Floor Statements

Mr. President, I rise today to honor an Iowan who has given his life in service to his country. PFC David Kirchhoff suffered heat stroke in Iraq and was evacuated to a base in Germany where he died. His wife Brooke was with him when he passed away. Private Kirchhoff is the fifth Iowan and the first member of the Iowa Army National Guard to be killed since the start of military operations in Iraq. David Kirchhoff graduated from Metro High School in Cedar Rapids, IA and lived most recently in Anamosa. In addition to his wife Brooke, David leaves

behind his parents, Larry and Nancy Kirchhoff, and two children. Nothing I can say can alleviate their sense of loss, but they remain in my thoughts and prayers. The death of a fellow Iowan brings home the incredible cost of war for me and for other Iowans. David Kirchhoff served his country honorably and was a dedicated soldier, but it is important that we remember him also as a husband, a son, a father, and a friend. Many Iowans are getting to know David Kirchhoff through news stories. We can identify with him and I know many people feel his loss whether they knew him or not. As we honor his tremendous sacrifice, we also honor his life and his memory lives on.

Mr. President, I also come before the Senate today to pay tribute to a fellow Iowan, PVT Michael J. Deutsch. On July 31, 2003, while serving our country in Operation Iraqi Freedom, Private Deutsch was killed when an explosive round hit the armored personnel vehicle in which he was riding. A 2000 graduate of Dubuque Senior High School, Michael Deutsch joined the U.S. Army in 2002. He served with the 1st Squadron, 1st Armored Cavalry Division in Budingen, Germany before being deployed to Iraq. I would like to express my deepest sympathy to his parents, Wayne and Ilene Deutsch, as well as the rest of his family, his friends, and his community during these difficult times as they cope with their loss. All of America mourns its fallen sons and daughters, yet we feel an overwhelming sense of appreciation for those who risk their lives for our sake. It's soldiers like Michael that protect our country against those who wish to steal what generations of Americans have worked so hard to maintain--our freedom.

After leaving for the Army, Michael wrote these words to his father:

When changes come we're never ready.

Always thinking of what we should have done.

But I am strong.

You have seen to that.

As I move on I carry with me that which you have given to me,

your love.

It is always a tragedy when a young life is ended prematurely, but Private Michael J. Deutsch's legacy of bravery and ultimate sacrifice is one for which we, as Americans, will forever be in his debt.

Mr. President, I rise today to state before this body that I object to proceeding to the consideration of Daniel Bryant, executive nominee to the Department of Justice. Mr. Bryant is nominated to be Assistant Attorney General, Office of Legal Policy at DOJ. I have placed a hold on this individual because I have numerous outstanding issues that have yet to be resolved by the Department of Justice. More specifically, I have several outstanding written requests before the Department of Justice. Some of these requests are more that 6 months overdue. In addition, I am presently working with the Department of Justice to overcome a number of procedural issues directly affecting my ability, as a member of the Judiciary Committee to, among other things, conduct oversight of the Department of Justice, and the Federal Bureau of Investigations.

Mr. President, I rise to say just a few words about the Senate Resolution being submitted today by Senator Lott along with the distinguished Senator from West Virginia, Senator Byrd, myself and Senator Wyden. This resolution aims to end the practice of secret holds in the Senate; an issue on which Senator Wyden and I have worked long and hard.

On May 21 of this year, I resubmitted with Senator Wyden our simple resolution to amend the Senate Rules to require Senators placing a hold to make that hold public in the Congressional Record. I was very pleased by the support and encouragement we received from Chairman Lott, who subsequently held a hearing on our resolution in the Senate Rules Committee. This was a very positive step in bringing this issue to the forefront. In fact, I was gratified by the many positive comments and expressions of interest from members of the Rules Committee in response to the testimony from myself and Senator Wyden.

Following the hearing, my staff and Senator Wyden's staff were able to engage in very productive discussions with Chairman Lott's staff and staff for Ranking Member Dodd and Senator Byrd. The product of those discussions is this resolution and I'm very pleased with the result. This resolution is a little longer and not as simple as our original resolution, but it does precisely what Senator Wyden and I have been seeking. In some ways it is even better than what we started with.

Unlike our previous resolution, this measure establishes a standing order instead of amending the Senate Rules. Some Senators are understandably nervous about making a permanent change to the Senate Rules. In fact, this order is only written for the remainder of the 108th Congress to allow Senators to see what effect this change has in practice before deciding whether to renew to requirement or make changes. Nevertheless, it's important to point out that a standing order has essentially the same force and effort in practice as a Senate Rule. Also, I'm confident based on my own experience in practicing public disclosure of holds in the Congressional Record, that Senators will find public holds don't hurt a bit. Therefore, it's my expectation that this standing order will be renewed in future congresses.

This new standing order would also spell out the exact format and content required when Senators publish notices of holds so there is no ambiguity or room for misunderstanding. Having a standard format will also make it easier in practice for Senators to submit notices of holds for the Record. It will be as simple as adding a cosponsor to a bill. Our resolution would also provide for publication in the Senate Calendars of notices of holds on legislation or nominees as well as a standard procedure for removing a Senator's name from the calendar when a hold is released.

One other change we made from our previous resolution was to allow for three session days instead of two after a hold has been placed for the public notice to be included in the Record. I want to be clear that I support immediate public disclosure of holds because I believe in the principle of open government and I can find no legitimate reason why a Senator placing a hold should remain anonymous. However, it's necessary to allow for a short window of time to permit Senators and their staff to prepare a notice and submit it for the Record. I've found that two session days has been more than adequate for myself and my staff, but not all Senators' offices are the same. Senator Byrd suggested that three session days might be more appropriate and since the practice of disclosing holds will be uncharted territory at first for most Senators, a deadline of three session days to publish holds seems reasonable.

I should add at this time that I'm very honored to have the support of Senator Byrd on this initiative. No one knows Senate procedure better or has more institutional knowledge of the Senate than Senator Byrd. Both he and Senator Lott have a unique understanding of the problem of secret holds, having both served as Senate Majority Leader. Having Senator Byrd's name on this resolution should send a strong message to the Senate that secret holds are a serious problem that should be dealt with for the good of the Senate as an institution.

I believe that this change will lead to more open dialogue and more constructive debate in the Senate. Moreover, it will make the Senate process more transparent and reduce public cynicism. I look forward to continuing to work with Senator Lott, Senator Byrd, and the rest of the Rules Committee to move this needed reform through the legislative process.

No, go ahead.

Chile-Singapore Free-Trade Agreements

Mr. President, would I be in order to speak on the Chile and Singapore free-trade agreements?

Mr. President, I rise in strong support of these two trade bills.

The Chile and Singapore trade agreements are state-of-the-art agreements that will provide real economic and strategic benefits to America's workers, farmers, consumers and industry.

S. 1416, the U.S.-Chile Free Trade Agreement Implementation Act, implements into law our first bilateral free trade agreement with a South American country. And I think it is appropriate that Chile be one of the first.

Chile's open economy is a model for much of Latin America. Because of its free market philosophy, Chile is one of the fastest growing economies in the world. Over the past decade it has established itself not only as a strong democracy, but also as a leading advocate of free trade.

Chile already has trade agreements with sixteen other countries, including Mexico, Canada, Mercosur, and the European Union. As a result, its trade with these economies has grown while the U.S. share of Chilean imports has dropped over 30 percent between 1998 and 2002. Years of delay in reaching a free trade agreement with Chile has reportedly cost U.S. companies over $1 billion in lost export potential. Clearly, it is time for us to get back in the game.

I also want to note how pleased I am about the strong agriculture market access provisions found in the U.S.-Chile FTA. More than three- quarters of U.S. farm goods exported to Chile will be duty free within 4 years of the agreement's implementation. Immediate elimination of tariffs on U.S.

products will provide up-front gains to U.S. exporters and, importantly, will level the playing field for our farmers, ranchers and workers as they compete with products from the EU and Canada. These provisions are complemented by the removal of unnecessary sanitary and phytosanitary barriers to U.S. agriculture exports.

But this agreement doesn't just benefit U.S. agriculture. It also provides groundbreaking market access across the board. The agreement will immediately eliminate tariffs on more than 85 percent of all U.S. goods, with most of the remaining tariffs eliminated within four years.

The U.S.-Chile FTA also opens new opportunities for U.S. banks, insurance, and telecommunications services. It provides new protections for U.S. investors and high levels of intellectual property rights protection. The U.S.-Chile FTA can also strengthen momentum in the ongoing negotiations to create a Free Trade Area of the Americas. In short, the agreement vastly enhances our economic opportunities in a growing and important region of the world.

