffee? The only place I know we grow coffee in the United States is in Hawaii, and that was 25 years ago. Maybe they do not even grow it there now. We have lots of coffee shops on our streets these days. If they set up their own coffee plantation

in Brazil, they would get hit under this amendment that is before us. I do not know whether we raise coffee anywhere else in the United States, but we sure do not raise it in Iowa.

It appears the amendment of Senator Dorgan and Senator Mikulski would allow a U.S. company to sell foreign goods to anyone in the world except to America. That does not make sense to me.

I have described how the bill would operate, but I do not think that is the intent of this legislation. What I believe is intended is that deferrals should be denied if a company closes a U.S. plant, produces the goods offshore, and then imports the goods back into the United States. This does not actually happen very often. The latest Department of Commerce data on U.S. multinationals shows that only 7 percent of foreign subsidiary sales were into the United States.

Nevertheless, this amendment insists that the rule of deferral in our tax law is somehow a tax benefit that moves jobs offshore and allows a company to not pay taxes on foreign income.

Of course, this is not true. Deferral has nothing to do with moving jobs, and it never forgives taxes that are owed on foreign products of U.S. companies. The rule of deferral exists to keep U.S. companies competitive in the global marketplace. Let me repeat. The rule of deferral exists to keep U.S. companies competitive in the global marketplace, and it has been that way in our tax laws since 1918. For 85 years it has been the law.

We are going to hear a great deal about deferrals this week. We will hear wild accusations about how this rule, which has been in place since 1918, spells doom for American workers. None of this is true. In fact, just the opposite is true. By enhancing the international competitiveness of U.S. companies, deferral ensures an ever-growing base of opportunity for U.S. companies and their employees at home and abroad.

U.S. multinationals are a critical component of our economy. These companies operate in virtually every industry and have investments of more than $13 trillion in facilities located across our great country.

As employers, they provided 23 million jobs for Americans in 2001, nearly 18 percent of the payrolls in the country. With a payroll in excess of $1.1 trillion, U.S. multinationals create more than 53 percent of the manufacturing jobs in America and employ more than two U.S. employees for every foreign worker.

During the 10 years between 1991 and 2001, U.S. multinationals increased domestic employment at a faster rate than the overall economy. We have a recent study confirming that U.S. multinationals are significant job creators, and those jobs are not created through exporting jobs to foreign nations with low labor and low tax costs, as the amendment infers.

The Department of Commerce data shows that the bulk of U.S. investment abroad occurred in high-income, high-wage countries. In the year 2001, 79 percent of the foreign assets and 67 percent of foreign employment of U.S. multinationals were located in high-income, developed nations, such as Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, South Africa, and the countries of the European Union.

We have to remind ourselves that corporations are comprised of people. People like good roads, safe water, reliable power grids, and stable societies. That is the only kind of environment where business can flourish. So it is only rational that if a U.S. corporation is going to make a foreign investment, it is going to make the safest investment possible. That means going to fully developed countries with thriving markets and highly paid workers.

We also have to remember a simple maxim for why companies go into foreign markets: You have to be there to sell there.

Today, fully 95 percent of the world's population and 80 percent of the purchasing power is located outside the United States. In other words, the United States is 5 percent of the world's population. But if we want to sell, we go where the people are. Ninety-five percent of the people are outside the United States. If you want to make sales, you go where the people are.

We have an instance in which foreign sales growth has outstriped domestic sales growth. So this increased growth requires increased foreign involvement. The good news is foreign growth also results in U.S. job growth.

A recent study confirmed that during the 10 years, 1991 through 2001, for every job U.S. multinationals created abroad, they created nearly two jobs in the United States in their parent corporation. That is why it is critical to our company that U.S. companies remain competitive in this international marketplace.

Let's review for a moment a more rational explanation for deferral and how it works to keep our U.S. companies competitive.

The United States taxes all of the worldwide income of its citizens and corporations. The U.S. income tax applies to all domestic and foreign earnings of U.S. companies. The United States fully taxes income earned overseas by foreign subsidiaries of U.S. companies. However, many foreign countries tax their companies on a territorial basis, meaning they only tax income earned within their country's borders and do not impose tax on the earnings of foreign subsidiaries.

Countries that use a territorial system, such as Australia, Belgium, Canada, Denmark, Finland, France, Germany, Luxembourgian, the Netherlands, Sweden, and Switzerland, among other countries, have a great advantage over a U.S. company.

We have to take that into consideration. The tax system is the cost of operation, and if we do not have a more level playing field for our companies, how do we expect to compete in this world marketplace?

