Floor Statements

Madam President, I ask unanimous consent the order for the quorum call be rescinded.

I ask consent to speak as in morning business.

Madam President, I yield the floor and suggest the absence of a quorum.

Today I am pleased to be introducing a piece of legislation designed to establish a national criminal justice commission. I do so with, at the moment, 12 cosponsors, including our majority leader, the chairman and the ranking Republican on the Senate Judiciary Committee, the chairman and the ranking member of the Judiciary Subcommittee on Crime and Drugs, and other members of our leadership. I introduce this bill after more than 2 years of effort here in the Senate that I will explain shortly; also with the prior conferral with Supreme Court Justice Kennedy and having discussed this matter with the President and the Attorney General, both of whom I think are strongly supportive of this concept.

Our design, our goal in this legislation, is to create a national commission with an 18-month timeline, not to simply talk about the problems that we have in our criminal justice system but actually to look at all of the elements in this system, how they are interrelated in terms of the difficulties that we have in remedying issues of criminal justice in this country, and to deliver us from a situation that has evolved over time where we are putting far too many of the wrong people into prison and we are still not feeling safer in our neighborhoods; we are still not putting in prison or bringing to justice those people who are perpetrating violence and criminality as a way of life.

I would like to say that, although I am not on the Judiciary Committee, I come to this issue as someone who first became interested in criminal justice issues while I was serving as a U.S. marine, serving on a number of courts-martial and thinking about the interrelationship between discipline and fairness; then after that, from having spent time as an attorney at one point representing, pro bono, a young former marine who had been convicted of murder in Vietnam. I represented him for 6 years pro bono. He took his life halfway through this process. I cleared his name 3 years later, but I became painfully aware of how sometimes inequities infect our process.

Prior to joining the Senate, I spent time as a journalist, including a stint 25 years ago as the first American journalist to have been inside the Japanese prison system, where I became aware of the systemic difficulties and challenges

we have. At that time, 25 years ago, Japan was half our population, and had only 40,000 sentenced prisoners in jail. We had 480,000. Today, we have 2.38 million prisoners in our criminal justice system and another 5 million involved in the process, either due to probation or parole situations.

This is a system that is very much in need of the right sort of overarching examination. I do note the senior Senator from Pennsylvania has joined me on the Senate floor. I am very gratified he has also joined me as the lead Republican on this measure. I look forward to hearing from him as soon as I am finished with my remarks.

The third thing I would like to say at the outset is, I believe very strongly, even though we are a Federal body, that there is a compelling national interest for us to examine this issue and reshape and reform our criminal justice system at the Federal, State, and local levels. I believe the commission I am going to present would provide us with that opportunity.

I start with a premise I do think not a lot of Americans are aware of. We have 5 percent of the world's population. We have 25 percent of the world's known prison population. We have an incarceration rate in the United States, the world's greatest democracy, that is five times as high as the incarceration rate in the rest of the world.

There are only two possibilities. Either we have the most evil people on Earth living in the United States or we are doing something dramatically wrong in terms of how we approach the issue of criminal justice. And I would ask my fellow Senators and my fellow citizens to think about the challenges that attend these kind of numbers when we are looking at people who have been released from prison and are reentering American society.

We have hundreds and thousands of American people who are reentering American society without the sort of transition that would allow a great percentage of them to again become productive citizens.

I think we need to look at this in terms of our own history, our own recent history. This is a chart that shows our incarceration rate from 1925 until today. Beginning in about 1980, our incarceration rate started to skyrocket. What has happened since 1980 is not reflective of where our own history has been on this issue. That is another need, why we need to examine it fuller. We also, for a complex set of reasons, are warehousing the mentally ill in our prisons. We now have four times as many mentally ill people in our prisons than we do in mental institutions. There are a complex set of reasons for that, but the main point for all of us to consider is, these people who are in prison are not receiving the kind of treatment they would need in order to remedy the disabilities that have brought them to that situation.

Drug incarceration has sharply increased over the past three decades. In 1980, we had 41,000 drug offenders in prison. Today we have more than 500,000. That is an increase of 112 percent.

Those blue disks represent the numbers in 1980. The red disks represent the numbers in 2007. A significant percent of these individuals are incarcerated for possession or nonviolent drug offenses, and in many cases, criminal offenses that stem from drug addiction and those sorts of related behavioral issues.

African Americans are about 12 percent of our population. Contrary to a lot of thought and rhetoric, their drug use, in terms of frequent drug use rate, is about the same as all other elements of our society, about 14 percent. But they end up being 37 percent of those arrested on drug charges, 59 percent of those convicted, and 74 percent of those sentenced to prison, by the numbers that have been provided to us and to the Joint Economic Committee. This is a disturbing statistic for us. I emphasize to my colleagues and to others that the issues we face with respect to criminal justice are not overall racial issues. They involve issues, in many cases, of how people are treated based on their ability to have proper counsel and other issues like that. But this is a statistic with respect to drugs that we all must come to terms with.

At the same time, I say we are putting too many of the wrong people in prison, and we are not solving the problems that will bring safety to our communities. Gangs are a hot issue today. I am on the Armed Services Committee. I am on the Foreign Relations Committee. There has been a lot of back and forth in recent months about the transnational gangs that are emanating across the Mexican border. Approximately 1 million gang members are currently in our country today. And I emphasis this is not an issue that is simply existent along the Mexican border. This is an issue that affects every community in the United States, and it is not simply an issue with respect to the Mexican drug cartels, although theirs are the most violent and the most visible today.