S. 1417, the U.S.-Singapore Free Trade Agreement Implementation Act, implements into law our first free-trade agreement with an Asian Pacific nation. Singapore is our largest trading partner in Southeast Asia and our twelfth largest in the world. Singapore is also a strong ally in the war against terrorism.

The U.S.-Singapore FTA is good for America. It opens up new markets and creates new opportunities for many sectors of our economy.

This FTA will guarantee fair and non-discriminatory treatment for U.S. services firms. This benefits our service industries, such as banking, insurance and the telecommunication industries.

The agreement also includes state-of-the-art provisions on e- commerce, transparency and competition, and strong intellectual property rights protection. This agreement continues our goal toward greater trade liberalization and higher standards, not only in the Pacific, but throughout the world.

Both agreements we are discussing today are the first to be considered under Trade Promotion Authority, or TPA, procedures. This is the first time in our history that the Senate has approved two free trade agreements in a single day. The fact that we were able to achieve this goal is a testament not only to the high quality of these agreements, but also to the power of Trade Promotion Authority.

It was almost a year ago today that the House and Senate gave final approval to the conference report for the Trade Act of 2002. This historic piece of legislation empowered the President, for the first time in almost a decade, to negotiate free trade agreements utilizing Trade Promotion Authority procedures. Today, with the passage of these two agreements, we are using TPA to take some of our first steps toward reengaging the world through international trade. It is a welcome development.

A fundamental part of TPA procedures is consultations. The TPA act requires that the Administration consult closely with Congress throughout the negotiating process. I know the Bush administration took these consultation requirements to heart. A number of modifications to the agreements and to the implementing legislation were adopted as a result of these procedures. That is the way the process is supposed to work--a partnership between the Congressional and executive branch to craft the best trade agreements for the American people.

Like any partnership, the more you put into it, the more you get out of it. I am disappointed that some of my colleagues who did not engage on these agreements early in the process are now complaining about some of the provisions they contain. I hope we can avoid similar problems as we work on future agreements.

Without Trade Promotion Authority, the United States fell behind on trade. But now we are back on track. The goal of TPA is to knock down barriers to trade and allow U.S. companies to compete on a level playing field around the world. These two agreements achieve that goal and more. I strongly urge my colleagues to join with me today and vote to approve these two solid agreements.

Mr. President, at this time I wish to highlight a number of the ways in which we stand to benefit from the United States-Chile Free Trade Agreement and the United States-Singapore Free Trade Agreement. I have spoken previously on how our farmers will benefit from improved market access for our agricultural exports as a result of these agreements. I want to elaborate on the benefits to agriculture, particularly with respect to sanitary and phytosanitary measures. I also want to take a moment to focus on some of the other benefits of these agreements, specifically the benefits of the telecommunications, services, and intellectual property provisions in the agreements, as well as the benefits for U.S. exporters of manufactured goods. Finally, I want to clarify how the short supply mechanisms for textiles will operate in these agreements.

With respect to agriculture, the agreement with Singapore commits Singapore to maintain its current open market for the importation of farm products from the United States, while the Agreement with Chile removes numerous barriers that previously limited U.S. exports of agricultural goods to that country. Chilean tariffs on 75 percent of U.S. agricultural products will go to zero within four years. These products include soybeans, corn, pork, and beef, all of which are major Iowa commodities.

Chile is committed to removing its price band on edible vegetable oils, wheat, wheat flour, and sugar under the FTA. Chile used its price band mechanism to protect its domestic producers of these products by keeping domestic prices within a predetermined range through the use of additional duties. As recently as 2000, this price band caused effective tariffs on wheat imported into Chile to rise as high as 90 percent. With the implementation of the agreement, Chile will eliminate its price band mechanism with respect to U.S. exports over a 12 year period.

U.S. agriculture will benefit in yet other ways under the Chile agreement. For example, up until now, the failure of Chile to recognize U.S. beef grading programs effectively blocked U.S. beef in consumer cuts from entering the Chilean market. This situation will change with the implementation of the agreement, as Chile is committed to recognize the equivalency of U.S. beef grading programs.

As a result of talks held in conjunction with negotiations of the free-trade agreement, Chile agreed to remove various non-science based barriers to imports of U.S. agricultural products. Of particular interest to Iowa's hog and cattle producers, Chile agreed to recognize the equivalency of the U.S. meat inspection system. Prior to this decision, Chile prohibited the importation of pork, beef, and lamb from U.S. facilities unless those facilities paid for Chilean inspectors to travel to the United States to inspect and certify them. Given the costs involved with this process, few U.S. plants were eligible to export meat to Chile.

With Chile's new meat inspection equivalency policy, and with duties going to zero under the agreement, barriers to the entry of U.S. pork, beef, and lamb into Chile will be removed. Following further review of its sanitary and phytosanitary, SPS, measures in conjunction with talks with the United States, Chile also agreed to permit the importation of grapefruit from Florida and cherries and stonefruit from California.

Achieving the removal of unjustified SPS measures through talks with Chile demonstrates that enhancing our trade relations with other countries can indeed provide the impetus for our trading partners to remove non-science based barriers to imports of U.S. agricultural products. Our experience with Chile creates an important precedent for other trade agreements the United States is negotiating, such as the Australia FTA, the Central America FTA, and the Free Trade Area of the Americas. The fact is, without the removal of scientifically unfounded barriers to trade, duty-free treatment under future trade agreements will mean little. I'm pleased that talks with Chile led to the lifting of these unjustified SPS measures.

With respect to telecommunications, these agreements introduce an important new concept on flexibility of choice and technology neutrality. Under Article 13.14 of the agreement

with Chile, and Article 9.13 of the agreement with Singapore, Chile and Singapore will endeavor to not prevent suppliers of public telecommunications services from having the flexibility to choose the technologies that they use to supply their services, including commercial mobile wireless services. This technology neutral approach to the regulation of commercial wireless mobile services is consistent with the practices of the U.S. Federal Communications Commission, FCC, which neither promote nor impede the use of particular wireless technologies in the U.S. market.

These provisions constitute an important first step. They introduce a key regulatory concept into free trade negotiations that can help to enhance competition and consumer choice. These provisions can also create export opportunities for U.S. manufacturers of communications equipment and thereby preserve U.S. jobs that depend on trade in technology products.

However, I view these provisions as only a first step because they are non-binding commitments. As such, they should be viewed as a floor, and not a ceiling, on standards for future free trade agreements. Going forward, we should strive to negotiate binding and enforceable commitments in our free trade agreements, to ensure that suppliers of commercial mobile wireless communications services are not prevented by governmental action from using the technology of their choosing to provide such services. Only then will we guarantee that U.S. technology suppliers enjoy market opportunities and benefits similar to those that foreign suppliers receive in the U.S. market.

Services are another critical component of our economy. Services now account for 65 percent of the U.S. economy, and 28 percent of the value of our exports. With respect to services, the agreements establish an important precedent by adopting a comprehensive ``negative list'' approach, whereby any exception to the liberalization obligations contained in the agreements must be specified. This broad approach is preferable to that contained in the WTO General Agreement on Trade in Services GATS, whereby countries specify their commitments rather than exceptions. The negative list approach means more obligations for Chile and Singapore to liberalize their services exports and more jobs right here in the United States. The agreements also broaden commitments, so that they apply to government-owned or government-controlled enterprises.

With respect to intellectual property protection, these agreements generally set out among the highest standards of protection and enforcement for copyrights and other intellectual property yet to be achieved in a bilateral or multilateral trade agreement. These protections will permit the growth of trade in digital technologies and products while still protecting the legitimate rights of copyright owners. Strong enforcement provisions require the application of criminal procedures and penalties in cases of trademark counterfeiting or copyright piracy on a commercial scale, and both Chile and Singapore commit to seize, forfeit, and destroy counterfeit and pirated goods and the equipment used to produce them. These protections will apply to goods-in-transit and mandate both statutory and actual damages under Chilean and Singaporean law for intellectual property rights violations.

The agreements also incorporate a principle of ``first in time, first in right'' to trademarks, whereby the first to file for a trademark is granted the exclusive right to that name, phrase, or geographical place name. This approach creates an important precedent that we should seek to replicate regionally and globally, particularly in the face of efforts by the European Union to unduly expand protections for geographical indications in the WTO.

With respect to manufactured goods, Chile's commitment to eliminate tariffs immediately on 85 percent of U.S. exports, including such key sectors as computers and other information technology products, provides immediate benefits to U.S. manufacturers. By entering into this agreement, Chile will embrace the duty reduction commitments reflected in the 1996 Information Technology Agreement. These commitments can create new export opportunities for our manufacturers, which is critical in this period of increasing unemployment.

