Floor Statements

Mr. Speaker, I thank the gentleman for yielding me this time.

And I thank my colleague from the Seventh Congressional District for offering this resolution at this time to pay tribute and to offer our condolences to all of the people, not only of the victims but even of the people who committed these terrible acts up in Red Lake.

Unfortunately, I think most of America, most Members of Congress will always think of Red Lake now in the terms of this great tragedy. But I would like to take a few minutes to think of a happier time, of a prouder time. And it is a story that most of the Members should know, and most of the Members do not, of what happened in 1997 in Red Lake. And that was the story of Gerald Kingbird and the story of the warriors who came down from Red Lake and brought a basketball team to the Minnesota State basketball tournament, and they offered something that had not been seen on many Indian reservations for many years, and that was a sense of pride, a sense of hope, and a sense of unity.

It was perhaps one of the greatest basketball teams ever assembled. They lost in the semi-finals that year to the Wabasso Rabbits 117 to 113, and it was perhaps the greatest basketball game ever played in the history of the State of Minnesota. And I bring that to Members' attention because, yes, this high school has been the scene of a terrible tragedy, but it has also been the scene of enormous pride in Native American activities. And what they did in 1997 in that game and in that tournament, I think, should also stand as a tribute to the people of Red Lake.

So, Mr. Speaker, I will insert an article into the Congressional Record, and I hope that my colleagues will read this article because I think it speaks of the kind of pride that we saw in 1997.

Clearly, this is a terrible tragic time for the people in Red Lake. But I hope that they will reflect and that we will reflect that there have been better days before and there will be better days to come.

I agree with my colleagues that we must do all that we can to make our schools safe. I agree with my colleagues when we say that schools should be places where kids want to go and feel comfortable. And we at the Federal level, and I am sure our colleagues at the State level, will do all that we can.

But I do not think we should take from this a belief that this is going to be a common occurrence or that this is really what happens in too many schools today. This is a rare occurrence, and we hope that it will never happen again. But we also hope that Members will remember that there have been happy and proud days in the days of the Red Lake Reservation and there will be happy and proud days to come.

Mr. Speaker, I rise again tonight to talk about the high cost of prescription drugs here in the United States relative to what the rest of the people in the industrialized world pay for the same drugs.

Recently there was an article in The Wall Street Journal which talked about how much name-brand prescription drugs have gone up just in the last year; and I think in that article they said over the last 5 years prescription drugs have gone up more than twice the rate of inflation. In fact, I think it is more like three times the rate of inflation. These are drugs that have been on the market for a long period of time, and the research costs were paid for a long time ago.

Recently, I got some research together from some pharmacies in three cities of five of the most commonly prescribed drugs in the United States. First, Lipitor, which is a drug which is made in Ireland. Every single tablet is made in Ireland, and it is exported around the world. The price of a 30-day supply of Lipitor in London, England, was $40.88. That same drug in Athens, Greece, was $55.65; and in the United States, $76.41.

The next drug here is Nexium, the new purple pill: 30 tablets, twenty milligrams, London, $42.23; Athens, $57.09; the United States, $138.06.

We compared the prices of Previcet, Zoloft, and Zyrtec. If you add them up, the price of those five drugs in London, $195.95; in Athens, those same five drugs, $231.04; but here in the United States, $507.96.

Why is this important? Well, this year, according to the head of pharmacology at the University of Minnesota, Dr. Steve Schondelmeyer, according to him, this year, Americans will spend $200 billion on prescription drugs. And if you compare what Americans pay for the same name-brand drugs compared to the industrialized countries around the rest of the world, we are paying at least 30 percent more. In fact, I think it may be more like 50 to 75 percent more, but let us take 30 percent. Thirty percent of $200 billion is $60 billion.

I believe if we treated prescription drugs the way we treat every other product and allowed Americans to have access to those drugs and those products as we do with other products, you would see prices in the United States drop dramatically.

That is why I have reintroduced a bill that has passed several times; in fact, we have improved it this year, made it even safer, the Pharmaceutical Market Access Act of 2005. I hope Members will go to my Web site at gil.house.gov, get the facts, take a look at these charts, get a copy of the bill, and decide to become a cosponsor. It is important, because we need to send a message that Americans deserve to have world-class access to world-class drugs at world-market prices, and when we do, we will see the prices here in the United States reflect more what is the average among the industrialized world.

So I hope my colleagues will join me. Go to my Web site at gil.house.gov; there is a lot of information there. We have about 70 sponsors right now; we would like to get that to 220. Please join me in the Pharmaceutical Market Access Act of 2005.

Mr. Speaker, I rise to pay tribute and to honor the memory of Travis Bruce.

Mr. Speaker, it is perhaps ironic that, as the family of Specialist Travis Bruce was learning the tragic news, I was at the military hospital in Landstuhl, Germany.

We all ask ourselves the questions that have haunted leaders from Washington to Grant to this very day: Are

we doing the right thing? Is it worth the sacrifice?

I can think of no better place to ask those questions than at that hospital. So I asked those young heroes, and I can honestly report that they answered ``yes.'' A few said ``absolutely.''

For Specialist Bruce, the battle is now over. He now rests in the loving arms of the God of our fathers. He takes his place in that long line of patriots who have made the ultimate sacrifice, that long line that has never failed us. It is now left for us to carry on.

There are no words adequate to express our condolences. It is enough for us to say that on behalf of a grateful Nation, we will never forget. We will always be proud, so that we will always be free.

Mr. Speaker, I move to suspend the rules and agree to the resolution (H. Res. 148) supporting the goals and ideals of Financial Literacy Month, and for other purposes.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on H. Res. 148.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, as a member of the Committee on Government Reform, I am pleased to call up House Resolution 148 for consideration. This valuable resolution supports the goals and ideals of Financial Literacy Month, and its purpose is to increase awareness of the significance of well-planned personal financial management. I strongly support this goal, and I encourage my colleagues to join me in support of this important resolution.

Mr. Speaker, it can be overwhelming for Americans of any age to establish and manage income, savings, and credit. But learning simple financial principles can help protect against illness or disability, long-term losses of unemployment, and other aspects of life that most of us will experience at one time or another.

Mr. Speaker, the resolution cites that over the last 20 years, personal savings have decreased from about 7.5 percent of personal income during the 1980s to only 1.1 percent in the last two quarters of 2004. This, I am afraid, shows the dangerous reality that unfortunately Americans are relying too much on credit and many are spending beyond their means.

Most Americans and their families will experience lean financial times sometime during their lives. That is why the message of this resolution is so important and why we need to encourage schools to teach our young people the principles of personal finance at early ages.

Life is uncertain, and jobs change. Family circumstances and macroeconomic instability can affect every one of us. But we as a Nation can be confident that we will ultimately enjoy big returns on our investments in financial literacy.

Mr. Speaker, several important groups, including the National Center on Economic Education, the Jump$tart Coalition For Personal Financial Literacy and their partner organizations consider April to be Financial Literacy Month. Consistent with this designation, today I am pleased to join with my distinguished colleague, the gentlewoman from Illinois (Mrs. Biggert), to sponsor this legislation in supporting financial literacy. I urge all Members to vote in favor of the adoption of this resolution.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I thank the gentleman from Illinois for his support for this important resolution, and I thank him for his wit and wisdom.

Madam Speaker, at this time I am pleased to yield such time as she may consume to the gentlewoman from Illinois (Mrs. Biggert), the author of this resolution.