The Mexican drug cartels are operating in more than 230 American cities, not simply along the border. The incidents along on the border illuminate the largeness of this problem and of this challenge. Gangs in many areas of the United States commit 80 percent of the crimes. They are heavily involved in drug distribution, but they are involved in other violent activities as well.

There has been some talk over the past few days about how our position toward drugs and our gun policies feed this problem. I would ask my colleagues to think very hard about that. Drugs are a demand- pull problem in the United States, there is no question about that. There are a lot of weapons that are going back and forth across the border. But we should remember the Mexican drug cartels are capable of very sophisticated levels of quasi-military violence.

Many of the members who are brought into the gangs by the drug cartels are former Mexican military. Some of them have been trained by our own special forces, and the weapons they use are not the kind of weapons you are going to buy at a gun show. You do not get automatic weapons, RPGs, and grenades at a gun show.

We have to realize these cartels have a lot of money. By some indications they make profit levels of about $25 billion a year. They can buy the weapons they want. We have to get on top of this as a national priority. Again, it is not simply the transnational gangs that come out of Mexico. Many of them are Central American.

In Northern Virginia, right across the Potomac River, we have thousands of members who belong to the MS-13 gangs emanating out of Central America, who are very active up the I-95 corridor. There are Asian gangs. We have to get our arms around this problem as we address the other problem of mass incarceration in the United States.

Another piece of this issue I hope we will be able to address with this national criminal justice commission is what happens inside our prisons. When I was looking at the Japanese system many years ago, their model in terms of prison administration was basically designed after a traditional military model. You could not be a warden in a Japanese jail unless you started as a turnkey. They had national examinations. They had a year of preparation, training in psychology, in counseling techniques, before an individual was allowed to be a turnkey in a jail. The promotion systems were internal, like the U.S. military. It provided a quality career path, and it brought highly trained people in at the very beginning.

We do not have that in America. Prisons vary warden to warden; they vary locality to locality. We need to examine a better way to do that in our country.

We also have a situation in this country with respect to prison violence and sexual victimization that is off the charts. We must get our arms around this problem.

We also have many people in our prisons who are among what are called the criminally ill, people who are suffering from hepatitis and HIV who are not getting the sorts of treatment they deserve.

I started, once I arrived in the Senate, working on this issue. I was pleased to be working with Senator Schumer on the Joint Economic Committee. He allowed me to chair hearings to try to get our arms around this problem and see what sort of legislative approach might help. I chaired a hearing on mass incarceration in October of 2007. I chaired another hearing last year on the overall impact of illegal drugs from point of origin through the criminal justice system. How does this work in terms of the underground

business environment? How does it work in terms of the disparity in treatment of people who end up incarcerated? How does it affect people's long-term lives? What are the costs associated with it?

I was able to work with the George Mason University Law Center to put together a forum bringing people in from across the country to talk about our overall drug policy. Once we started talking about this, particularly over the last year, we started being contacted by people all across the country, people from every different aspect of the political and the philosophical areas that come into play when we talk about incarceration. It is a very emotional issue.

As I said, I heard from Justice Kennedy at the Supreme Court. I have heard from prosecutors, judges, defense lawyers, former offenders, people in prison, police on the street. All of them are saying we have a mess; we have a mess. We have to get a holistic view of how to solve it. There are many good pieces of legislation that have been introduced in the Congress to deal with different pieces of this issue. But after going through this process over the past year, I have come to the conclusion that the way we should address this is with a national commission that will examine all of these pieces together and make specific findings so we can turn it around.

These are examples of some of the editorial support that we have received. I have written a piece for Parade magazine which will be out this weekend to summarize the challenges we have; I hope our fellow citizens will take a look at it.

As to the design of this legislation, we are looking for two things. One is to shape a commission with bipartisan balance: the President nominating the chairman; the majority and minority leaders in the Senate, in consultation with the Judiciary Committee, each nominating two members; the Speaker of the House and the House Minority Leader, in concert with the Judiciary Committee, each nominating two members; and the National Governors Association, Republican and Democrat, each getting one member. The idea is not to have a group of people who are going to sit around and simply remonstrate about the problem. It is to get a group of people with credibility and wide expertise to examine specific findings and to come up with policy recommendations on an 18- month time period.

This commission will be asked to investigate the reasons in our own history that we have seen this incredible increase in incarceration. What do other countries do, particularly countries that have the same basic governmental systems we do? How do they handle comparable types of crime? What should we do about prison administration policies, prison management? How can we bring more quality, stability, and predictability in terms of the prison environment itself? What are the costs of our current incarceration policies, not only in terms of the billions of dollars we spend on building prisons or the billions we spend on housing people in prisons but also in terms of lost opportunities with our post-prison systems, and how we can better manage that area. What is the impact of gang activities, including these transnational gangs, and how should we approach that issue, not simply in terms of incarceration but as a nation that is under duress from not being able to respond properly? Importantly, what are we going to do about drug policy, the whole area of drug policy, and how does that affect sentencing procedures and other alternatives we might look at? We need to examine the policies as they relate to the mentally ill. We should look at the historical role of the military when it comes to how we are approaching these cross-border situations, particularly on the Mexican border. Finally, importantly, any other area the Commission deems relevant.

This is our best effort, after 2 years of coming up with the universe of issues that need to be examined. There are many people, including the senior Senator from Pennsylvania, who have worked on these areas for a number of years. If they have specific findings they believe the Commission should review, we are very happy to accommodate that.