The National Association of Manufacturers has estimated that the absence of a free trade agreement with Chile has cost us about 20,000 job opportunities annually, and over $1 billion dollars in export potential. Well, that's about to change with the implementation of this agreement. And that is just the start. We need to aggressively pursue additional free trade agreements that will expand market access opportunities for our farmers and our manufacturers, to help add jobs to our economy and reverse the current trend in unemployment.

Finally, I note that the Finance Committee has received inquiries regarding the textile commercial availability provisions in the Chile and Singapore Agreements. I asked the Office of the United States Trade Representative to clarify the operation of the short supply provisions in these agreements, and I want to share that clarification today.

All products designated as not commerically available prior to November 2002 under the African Growth and Opportunity Act, AGOA, and Caribbean Basin Trade Partnership Act, CBTPA, preference programs would be deemed as not commercially available under the Singapore agreement. The Chile agreement does not incorporate such a provision. In the future, for both the Chile and Singapore agreements, to designate an item as not commerically available would require consultations under the provisions for revision of the rules of origin contained in each agreement. These provisions require the parties to consult, upon request, to consider whether particular goods should be subject to different rules of origin to address issues of availability of the supply for fibers, yarns, or fabrics in the free trade area, and require the parties to endeavor to conclude their consultations within 60 days. I hope that this clarification proves helpful.

In sum, I strongly support the Chile and Singapore free-trade agreements. I support them because they open markets for U.S. exports of agricultural products and manufactured goods. I support them because they open markets for U.S. exports of a wide array of services. I support them because they will create opportunities for job growth here in the United States. I support them because they enhance protections for intellectual property rights holders here in the United States. And I support them because they establish important precedents for future negotiations. For these reasons, I urge each of my colleagues to support the implementing bills before us today.

Mr. President, I rise to address the benefits to U.S. agriculture from the United States-Chile Free-Trade Agreement. U.S. agriculture needs trade agreements to expand sales and farm incomes. Since 96 percent of the world's population resides outside the United States, access to foreign markets is essential for the continued growth and viability of U.S. agriculture. Bilateral agreements such as the Chile FTA are essential because they provide strong benefits to U.S. farmers.

This agreement will provide America's farmers and ranchers new access to Chile's market of 15 million consumers. This agreement is comprehensive, calling for eventual duty-free, quota-free access for all products.

On tariffs, more than three-quarters of U.S. farm goods exported to Chile will be duty free within 4 years of the agreement's implementation. Let me just name some of the specific U.S. products that will benefit. Under the FTA, Chile will provide immediate duty- free access for soybeans and pork, two major Iowa products. Chile will also immediately eliminate its tariffs on U.S. apples, pears, cherries, breakfast cereals, pasta, and bread. Corn grown in Iowa and other States will receive duty-free treatment in 2 years. The agreement provides for duty-free access for beef offal immediately, and for all U.S. beef products within 4 years.

Under the FTA, Chile commits to recognize U.S. beef grading programs. I should note as well that, through talks held in conjunction with the FTA negotiations, Chile agreed to recognize the equivalency of the U.S. meat inspection system. Chile's recognition of the equivalency of U.S. meat inspections

and U.S. beef grading should greatly facilitate the export of U.S. pork and beef to Chile.

Chile's price band mechanism has been a major concern to many U.S. agricultural exporters. Well, under this agreement Chile will not only allow U.S. exports of durum wheat and pasta to enter duty free, but will also eliminate its price band mechanism for common wheat and flour in 12 years. This will open Chile's market to U.S. exporters for wheat and wheat flour.

American agriculture recognizes a good deal when it sees one. Let me read an excerpt from a July 9 letter from 32 agriculture organizations:

Mr. Majority Leader, the undersigned organizations urge

your support and vote for the Free Trade Agreement with

Chile. The U.S.-Chile FTA, provides new market opportunities

for U.S. agriculture products and resolution to outstanding

trade concerns that U.S. producers have experienced with

Chile.

And the letter is signed by such groups as the American Farm Bureau, the American Soybean Association, the National Corn Growers Association, the National Pork Producers Council, and many, many others.

This is a strong agreement for American agriculture. It sets a new standard for what we can achieve for American agriculture in a free- trade agreement. I urge my colleagues to do the right thing for American agriculture and support this strong trade agreement.

I yield the floor.

Mr. President, last night, Senator Baucus and I, along with Chairman Domenici and Senator Bingaman introduced the Energy Tax Incentives Act of 2003 as an amendment to the underlying energy bill. We also submitted an amendment that contains technical and conforming modifications to the Finance Committee reported amendment. Those amendments are numbered 1424 and 1431 and are printed in the Record of Wednesday, July 30, 2003. These important tax initiatives were developed after several months of consultation between our Committee members, and voted out of the Finance Committee as a bipartisan product. In my estimation, the Energy Tax Incentives Act reflects a fair balance of the interests of the members and effectively supports the development of energy production from renewable and environmentally beneficial sources.

I would like to briefly describe that amendment before I talk about the tax incentives part of the energy bill.

For years, I have worked to decrease our reliance on foreign sources of energy and accelerate and diversify domestic energy production. I believe public policy ought to promote renewable domestic production that uses renewable energy and fosters economic development.

Specifically, the development of alternative energy sources should alleviate domestic energy shortages and insulate the United States from the Middle East dominated oil supply. In addition, the development of renewable energy resources conserves existing natural resources and protects the environment. Finally, alternative energy development provides economic benefits to farmers, ranchers and forest land owners, such as those in Iowa who have launched efforts to diversify the state's economy and to find creative ways to extract a greater return from abundant natural resources.

Section 45 of the Internal Revenue Code currently provides a production tax credit for electricity produced from renewable sources including wind, closed-loop biomass, and poultry waste. The Energy Tax Incentives Act extends the section 45 credit and expands the sources of electricity to include biomass, including agricultural waste nutrients, geothermal wells and solar energy.

I have been a constant advocate of alternative energy sources. Since the inception almost ten years ago of the wind energy tax credit, nearly 4,300 megawatts of generating capacity have been installed across the country. Forty percent of that capacity was added during 2001, a year in which wind energy installations increased 3000% over the prior year--the most new wind capacity ever installed in the United States. Wind farms installed last year produce enough electricity to power almost half a million average American households per year, demonstrating the significant capacity of wind. In addition, wind represents an affordable and inexhaustible source of domestically produced energy. Extending the wind energy tax credit until 2007 would support the tremendous continued development of this clean, renewable energy source.

The Finance Committee's amendment supports a maturing green energy source. Experts have established wind energy's valuable contributions to maintaining cleaner air and a cleaner environment. Every 10,000 megawatts of wind energy produced in the United States can reduce carbon monoxide emissions by 33 million metric tons by replacing the combustion of fossil fuels.

In addition, this proposal helps to empower our rural communities to reap continued economic benefits. The installation of wind turbines has a stimulative economic effect because it requires significant capital investment which results in the creation of jobs and the injection of capital into often rural economic areas. The wind industry now estimates that nearly $2 billion in employment and economic development will be added this year alone in the presence of the prompt extension of the credit through January 1, 2007

In addition, for each wind turbine, a farmer or rancher can receive more than $2,000 per year for 20 years in direct lease payments. Iowa's major wind farms currently pay more than $640,000 per year to land owners, and the development of 1,000 megawatts of capacity in California, for example, would result in annual payments of approximately $2 million to farm and forest landowners in that state.

As many of my colleagues know, I authored the section 45 tax credit included in the Energy Policy Act of 1992 which provided a tax credit for the production of energy from closed loop biomass.

This term refers to biomass produced specifically for energy production. An example is switchgrass grown in my home state of Iowa. To sustain many of the benefits derived from the production of biomass energy, we extend the existing credit and expand the provision to additional new sources of biomass energy production.

Environmentally-friendly biomass energy production is a proven, effective technology that generates numerous waste management public benefits across the country.

Moreover, the amendment expands the biomass definition to cover open loop biomass. Open loop biomass, includes organic, non-hazardous materials such as saw dust, tree trimmings, agricultural byproducts and untreated construction debris.

The development of a local industry to convert biomass to electricity has the potential to produce enormous economic benefits and electricity security for rural America.

In addition, studies show that biomass crops could produce between $2 and $5 billion in additional farm income for American farmers. As an example, over 450 tons of turkey and chicken litter are under contract to be sold for an electricity plant using poultry litter being built in Minnesota. This is a win-win, not only do the farmers not have to pay to dispose of this stuff, they get paid to sell the litter.

Finally, marginal farmland incapable of sustaining traditional yearly production is often capable of generating native grasses and organic materials that are ideal for biomass energy production. Turning tree trimmings and native grasses into energy provides an economic gain and serves an important public interest.