Madam Speaker, I would only close by saying that financial literacy clearly is an idea whose time has come. I thank the authors for bringing it forward. I urge all Members to support the adoption of House Resolution 148.

Madam Speaker, I yield back the balance of my time.

Madam Speaker, I move to suspend the rules and agree to the resolution (H. Res. 188) recognizing and honoring firefighters for their many contributions throughout the history of the Nation.

Madam Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on the bill under consideration.

Madam Speaker, I yield myself such time as I may consume.

Madam Speaker, I rise in strong support of this worthwhile resolution that honors our Nation's incredible firefighters. This resolution extends the most sincere gratitude of the House of Representatives to the more than 1 million men and women who stand ready to put their lives on the line each time that fire station alarm bell rings.

Madam speaker, American firefighters respond to nearly 25 million calls each year from citizens across the country. Their dependability and service during countless kinds of urgent events are traits that Americans have come to count on.

From their unequal bravery at the World Trade Center and the Pentagon on September 11, 2001, to their responsiveness during the 2003 California wildfires, to their aid provided time and time again following the series of hurricanes in Florida last fall, firefighters have been on the front lines of many headlining emergencies in recent years.

Through these events, I believe Americans have gained an even greater level of admiration for firefighters because of their courage and selflessness.

Madam Speaker, on behalf of all Members, I want to thank firefighters for their service to this country. I highly commend the distinguished ranking member of the homeland security select subcommittee, the gentleman from Mississippi (Mr. Thompson), for introducing this measure.

I urge the adoption of House Resolution 188.

Madam Speaker, I reserve the balance of my time.

Madam Speaker, I am proud to yield 8 minutes to the gentleman from Pennsylvania (Mr. Weldon) who has been, in my time in Congress, the leader of the Fire Caucus and the go-to guy on fire issues.

Madam Speaker, I am happy to yield 1 minute to the gentleman from Virginia (Mr. Tom Davis), the chairman of the Committee on Government Reform.

Madam Speaker, we have no further speakers on our side, I do not believe, on this resolution.

Madam Speaker, I yield myself such time as I may consume.

I thank the gentleman from Illinois, and I thank all the other speakers on this important resolution. I think it is important that we, as a Congress, periodically recognize the contributions and the sacrifices that our firefighters make on our behalf every single day. So I hope all Members will join me in supporting the adoption of this resolution.

Madam Speaker, I yield back the balance of my time.

Madam Speaker, first of all, I thank the gentleman for yielding me this time.

Abraham Lincoln was succeeded by Andrew Johnson. Johnson was impeached by his fellow Republicans. Teddy Roosevelt became so frustrated with his successor, he came back to run against him.

Great Presidents and great Popes are seldom succeeded by great Presidents and great Popes, which is why so many of us mourn the loss of Pope John Paul II so much.

I never saw him in person. As a third-generation Lutheran boy marrying a Catholic girl, I take a more ecumenical view of the papacy. Until John Paul II, I saw the Pope as generally irrelevant to matters of personal faith and world events. Karol Wojtyla changed all that. He began his papacy with those simple words, ``Be not afraid.'' He lived those words until his dying breath. History always finds a special place for the fearless.

He understood something that many Western sophisticates do not. There is enormous persuasive power in communicating deeply held moral truths. President Victor Yushchenko reminded us today of something the Pope said. He said, ``The path of truth is often difficult, but never impossible.''

He literally took up his cross daily and led charismatically his massive flock. He spoke with clarity to them and to the world. He led by example, and in the process, like St. Peter before him, he changed the world.

He stared down the Soviets when they threatened to put down the Solidarity movement in his native Poland. He traveled more and touched the lives of more people than any Pontiff in history. I thank God for giving us Karol Wojtyla. He will be succeeded. He will be hard to replace.

Mr. Speaker, as an original cosponsor of the first legislation introduced to protect the life of Terri Schiavo, I am pleased Members of Congress from both bodies and from both sides of the aisle were able to come together to pass legislation that gives Terri Schiavo a chance at life. S. 868 will allow members of Terri's family to file a claim in the U.S. District Court in Florida for an alleged violation of her Constitutional rights. Our Constitution states that no state shall ``deprive any person of life, liberty, or property, without due process of law.'' Yet Terri has never had her own attorney exclusively representing her interests in court. This action will finally give her that opportunity. Convicted criminals on death row are granted this right; should not an individual who has never been convicted of a crime?

I understand issues involving long-term family illness are areas in which Congress should tread softly, if at all. This is an extremely sensitive area. But the facts of this case show that Terri's parents and siblings are willing to care for her and bear her medical expenses. This is not someone in a coma or with a terminal illness. Terri is awake and is able to see and hear and is often alert and interacts with her environment. We have a responsibility to protect the most vulnerable among us. Though we sometimes are led astray, every man, woman and child is precious in God's eyes. Terri's family must be given the opportunity to give her the treatment and care she deserves.

It was vitally important that Congress pass this legislation; not just to protect Terri's life, but also to avoid setting the disturbing precedent of ending human life against the wishes of someone's family and those willing to give her care. What kind of statement would we have been making to other incapacitated or disabled individuals who aren't able to survive without the assistance of medical technology or the care of others? As many have stated, when it comes to life and death decisions we must always err on the side of life.

I regret I was not available to vote for S. 868. Had my vote been needed for passage, I would have returned immediately.

Mr. Speaker, I rise again tonight to talk about an issue that most Americans, particularly seniors, are more than aware of, and that is the high cost of prescription drugs, but, more importantly, the difference between what we pay in the United States and what people around the rest of the industrialized world pay for the same drugs. And what I have here with me tonight is a chart which shows prices of five of the most commonly prescribed prescription drugs, and what consumers pay for those drugs in London, and in Athens, and in the United States.

And let us look at the first drug, Lipitor, 30 tablets, 10 milligrams, and more importantly every single tablet of Lipitor is made in Ireland. Okay. So it is all imported somewhere.

Lipitor in London, for 30 tablets, effectively a month's supply, is $40.88. In Athens it is $55.65. In the United States it is $76.41. And let me add that over the last year, we would have expected the prices, the differentials, to be diminished, because what we have seen is the decline in the American dollar of over 20 percent. But that is not really what has been happening. Let us look at some of the others.

Nexium, $42.23 in London, $57 in Athens, but $138 in the United States. Prevacid, $32 in London, $39 in Athens, $139.15 in the United States. If you take these drugs, Zoloft, Zyrtec, Prevacid, all of them, you add them up for a month's supply of those five drugs in London, $195.95 American; in Athens, $231.04 in American dollars. But here in United States, those five drugs total $507.96.

Now, we have heard a lot of debate, and my colleague, the gentleman from Texas (Mr. Gene Green), just recently talked about Social Security, what we should or should not do about Social Security. Frankly I think we need to get serious about reforming Social Security, because I think the system is unfair to our kids.

But the system that we have with Medicare and with prescription drugs is unfair to everybody. And while we have a problem coming out at us relative to the cost of Social Security and the generational unfairness that particularly our kids are going to face, the problem with Medicare is much larger.

And unfortunately, in my view, a year ago we passed a bill. We were told that it would cost no more than $400 billion, which is still an enormous amount of money, to provide a prescription drug benefit under Medicare. Now we are told that the cost of that could be over a trillion dollars over the next 10 years. And that is only part of the bad news.