The first step for the commission would be to give us findings, factual findings. From those findings, then give us recommendations for policy changes. The same areas I addressed in terms of findings apply in terms of the policy recommendations: How we can refocus our incarceration policies, work toward properly reducing the incarceration rate in fair, cost-effective ways that still protect communities; how we should address the issue of prison violence in all forms; how we can improve prison administration; how we can establish meaningful reentry programs. I believe with the high volume of people coming out of prisons, we must, on a national level, assist local and State communities in figuring out a way to transition these people so those former offenders who are not going to become recidivists will have a true pathway to get away from the stigma of incarceration and move into a productive future.

Again, importantly, the last category, any other aspect of the system the Commission or the people participating in it determine necessary.

This is our approach. I am gratified to have had as initial cosponsors six members of the Senate Judiciary Committee, including the chairman, Senator Leahy; the ranking Republican, Senator Specter; the chairman of the Subcommittee on Crime and Drugs, Senator Durbin; the ranking Republican on that subcommittee, Senator Graham; and a number of others, including key Democratic leadership--most importantly, our leader.

I hope we can get this legislation done this year. This is an issue that does not percolate up in the same way. It doesn't have a programmatic element to it in many cases, but it is an issue that threatens every community and begs for the notion of fairness.

I see the senior Senator from Pennsylvania is on the floor. I greatly admire the work he has done in this area over many years, and I appreciate his support on this endeavor.

I wish to express my appreciation to the senior Senator from Pennsylvania for joining me on this legislation and in this endeavor because it will be an endeavor, as the Senator knows, well beyond the legislative approval of the commission. I think this is going to take years. But I wish to express my appreciation for that, for his comments today, and for all the work he has done in this field.

I wish to emphasize a couple of things, in reaction to what the Senator mentioned. I agree. I do believe we can

meaningfully address this problem. And ``solution'' is perhaps a more illusive word. But we can certainly meaningfully address this problem. I think it is very important to say that it is in the interest of every American we do so.

There are a lot of people who will look at this and talk about specific elements of who has committed a crime and whether you should do the time and these sorts of things, but we do need to sort it out. When we have 5 percent of the world's population and 25 percent of the world's prison population, there are better ways. When we still have public safety issues in every community because of gang violence, and particularly transnational gang violence at this moment, there are better ways.

That is the purpose of having a commission: getting the greatest minds in this area in the country together, with a specific timeline, to bring us specific findings and recommendations for the entire gamut of criminal justice in the country--not simply incarceration, not simply gang violence, not simply reentry--but all of those and other issues together, so we can have a much needed and long overdue restructuring of how we address the issue of crime in this country.

I ask unanimous consent that Senator Kennedy be added as an original cosponsor on this bill.

Today I am pleased to be introducing a piece of legislation designed to establish a national criminal justice commission. I do so with, at the moment, 12 cosponsors, including our majority leader, the chairman and the ranking Republican on the Senate Judiciary Committee, the chairman and the ranking member of the Judiciary Subcommittee on Crime and Drugs, and other members of our leadership. I introduce this bill after more than 2 years of effort here in the Senate that I will explain shortly; also with the prior conferral with Supreme Court Justice Kennedy and having discussed this matter with the President and the Attorney General, both of whom I think are strongly supportive of this concept.

Our design, our goal in this legislation, is to create a national commission with an 18-month timeline, not to simply talk about the problems that we have in our criminal justice system but actually to look at all of the elements in this system, how they are interrelated in terms of the difficulties that we have in remedying issues of criminal justice in this country, and to deliver us from a situation that has evolved over time where we are putting far too many of the wrong people into prison and we are still not feeling safer in our neighborhoods; we are still not putting in prison or bringing to justice those people who are perpetrating violence and criminality as a way of life.

I would like to say that, although I am not on the Judiciary Committee, I come to this issue as someone who first became interested in criminal justice issues while I was serving as a U.S. marine, serving on a number of courts-martial and thinking about the interrelationship between discipline and fairness; then after that, from having spent time as an attorney at one point representing, pro bono, a young former marine who had been convicted of murder in Vietnam. I represented him for 6 years pro bono. He took his life halfway through this process. I cleared his name 3 years later, but I became painfully aware of how sometimes inequities infect our process.

Prior to joining the Senate, I spent time as a journalist, including a stint 25 years ago as the first American journalist to have been inside the Japanese prison system, where I became aware of the systemic difficulties and challenges

we have. At that time, 25 years ago, Japan was half our population, and had only 40,000 sentenced prisoners in jail. We had 480,000. Today, we have 2.38 million prisoners in our criminal justice system and another 5 million involved in the process, either due to probation or parole situations.

This is a system that is very much in need of the right sort of overarching examination. I do note the senior Senator from Pennsylvania has joined me on the Senate floor. I am very gratified he has also joined me as the lead Republican on this measure. I look forward to hearing from him as soon as I am finished with my remarks.

The third thing I would like to say at the outset is, I believe very strongly, even though we are a Federal body, that there is a compelling national interest for us to examine this issue and reshape and reform our criminal justice system at the Federal, State, and local levels. I believe the commission I am going to present would provide us with that opportunity.

I start with a premise I do think not a lot of Americans are aware of. We have 5 percent of the world's population. We have 25 percent of the world's known prison population. We have an incarceration rate in the United States, the world's greatest democracy, that is five times as high as the incarceration rate in the rest of the world.

There are only two possibilities. Either we have the most evil people on Earth living in the United States or we are doing something dramatically wrong in terms of how we approach the issue of criminal justice. And I would ask my fellow Senators and my fellow citizens to think about the challenges that attend these kind of numbers when we are looking at people who have been released from prison and are reentering American society.