I am very proud of a long history of supporting new alternative energy concepts in the production of electricity. This amendment continues and expands that commitment. As discussed previously, section 45 provides a production tax credit for electricity produced from renewable sources including wind, closed-loop biomass, and poultry waste. The amendment modifies section 45 to include electricity generated from swine and bovine waste nutrient. This is a great example of how the agriculture and energy industries can come together to develop an environmentally-friendly renewable resource.

By using animal waste as an energy source, an American livestock producer can reduce or eliminate monthly energy purchases from electric and gas suppliers and provide excess energy for distribution to other members of the community. By way of example, in January 2001, an 850- cow dairy operation near Princeton, MN generated enough electricity to run its entire dairy farm and to sell $4,400 worth of excess power to the local electric provider--enough to power 78 homes during the coldest month of the year. In addition, a 5,000-hog farm, has potential to generate approximately 650,000 kilowatts of electricity--an amount equal to the consumption of 76 average American homes.

The swine and bovine proposal is truly Green electricity, as it also furthers environmental objectives. Specifically, anaerobic digestion of manure improves air quality because it eliminates of as much as 90 percent of the odor from feedlots and improves soil and water quality by dramatically reducing problems with waste run-off. Maximizing farm resources in such a manner may prove essential to remain competitive in today's livestock market. In addition, the technology used to create the electricity results in the production of a fertilizer product that is of a higher quality than unprocessed animal waste.

The Energy Tax Incentives Act is important to agriculture, rural economy and small business, it is also important for domestic supply and energy independence.

Rural America can play an important part in energy independence and domestic supply. In addition to the production of electricity, this amendment includes additional tax incentives for the production of alternative fuels from renewable resources.

A small producers credit for the production of ethanol has been included to clarify that farmers cooperatives producing ethanol will be able to pass that tax incentive through to their farmer members. And we have a new incentive for the production of biodiesel. Biodiesel is a natural substitute for diesel fuel and can be made from almost all vegetable oils and animal fats. Modern science is allowing us to slowly substitute natural renewable agricultural sources for traditional petroleum. It gives us choices for the future and it can relieve the strain on the domestic oil production to fulfill those important needs that agricultural products cannot serve.

Let me point out that the Finance Committee amendment contains provisions that enhance the tax incentives for ethanol production. Ethanol is a clean burning fuel that will continue to be a key element in our transportation fuels policy. We reshaped the ethanol excise tax exemption. Under the Finance Committee change, ethanol-blended fuels will make the same contribution to the highway trust fund as regular gasoline while also retaining an important incentive to promote the use of domestic, renewable fuels.

It makes common sense for ethanol taxes to contribute just as much to building highways as traditional gasoline taxes. It isn't logical for a smaller portion of ethanol taxes to contribute to highways than the taxes from traditional gasoline. All types of vehicle fuel taxes should contribute equally to highway construction and maintenance.

Our highway needs are great. Our dependence on imported fuel should decrease. This restructuring of ethanol excise taxes contributes to both of those priorities. At the same time, it preserves all incentives to use the clean-burning, renewable, domestically produced ethanol, the fuel of the future.

Renewable fuels like ethanol and biodiesel will improve air quality, strengthen national security, reduce the trade deficit, decrease dependence on the Middle East for oil, and expand markets for agricultural products.

The Energy Tax Incentives Act amendment is a balanced package. I would like to note, with some satisfaction, that today we have the opportunity to do the people's business in the way they want us to do business. This Energy Tax Incentive amendment was crafted in a bipartisan way on an important initiative in a way that reflects the diversity of our views and the diversity of our nation. In this wartime climate, this is what the people want.

I have only taken a few minutes to review a portion of the amendment. The electricity tax credits and the alternative fuel incentives in the amendment are good for agriculture, good for the environment, good for energy consumers and good for national security interests. But this entire tax incentive amendment is equally important to a sound energy policy and I hope that my colleagues will join with me to advance these important legislative objectives.

Let me turn to the peculiar procedural situation that we find ourselves in. I want to enter conference with a clear understanding of the bipartisan intent of the Senate.

Today, the Senate will pass the text of last year's energy bill. Read literally, the unanimous consent agreement, states that the text of last year's Finance Committee amendment, which was adopted unanimously at the time, passes the Senate.

Folks in my home state of Iowa or my friend, Senator Baucus' home State of Montana, might reasonably ask a question. That question would be if you have improved the Finance Committee amendment from last year's bill, why not last year's tax title with this year's tax title? That's a good question. That was my position and that of Senator Baucus.

From a technical standpoint, you'd have to scratch your head, looking at effective dates for a bill that is now over a year old. There are other details in the official Senate-passed bill that will appear odd simply because the text has not been updated in over a year.

The answer to the question is simple. The answer is that this procedural agreement would not hold together unless last year's bill text stayed exactly the same. That reflects the agreement of the leaders on both sides. It has nothing to do with the substance of this year's Finance Committee amendment which is non-controversial. It has to do with the all or nothing, simplistic nature of the offer made by Senators Daschle and Reid. The problem is that, if tax matters are opened up, no matter how non-controversial, then other matters would be open. In that situation, then the agreement of the leaders could not be consummated expeditiously.

Our majority leader, Senator Frist, assured me that the position of the Senate Republican Caucus would be this year's Finance Committee amendment. As the senior Finance Committee conferee, let me assure the Senate, that will be our conference position. Just as importantly, let me make sure the other body understands the letter and spirit of our position. Let me repeat that, loudly and clearly.

The Senate position for conference purposes will be this year's Finance Committee amendment. Everyone here knows, that in regular order, this year's Finance Committee would have been adopted by the Senate. That is the substantive position and the intellectually honest position. I expect my House counterparts to recognize and respect that intellectually honest position.

Before I finish I would like to comment on a few tax incentive proposals I intended to offer to the Finance Committee amendment. Because of the procedural situation we are in, these matters will not be in the Senate-passed bill. That is unfortunate, but, if we are to get a bill out of the Senate, these proposals became casualties for the cause.

The first proposal deals with dividend allocation rules for cooperatives. This proposal would allow the payments of dividends on the stock of cooperatives without reducing patronage dividends. This measure is very important for energy production and agriculture and, I expect, would have easily cleared the Senate.

The second proposal deals with an expansion of the qualified zone academy bond program to cover certain ``green'' teaching facilities recognized by the Department of Energy. This is an important matter for one such facility in my home State of Iowa. Like the first proposal, I expect this provision would have easily cleared the Senate.

The third proposal deals with publicly-traded partnerships. This proposal would permit mutual funds to acquire interests in publicly- traded partnerships. Publicly-traded partnerships are a key source of financing for energy production projects such as pipelines.

I regret the procedural situation we find ourselves in. Unfortunately, these important priorities will not be directly addressed in the Senate bill. I intend to raise them in conference in the spirit of this bill. If not successful, I will pursue them on future tax vehicles.

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 started 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.

labor law colloquy

As my friend from Montana pointed out, I am pleased that the tax title of the pending energy conference report includes several such incentives on which we have dedicated much effort and attention. Fuel cell power plants represent a promising means for providing electricity that is generated in environmentally friendly means and from nonconventional sources. They also provide important load-leveling capabilities that will reduce the stress and reliance on our Nation's electricity grid. I am pleased to assure my friend from Montana that I will work to make sure that rechargeable fuel cell power plants, such as those he described, would be eligible for this tax credit.

Mr. President, today the Senate passed the United States-Chile and the United States-Singapore Free Trade Agreement Implementation Acts. This is the first time in our history that the Senate has approved two free trade agreements in a single day. The fact that we were able to achieve this goal is a testament not only to the high quality of these agreements, but also to the power of Trade Promotion Authority.

It was almost a year ago today that the House and Senate gave final approval to the conference report for the Trade Act of 2002. This historic piece of legislation empowered the President, for the first time in almost a decade, to negotiate free trade agreements utilizing Trade Promotion Authority procedures. Today, with the passage of these two agreements, we are using TPA to take some of our first steps toward re-engaging the world through international trade. It is a welcome development.

International trade has long been one of the most important foreign policy and economic tools in our Nation's arsenal. It was a key component of our post-World War II international economic strategy. For over 50 years international trade contributed to stability and economic growth throughout the world. It helped to lift the nations of Europe and Asia out of the ashes of World War II. And it helped America experience unprecedented prosperity here at home.

International trade can play a similar role at the beginning of the twenty-first century. That is part of what Trade Promotion Authority is all about. Trade Promotion Authority represents a partnership between the executive and legislative branches of government. It provides the President with Congressional support so he can negotiate the best trade agreements for America's workers. It provides certainty to our trading partners that any agreement reached will get timely consideration and will not be ripped apart by the U.S. Congress. In exchange for the authority to negotiate, Congress requires intense consultation and notification procedures. It provides a legislative check on the President's ability to negotiate. And it provides greater certainty to Congress that its intent is being followed. The success of these procedures can be seen by the strong support these two agreements enjoy today.