I think even worse news is that every single penny of that new entitlement cost will have to be paid by our kids, because it will have to be borrowed. What we really need to do, one of my favorite Presidents was President Ronald Reagan, and he said it best: Markets are more powerful than armies. We need to use the magic of the marketplace to help bring down the cost of prescription drugs in the United States.

The reason we see these big differences essentially is this: Americans are held captive. And if you have a captive market, there is no question that any free market company is going to use monopolistic practices. The net result is Americans are paying two to three times more for many of the drugs that they have to take to save their lives. This is wrong, and we can do something about it.

Many of my colleagues say, well, shame on the pharmaceutical industry. Well, they did not really make the rules. Now, they are certainly doing all they can to defend these rules that hold Americans captive, but this year Americans will spend over $200 billion on prescription drugs.

Shame on us if we do not change the rules so that Americans have access to world-class drugs at world market prices. I am asking all of my colleagues to cosponsor the Pharmaceutical Market Access Act of 2005. We have over 70 sponsors now in the House; we have a growing list of sponsors in the Senate. You can get information on my Website at gil.house.gov.

But really we should be willing to subsidize people in sub-Saharan Africa in terms of the cost of prescription drugs. We should not be required to subsidize the starving Swiss. Please join me in sponsoring the Pharmaceutical Market Access Act of 2005.

Mr. Speaker, I rise again today to talk about the issue of prescription drugs and the price that Americans pay relative to the rest of the industrialized world.

Now, I understand that we are a blessed country, and I understand that in many respects we as Americans should shoulder more of the burden than, for example, the people in Sub-Saharan Africa. But I do not think Americans ought to have to subsidize the starving Swiss.

Let me just show this chart, Mr. Speaker. These numbers are very recent in terms of the comparisons of what we pay in the United States for name-brand prescription drugs and what the people in Germany pay for

the same drugs. Let me cite some of these examples:

Nexium. The next purple pill. It is advertised at every level in the United States. A 30-day supply in Rochester, Minnesota, is $145.33. That same drug at the Metropolitan Pharmacy in Frankfurt, Germany, is $60.25. Exactly the same drug.

Look at this list. These are the most commonly prescribed drugs in the United States. Dropping down to Zocor, Zocor is a commonly prescribed drug that reduces cholesterol, particularly for people who have had heart problems. In fact, we have a number of our colleagues here in Congress who take Zocor.

The interesting thing is if you buy that drug at the pharmacy in Rochester, Minnesota, it is $85.39 for a 30-day supply. If you buy that drug in Frankfurt, Germany, it is $23.83.

What makes that even more interesting is that if you are a Federal employee, if you are a Member of Congress, there is now a $30 copay on that drug. So in other words, even a Member of Congress pays $30, when any German consumer can walk into a local pharmacy and buy it for $23.80.

The interesting thing is if you total up these commonly prescribed drugs, in Germany those drugs will cost you $455.57 American. If you buy them here in the United States it is $1,040.04. That is a 128 percent difference.

What makes this even worse, Members, is that the differences between what we pay in the United States and what they pay in Germany has actually gotten worse over the last year, and that is at a time when the value of the dollar has declined by more than 20 percent. The differentials should have gotten less.

I also want to call Members' attention to an article that appeared today in the Chicago Tribune, and it will be on my Web site as soon as my people can get it on the Web site. It tells what the FDA is now doing. They are, apparently, targeting a program started by the Illinois legislature and their Governor, Governor Rod Blagojevich, a former colleague of ours, that allows Illinois seniors and others to buy prescription drugs from preapproved Web sites in Canada. The savings there average over 50 percent.

Apparently, the FDA is now intercepting these packages. They are literally saying that those drugs are illegal simply because they came from Canada. Well, in my view, that is an extension of what the law actually says, and I do not think the FDA has that power. Worse yet, they may have opened a door here now to a class action lawsuit that this administration is going to rue the day that this door was opened.

This is a very high-risk strategy for this administration. First, they are clearly putting the health of many Americans at risk by seizing prescription drugs en route to patients. Second, it underscores the hypocrisy between agencies. The FDA on one hand is demanding absolute safety for prescription drugs from Canada, notwithstanding the fact that there is no evidence of any danger to the public health. Meanwhile, another agency is fighting to reopen the border for Canadian beef when worldwide 150 people, including one American, have died from Mad Cow Disease. Apparently, the U.S. cattlemen do not enjoy the same political clout as the pharmaceutical industry.

Finally, they have opened the door, as I said, to a class action suit. Several top lawyers have told me they are drooling at the prospect of getting a case into Federal Court. By using discovery powers, they could uncover documents and information terribly damaging to the administration and the pharmaceutical industry. It is altogether likely that the courts will stop the FDA from treating law-abiding citizens in the United States like common criminals.

The law is vague, but congressional intent is clear: the FDA is wrong in the law, it is wrong on safety, and the courts and Congress can now make that crystal clear.

Mr. Speaker, I submit for the Record the article from the Chicago Tribune to which I earlier referred:

U.S. Blocks Drugs Sent From Canada

(By John Chase and Christi Parsons)

The Bush administration has begun selectively seizing

prescription drugs imported under a program created by Gov.

Rod Blagojevich, ratcheting up pressure to stop a practice

that the governor says will save money for consumers but

regulators contend is unsafe and illegal.

The Canadian firm that manages Blagojevich's I-SaveRx

initiative says the federal Food and Drug Administration in

the first two weeks of February blocked more than one-fourth

of the foreign drug shipments it mailed to consumers in

Illinois and four other states that participate in the

governor's plan.

``I won't say the FDA has targeted I-SaveRx, but that's an

unbelievable coincidence,'' said G. Anthony Howard, president

and CEO of Ontario based CanaRx Services Inc.

Operators of other Canadian pharmacies that ship drugs to

U.S. consumers also said they have noticed an upsurge in

seizures in recent weeks.

The FDA has long opposed drug imports yet has done little

to stop them. But the reports could signal an aggressive new

phase by regulators in their battle to stop Americans from

getting their prescriptions from abroad. Officials involved

with Blagojevich's program also fear the sporadic seizures

may be designed to deter customers for I-SaveRx by creating

uncertainty over whether ordered drugs will actually arrive.

In the past, ``the FDA has said, `If it is for personal

use, we'll allow them to go into the country,''' said Howard.

``Now they're seizing their medication and not allowing it to

go through.''

The FDA and Blagojevich have been battling since 2003 over

his push to end restrictions on drug imports from Canada and

Europe, where prescriptions cost less because of price

controls.

The Bush administration opposes importation because it says

it cannot guarantee the safety of medicine from other

nations, but Blagojevich and others argue that much of the

medicine is manufactured overseas and the only difference is

the price. Pushing the importation issue, they argue, will

force drug companies to lower the cost of drugs in the U.S.

William Hubbard, the FDA's associate commissioner of policy

and planning, denied the agency was targeting the program.

Though he said the agency considers all of I-SaveRx's

shipments illegal, the FDA is focused on seizing drugs from

overseas that can easily be counterfeited, such as the

cholesterol-lowering drug Lipitor.

``The inspectors' instructions are to open and inspect

these foreign shipments when they have the time and capacity

to do it,'' he said.

Failed flu vaccine purchase

Blagojevich's run-ins with the FDA have extended beyond I-

SaveRx.

Last fall, shortly before the November election, he

announced that he had purchased millions of dollars in

European-made flu vaccine to help ease shortages expected

because of the sudden closure of a plant that was to have

produced half the U.S. supply.