I will give an example. A U.S. company with a Singapore subsidiary will pay U.S. tax and a Singapore tax on the subsidiary's income. A French company with a Singapore subsidiary will pay Singapore tax but not any tax in Paris. That means the U.S. company in Singapore has a higher tax burden than the French company in Singapore. Two basic tax rules answer this problem and seek to put U.S. companies on a level playing field with foreign competitors from territorial countries.

The first rule says when foreign income is brought home, the U.S. allows a reduction against U.S. tax for any foreign tax paid on that income. This foreign tax credit prevents the U.S. from double-taxing foreign earnings. Does anybody believe in double taxing?

In effect, that would make our companies noncompetitive in this international marketplace. Like deferral, this too has been on the tax laws of the United States since 1918. The foreign tax credit is limited. It may only offset up to 35 percent of the U.S. corporate tax. If the foreign tax rate is higher, the credit stops where we stop taxing corporations at 25 percent. If the credit is lower, say 10 percent, then an additional U.S. tax will be owed up to the full 35 percent. In this example, the additional 25 percent of taxes would be owed to the U.S., which is the difference between the 10 percent and our 35-percent top rate.

The second basic tax rule is U.S. companies are allowed to defer U.S. tax on income from the active business operation of a foreign subsidiary until that income is brought back to the United States, and that is usually brought back in the form of a dividend paid to the U.S. parent. This is referred to as the rule of deferral, meaning the U.S. tax is deferred until the earnings are brought back. This is the rule this amendment attacks.

It is important to note deferral is not a forgiveness of a tax. It simply means we impose full U.S. tax tomorrow instead of today. We do not forgive tax under deferral because we do not want to create incentives to move operations offshore. The reason we defer tax on active business operations is so U.S. companies can remain competitive with foreign companies, from those countries that have a territorial tax system.

We do not defer tax on passive activities such as setting up an offshore bank account. We tax passive activities yearly, and active operations are subject to competitive disadvantage. For example, if we impose U.S. tax today on the profits of a Singapore subsidiary, then a U.S. company will pay 35-percent U.S. taxes plus any Singapore taxes, but the French competitor located next door will only pay the Singapore tax and not the Paris tax.

If a Singapore tax rate is less than the 35-percent U.S. tax rate, then the

French competitor will have a tax advantage. This is because the U.S. allows the foreign tax credit offset against U.S. income tax imposed on those foreign earnings but only up to a 35-percent top corporate rate.

If the foreign rate is less than the U.S. 35-percent rate, then residual U.S. taxes are owed on the difference between the U.S. and foreign rates.

In another example, if the Singapore tax is 15 percent and the U.S. tax 35 percent, then the U.S. will impose an additional 20-percent tax on those Singapore earnings. The French company, however, will only pay 15 percent Singapore tax, no tax in Paris.

If we did not allow deferral of that additional 20-percent tax, then the U.S. company today would have to pay 20-percent tax compared to the French company. The question on repealing deferral is whether we want to hand over the world markets to companies from France and Germany.

This amendment is being offered presumably to save jobs in America, but when we have a tax system like they want, there is going to be an incentive for moving those jobs. Repealing deferral means we export our high U.S. tax rates to U.S. operations around the globe.

The U.S. has one of the highest corporate tax rates in the world. There are very few countries with higher marginal corporate rates. This means without deferral, U.S. companies will be at a continual worldwide disadvantage compared to their foreign competitors. That is why we defer U.S. tax on active business operations, to allow U.S. companies to be competitive in the global marketplace.

Some Senators today propose repealing deferral or cutting back. These proposals would export the high U.S. tax rate to U.S. operations around the world. That would be fine if all companies around the world were paying the high U.S. tax rate, but they are not. Companies of foreign countries are not subject to our tax laws and are usually taxed at a lower rate.

That brings us back then to the implications of the amendment before the Senate. Our focus in considering this amendment must be on the ability of American companies to compete within the United States. The issue is not whether we tax foreign earnings currently but whether we cede the U.S. market to foreign competition: You compete or you die.

The Dorgan-Mikulski amendment will increase taxes on U.S. companies, but their foreign competitors in the United States will not face a similar tax increase. This can lead to a loss of domestic market share, or even if market share is maintained losses may be incurred on domestic sales because of pricing pressures and uncompetitive margins created by the additional tax burden.

The best measure of an economic impact of their tax increase is the very concerns Senators Dorgan and Mikulski cite in debating their amendment, whether U.S. employment levels of the U.S. companies will drop after this additional tax is imposed. This goes to the issue of whether salespeople, purchasing agents, line workers, or others could lose their jobs if the Dorgan-Mikulski tax increase is imposed on companies' imports.