With our votes today we are locking in two strong trade agreements with our two strongest international trade allies, Chile and Singapore. With the passage of these agreements, we send a strong message to the world that the United States is back in the game.

These bills would not have been possible without the able assistance of many people. First, I want to acknowledge the leadership of President George W. Bush and our United States Trade Representative, Ambassador Robert Zoellick. Their stalwart commitment to expanding export opportunities for America's farmers and workers was a major factor in passing Trade Promotion Authority last year and in concluding these two agreements.

I would also like to take a moment to thank some of those individuals in the Senate who helped to make this historic day possible. First, I want to thank my colleagues on the Finance Committee, especially the Ranking Member, Mr. Baucus. Working together, we demonstrated that international trade is not a Republican or a Democratic issue, but rather an issue that works for all Americans.

Next, I would like to thank my Finance Committee staff who has worked hard over the summer to get the implementing bills drafted and the materials ready so that we could consider these agreements before the August recess. It was no easy task, and I appreciate their hard work and dedication.

First and foremost, I want to thank my Chief Counsel and Staff Director, Kolan Davis, whose ability to manage multiple legislative priorities is a key factor to the success of the Finance Committee's work. I also would like to thank my Chief International Trade Counsel, Everett Eissenstat, who successfully coordinated the efforts of the Finance Committee trade staff to enable us to move this legislation quickly. I also want to recognize the rest of my trade team, Carrie Clark, Zach Paulsen, David Johanson, Nova Daly, Stephen Schaefer and Cathy

McKinnell. This group sacrificed many long hours to bring these agreements to fruition. Without their hard work and dedication, our success today would not have been possible.

Mr. Baucus had a good staff helping him as well and I would like to take a moment and thank them for their efforts. I thank Senator Baucus' Staff Director, Jeff Forbes, and General Counsel, William Dauster. I also appreciate the work of his trade staff led by the Chief International Trade Counsel, Tim Punke, along with Shara Aranoff, John Gilliland, Brian Pomper and Lara Birkes.

A sincere thank you also must be given to Polly Craighill from the office of the Senate Legislative Counsel, for her patience and expertise in drafting this legislation. She is truly a valued part of this institution, and her knowledge of the law and devotion to task is without equal.

We can all be proud of today's accomplishments. I look forward to President Bush signing these two bills into law.

Mr. President, on July 10, the Senate passed an amendment to S. 925, the Foreign Relations Authorization Act, to authorize $100 million for rural development programs in Mexico. This amendment authorizes funding for programs to promote microcredit lending, to promote small business and entrepreneurial development, to aid small farms impacted by the collapse of coffee prices,

and to strengthen private property ownership in rural communities.

I understand why Senator Reid offered this amendment. Mexico is important to the United States, and it deserves our attention. But I voted against this amendment. Let me explain why.

A better way to improve Mexico's economy, including its rural economy, is not through foreign assistance from the United States, but through trade. As recently noted by the Ambassador of Mexico to the United States, Mexico has been transformed in recent years through trade liberalization, and in particular through the NAFTA.

Mexico's exports to the world grew from $50 billion to $160 billion between 1993 and 2001. Total trade between the United States and Mexico increased from $88 billion to $250 billion between 1993 and 2002.

Mexico's agricultural producers have shared in the benefits of NAFTA. Between 1993 and 2001, Mexican agricultural exports to the United States rose by almost 97 percent. Some 78 percent of all Mexican agricultural exports are shipped to the United States, and the United States is by far Mexico's largest agricultural export destination.

While well intentioned, increased foreign aid from the United States, such as through Senator Reid's amendment, will make little difference to the Mexican economy. Clearly, Mexico's leaders recognize that the best means of achieving a healthier Mexican economy, including Mexico's rural economy, is through continued strong trade ties with the United States.

Regardless, some of these same leaders seem to be losing interest in maintaining strong trade relations between our countries. They are doing this by attempting unilaterally to renegotiate agricultural provisions of the NAFTA.

Mexico has imposed, or threatened to impose, restrictions on the importation of a variety of U.S. agricultural products. These products include pork, beef, corn, and high fructose corn syrup, all of which are major Iowa commodities. I spoke on this situation just last month on the Senate floor, so I will not go into the specifics on Mexico's trade restrictions on these commodities.

Given barriers imposed by Mexico on U.S. agricultural products, now is clearly not the proper time to increase foreign aid to Mexico. Mexico's trade policies are harming farmers in Iowa and other states. Providing more foreign aid to Mexico sends the wrong signal. I realize that Senator Reid's amendment to increase foreign aid has already passed the Senate. But until such time as Mexico's agricultural trade barriers are removed, I urge Senators to keep them in mind when voting on any future legislation involving foreign aid for Mexico.

At the same time, I hope that Mexico will realize that by not abiding by its NAFTA commitments, and by thus threatening its trade relations with the United States, it is doing little to improve the lives of rural Mexicans.

In fact, any reduction in trade between our two countries would likely lead to increased economic hardship in Mexico. Such a situation would benefit neither Mexico nor the United States.

Once again, as I did last month, I urge officials in Mexico to consider the effects that Mexico's barriers to imports of U.S. agricultural products are having on overall trade relations between the United States and Mexico. Mexicans, including those living in rural areas, have much more to gain from closer economic ties to the United States than from increased foreign aid.

Mr. President, as Members of the this Senate are well aware, I have worked for many years on the development of renewable fuels in the marketplace. Twenty-five years ago we created an alcohol fuels tax incentive to promote the use of ethanol. Today, I am introducing legislation that will simplify the excise tax collection system for all transportation and renewable fuels.

This legislation reforms the alcohol fuels tax credit and creates a new ``Volumetric Ethanol Excise Tax Credit'' (VEETC). In addition to streamlining the alcohol fuels tax credit, this legislation creates a new tax credit for biodiesel.

Under the VEETC we accomplish three objectives: First, improve the tax collection system for renewable fuels; second, increase the revenue source for the Highway Trust Fund.

This is because the full amount of user excise taxes levied will be collected and remitted to the Highway Trust Fund (HTF). In simplifying the tax collection system, all user excise taxes levied on both gasoline and ethanol blended fuels would be collected at 18.4 cents per gallon; and all excise taxes levied on diesel and biodiesel blended fuels would be collected at 24.4 cents per gallon.

On average, the proposal would generate more than $2 billion per year in additional HTF revenue, which would improve the ability of the federal government to address the nation's transportation infrastructure needs; and third, we will enhance the delivery of renewable fuels in the marketplace.

The federal government's tax collection system will work in concert with the petroleum industry's and independent terminal's fuel delivery system.

The Grassley/Baucus amendment provides tremendous new flexibility to gasoline refiners, marketers, and ethanol producers.

It eliminates the restrictive blend levels, 5.7 percent, 7.7 percent and 10 percent dictated by the Tax Code to reflect obsolete Clean Air Act requirements, providing significant flexibility to oil companies to blend as much or as little ethanol or biodiesel to meet their octane or volume needs.

It streamlines the tax collection system to avoid the potential for fraud while accelerating the refund mechanism.

It provides new market opportunities for ethanol and biodiesel in off-road uses, E-85 and ETBE, and, of course, it resolves a longstanding issue with regard to the Highway Trust Fund.

The ``Volumetric Ethanol Excise Tax Credit Act of 2003'' is a forward-thinking piece of legislation that deserves universal support and it will address a number of tax issues that have created roadblocks for the renewable industry for a number of years.

Specifically, the tax amendment will do the following: eliminate the negative impact of the ethanol tax incentive on the Highway Trust Fund; eliminate the waste, fraud and abuse of the excise tax collection system, which means that 18.4 cents per gallon of each gallon of ethanol-blend fuel will be remitted to the U.S. Treasury; streamline the delivery of renewable fuels to petroleum blenders at the terminal rack because fuel mixtures will not be based on the Clean Air Act requirements of 5.7, 7.7 or 10 percent blends--the tax credit is allowed for any blend of ethanol and gasoline; streamline the tax refund system for below the rack blenders to allow a tax refund of 52 cents per gallon on each gallon of ethanol blended with gasoline to be paid within 20 days of blending gasoline with ethanol; Eliminate the need of the alcohol fuels income tax credit that is subject to the alternative minimum tax; any taxpayer eligible for the alcohol fuels tax credit will be able to use the volume ethanol excise tax credit system, which means they will be able to file for a refund for every gallon of ethanol used in the marketplace without regard to the income of the taxpayer or whether the ethanol is used in a taxed fuel or tax exempt fuel.