His maneuver backfired, however, because the FDA dragged

its feet on approving the imports. The flu season remained

mild and vaccine shortages never got as bad as feared.

Blagojevich launched I-SaveRx in October and sold it as a

way for all 12 million Illinois residents to save money on

their medicine. Since then, Wisconsin, Kansas, Missouri and

Vermont have also joined, potentially opening the door to

millions more consumers.

But the drug seizure controversy has highlighted how few

people have opted to use the program despite its promise of

great savings.

Howard said the total number of shipments seized for

customers in the I-SaveRx states in the first two weeks of

February was 54, and that represented 26 percent of all

shipments sent to customers of the program during that time

frame.

Since the October start, consumers in the five states have

ordered just 4,700 prescriptions.

Blagojevich spokeswoman Abby Ottenhoff downplayed the

number of seizures by the FDA, describing them as

``minuscule'' when viewed in the context of the number of

shipments made since the program started.

``This is not extraordinary that this would happen at some

level,'' she said. ``The program has overwhelmingly been

working smoothly. In a few instances where shipments weren't

received, they were re-sent at no cost to the consumer.''

They had my medicine

One of those seniors who missed a shipment was Robert

Wuerth, a 79-year-old retiree from Arlington Heights.

Wuerth had been expecting a three-month supply of Lipitor

to arrive in the mail, but instead he got a letter from the

FDA informing him that it had sent the medicine back to

Canada.

``I couldn't believe it,'' said Wuerth, who is recovering

from three heart procedures. ``I just got this letter telling

me they had my medicine.''

Wuerth said he was lucky he still had medicine left when he

learned of the seizure and had time to call CanaRx and ask

for a new shipment, which he said is $80 less than U.S.

prices.

Not only did the FDA let that one through, but when it came

it bore two labels. One read that it had been rejected for

delivery. On top of that was another that said it had been

released for delivery.

Officials with CanaRx fear the FDA might be picking on I-

SaveRx to embarrass Blagojevich. But officials with other

Canadian pharmacies said they too have noticed a

considerable upsurge in the number of seizures of their

imports, mostly at airports in Los Angeles and Chicago.

Randy Stephanchew, vice president of standards for the

Canadian International Pharmacy Association, which is

unaffiliated with the I-SaveRx program, said more than 50

shipments from his Winnipeg pharmacy in recent weeks have

been detained from customers in California because they were

considered an ``unapproved, misbranded drug. ``

A former official with Health Canada, the Canadian

government's equivalent to the FDA, Stephanchew said the FDA

has long held a policy permitting individual American

citizens to import drugs from foreign countries.

Mr. Speaker, I ask unanimous consent to take the time of the gentleman from California (Mr. Rohrabacher).

Mr. Speaker, I rise tonight to talk about an issue that is not new to this Congress and certainly is not new to the American people, and that is the price that Americans pay for prescription drugs relative to the rest of the industrialized world.

I started this pilgrimage about 5 or 6 years ago. Many Members do not know how I got involved in this, but the issue that got me involved was the price of pigs. Because about 5\1/2\ years ago, the price of live hogs in the United States collapsed. It dropped from about $37 per hundred-weight down to about $7 per hundred-weight. So these farmers started to call me and say, Can't you do something about this, Congressman? And I said, Well, I don't know what we can do. They said, At least can you stop all these Canadian pigs from coming across our border making our market even more difficult?

So I did what any good Congressman would do, I called the Secretary of Agriculture, I called the Secretary of Commerce, and essentially I got the same answer. And the answer was: Well, that's called NAFTA. That's called free trade. We have open borders. I said, You mean we have open borders when it comes to pork bellies but not open borders when it comes to Prilosec? And the Secretary of Commerce literally said to me, Well, I guess that's right. I said, Well, that doesn't sound right to me.

So I got some charts and started comparing what Americans pay for drugs compared to Canada and Europe, and I started bringing these charts down to the floor of the House and talking about those differences and saying essentially that if we are going to have open markets that our farmers have to compete with, then the big pharmaceutical companies ought to have to compete as well.

Last year, I had a chart from Germany, and we have some relationships now with some of the pharmacies around the world, and they give us regular prices in terms of what they are charging for the drugs. Last year, the difference between Germany and the United States, depending on how you look at it, about a 40 percent difference.

Over the last year, the price of the American dollar has declined by over 20 percent relative to the Euro. So when we got these charts, I was afraid the differences would have all but evaporated. Lo and behold, the prices are even more exaggerated today than they were a year ago. In other words, prices here in the United States, the differential is even greater today than it was a year ago, even though the value of the dollar has declined by 20 percent.

Let me give a couple of examples of drugs people might recognize. One is the drug Nexium, the new purple pill. At the local pharmacy in Rochester, Minnesota, a 30-day supply of Nexium, 20 milligrams, is $145. You can buy that same package of Nexium at the Metropolitan Pharmacy in Frankfurt, Germany for $60.25.

Norvasc, 30 tablets, $54.83 in the United States, $19.31 over in Germany.

But here is one that really got our attention: Zocor. In the United States, $85.39; in Germany, $23.83. What is interesting there is we negotiate and get good deals for Federal employees. The Federal copay right now for Zocor is $30. In other words, you can buy it walking in off the street with a prescription in Frankfurt, Germany, cheaper than you can the copay for Federal employees.

Mr. Speaker, I just want to serve notice tonight that this issue is not going to go away, I am not going to go away, and the people of not only my State but people all over the country are only demanding we get fair prices. We as Americans subsidize the pharmaceutical industry in three separate ways. First of all, we pay for a big share of the research. This year we will spend about 27 billion taxpayer dollars to fund basic research and research in drugs and chemicals and so forth to determine what might work. And many of those things are given to the pharmaceutical industry, essentially, and then they patent those drugs. So we do subsidize a big part of their research.

Second, we subsidize them through the Tax Code. Literally, they write off all the costs they have for research. In fact, in some cases they get tax credits, research and development tax credits.

Finally, we subsidize them through the prices we pay.

Now, I believe in patents, and I do not believe anybody should be stealing other people's patents. And I do not believe that we as Americans should escape paying our fair share for the cost of these drugs. I think it is fair we pay our fair share. I think we should subsidize the people in sub-Saharan Africa, for example. But I do not think Americans should be forced to continue to subsidize the starving Swiss and the starving Germans and the people in the industrialized world.

It is time Americans have access to world-class drugs at world market prices. I hope my colleagues will go to my Web site at gil.house.gov. We have a site there with great charts and a lot of information. If people will just study this, be objective, I think they will come to the same conclusion, that it is time to open up markets for the pharmaceutical companies the way our farmers have to compete in a world marketplace.

Mr. Speaker, I extend my best wishes and congratulations to Taiwan Ambassador David Lee, President Chen Shui- bian, and the 23 million people of the Republic of China on the occasion of their National Day, October 10th.

The United States is Taiwan's largest trading partner. In 2000, total U.S.-Taiwan trade was approximately $65 billion, with a Taiwan surplus of approximately $16 billion. Taiwan's chief exports to the United States include clothing and footwear, toys, and various electronic products. In recent years, Taiwanese government officials have attempted to accommodate increased U.S. pressure on trade issues by meeting many U.S. demands for greater market access for U.S. goods and services, and responded to U.S. complaints by taking stronger measures to protect U.S. copyrights and other intellectual property rights.