We have hundreds and thousands of American people who are reentering American society without the sort of transition that would allow a great percentage of them to again become productive citizens.

I think we need to look at this in terms of our own history, our own recent history. This is a chart that shows our incarceration rate from 1925 until today. Beginning in about 1980, our incarceration rate started to skyrocket. What has happened since 1980 is not reflective of where our own history has been on this issue. That is another need, why we need to examine it fuller. We also, for a complex set of reasons, are warehousing the mentally ill in our prisons. We now have four times as many mentally ill people in our prisons than we do in mental institutions. There are a complex set of reasons for that, but the main point for all of us to consider is, these people who are in prison are not receiving the kind of treatment they would need in order to remedy the disabilities that have brought them to that situation.

Drug incarceration has sharply increased over the past three decades. In 1980, we had 41,000 drug offenders in prison. Today we have more than 500,000. That is an increase of 112 percent.

Those blue disks represent the numbers in 1980. The red disks represent the numbers in 2007. A significant percent of these individuals are incarcerated for possession or nonviolent drug offenses, and in many cases, criminal offenses that stem from drug addiction and those sorts of related behavioral issues.

African Americans are about 12 percent of our population. Contrary to a lot of thought and rhetoric, their drug use, in terms of frequent drug use rate, is about the same as all other elements of our society, about 14 percent. But they end up being 37 percent of those arrested on drug charges, 59 percent of those convicted, and 74 percent of those sentenced to prison, by the numbers that have been provided to us and to the Joint Economic Committee. This is a disturbing statistic for us. I emphasize to my colleagues and to others that the issues we face with respect to criminal justice are not overall racial issues. They involve issues, in many cases, of how people are treated based on their ability to have proper counsel and other issues like that. But this is a statistic with respect to drugs that we all must come to terms with.

At the same time, I say we are putting too many of the wrong people in prison, and we are not solving the problems that will bring safety to our communities. Gangs are a hot issue today. I am on the Armed Services Committee. I am on the Foreign Relations Committee. There has been a lot of back and forth in recent months about the transnational gangs that are emanating across the Mexican border. Approximately 1 million gang members are currently in our country today. And I emphasis this is not an issue that is simply existent along the Mexican border. This is an issue that affects every community in the United States, and it is not simply an issue with respect to the Mexican drug cartels, although theirs are the most violent and the most visible today.

The Mexican drug cartels are operating in more than 230 American cities, not simply along the border. The incidents along on the border illuminate the largeness of this problem and of this challenge. Gangs in many areas of the United States commit 80 percent of the crimes. They are heavily involved in drug distribution, but they are involved in other violent activities as well.

There has been some talk over the past few days about how our position toward drugs and our gun policies feed this problem. I would ask my colleagues to think very hard about that. Drugs are a demand- pull problem in the United States, there is no question about that. There are a lot of weapons that are going back and forth across the border. But we should remember the Mexican drug cartels are capable of very sophisticated levels of quasi-military violence.

Many of the members who are brought into the gangs by the drug cartels are former Mexican military. Some of them have been trained by our own special forces, and the weapons they use are not the kind of weapons you are going to buy at a gun show. You do not get automatic weapons, RPGs, and grenades at a gun show.

We have to realize these cartels have a lot of money. By some indications they make profit levels of about $25 billion a year. They can buy the weapons they want. We have to get on top of this as a national priority. Again, it is not simply the transnational gangs that come out of Mexico. Many of them are Central American.

In Northern Virginia, right across the Potomac River, we have thousands of members who belong to the MS-13 gangs emanating out of Central America, who are very active up the I-95 corridor. There are Asian gangs. We have to get our arms around this problem as we address the other problem of mass incarceration in the United States.

Another piece of this issue I hope we will be able to address with this national criminal justice commission is what happens inside our prisons. When I was looking at the Japanese system many years ago, their model in terms of prison administration was basically designed after a traditional military model. You could not be a warden in a Japanese jail unless you started as a turnkey. They had national examinations. They had a year of preparation, training in psychology, in counseling techniques, before an individual was allowed to be a turnkey in a jail. The promotion systems were internal, like the U.S. military. It provided a quality career path, and it brought highly trained people in at the very beginning.

We do not have that in America. Prisons vary warden to warden; they vary locality to locality. We need to examine a better way to do that in our country.

We also have a situation in this country with respect to prison violence and sexual victimization that is off the charts. We must get our arms around this problem.

We also have many people in our prisons who are among what are called the criminally ill, people who are suffering from hepatitis and HIV who are not getting the sorts of treatment they deserve.

I started, once I arrived in the Senate, working on this issue. I was pleased to be working with Senator Schumer on the Joint Economic Committee. He allowed me to chair hearings to try to get our arms around this problem and see what sort of legislative approach might help. I chaired a hearing on mass incarceration in October of 2007. I chaired another hearing last year on the overall impact of illegal drugs from point of origin through the criminal justice system. How does this work in terms of the underground

business environment? How does it work in terms of the disparity in treatment of people who end up incarcerated? How does it affect people's long-term lives? What are the costs associated with it?

I was able to work with the George Mason University Law Center to put together a forum bringing people in from across the country to talk about our overall drug policy. Once we started talking about this, particularly over the last year, we started being contacted by people all across the country, people from every different aspect of the political and the philosophical areas that come into play when we talk about incarceration. It is a very emotional issue.