Create a new tax credit for biodiesel--$1.00 per gallon for biodiesel made from virgin oils derived from agricultural products and animal fats; and $.50 per gallon for biodiesel made from agricultural products and animal fats.

Allow the credit to be claimed in both taxable and nontaxable markets; tax exempt fleet fuel programs; off road diesel markets (died diesel).

Streamline the use of biodiesel at the terminal rack--the tax structure and credit will encourage petroleum blenders to blend biodiesel as far upstream as possible, which under the RFS and Minnesota's 2 percent volume requirement will allow more biodiesel to be used in the marketplace.

Streamline the tax refund system for below the rack blenders to allow a tax refund of the biodiesel tax credit on each gallon of biodiesel blended with diesel, dyed and undyed, to be paid within 20 days of blending.

The alternative minimum tax (AMT) will not be an issue for biodiesel; any taxpayer eligible for the biodiesel tax credit will be able use the volume biodiesel excise tax credit system, which means they will be able to file for a refund for every gallon of biodiesel used in the marketplace regard to the income of the taxpayer or whether the ethanol is used in a taxed fuel or tax exempt fuel.

No affect on the Highway Trust Fund--the biodiesel tax credit will be paid for out of the ``General fund'' not the ``Highway Trust Fund.''

Eliminate the E85 AMT issue: any taxpayer eligible for the alcohol fuels tax credit will be able use the volume ethanol excise tax credit system, which means they will be able to file for a refund for every gallon of ethanol used in the marketplace without regard to the income of the taxpayer or whether the ethanol is used in a taxed fuel or tax exempt fuel.

Allow the alcohol fuels tax credit to be claimed in both taxable and nontaxable markets;

Streamline the tax refund system for below the rack blenders to allow a tax refund of the alcohol fuels credit on each gallon of ethanol blended with gasoline to be paid within 20 days of blending.

I feel strongly about the legislation because it eliminates the tax infrastructure, and fuel delivery impediments that have been problematic throughout the history of the renewable duels industry and encourage you to join us in working to enact this legislation during this Congress.

Mr. President, as Members of the this Senate are well aware, I have worked for many years on the development of renewable fuels in the marketplace. Twenty-five years ago we created an alcohol fuels tax incentive to promote the use of ethanol. Today, I am introducing legislation that will simplify the excise tax collection system for all transportation and renewable fuels.

This legislation reforms the alcohol fuels tax credit and creates a new ``Volumetric Ethanol Excise Tax Credit'' (VEETC). In addition to streamlining the alcohol fuels tax credit, this legislation creates a new tax credit for biodiesel.

Under the VEETC we accomplish three objectives: First, improve the tax collection system for renewable fuels; second, increase the revenue source for the Highway Trust Fund.

This is because the full amount of user excise taxes levied will be collected and remitted to the Highway Trust Fund (HTF). In simplifying the tax collection system, all user excise taxes levied on both gasoline and ethanol blended fuels would be collected at 18.4 cents per gallon; and all excise taxes levied on diesel and biodiesel blended fuels would be collected at 24.4 cents per gallon.

On average, the proposal would generate more than $2 billion per year in additional HTF revenue, which would improve the ability of the federal government to address the nation's transportation infrastructure needs; and third, we will enhance the delivery of renewable fuels in the marketplace.

The federal government's tax collection system will work in concert with the petroleum industry's and independent terminal's fuel delivery system.

The Grassley/Baucus amendment provides tremendous new flexibility to gasoline refiners, marketers, and ethanol producers.

It eliminates the restrictive blend levels, 5.7 percent, 7.7 percent and 10 percent dictated by the Tax Code to reflect obsolete Clean Air Act requirements, providing significant flexibility to oil companies to blend as much or as little ethanol or biodiesel to meet their octane or volume needs.

It streamlines the tax collection system to avoid the potential for fraud while accelerating the refund mechanism.

It provides new market opportunities for ethanol and biodiesel in off-road uses, E-85 and ETBE, and, of course, it resolves a longstanding issue with regard to the Highway Trust Fund.

The ``Volumetric Ethanol Excise Tax Credit Act of 2003'' is a forward-thinking piece of legislation that deserves universal support and it will address a number of tax issues that have created roadblocks for the renewable industry for a number of years.

Specifically, the tax amendment will do the following: eliminate the negative impact of the ethanol tax incentive on the Highway Trust Fund; eliminate the waste, fraud and abuse of the excise tax collection system, which means that 18.4 cents per gallon of each gallon of ethanol-blend fuel will be remitted to the U.S. Treasury; streamline the delivery of renewable fuels to petroleum blenders at the terminal rack because fuel mixtures will not be based on the Clean Air Act requirements of 5.7, 7.7 or 10 percent blends--the tax credit is allowed for any blend of ethanol and gasoline; streamline the tax refund system for below the rack blenders to allow a tax refund of 52 cents per gallon on each gallon of ethanol blended with gasoline to be paid within 20 days of blending gasoline with ethanol; Eliminate the need of the alcohol fuels income tax credit that is subject to the alternative minimum tax; any taxpayer eligible for the alcohol fuels tax credit will be able to use the volume ethanol excise tax credit system, which means they will be able to file for a refund for every gallon of ethanol used in the marketplace without regard to the income of the taxpayer or whether the ethanol is used in a taxed fuel or tax exempt fuel.

Create a new tax credit for biodiesel--$1.00 per gallon for biodiesel made from virgin oils derived from agricultural products and animal fats; and $.50 per gallon for biodiesel made from agricultural products and animal fats.

Allow the credit to be claimed in both taxable and nontaxable markets; tax exempt fleet fuel programs; off road diesel markets (died diesel).

Streamline the use of biodiesel at the terminal rack--the tax structure and credit will encourage petroleum blenders to blend biodiesel as far upstream as possible, which under the RFS and Minnesota's 2 percent volume requirement will allow more biodiesel to be used in the marketplace.

Streamline the tax refund system for below the rack blenders to allow a tax refund of the biodiesel tax credit on each gallon of biodiesel blended with diesel, dyed and undyed, to be paid within 20 days of blending.

The alternative minimum tax (AMT) will not be an issue for biodiesel; any taxpayer eligible for the biodiesel tax credit will be able use the volume biodiesel excise tax credit system, which means they will be able to file for a refund for every gallon of biodiesel used in the marketplace regard to the income of the taxpayer or whether the ethanol is used in a taxed fuel or tax exempt fuel.

No affect on the Highway Trust Fund--the biodiesel tax credit will be paid for out of the ``General fund'' not the ``Highway Trust Fund.''

Eliminate the E85 AMT issue: any taxpayer eligible for the alcohol fuels tax credit will be able use the volume ethanol excise tax credit system, which means they will be able to file for a refund for every gallon of ethanol used in the marketplace without regard to the income of the taxpayer or whether the ethanol is used in a taxed fuel or tax exempt fuel.

Allow the alcohol fuels tax credit to be claimed in both taxable and nontaxable markets;

Streamline the tax refund system for below the rack blenders to allow a tax refund of the alcohol fuels credit on each gallon of ethanol blended with gasoline to be paid within 20 days of blending.

I feel strongly about the legislation because it eliminates the tax infrastructure, and fuel delivery impediments that have been problematic throughout the history of the renewable duels industry and encourage you to join us in working to enact this legislation during this Congress.

Mr. President, I rise today to state that I object to proceeding to the consideration of two executive nominees to the Department of Justice. The first nominee is Mr. Christopher A. Wray, who is nominated to be the assistant attorney general of the criminal division at the Department of Justice. The second nominee to which I object is Mr. Jack Landman Goldsmith III, who is nominated to be assistant attorney general, office of legal counsel at the Department of Justice.

I have placed holds on these individuals because I have numerous outstanding issues that have yet to be resolved by the Department of Justice. More specifically, I have several outstanding written requests before the Department of Justice. Some of these requests are more than 6 months overdue. In addition, I am presently working with the Department of Justice to overcome a number of procedural issues directly affecting my ability, as a member of the Judiciary Committee to, among other things, conduct oversight of the Department of Justice, and the Federal Bureau of Investigations.

Mr. President, I ask unanimous consent that morning business be extended for 7 minutes.

Mr. President, I rise to speak on another subject, but I think it is appropriate for me to respond to the Senator from Delaware only in a general way, not to the specific points he made.

I do take very seriously his efforts at what we call welfare reform, moving people from welfare to work, because not only as Governor did he demonstrate leadership in that area, but in the short time I have served with him in the Senate, he has talked with me frequently about various aspects of welfare, and I know he has been working with others on his side of the aisle, as well as Republicans.