The Republic of China on Taiwan is a genuine democracy and its people enjoy one of the highest standards of living in the world. As one of our largest trading partners and friends in the Far East, it is my opinion that the Republic of China on Taiwan deserves much greater international recognition. I will continue to press for more favorable U.S. treatment of Taiwan and for Taiwan's inclusion in some capacity in international organizations like the World Health Organization. Taiwan's participation in the World Health Organization is vital to the interests of the people of Taiwan, and will open Taiwan's access to the latest information on epidemics and diseases. I have joined the House Taiwan Caucus to express my support of this important ally.

I hope that we will continue to strengthen U.S.-Taiwan relations and raise the level of strategic cooperation between the United States and Taiwan in accordance with the Taiwan Relations Act.

Mr. Speaker, I want to thank the gentleman from Georgia for having this Special Order, and I want to thank him for his leadership on this issue.

I wonder if he would step back to podium, because I am not sure if my colleagues who have been listening in their offices really understand what we are talking about tonight. The gentleman is talking about getting rid of the income tax system as we have it in America today.

So the gentleman thinks that the Federal Government should not know at least as much as my spouse how much I give to charity. That is none of the government's business.

And the gentleman thinks that what I do for a living and how I make my money is none of the government's business.

The gentleman thinks that I ought to be taxed based on how I spend my money rather than whether I want to save it, invest it or spend it on different things.

This is really remarkable. In fact, I think that if the Founders knew that we had this tax system here in America today, Mr. Speaker, I think the Founders would be rolling in their graves. The idea that we have a Federal agency who keeps track of how we spend our money, who wants to know more; every year, they want to know more about how we spend our money, where the money comes from, where it goes. In some respects, it is almost un-American, the system we have today.

I want to talk just a few minutes tonight about all of the regulations, about all of the rules. I understand there are 90,000 pages of the IRS regulations that every American one way or another has to comply with. That is just outrageous. And, more importantly, I think the other issue we want to talk about tonight is how every American knows somehow, down in their bones, that there is something almost immoral about a system where we have this enormous amount of regulation, this enormous amount of bureaucracy, all of these rules and regulations just to pay our taxes. And I wonder if the gentleman would talk a little bit about how long it takes the average American just to fill out their tax forms and then, more importantly, what it means to business in terms of all of the regulations, the accountants, the lawyers, the rules and all that goes with it, just so that the average small businessperson can just simply pay their Federal taxes.

Those are issues that we need to talk about, and ultimately, those are issues that affect how we live in America and ultimately whether or not we can compete in a world marketplace.

I wonder if the gentleman would just talk a little bit about all of those pages of rules and regulations in the IRS codes.

Mr. Speaker, if I could just say, the Senate has just informed the House that we have reformed the IRS code. Now, is that not wonderful? Now, we have reformed or amended the IRS code 6,000 times.

Since 1986, and now we are going to do it again. And every time we talk about reforming the Tax Code, what, in effect, we do is we make it more complicated.

Now, in some respects, I do have a vested interest, because my daughter and my son-in-law are both CPAs. So, in some respects, if I want full employment for my daughter and son-in-law, we want to make this Tax Code even more complicated. But the interesting thing is when I talk to them, they say, make the Tax Code simpler. And the truth of the matter is, the best thing we could do is eliminate the income tax system all together and make it a consumption tax.

Mr. Speaker, there is an old adage that if you want more of something, you should subsidize it. If you want less of something, you should tax it. And what do we do in America? We tax income. We tax investment. We tax savings. We tax productivity. We tax all the things we want more of, and yet

we subsidize consumption, indirectly. What we are really talking about is something very revolutionary. It is about a whole new concept. It is about changing the whole paradigm in the way the Federal Government raises revenue, and saying, wait a second, why do we want to tax the things we want more of? We ought to tax the things that may, in fact, drag down our economy.

So this is so important. I want to compliment the gentleman on one very important thing he said earlier. When the gentleman talks about manufacturing, and we have all heard, we have heard from our friends on the left, and we have heard from the media, and we have heard from all kinds of people that America is not doing as well as it should do relative to creating more manufacturing jobs here in the United States. Well, one of the things we have to do is change the Tax Code.

I think the gentleman made the point, and we need to talk about that a lot, in terms of changing the Tax Code to make it more productive or more profitable for people to create manufacturing jobs in the United States. The gentleman talked about, one of the things he mentioned, and I think a lot of people may have missed this point, and that is that in every product that we produce here in the United States there is embedded in that product anywhere from 22 to 30 percent taxes. And one of the things the gentleman wants to change is to say, that ought to be taken out. And all of a sudden, everything we produce here in the United States would be anywhere from 22 to 30 percent less expensive on the world market. If we did that, it seems to me, if everything we made in the United States was 22 to 30 percent less expensive on the world market, it would seem to me we would be very competitive and all of a sudden, a lot of companies would want to produce those products right here in the United States.

I wonder if the gentleman could talk about that just for a minute.

Mr. Speaker, let me just come back to that number. The gentleman said $6 trillion. Now, around this place, we throw around big numbers, but $6 trillion is a huge number.

Can the gentleman put that in some kind of perspective?

Mr. Speaker, if I could just say, we have talked about capital, and we have talked about big business, and we have talked about investors and manufacturing, but I am told that when we talk about small business, it is where we really see the benefits. Because I am told that a small business can pay over $700, if we look at all of their costs of complying with the current Tax Code, to pay $100 in taxes.

So that cost is over $800 for the Federal Government to raise $100.

It is almost unbelievable. If we could get Americans to just think about this, because we all pay the taxes. I mean Paul Harvey often says that businesses do not pay taxes; people do. If you could get people to just think about this, that the system we have today is so incredibly inefficient that we all pay a lot more just to collect the revenues that the Federal Government needs.

Now, we all agree that the Federal Government, whether it is for national security or domestic security or for roads or for prisons and all of the other things we need, we need some revenue, right?

And we are not talking about cutting the amount of revenue to the Federal Government; we are talking about creating that revenue in a new and more efficient way.

This is an idea we think we know about, but we do not really understand. That is, every time we buy a product, embedded in the cost of that product are the cost of taxes. We do not think about that, but it is there nonetheless. If we buy a refrigerator, there is a certain amount of tax that is included in that. And there have been some people who have attempted to quantify how much that tax is. And so if I buy a refrigerator for

$500, embedded in the cost of that refrigerator may be 22 percent or more in taxes. More important than that, it is not just the taxes. It is how much that that company had to pay the auditors, the accountants, the lawyers and so forth to keep all of those records. So the cost may well be 30 percent of just taxes.

Now, if you take that many out and you put a 22 percent sales tax on that item, the net cost of that refrigerator, instead of being $500 might be $490 or something like that number. Will the gentleman talk a little bit about what the real net cost would be to the average consumer.

So on April 15, the average American would say what?

Another nice spring day in Minnesota or Georgia or Iowa. That is an amazing thing because many Americans dread the idea of April 15 coming around. They dread it for a lot of reasons. Not only the amount of money they have to spend, but they worry they might make a mistake in filling out all these forms and they may have not added correctly and they did not do this right or whatever and they did not go back three spaces and they ignored line 1-A or 15-A or 15-B. All of this would go away. The average American would not have to worry about April 15.

Would not have to keep a receipt, would not have to worry how much they paid the dentist, how much they paid the doctor, how much they gave to their church. All of those things would simply go away. I know a lot of people, and the gentleman mentioned the Realtors and they are worried about this because at the end of the day this would affect whether or not Americans would buy homes and particularly new homes. But the bottom line is, that new home would, probably on a net-net basis be less expensive than it is today.