As I said, I heard from Justice Kennedy at the Supreme Court. I have heard from prosecutors, judges, defense lawyers, former offenders, people in prison, police on the street. All of them are saying we have a mess; we have a mess. We have to get a holistic view of how to solve it. There are many good pieces of legislation that have been introduced in the Congress to deal with different pieces of this issue. But after going through this process over the past year, I have come to the conclusion that the way we should address this is with a national commission that will examine all of these pieces together and make specific findings so we can turn it around.

These are examples of some of the editorial support that we have received. I have written a piece for Parade magazine which will be out this weekend to summarize the challenges we have; I hope our fellow citizens will take a look at it.

As to the design of this legislation, we are looking for two things. One is to shape a commission with bipartisan balance: the President nominating the chairman; the majority and minority leaders in the Senate, in consultation with the Judiciary Committee, each nominating two members; the Speaker of the House and the House Minority Leader, in concert with the Judiciary Committee, each nominating two members; and the National Governors Association, Republican and Democrat, each getting one member. The idea is not to have a group of people who are going to sit around and simply remonstrate about the problem. It is to get a group of people with credibility and wide expertise to examine specific findings and to come up with policy recommendations on an 18- month time period.

This commission will be asked to investigate the reasons in our own history that we have seen this incredible increase in incarceration. What do other countries do, particularly countries that have the same basic governmental systems we do? How do they handle comparable types of crime? What should we do about prison administration policies, prison management? How can we bring more quality, stability, and predictability in terms of the prison environment itself? What are the costs of our current incarceration policies, not only in terms of the billions of dollars we spend on building prisons or the billions we spend on housing people in prisons but also in terms of lost opportunities with our post-prison systems, and how we can better manage that area. What is the impact of gang activities, including these transnational gangs, and how should we approach that issue, not simply in terms of incarceration but as a nation that is under duress from not being able to respond properly? Importantly, what are we going to do about drug policy, the whole area of drug policy, and how does that affect sentencing procedures and other alternatives we might look at? We need to examine the policies as they relate to the mentally ill. We should look at the historical role of the military when it comes to how we are approaching these cross-border situations, particularly on the Mexican border. Finally, importantly, any other area the Commission deems relevant.

This is our best effort, after 2 years of coming up with the universe of issues that need to be examined. There are many people, including the senior Senator from Pennsylvania, who have worked on these areas for a number of years. If they have specific findings they believe the Commission should review, we are very happy to accommodate that.

The first step for the commission would be to give us findings, factual findings. From those findings, then give us recommendations for policy changes. The same areas I addressed in terms of findings apply in terms of the policy recommendations: How we can refocus our incarceration policies, work toward properly reducing the incarceration rate in fair, cost-effective ways that still protect communities; how we should address the issue of prison violence in all forms; how we can improve prison administration; how we can establish meaningful reentry programs. I believe with the high volume of people coming out of prisons, we must, on a national level, assist local and State communities in figuring out a way to transition these people so those former offenders who are not going to become recidivists will have a true pathway to get away from the stigma of incarceration and move into a productive future.

Again, importantly, the last category, any other aspect of the system the Commission or the people participating in it determine necessary.

This is our approach. I am gratified to have had as initial cosponsors six members of the Senate Judiciary Committee, including the chairman, Senator Leahy; the ranking Republican, Senator Specter; the chairman of the Subcommittee on Crime and Drugs, Senator Durbin; the ranking Republican on that subcommittee, Senator Graham; and a number of others, including key Democratic leadership--most importantly, our leader.

I hope we can get this legislation done this year. This is an issue that does not percolate up in the same way. It doesn't have a programmatic element to it in many cases, but it is an issue that threatens every community and begs for the notion of fairness.

I see the senior Senator from Pennsylvania is on the floor. I greatly admire the work he has done in this area over many years, and I appreciate his support on this endeavor.

I wish to express my appreciation to the senior Senator from Pennsylvania for joining me on this legislation and in this endeavor because it will be an endeavor, as the Senator knows, well beyond the legislative approval of the commission. I think this is going to take years. But I wish to express my appreciation for that, for his comments today, and for all the work he has done in this field.

I wish to emphasize a couple of things, in reaction to what the Senator mentioned. I agree. I do believe we can

meaningfully address this problem. And ``solution'' is perhaps a more illusive word. But we can certainly meaningfully address this problem. I think it is very important to say that it is in the interest of every American we do so.

There are a lot of people who will look at this and talk about specific elements of who has committed a crime and whether you should do the time and these sorts of things, but we do need to sort it out. When we have 5 percent of the world's population and 25 percent of the world's prison population, there are better ways. When we still have public safety issues in every community because of gang violence, and particularly transnational gang violence at this moment, there are better ways.

That is the purpose of having a commission: getting the greatest minds in this area in the country together, with a specific timeline, to bring us specific findings and recommendations for the entire gamut of criminal justice in the country--not simply incarceration, not simply gang violence, not simply reentry--but all of those and other issues together, so we can have a much needed and long overdue restructuring of how we address the issue of crime in this country.

I ask unanimous consent that Senator Kennedy be added as an original cosponsor on this bill.

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

Madam President, I rise to address the recent debate we have had on the Omnibus appropriations bill with respect to earmarks. The premise seems to be, for those who have criticized the earmarks process, that this is pork. Sometimes it is; sometimes it is not. But I would start first with the Constitution.

There is nothing in the Constitution that says the executive branch of Government should appropriate funds or decide which funds should be spent. That is a procedure that has evolved over the centuries because of the complexities of Government, where the executive branch looks at its needs and comes to the Congress and asks for appropriations. Earmarks take place when individual Members of Congress, exercising their authority to appropriate under the Constitution, decide and recommend that worthwhile programs in an ideal case should be included in a budget process, programs that have not been considered or included by the executive branch or through other processes.