I hope to be able to give fair consideration to the propositions about which he has spoken this morning.

(The remarks of Mr. Grassley pertaining to the introduction of S. 1440 are printed in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. President, the Federal Bureau of Investigation faces tremendous challenges in the war on terrorism, particularly with its internal operations, where a culture of fear, retaliation, and coverup demoralize agents and weaken the organizations.

Director Mueller has taken at least two important steps to address this culture. First, he has recognized it, making him one of the first Directors in recent memory to acknowledge the problem. His appointment of Judge Griffin Bell and Dr. Lee Colwell to study the Office of Professional Responsibility, OPR, is an excellent example of his recognizing the seriousness of the problem.

Second, Director Mueller has translated this attitude into action. For example, earlier this year, he justly and fairly punished a senior manager, which was especially noteworthy because he had been handpicked by the Director for the job. Just a few years ago, I could not have imagined an FBI Director taking action against a top official the way he did with Robert Jordan, the Assistant Director of OPR. By implementing the recommended punishment of the Justice Department Inspector General (DOJ OIG), Director Mueller fairly applied high standards to a senior-level FBI official.

I commend the Director for these positive developments, and that is why I feel the following issues are important.

Specifically, I am concerned about the FBI recently awarding contracts to several former senior officials involved in wrongdoing during their careers. The former top officials are Charles Mathews III, who recently retired from the position of Special Agent in Charge of the Portland, OR, Division; Thomas Coyle, who held the position of Assistant Director, Personnel Division; and Special Agent in Charge of the Buffalo, NY, Division; and Joseph Wolfinger, who retired in the late 1990s from the position of Assistant Director of the Training Division in Quantico, VA.

First, it is my understanding that Mr. Mathews recently was selected to accompany several current FBI officials on a trip to Jakarta, Indonesia, to conduct training for law enforcement and security officials.

Second, it is my understanding that MPRI, an Alexandria VA, defense and security contracting company, was awarded a contract worth between $500,000 and $1.5 million to conduct counter-intelligence training for FBI agents. Mr. Wolfinger, who holds the title of Senior Vice President and General Manager, heads MPRI's ``Alexandria Group,'' which ``will provide the highest quality education, training, and organizational expertise, to law enforcement and corporations around the world,'' according to the company's Web site. Mr. Coyle is listed as ``Senior Law Enforcement Affiliate'' for the company.

One reason I have questions about these former officials and/or their companies obtaining contracts is that they were involved in the Ruby Ridge scandal (Mathews) and the ``Pottsgate'' scandal (Wolfinger). Mr. Coyle was involved with both Ruby Ridge and Pottsgate.

Ruby Ridge refers not only the deadly 1992 standoff at the Idaho home of Randall Weaver, but also the ensuring coverups of misconduct and lying by senior FBI officials. The Pottsgate scandal refers to the sham conference held in 1997 so friends and co-workers of then-Deputy Director Larry Potts could fly to Washington for his retirement party on the taxpayers' dime, rather than their own personal money.

It is not worth repeating the long and sorry history of the misconduct of all the senior-level officials involved in the Ruby Ridge standoff; Pottsgate; the ensuing investigations, re-investigations, and reviews of investigations; and the failure to take appropriate disciplinary action in both matters. A full recounting covering more than a dozen officials who were involved in wrongdoing would take hundreds of pages.

The most comprehensive, public details of these two scandals are outlined in the DOJ OIG's report, entitled ``A Review of Allegations of a Double Standard of Discipline at the FBI,'' issued in November 2002.

The FBI's reputation and integrity suffered enough when these men escaped any appropriate discipline for wrongdoing during their careers. Not only did they avoid accountability, but recent developments indicate that their former colleagues and friends are rewarding them with lucrative contracts. I am sure this is not the lesson Director Mueller wants agents and the public to learn about the FBI and the way it handles misconduct in its top ranks.

Before I explain my other concerns about Mr. Mathews, Mr. Wolfinger/ MPRI, and Mr. Coyle/MPRI profiting--either directly of indirectly--from these contracts, a brief explanation of their involvement in misconduct is necessary. The following is based on the DOJ OIG's report on the double standard in discipline.

Mr. Mathews, in June 1994, led an internal inquiry into the findings of a previous criminal investigation regarding allegations of FBI misconduct during the Ruby Ridge standoff. Danny Coulson, for whom Mr. Mathews worked from 1988 to 1990 in Portand, OR, was one subject of the criminal probes and Mr. Mathews' inquiry.

Mr. Mathews' probe led to discipline for several agents and officials at the scene of the standoff, but not for any headquarters officials-- including Mr. Coulson and his boss, Mr. Potts. Later, the Justice Department, DOJ, conducted criminal and administrative investigations into new allegations, including that Mr. Mathews and his investigation covered up misconduct. While under investigation for those issues, Mr. Mathews was promoted twice, and shortly after that DOJ investigation ended in 2001, he was promoted a third time to head the Portland, OR, Division. After contradictory conclusions at the senior levels of the DOJ under former Attorney General Janet Reno, Mr. Mathews, like other senior officials, escaped any discipline.

However, the November 2002 DOJ OIG report later determined that:

Mathews should have been disciplined for failure to carry

out [his] assigned duties--completing thorough and impartial

inquiries--regardless of whether there was evidence of

improper motivation. Moreover,

like DOJ OPR, we believe that there was sufficient evidence

in the record to sustain a finding that [Mathews] acted with

an improper purpose. (Page 64)

The DOJ OIG report also stated:

We also believe that Mathews' failure to rescue himself

despite his relationship with Coulson, taken together with

his statements and the unsubstantiated findings in his report

regarding approval of the rules of engagement, established by

a preponderance of the evidence that Mathews conducted an

inadequate investigation. (Page 64)

The Pottsgate scandal refers to the allegation, among others, that Mr. Wolfinger, in October of 1997, arranged a conference to justify official business travel to Washington, DC, of senior officials so they could attend the retirement party of Mr. Potts, who was Deputy Director of the FBI at the time. The investigation focused on whether: the ``conference'' was a sham; it was used to justify the personal travel of officials to Washington for the party; those officials misrepresented their actions on travel forms and other government documents; and the officials were less than honest to investigators about their actions.

Mr. Wolfinger, the Assistant Director of the Training Division in Quantico, VA, was the organizer of the Thursday, October 9, 1997, retirement party for Mr. Potts. Just 7 days before the party, Mr. Wolfinger ordered a subordinate to send out a communication to the field announcing a conference for Special agents in charge, SACs, on Friday, October 10, 1997, the day after the party.

This ``conference'' was unusual in several ways, as the DOJ OIG November 2002 report points out. The conference--

announcement did not contain a conference schedule, a

starting or concluding time, a training identification

number, or travel instructions. The conference was scheduled

for a Friday, normally a travel day for FBI employees

following the conclusion of conferences. (Page 17)

The DOJ OIG report identifies other unusual characteristics of the ``conference.'' Only five people attended: Mr. Wolfinger, the subordinate he ordered to organize it, two SACs, and another individual. The agent who was ordered to give a presentation was told of the conference only 3 days before, on October 7, 1997. The conference had no formal agenda, and it lasted between 45 minutes and 90 minutes, rather than all day.

Despite the damning evidence, a disciplinary board of Senior Executive Service, SES, officials decided the ``conference'' was not a sham, though the board did conclude ``the planners exercised poor judgment in not properly preparing for it.'' (Page 26)

The DOJ OIG report notes that it is unclear exactly what action, if any, the board during two meetings decided to take against Mr. Wolfinger, who retired shortly after the board's meetings. Ultimately, however, it appears that Mr. Wolfinger was not punished. Michael Defeo, the Assistant Director of FBI OPR at the time, told the DOJ OIG that ``no recommendation as to Wolfinger was ultimately made . . .'' (Page 28)

Mr. Coyle, a coworker of Mr. Wolfinger at MPRI, was one member of the disciplinary board in the Pottsgate matter. The DOJ OIG concluded:

Coyle should not have participated because, at a minimum,

an appearance of a conflict of interest existed, if not an

actual conflict of interest. (Page 30)

As the DOJ OIG report notes, at the time of the board's decisions, Mr. Coyle and Mr. Potts were subjects of the Ruby Ridge investigation. The DOJ OIG wrote:

It was well known that many people wanted to attend the

Potts retirement party to show support for him because of the

Ruby Ridge investigation. That attitude was likely to be

especially strong for someone like Coyle who also was a Ruby

Ridge subject. We believe that Coyle should have recused

himself or been removed from these Board proceedings. (Page

30)

The actions of these officials during their careers at the FBI are troubling. That is why I sent Director Mueller a letter today asking questions about the contracts these men were awarded. I asked for a response by Wednesday, August 27, 2003.