Keep in mind their amendment would attack imports of bananas from Costa Rica and coffee from Brazil. That is going to cost U.S. jobs. The amendment will kill U.S. jobs and the amendment is defeating its own purpose and should not be supported in the Senate.

If the objective of Senators Dorgan and Mikulski is to ensure companies do not reduce U.S. employment by round-tripping production, then it is equally important to ensure their tax increase does not reduce U.S. employment.

Increasing taxes on U.S. companies will not bring those jobs back to America. A company will only pay taxes if the company is profitable, and they will only stay profitable if they remain competitive in their markets. But in the United States, taxes are a 35-percent cost to profit, and that is where a competitiveness disadvantage can occur when the U.S. company is competing against foreign companies that will not incur this tax increase.

Senator Baucus and I, in trying to develop this bipartisan bill that is before us, held hearings last July regarding the effects of international competition within the United States. So I think we have a right to believe we are very familiar with the domestic effects of these kinds of rate differentials.

I would like to close with a quote from Joseph Guttentag, International Tax Counsel for the Clinton administration. He gave this testimony before the Senate Finance Committee 9 years ago, July 21, 1995. He said this:

Current U.S. tax policy generally strikes a reasonable

balance between deferral and current taxation in order to

ensure that our tax laws do not interfere with the ability of

our companies to be competitive with their foreign-based

counterparts.

I hope a statement from another administration, particularly from a recent Democratic administration, the Clinton administration, will carry a lot of weight with both Republicans and Democrats in helping to defeat this amendment on which we will soon be voting.

I hope Senators will join me in voting against the job losses that will result from this amendment and this tax increase that comes on American business with this amendment.

Mr. President, I think I have about 3\1/2\ minutes. I am going to take 1\1/2\ minutes for myself, and then I hope Senator Kyl will get over here. He asked me for 2 minutes. Then that would use up our time.

The first reaction to the response to my remarks that I have that I want to clear up is that the author of the amendment speaks to the point that it only hits imports coming into the United States if a company moved overseas. The fact is--it may be a flaw in the way it is written--this amendment hits all imports coming into the United States.

The second point is, it was stated that this was not a tax increase. This amendment raises $6.5 billion. In my judgment, when you change tax law and you bring revenue in, that is a tax increase.

The second issue regarding Huffy moving overseas, the response to that is, their competition is in China and Taiwan. Companies have to do what they can to meet the competition. Would they rather have a Huffy company that existed as a U.S. corporation competing with China and Taiwan manufacturers or would they rather have the whole company go out of business? If you do not meet your competition, you do not compete you die.

Then there was reference to the fact the GAO report says 61 percent of companies did not pay taxes. That could be true. But that also includes new companies and it includes companies that maybe are dormant; in fact, it does include all of those.

Here is the significant thing about this GAO report: It says 96 percent of all large corporations in America pay tax.

We are back to the issue of what this amendment does or does not do. It does not do enough.

I have to ask the Presiding Officer if Senator Kyl does not arrive and I have 1 or 2 minutes remaining, what do I do? I want to save the time for him, if I can, under the rules of the Senate.

I yield the floor and save my time for Senator Kyl.

Mr. President, I don't have much time remaining, 2 minutes.

Could the Senator be kind enough to give him an additional minute and a half for our side? That is infinitesimal. We will argue for a minute and a half over it.

I yield Senator Kyl my remaining time.

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

Mr. President, before we move on this amendment, I ask unanimous consent that there be 4 minutes of debate equally divided prior to the vote in relation to the Allard amendment.

Mr. President, I move to table the Dorgan amendment and ask for the yeas and nays.

I move to lay that motion on the table.

Madam President, first of all, there has been a very good working relationship between the two sides on this bill. That is very encouraging. I recognize that upfront.

In regard to the list of amendments, the fact that it is very short, with time agreements, is very good news. However, in that list of amendments, there are some that are nongermane, some that are very controversial, some on our side of the aisle we do not think are appropriate to be brought up on this legislation; and also a reminder that we have only dealt with two Republican amendments at this point and we have dealt with a lot of amendments on the other side. Now, there is nothing wrong with dealing with more amendments on one side than on the other, and we have been very fair in how we have approached this.

I don't have a response to the Senator from Nevada, the distinguished Democratic assistant leader. We intend to work very closely with him to see if we can get this bill to finality. In the same way we have gotten this far this week--we have made a great deal of progress--it is because we have had a good working relationship with the Senator from Nevada and the Senator from Montana.

I cannot state an agreement at this point. I yield the floor.