For instance, I was able, last year, along with Senator John Warner, now retired, to bring $5 million into a rural area of Tidewater, VA, so they could put broadband in. Broadband is something we know all Americans who want to compete for their future and contribute equally need to have. It didn't make it into anybody's bill. Who is thinking about sparsely populated areas such as rural Virginia? Yet we were able to bring a lot of benefit to those who otherwise would not have received it.

What I would ask my colleagues, particularly those who have become so adamant in their concern over the earmarks process, to consider is, let's take a look at the budget that comes to the Congress. Is there pork in the budgets that come over, pork that comes through, in some cases, unnecessary influence or individual discretion? You bet there is.

I say that as someone who spent 5 years in the Pentagon, 4 years of which I was on the Defense Resources Board where on any given day we were implementing a budget, arguing a budget in the Congress, and developing the next year's budget. I offer an example of a situation that my staff has been following for the last 10 months and use it as an invitation to colleagues to join me in looking at where there can be abuses of discretion and where there can be a lot of money that can be saved.

Ten months ago, on May 21, there was an article in the Wall Street Journal that talked about Blackwater Worldwide attempting to obtain local approval for a new training center in San Diego, CA. We all remember Blackwater. They are an independent contractor that has done more than a billion dollars of business since the Bush administration, the most recent Bush administration took office. I became curious about this project, first, because I had seen reports of what a very high percentage of the Blackwater contracts had been awarded were either noncompete or minimal compete and the high volume number, more than a billion of them. And also the fact that having at one time been Secretary of the Navy, they were apparently wanting to build a training center so they could train Active-Duty sailors how to defend themselves onboard a ship.

Having spent time in the Marine Corps, I immediately started thinking about what it would have been like to have a nonmilitary contractor teaching me how to do patrolling when I was going through basic school in Quantico all those years ago. It didn't fit.

I started asking around. The first thing I found out was, this was a contract from the Navy that was worth about $64 million. I wrote a letter to Secretary Gates. I said: Is this Blackwater program in any way authorized or funded by U.S. tax dollars? The answer came back, yes, obviously. I asked: Is there specific legislative authorization for it? Because I couldn't find any, as a member of the Armed Services Committee. The answer was no. According to Secretary Gates, this activity falls under the broad authorization provided to the Secretary of Defense and the Secretaries of the military departments to procure goods and services using appropriated funds and prescribed procedures for those procurements.

Then I asked him in this letter: Is there a specific appropriation, either in an appropriations bill or through an earmark? The answer is: No, there was no specific appropriation or earmark directing this effort.

As we started to peel this back, here is what we found. An individual, an SCS, midlevel individual in the Department of the Navy had the authority to approve this type of a program up to the value of $78 million, without even having a review by the Secretary of the Navy. This was not an authorized program. It was not an appropriated program. It was money that came out of a block of appropriated funds for operation and maintenance that then somebody in the Navy said was essential to the needs of the service, the needs of the fleet, which is a generic term.

I ask my colleagues who are so concerned about some of the pork projects or earmarks process here, which has gained a great deal of visibility since I have been here over the past 2 years and transparency, to join me in taking a look at these sorts of contracts. When a midlevel person in the Pentagon has the authority to approve a program that hasn't been authorized and hasn't been appropriated up to the value of $78 million and not even have the oversight of the Secretary of that service, that is where you see the potential for true abuse of the process. That is where we need to start focusing our energies as a Congress.

Madam President, I have introduced a bill that will create a perpetual Purple Heart stamp. I cannot think of any other stamp or any other area for a perpetual stamp that is more deserving than this award which recognizes sacrifice on the battlefield.

The original cosponsors of this legislation are Senators Brown, Vitter, Wicker, Boxer, Lincoln, and Ben Nelson of Nebraska. The Purple Heart is the oldest continually authorized U.S. military decoration. It was created as a badge of military merit by George Washington in 1782.

The original Purple Hearts were awarded to three soldiers in the Continental Army who had shown outstanding courage during the Revolutionary War. In 1931, Army Chief of Staff Douglas MacArthur commissioned work on a new design for the Purple Heart to coincide with the then upcoming 200th anniversary of President Washington's birth.

President Hoover's War Department authorized the award for wounds received by Army personnel in action or for meritorious service dating back to World War I. On February 22, 1932, General MacArthur became its first recipient. In December of 1942, the Purple Heart was extended to all branches of service, but the criteria were then strictly limited to those we know

today; that is, to be awarded to those who are wounded or killed during direct combat with the enemies of the United States. More than 1.7 million Americans of every race, color, creed and from all 50 States have received the Purple Heart in honor of their sacrifice on our Nation's battlefields.

This is the only U.S. military decoration for which there is no recommendation. It is simply earned through bloodshed for our country.

In 2003, the Postal Service honored recipients of this award by commissioning a first-class Purple Heart stamp in a ceremony at the home of George Washington in Mount Vernon, VA. The image used for this stamp is a photograph of one of the two Purple Hearts received by Marine LTC James Loftus Fowler of Alexandria, VA, which he received in 1968 as a battalion commander near the Ben Hai River in South Vietnam. Since that first issuance in 2003, approximately 1.2 billion first- class Purple Heart stamps have been sold, an average of 200 million a year. At the new first-class rate of 44 cents, which is taking place in May, that is approximately $88 million a year in revenue for the U.S. Government.