And we have got to get people to think beyond the first thing that they see and they say, oh, my gosh, you mean I would have to pay a 23 percent sales tax on everything I buy?

Well, stop and think about it. What would happen is at every payday you would get to keep everything you earn.

And it would be a real number.

So that average family when they go out to buy a home would be able to buy more home. And when you take away the cost of all the accountants and everything that goes with the IRS system today, that home would actually be less expensive.

Now, the other argument that we hear sometimes is from people who buy expensive machinery and, frankly, we have a lot of those people in my district. They are called farmers. Every so often they go out and buy a new tractor, and that new tractor today may be $150,000. They say, oh, my gosh. You mean I am going to have to pay a 22 or 23 percent sales tax on a $150,000 tractor? I cannot afford that.

So in other words, a farmer that goes down to buy another tractor that today is $150,000, embedded in the cost of the tractor is maybe 22 percent tax or 25 percent tax. So in other words, if you take that out of the price of that tractor, they are actually going to buy that tractor for $110,000 and they will pay no tax on it.

I agree with you. If we can get people to just think in those terms, all of sudden they are going to be say, well, let us have this right now. Why have we waited. Why do we have this unbelievable system that I have to go down to my accountant and I have to worry about this and I have to worry about that.

All of the sudden we have a very simple system that is only about how much I really consume. Not how much I spend to produce a product, how much I spend to produce a crop, how much I invest to produce a new job or a new business or a new product or whatever. This is consumption. And if we can get people to talk about consumption taxes, all of the sudden this whole debate becomes very, very simple. And people say, well, this makes perfect sense.

We have been joined by my friend from the State of Iowa, and I hope that the gentleman will jump into this debate and talk a little bit about what it means to him and more importantly how it affected his last election and how he became a proponent of this thing.

Mr. Speaker, if the gentleman would yield, I want to thank both of my colleagues, and particularly the gentleman from Iowa (Mr. King) because he has really been an educator for me.

I want to come back to an issue that we have not talked about yet because I think it deserves to be talked about, and we hear about it from our friends on the left. That is called the alternative minimum tax, and frankly, it is interesting because it was created back in 1969 to make certain that everybody paid some taxes, right, and we created all these loopholes for the ``wealthy.'' All of the sudden they discovered that some of these people were actually taking advantage of these programs so that they paid very little or no taxes.

They created this whole second tax system, the alternative minimum tax, that says even if you qualify under all the rules, you play by the rules as some people say, you wind up paying no tax, but you have to recalculate your taxes. Now, all of the sudden, we are talking about millions of Americans who are finding out, well, listen, I did the right thing, I followed the forms, I played by the rules, I did everything right, but now the IRS says, oh, oh, oh, wait a minute, you have to recalculate your taxes; and under the AMT, you owe another $3,000 or $5,000 or $10,000 or in some cases literally hundreds of thousands of dollars in taxes.

Let me give you an example. One of my constituents is a wonderful person, and he had made some incredibly lucky or smart investments, depending on your perspective and had become relatively, well, some people would say a very wealthy, man. He wanted to give his alma mater $1 million. He could afford to do that. So what he did is he sold some stock, and he gave his college a $1 million donation. That is a wonderful thing to do, right? Well, the IRS came back the next year and said you have got to recalculate your taxes; and for being a generous benefactor of his college, under AMT, the IRS said you owe us another $340,000 in taxes.

Now that was bad tax planning, and he did not spend enough time with his auditors and his CPAs and lawyers and so forth, but that is one example, but it happens every day.

Mr. Speaker, 35 million Americans, and this is the point I want to make. Anybody who has ever been bit by the AMT will never forget this.

One of the most beautiful things about what you are talking about, and I want to thank both of you, is that under your plan they never have to worry again about having to recalculate their taxes after they have already paid what they think is their fair share.

There is a connecting point there that I want to expand upon, and that is, once we do this, they will have no choice because all of the sudden the rest of the world will turn to America and say, look, if we can invest there and not be taxed, we are going to invest even more of our resources in the United States. All of the sudden, Europe, the former Soviet Union, Iraq, anywhere else in the world, they are going to have to adopt tax policies similar to ours, where we say to people, you can earn as much as you want, you can invest as much as you want, you can risk as much as you want. We are only going to tax you on your consumption.

Now I want to come back, though, to a question that sometimes our liberal friends say, and the gentleman from Georgia (Mr. Linder) sort of touched on this a few minutes ago, and that is, wait a second, poor people spend more of their disposable income on things that they need, and therefore, they will have to pay a lot more taxes than somebody who makes $1 million a year and only has to spend 100,000 of it on the things that they want or need just to live and so forth. How do you respond to that?

So there are only four things that people can do with their money if you think about it. They can either spend it, they can save it, they can pay taxes, or they can give it away. Those are the only four things they can do.

Exactly, and when they save it and invest it, it creates more jobs, more economic opportunity for the people at the lower end of the spectrum. Right?

Bingo.

But some of our friends think that we have to have these people pay lots of taxes because that is a good thing. What we are sort of saying is, well, we have to pay a certain amount of taxes, but at the end of the day if they pay more in taxes, it means they have less to invest or give away.

Bingo.

Mr. Speaker, of all the things that people can do with their money, the least efficient thing in terms of growing the economy is to give it to the Federal Government because we know that the Federal Government will spend it less efficiently than they will, and that is a philosophical debate; and I understand that.

At the end of the day, we can create a system that is just as fair or fairer than the system we have today because when people think about it, you think about the average poor person. Everything that they buy has embedded in it anywhere from 22 to 30 percent taxes.

So they are paying the taxes. Businesses do not pay them. And in some respects even wealthy people do not pay the taxes. It is the poor people who pay them.

So if I buy a $100,000 automobile, I pay a lot more taxes than if I buy a $20,000 automobile. That is the way the whole system works.

Mr. Speaker, we have to do a better job of explaining this to everybody. Because I think, in the end, and I want to thank both my colleagues, particularly the gentleman from Iowa (Mr. King), because he has been helpful to me in beginning to understand.

Let me close for my part of this with two very important points made by one of my favorite people from the United Kingdom, Winston Churchill observed this about the American people: First of all, he said Americans always do the right thing, once we have exhausted every other possibility.

And I think we have really reached a point, when you look at the Tax Code, that we have exhausted every other possibility. And it really is time for us to do the right thing.

The other thing that he said is that the difference between someone who is convinced of something--no, I am going to forget the story. Have you got the story?

A fan. Yes, that is it.

The difference between a fan and a fanatic is that a fanatic cannot change their mind and will not change the subject.

I have almost become a fanatic on this issue because this is something that, if you think it through, begins to change the entire paradigm. As the gentleman from Iowa said, it not only changes the way we see government but it changes the way we react to government. In the end, it says to Suzie and Johnny when they go in to buy something at the store, wait a second, every time I buy something, it is 22 cents or 23 cents, or whatever the number is. And all of a sudden they begin to see government as a real cost to them.

And they demand less of the government. So this is an issue whose time has come.

It seems to me that we have a responsibility as Members of Congress to go out and tell this story. And if we do our job of telling the story, as Jefferson said, give the people the truth and the republic will be saved. If we give the people the truth on this subject, then it seems to me that ultimately they will demand that Congress do something like this.