Madam President, to respond to the Senator from Massachusetts, first of all, not involving me but other people that are interested--I am interested--I have asked other members to see what could be negotiated. There are talks ongoing now that range from, hopefully, we can establish a couple other amendments for votes before that. Part of that discussion is seeing if we can reach an agreement on bringing up the amendment. However, I don't have anything to report to Senator Kennedy at this point.

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

Yes, I will. Madam President, I withdraw my unanimous consent request.

Madam President, I withdraw my unanimous consent request and yield the floor.

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

Limited to speaking, and no requests or anything like that?

My request would be so modified.

Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet during the session of the Senate on Wednesday, May 5, 2004, at 2:30 p.m., in closed session to mark up the Department of Defense Authorization Act for fiscal year 2005.

Mr. President, I ask unanimous consent that the Committee on Commerce, Science, and Transportation be authorized to meet on Wednesday, May 5, 2004, at 9:30 a.m., for a closed hearing on steroids.

Mr. President, I ask unanimous consent that the Committee on Finance be authorized to meet during the session on Wednesday, May 5, 2004, at 10 a.m., in the 215 Dirksen Senate Office Building, to hear testimony on ``The Benefits of Healthy Marriage.''

Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet to conduct a hearing on Wednesday, May 5, 2004 at 10 a.m. on ``Oversight Hearing: Aiding Terrorists--An Examination of the Material Support Statute'' in the Dirksen Senate Office Building Room 226.

Witness List

Panel I: The Honorable Chris Wray, Assistant Attorney General, Criminal

Division, United States Department of Justice, Washington, DC; The Honorable Daniel Bryant, Assistant Attorney General, Office of Legal Policy, United States Department of Justice, Washington, DC; and Mr. Cary Bald, Assistant Director, Counterterrorism Division, Federal Bureau of Investigation, United States Department of Justice, Washington, DC.

Panel II: Mr. David Cole, Professor of Law, Georgetown University Law Center, Georgetown University, Washington, DC; and Mr. Paul Rosenzweig, Senior Legal Research Fellow, The Heritage Foundation, Washington, DC.

Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on May 5, 2004, at 2:30 p.m., to hold a closed hearing on intelligence matters.

Mr. President, I ask unanimous consent that the Subcommittee on Forests and Public Lands of the Committee on Energy and Natural Resources be authorized to meet during the session of the Senate on Wednesday, May 5, at 2:30 p.m.

The purpose of the hearing is to receive testimony on the following bills: S. 155, to convey to the town of Frannie, WY, certain land withdrawn by the Commissioner of Reclamation; S. 2285, to direct the Secretary of the Interior to convey a parcel of real property to Beaver County, UT; S. 1521, to direct the Secretary of the Interior to convey certain land to the Edward H. McDaniel American Legion Post No. 22 in Pahrump, NV, for the construction of a Post building and memorial park for use by the American Legion, other veterans' groups, and the local community; S. 1826, to direct the Secretary of the Interior to convey certain land in Washoe County, NV, to the Board of Regents of the University and Community College System of Nevada; S. 2085, to modify the requirements of the land conveyance to the University of Nevada at Las Vegas Research Foundation; and H.R. 1658, to amend the Railroad Right-of-Way Conveyance Validation Act to validate additional conveyances of certain lands in the State of California that form part of the right-of-way granted by the United States to facilitate the construction of the Transcontinental Railway, and for other purposes.

Mr. President, I ask unanimous consent that the Subcommittee on Personnel of the Committee on Armed Services be authorized to meet during the session of the Senate on Wednesday, May 5, 2004, at 9 a.m., in closed session to mark up the personnel programs and provisions contained in the Department of Defense Authorization Act for fiscal year 2005.

Mr. President, I ask unanimous consent that the Subcommittee on Readiness and Management Support of the Committee on Armed Services be authorized to meet during the session of the Senate on Wednesday, May 5, 2004, at 10 a.m., in closed session to mark up the readiness and management support programs and provisions contained in the Department of Defense Authorization Act for fiscal year 2005.

Mr. President, I ask unanimous consent that the Subcommittee on Science, Technology, and Space be authorized to meet on Wednesday, May 5, 2004, at 2:30 p.m., on Space Shuttle and the Future of Space Launch Vehicles.

Mr. President, I ask unanimous consent that the Subcommittee on Strategic Forces of the Committee on Armed Services be authorized to meet during the session of the Senate on Wednesday, May 5, 2004, at 11:30 a.m., in closed session to mark up the strategic forces programs and provisions contained in the Department of Defense Authorization Act for fiscal year 2005.

Mr. President, I ask unanimous consent for Jill Gotts, a legislative fellow for the Finance Committee majority staff, be granted floor privileges between now and the end of the 108th Congress.