This yearly sales rate is equal to or greater than the sales of even the most popular commemorative stamps issued during that period, stamps bearing such American icons as Supreme Court Justice Thurgood Marshall, singer Frank Sinatra, and the classic Disney characters.

In 2007, the Postal Service created the first ``forever'' stamp, a stamp which, no matter when it was purchased, would be good for first- class postage on the day it was used. The image they chose was an image as old and venerable and quintessentially American as the Purple Heart--the Liberty Bell. According to a Postal Service press release, since its first issuance in April of 2007, more than 6 billion forever Liberty Bell stamps have been sold. This is an order of magnitude greater than any other single stamp sold in the United States, generating revenue of $2 billion.

Clearly, the volume of sales of forever stamps is a win for the Postal Service, which is facing a shortfall in future revenues, and a win in terms of the value delivered to the people who want to use them.

In creating the first Purple Heart, General Washington said:

Let it be known that he who wears the military order of the

Purple Heart has given of his blood in defense of his

homeland and shall forever be revered by his fellow

countrymen.

George Washington intended that the Nation he helped found would forever revere those who wear the Purple Heart as a symbol of the sacrifice they have given in our Nation's defense.

As a recipient of the Purple Heart in Vietnam as a Marine, I believe that making the Purple Heart stamp a forever stamp is the most appropriate way to honor the past and future recipients of our Nation's oldest military decoration.

I hope my colleagues will join me in this legislation.

Madam President, I have introduced a bill that will create a perpetual Purple Heart stamp. I cannot think of any other stamp or any other area for a perpetual stamp that is more deserving than this award which recognizes sacrifice on the battlefield.

The original cosponsors of this legislation are Senators Brown, Vitter, Wicker, Boxer, Lincoln, and Ben Nelson of Nebraska. The Purple Heart is the oldest continually authorized U.S. military decoration. It was created as a badge of military merit by George Washington in 1782.

The original Purple Hearts were awarded to three soldiers in the Continental Army who had shown outstanding courage during the Revolutionary War. In 1931, Army Chief of Staff Douglas MacArthur commissioned work on a new design for the Purple Heart to coincide with the then upcoming 200th anniversary of President Washington's birth.

President Hoover's War Department authorized the award for wounds received by Army personnel in action or for meritorious service dating back to World War I. On February 22, 1932, General MacArthur became its first recipient. In December of 1942, the Purple Heart was extended to all branches of service, but the criteria were then strictly limited to those we know

today; that is, to be awarded to those who are wounded or killed during direct combat with the enemies of the United States. More than 1.7 million Americans of every race, color, creed and from all 50 States have received the Purple Heart in honor of their sacrifice on our Nation's battlefields.

This is the only U.S. military decoration for which there is no recommendation. It is simply earned through bloodshed for our country.

In 2003, the Postal Service honored recipients of this award by commissioning a first-class Purple Heart stamp in a ceremony at the home of George Washington in Mount Vernon, VA. The image used for this stamp is a photograph of one of the two Purple Hearts received by Marine LTC James Loftus Fowler of Alexandria, VA, which he received in 1968 as a battalion commander near the Ben Hai River in South Vietnam. Since that first issuance in 2003, approximately 1.2 billion first- class Purple Heart stamps have been sold, an average of 200 million a year. At the new first-class rate of 44 cents, which is taking place in May, that is approximately $88 million a year in revenue for the U.S. Government.

This yearly sales rate is equal to or greater than the sales of even the most popular commemorative stamps issued during that period, stamps bearing such American icons as Supreme Court Justice Thurgood Marshall, singer Frank Sinatra, and the classic Disney characters.

In 2007, the Postal Service created the first ``forever'' stamp, a stamp which, no matter when it was purchased, would be good for first- class postage on the day it was used. The image they chose was an image as old and venerable and quintessentially American as the Purple Heart--the Liberty Bell. According to a Postal Service press release, since its first issuance in April of 2007, more than 6 billion forever Liberty Bell stamps have been sold. This is an order of magnitude greater than any other single stamp sold in the United States, generating revenue of $2 billion.

Clearly, the volume of sales of forever stamps is a win for the Postal Service, which is facing a shortfall in future revenues, and a win in terms of the value delivered to the people who want to use them.

In creating the first Purple Heart, General Washington said:

Let it be known that he who wears the military order of the

Purple Heart has given of his blood in defense of his

homeland and shall forever be revered by his fellow

countrymen.

George Washington intended that the Nation he helped found would forever revere those who wear the Purple Heart as a symbol of the sacrifice they have given in our Nation's defense.

As a recipient of the Purple Heart in Vietnam as a Marine, I believe that making the Purple Heart stamp a forever stamp is the most appropriate way to honor the past and future recipients of our Nation's oldest military decoration.

I hope my colleagues will join me in this legislation.

Mr. President, today I rise to introduce the bipartisan Federal and Military Retiree Health Care Equity Act. I introduce this bill with Senators Burr, Collins, Cardin, Durbin, Warner, Rockefeller, Akaka, Dodd, Kerry, and Bunning. This legislation will provide some relief for our Nation's Federal and military retirees from the increases in their health care plans. This measure extends premium conversion to Federal and military retirees, allowing them to pay their health insurance premiums with pretax dollars.

I believe strongly in protecting the rights and benefits of our federal and military retirees, many of whom have given years of service to our country. I commend their service to our Nation.

The increasing cost of health care is a critical issue, especially to Federal and military retirees living on a fixed income. Health care premiums are rising for Federal and military retirees and their families. This legislation will help to ensure that more Federal and military retirees are able to continue their health care coverage with the Federal Employee Health Benefits Plan and supplemental TRICARE health insurance plans as premiums continue to rise.