Mr. Speaker, I rise with my friend from Texas tonight to pay a special tribute to some genuine American heroes and one in particular. Last week, I met with the mother, Maria, the mother of Sergeant Juan Calderon, Jr., and I must tell my colleagues, those were very, very difficult times. And they are very difficult times for her, and it was not easy for me.

In the book of John, the good shepherd says, ``Greater love has no man than this, that he lay down his life for his friends.'' Sergeant Juan Calderon did exactly that on Monday, August 2. He died in a military hospital while fighting and doing operations in Iraq.

Sergeant Calderon was a native of Weslaco, Texas, as the gentleman just preceding me said. He was a resident of Camp Pendleton, California. I had the opportunity to meet with his mother, Maria, who lives in Alden, Minnesota. He has many friends and relatives in the Alden and Albert Lee area. His father, Juan, Sr., still resides in Texas. Calderon's wife of 3 years lives at Camp Pendleton in California and, I regret to say, is expecting their first child.

Calderon's awards include the Navy and Marine Corps Achievement Medal, Good Conduct Medal, National Defense Service Medal, the Humanitarian Service Medal and the Sea Service Deployment Ribbon.

Juan Calderon's sister said recently in an interview with the Albert Lee Tribune, ``Juan, Jr., was a big comedian. He was full of life. He was excited to actually go to Iraq and serve his country. He was always proud to serve and proud of what he was doing.''

Calderon's father recently received a letter, and reported in the Associated Press was an account where his son had written to him where he said, ``Don't worry about me. You raised me for 19 years. Now it is time for me to do something to repay you.''

I would like to repeat a story, though, because I think sometimes we need to be reminded that what we are doing there is important. Recently, in a story about an Iraqi translator, a woman whose children were taken away from her more than 6 months ago, her husband beat her. Her brother threatened her life while holding a gun to her head, and her own father contracted for her death with a $500,000 reward. All of this because she was assisting the American coalition. She said, ``You, the soldiers and marines, come from America to help my country. I must help you help my people. I see these soldiers that lose their lives for Iraqis. They come into our country and die for us. We must appreciate these guys. I appreciate the Army and the Marines. I love them.''

Ronald Reagan used to say, those who say that we are in a time where there are no heroes, well, they just don't know where to look. On August 2, we lost several heroes. One of them, Sergeant Juan Calderon, Jr., will be mourned. He will be missed. He will not be forgotten.

Sergeant Calderon did not die in vain. Freedom must prevail. May Almighty God have mercy on this good and faithful servant. May He continue to bless this country and all who defend her.

Mr. Chairman, I thank the gentleman for yielding me time.

I want to agree in most part with what the chairman said about this issue. It probably is not the appropriate time to have a big debate about pension policy, but I come to a completely different conclusion.

He said this amendment does not belong on this bill. It is a shame that we have to talk about this amendment on this bill, because it really is about pension policy, and it is about age discrimination, and it is about one company in particular. Now, I do disagree with the gentleman from Vermont (Mr. Sanders). I do not think all of these cash balance plans are inherently evil. And, frankly, there have been a number of companies that have converted their pension plans working with the collective bargaining units, working with their employees, giving employees their choice that have done things the right way. So these are not inherently evil things in terms of pension.

As we go forward as a society, as people change jobs more often, the idea of a cash balance plan may make some sense; but it does not make sense when you have a system that works the way it did in the IBM employees' case, and that is where they were given no choice, they were given no say. These were people with vested benefits.

Let me remind Members about what vested says about things. This is the quotation from Webster's Collegiate Dictionary. It says: ``Fully and unconditionally guaranteed as a legal right, benefit, or privilege.''

Now, these employees showed up for work one day, and they thought they had a pension benefit plan that was vested, that was theirs, that was fully and unconditionally guaranteed; and all of the sudden they found out that day that vested does not mean what they thought it meant. And they finally wound up getting this case before a Federal judge in a Federal court. And the Federal court, and I believe the Federal court in this case was absolutely right, said, wait a second. You cannot do this because the way pensions accrue value is you get most of the benefit.

There is sort of an ascending curve in pension benefits, and it is toward the end of your working career when you get the most benefit. So people who had worked for IBM for 20 years and were going to retire in 5 or 6 years, and I will say that IBM under enormous pressure did rescind the original package that they put in front of the employees, they made it a little better for older workers.

But it did not change the basic facts. First of all, the employees were given no choice even if they were vested. What it did and the reason why IBM and a lot of other employees wanted to convert to these cash balance plans is because they understood that it was a way to shave off those benefits for older workers in the last 5 or 6 years that they might be working for the company.

The bottom line is this: what they were really trying to do is get their hands in the pension funds, because they realized and their actuaries realized that most of these pension funds were overfunded, and they could literally move that money from the pension fund to their bottom line by making these conversions.

Companies are now coming and saying, gee whiz, this is going to cost us billions of dollars. Well, yes, it is going to cost billions of dollars because that was the employees' money. It did not belong to the employer. In fact, in some respects pension funds do not belong to the employee or employer. It is money being held in trust. And one company broke that trust, and the

Federal courts have come down on them very heavily.

I agree with the chairman, we should not have to be offering this amendment today because it is just outrageous for us to think that our own Federal Government would attempt to intervene in a case in which they are not a party to try and overturn a hard-won victory for the employees of IBM. This is an outrage. This is where we, whether Republicans or Democrats, ought to stand together and say it is wrong to steal from pension funds.

Support the Gutknecht-Sanders amendment.

I come to the floor as a cosponsor of this important amendment. IBM employs about 5000 people in my district and there are close to 5000 IBM retirees across the state of Minnesota. Their employees are also my constituents and I, therefore, have a vested interest in ensuring IBM employees are treated fairly.

Fifty years ago a salary was the most important thing to workers. Times have changed. today pensions and other benefits are the main reasons workers choose a particular company. It is important we encourage employers to keep their promises to their employees and not change their pension plans in midstream.

When an employee becomes vested in a pension plan he or she expects to receive those benefits. ``Vested'' according to my Webster's Collegiate Dictionary means ``fully and unconditionally guaranteed as a legal right, benefit, or privilege.'' These expected benefits should not be taken away.

Unfortunately, IBM did just that. Perhaps IBM received bad business advice, but the method by which IBM went about switching to a cash balance pension plan was far from exemplary. Let me remind you we're not talking about a company in dire fiscal straits. We're talking about a very healthy company.

Originally IBM offered only those employees within five years of retirement a choice between the old and new pensions plans. While I am pleased they expanded this choice to cover more employees after the employees rightly expressed their outrage, I believe the court case brought against IBM should proceed without intervention by the U.S. Treasury Department.

I wish IBM had adopted models used by other companies when they switched to alternatives to traditional defined benefit pension plans.

For example, Honeywell, another company with many employees in Minnesota, across America, and around the world, switched to a pension equity plan in 2000. Honeywell offered all their employees a choice between remaining in the old plan and switching to the new plan. This is the model of how I feel companies should proceed in this area.

The Director of Benefits for Eaton Corporation, Ellen Collier, testified in front of the House Education and Workforce Committee this year that her company has given employees the choice between two retirement plans. Motorola, Deloitte & Touche, Northern States Power, Eastman Kodak and many other companies have all given their employees choice between old and new plans.

I understand that cash balance plans are a reality of the modern world and we should not discourage companies from offering them. I, however, do feel there are right and wrong ways to go about converting from one plan to another.