Mr. Chairman, I also ask that the letter, dated today, July 22, be printed in the Record.

Mr. President, I am proud to be reintroducing the FBI Reform Act of 2003 with Senator Patrick Leahy. This reform bill is designed to address the accountability problems that have plagued the FBI for years. For almost a decade, I have been engaged in FBI oversight, and during that time, I have seen numerous scandals and coverups. I am pleased to see that Director Mueller is committed to changing the culture of the FBI. He is making good strides toward overcoming past bad policies and procedures at the Bureau. However, Congress also has a role to play in this overhaul of the FBI.

A little over a year ago, a bill similar to this one was approved unanimously by the Judiciary Committee. Since then, a number of the provisions of that bill were enacted in separate legislation. However, some of the most important provisions of that bill--provisions protecting whistleblowers, creating a Security Career Program and Counterintelligence Polygraph Program, and ending the double standard for discipline of senior FBI executives--have yet to be taken up by the full Senate. These provisions are needed to maintain America's confidence in the FBI.

When I was growing up, I was surrounded by a generation that believed the FBI could do no wrong. Yet today at a time when we rely on the FBI to protect us from acts of catastrophic terrorism that endanger the lives of the American people, a time when the need for confidence in the FBI is at its greatest, Americans' trust and confidence in the FBI has been shaken. Do not get me wrong, the majority of FBI agents and especially those who are posted all over the heartland of this country, are honorable, hard working Federal servants who are doing a great job of protecting us from harm. However, there are a few bad apples that must be dealt with because their actions give the Bureau a black eye. The spy cases of Robert Hanssen and Chinese espionage in Los Angeles have highlighted internal security problems. Retaliation against agents like John Roberts, Frank Perry, and Patrick Kiernan, who did their duty investigating internal wrongdoing and spoke the truth to Congress, highlight continuing cultural hostility to criticism. This bill goes a long way to address these systemic problems and shore up trust and confidence in the FBI in the wake of these concerns.

While Congress sometimes follows a hands-off approach to the FBI, the Judiciary Committees hearings and other oversight activities over the last 2 or 3 years have highlighted the actions that Congress needs to take to do its part in reforming the Bureau. The hearings that spurred this legislation demonstrated the need to extend adequate whistleblower protections to the FBI, enhance the Bureau's internal security program, end the double-standard for discipline, and modernize the FBI's information technology systems. These and additional management issues the committee has explored are reflected in this bill. As the Patriot Act has increased the FBI's powers, as the American people have increased their reliance on the FBI to stop terrorism, and as we continue to increase the FBI's funding, it is time for Congress to take action with a more hands-on approach. Let me provide some more detail about the most important provisions of the FBI reform bill.

First, title I of the bill contains much needed protections for FBI whistleblowers. As my colleagues know, I have long held that good government requires that the brave men and women who blow the whistle on wrongdoing be protected. It is my strong belief that disclosures of wrongdoing by whistleblowers are an integral part of our system of checks and balances. However, although whistleblowers play a critical role in ensuring that waste, fraud, and abuse are brought to light and that public health and safety problems are exposed, the same whistleblower protection laws that apply to almost all other Federal employees do not currently apply to the FBI. In fact, it is a violation for FBI agents to report problems to Congress. That restriction leaves patriotic, loyal FBI employees with little recourse. This bill will fix that problem.

I truly believe that reform at the FBI will only occur when FBI employees feel free to blow the whistle on wrongdoing. Without adequate whistleblower protections, I am concerned that agents, such as Coleen Rowley and others, who speak out about abuses and problems at the FBI will be subject to retaliation. Thus, this bill finally gives FBI whistleblowers the same rights and protections that other Federal employees currently possess. When this bill is passed, FBI employees who are retaliated against for blowing the whistle will be able to avail themselves of all the protections afforded by the Whistleblower Protection Act.

In order to enhance internal security at the FBI, title II of the bill requires the FBI to establish a career security program and ensure that appropriate management tools and resources are devoted to that task. Modeled after the Department of Defense Acquisition Career Program, security professional career development requirements would bring the FBI into line with the other Federal agencies that handle top secret intelligence. This bill establishes and defines the Career Security Program and sets out the framework for career development and training in internal security. With the development of a Career Security Program, the FBI can meet the challenges of espionage, information technology vulnerability, and the threat of direct terrorist attack.

This bill requires the Attorney General to establish policies and procedures for career management of FBI security personnel. It directs the Director of the FBI to appoint a Director of Security who would chair a security career program board that would advise in the management of hiring, training, education, and career development. The bill also requires the FBI Director to designate certain positions as security positions. The bill requires that career paths to senior positions be published, and it ensures that all FBI personnel would have the opportunity to acquire the education, training and experience needed for senior security positions. Moreover, in order to ensure that security professionals gain the stature that special agents enjoy, the bill provides that special agents would not have preference for security positions and security positions could not be restricted to special agents unless the Attorney General makes a special determination.

Furthermore, the bill would direct that education, training, and experience requirements be established for each position and that before assignment as a manager or a deputy manager of a significant security program, a person would have to complete an accredited security program management course and have at least 6 years security experience, including 2 years in a similar program.

In addition to the Security Career Program, the bill will also enhance security through the creation of an FBI counterintelligence polygraph program. The program would consist of the periodic screening of employees and contractors who have access to sensitive information or restricted data. While the program recognizes the value of polygraph screening, it also provides safeguards for those subject to polygraph examination. The bill directs that the program have procedures to address false positives, ensure quality control, requires that no adverse personnel action could be taken solely by reason of physiological reaction on an exam without further investigation, and provides that employees would have prompt access to unclassified reports of their exams that relate to adverse personnel action. Thus, title III provides increased security while at the same time protecting employee rights.

Title IV requires the Attorney General to report on the legal authority for the FBI's programs and activities. This report will help the FBI focus on its most important duty--preventing terrorism--by cutting back on the FBI's jurisdiction, which has become cumbersome and unwieldy. Currently, the FBI investigates over 300 different Federal offenses, which are divided between violent crime, white collar crime, organized crime, drugs, national security, and civil rights. In many of these areas, there are instances of concurrent or overlapping jurisdiction with other Federal law enforcement agencies who specialize in investigating these crimes.

The FBI needs to scale back on the broad range of investigations which are duplicated by other Federal and State agencies. The Bureau needs to completely jettison some of these areas and in other areas, the Bureau could simply take a secondary role, allowing another agency to take the lead. In order to assist the FBI in scaling back its jurisdiction, this bill directs the Attorney General to report to Congress on the legal authority for FBI programs and activities, identifying those that have express statutory authority and those that do not. The bill also requires the Attorney General to recommend what criminal statutes for which he believes the FBI should have investigative responsibility.

Additionally, there exists a gross inequality in the way Senior Executive Service, SES, employees of the FBI and rank and file agents are disciplined. SES employees are often given a slap on the wrist for an infraction, whereas the rank and file agents are often punished to the letter of the law. Title V of the bill attempts to address this double standard. The bill attempts to address the double standard by providing some flexibility in how SES employees can be punished. The Senate Judiciary Committee has heard repeatedly that this inflexibility is one of the main causes for the inequality in punishment at the FBI. Under the current

system, the minimum suspension that an SES employee can receive is 14 days. This means that the FBI's management is often left with the choice of either an overly harsh penalty or no penalty at all. Often they decide not to impose any meaningful disciplinary action.

In order to attempt to remedy this problem our bill lifts the 14-day minimum suspension for SES disciplinary cases to provide for additional options in disciplining senior executive employees. Hopefully, this change will help to remedy this double standard. In addition, our bill would require the Office of Inspector General to submit to the Judiciary Committees of both houses, for 5 years, annual reports by the FBI Office of Professional Responsibility on its investigations, recommendations, and their disposition including an analysis of whether any double standard is being employed.

Finally, title VI of the bill attempts to provide further enhancement to security at the Department of Justice as a whole. This title would implement recommendations of the Webster Commission for enhancing security at the DOJ. It requires the Attorney General to submit a report to Congress on the manner by which the Department plans to improve protection of security information at the DOJ. Moreover, this title authorizes funds to meet the demands for increased security at the DOJ. Also, the bill would authorize funds for the DOJ Office of Intelligence Policy and Review to help meet the increased demands to combat terrorism, process applications to the Foreign Intelligence Surveillance Court, participate effectively in counterespionage investigations, provide policy analysis and oversight on national security matters, and enhance computer and telecommunications security.

Mr. President, I say to my fellow colleagues, it is time we acted on the reforms in this bill. It has been almost a year since this bill passed unanimously out of committee. Let's act to reform the FBI and help maintain America's trust and confidence in the Bureau.

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