IBM handled this inappropriately and I believe the court case should proceed without federal government involvement.

This amendment overwhelmingly passed the House last year by a vote of 258 to 160 with strong support from both sides of the aisle. It is supported by the AARP. I urge my colleagues to support the Sanders/ Gutknecht Amendment.

Hon. Gil Gutknecht,

House of Representatives,

Washington, DC.

Dear Representative Gutknecht: AARP supports the Gutknecht-

Sanders amendment to the Transportation, Treasury and

Independent Agencies Appropriations Act for Fiscal Year (FY)

2005 to ensure that the Internal Revenue Service (IRS) does

not use any funds in contravention of current law

prohibitions on age discrimination in pension plan funds and

to specifically prohibit the IRS from issuing regulations or

implementing any other measure that would conflict with the

July 31, 2003, federal court ruling in Kathi Cooper, et al.

v. IBM Personal Pension Plan, et. al.

AARP has long been concerned with the legal basis for the

hybrid cash balance formula and the significant age

discriminatory issues that arise when employees convert

defined benefit pension plans to a cash balance formula. We

believe that a careful review of the legal distinction

between defined benefit and defined contribution plans such

as was conducted by the federal court in Cooper makes clear

that the most common designs for hybrid cash balance plans do

not fit within the current legal framework of the Internal

Revenue Code (IRC), the Age Discrimination in Employment Act

(ADEA), and the Employee Retirement Income Security Act

(ERISA).

As the court concluded in Cooper, the cash balance plan

formula discriminates against older workers, and older

workers are particularly disadvantaged when an employer

converts from a defined benefit pension plan to a cash

balance plan. These longer-term employees have given up wages

and accepted a lower pension in the early years of their

employment in exchange for the larger future benefits from

their employer's traditional defined benefit pension plan.

Without adequate protection, older workers will now lose some

of the benefits they were promised. Older workers generally

have less time to accumulate benefits under a new cash

balance formula, have a harder time leaving their current job

if compensation and benefits are cut, will have fewer

prospects of finding a new job, and are less able to adjust

to the changes that may dramatically reduce their retirement

security (for example, they have less time to adjust by

increasing their savings for retirement).

In September 1999, the IRS imposed a moratorium on

corporate plans that convert traditional defined benefit

plans to a cash balance formula so the agency could review

the matter. The moratorium suspended consideration of

approximately 300 pending applications submitted by

corporations to convert an existing plan to a cash balance

formula. The Treasury initially proposed regulations in

December 2002 that would have lifted the moratorium and

permitted corporations to establish cash balance plans.

However, the IRS withdrew the proposed regulations in July of

this year.

In its FY 2005 budget, the Administration proposed

legislation that would have addressed some of the concerns

related to cash balance plan conversions. AARP was pleased

that the legislative proposal recognized the problem with so

called ``wear-away'' and recommended a ban on the wear-away

of any benefits at any time after a cash balance plan

conversion. In recognition of the transition problem faced by

workers, the Administration's proposal also included a five-

year ``hold harmless'' period after each cash balance plan

conversion.

While the proposal is a step in the right direction, it

does not go far enough. More can be done to ensure that older

workers are adequately protected from the impact of a

``pension pay cut'' in any conversion to a cash balance plan.

In fact, many of the recent pension conversions--recognizing

the harm to older workers--have provided older and longer-

service workers with more generous transition relief,

including a choice to remain in the old plan rather than move

to the new cash balance plan. This is further confirmation

that business can and should do the right thing for their

older, longer-service employees.

AARP believes that Treasury should not take any action that

would encourage companies to change their pension plans in a

manner that is contrary to the age discrimination laws and

the federal court ruling. Rather, Congress should act to

ensure that older workers are protected in any cash balance

conversion. We urge adoption of this amendment.

Thank you for your leadership and dedication to

strengthening the private pension system and protecting the

pension benefits of workers. Please let me know, or have your

staff call Frank Toohey (202-434-3760) of our Federal Affairs

office, if we can be of further assistance.

Sincerely,

Michael Naylor,

Director of Advocacy.

Mr. Chairman, I hate to rise and oppose two of my good friends, but I thank the gentleman from Texas (Mr. Sam Johnson), who has just given a speech; and I just want to contradict a couple of things he said.

First of all, if the IBM company had given IBMers all they wanted, they would not be in court; and if there were not age discrimination, they would not have won; and if it were not for the IRS and the Department of Treasury wanting to get involved in this case, we would not have to offer this amendment.

This is wrong. As my friend said, this is not a matter of right versus left. It is right versus wrong. It is wrong for employers to steal from pension funds. It is that simple.

The reason we are here today is to try and keep this administration from doing something incredibly stupid, and that is, getting involved in this case which the workers have already won, and they are right, because it is the age discrimination.

Cash balance plans are not intrinsically evil. I said that earlier; but when you do it in such a way so that you shave off the end where people really accrue benefits, the courts have correctly ruled.

Mr. Chairman, I rise in opposition to the Norton amendment. Just a few minutes ago, I was here on the House floor arguing about a pension issue because employees were not given a choice. The essence of the Norton amendment is to not give Federal employees this choice.

The idea that Federal employees and public employees in general do not want to have the choice of a health savings account is simply not true. It may not work as we think it will. I have heard of the study in Idaho, but I have also heard studies from private employers that these programs provide as good or better quality health care, and they do something we must do, they save money.

But do not take my word for it. Public employees in the State of Minnesota have studied these, and they want access. I have letters, and I will submit them for the Record, from the Minnesota Teamsters Local 320, Minneapolis Police Relief Association, Minnesota Firefighters' Relief Association, Minnesota State Retirement System and from the Public Employees Retirement Association in the State of Minnesota representing over a quarter of a million people in Minnesota, public employees, who want to have access to health savings accounts.

Will they work as well as some people think they will, we do not know. But putting this as part of the Federal Employees Health Benefits Program is one way to find out. The Norton amendment is one small step in chipping away at the option that Federal employees ought to have to find out whether health savings accounts work as well as many of us believe. Public employees from the State of Minnesota have studied this issue. They want to have that opportunity. We should not deny that opportunity for Federal employees.

Minnesota Teamsters Public & Law Enforcement Employees'

Union, Local No. 320,

Minneapolis, MN, July 1, 2004.

Congressman Gil Gutknecht,

Washington, DC.

Dear Congressman Gutknecht: We are writing to you seeking

your continued leadership in addressing Health Savings

Accounts (HSA's). As you are well aware, in the 2003 Medicare

Act, individuals over the age of 65 were excluded from

participating in the newly created HSA's.

It is important that not only do the changes to the

Medicare Reform Act of 2003 include participation for those

over age 65 in the HSA's but the language which ties Medicare

ineligibility to HSA participation must also be removed. HSA

participation would provide a very modest way in which our

over 65 retiree's could tax defer some of their financial

resources.

Our public safety retirees put in their time and duty and

had planned on living out their retirement years with not

having to face financial difficulties. However, health care

costs for those over 65 years of age have increased

dramatically over the last decade. Supplemental insurance to

Medicare can cost a retired couple up to $8,000 per year.

We strongly encourage you to work with other members of

Congress and the Bush Administration to correct his

discrimination against our retirees.

Again, thank you for all your support and past leadership

in the HSA's. Please continue to assist us in this battle for

affordable health care.

Sincerely,

Sue Mauren,

Secretary-Treasurer,

Teamsters Local #320.