In the fall of 2000 premium conversion became available to active Federal employees who participate in the Federal Employees Health Benefits Program. It is a benefit already available to many private sector employees. While premium conversion does not directly affect the amount of the Federal Employee Health Benefit Plan premiums, it helps to offset some of the increase by reducing an individual's Federal tax liability.

Extending this benefit to Federal employees requires a change in the tax law, specifically section 125 of the Internal Revenue Code. This legislation makes the necessary change in the tax code. Under the legislation, the benefit would be concurrently afforded to our Nation's military retirees as well to assist with increasing health care costs.

A number of organizations representing federal and military retirees are strongly behind this initiative: National Active and Retired Federal Employees Association, The Military Coalition, National Treasury Employees Union, National Association of Postmasters of the United States, Professional Aviation Safety Specialists, National Association of Postal Supervisors, National Federation of Federal Employees, National Association of Government Employees, National Rural Letter Carrier Association, National Postal Mail Handlers, American Foreign Service Association, and American Postal Workers Union.

The Federal and Military Retiree Health Care Equity Act has enjoyed overwhelming, bipartisan support for four Congresses. This is a matter of basic fairness. Our Federal employee and military retirees deserve access to the same quality, affordable health care they received as active members of the civil service and military. I encourage my colleagues to join me in moving this legislation forward in this Congress.

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

Mr. President, today I rise to introduce the bipartisan Federal and Military Retiree Health Care Equity Act. I introduce this bill with Senators Burr, Collins, Cardin, Durbin, Warner, Rockefeller, Akaka, Dodd, Kerry, and Bunning. This legislation will provide some relief for our Nation's Federal and military retirees from the increases in their health care plans. This measure extends premium conversion to Federal and military retirees, allowing them to pay their health insurance premiums with pretax dollars.

I believe strongly in protecting the rights and benefits of our federal and military retirees, many of whom have given years of service to our country. I commend their service to our Nation.

The increasing cost of health care is a critical issue, especially to Federal and military retirees living on a fixed income. Health care premiums are rising for Federal and military retirees and their families. This legislation will help to ensure that more Federal and military retirees are able to continue their health care coverage with the Federal Employee Health Benefits Plan and supplemental TRICARE health insurance plans as premiums continue to rise.

In the fall of 2000 premium conversion became available to active Federal employees who participate in the Federal Employees Health Benefits Program. It is a benefit already available to many private sector employees. While premium conversion does not directly affect the amount of the Federal Employee Health Benefit Plan premiums, it helps to offset some of the increase by reducing an individual's Federal tax liability.

Extending this benefit to Federal employees requires a change in the tax law, specifically section 125 of the Internal Revenue Code. This legislation makes the necessary change in the tax code. Under the legislation, the benefit would be concurrently afforded to our Nation's military retirees as well to assist with increasing health care costs.

A number of organizations representing federal and military retirees are strongly behind this initiative: National Active and Retired Federal Employees Association, The Military Coalition, National Treasury Employees Union, National Association of Postmasters of the United States, Professional Aviation Safety Specialists, National Association of Postal Supervisors, National Federation of Federal Employees, National Association of Government Employees, National Rural Letter Carrier Association, National Postal Mail Handlers, American Foreign Service Association, and American Postal Workers Union.

The Federal and Military Retiree Health Care Equity Act has enjoyed overwhelming, bipartisan support for four Congresses. This is a matter of basic fairness. Our Federal employee and military retirees deserve access to the same quality, affordable health care they received as active members of the civil service and military. I encourage my colleagues to join me in moving this legislation forward in this Congress.

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

Mr. President, I rise today to speak about today's guest Chaplain, Reverend Marshal Ausberry of Antioch Baptist Church, located in Fairfax Station, VA. I am pleased to welcome Dr. Ausberry to the U.S. Senate today.

Dr. Ausberry holds a master of divinity degree from the Samuel DeWitt Proctor School of Theology at Virginia Union University and a doctorate of ministry degree in preaching at Gordon-Conwell Theological Seminary. He and his wife Robyn have been married for nearly 30 years, and have three children: Marshal Jr., Rian, and Mycah.

Antioch Baptist Church was founded in January 1989, and in its 20th year continues to bring its mission and ministry to the greater DC metro area. Since 1995, Dr. Ausberry has led this vibrant and robust congregation, expanding not only their membership, but their outreach and community involvement as well.

Through the dozens of missions and ministries at Antioch, Dr. Ausberry has made a profound impact on the lives of many members of not only my constituency but those throughout the DC metro area. I am certain that he will continue to guide his congregation for many years to come, and I look forward to seeing the direction of Antioch Baptist Church under his leadership.

I suggest the absence of a quorum.

Mr. President, I rise today to celebrate the 100th anniversary of the founding of the National Association for the Advancement of Colored People, NAACP, one of our Nation's oldest and most influential civil rights organizations.

Founded on February 12, 1909, the NAACP's original and primary goal was to secure for African Americans the rights that our Constitution guarantees under the 13th, 14th and 15th amendments. The NAACP played a leading role in the civil rights movement in the mid-20th century, stirring the conscience of our nation against segregation and institutionalized racism. Today, the NAACP continues its work to eliminate racial prejudice, and the organization has expanded its endeavors to ensure equal access to political, educational, social and economic advancement for all Americans.

Throughout its 100-year history, the NAACP has effected change at all levels of society and politics, working tirelessly through organizing, advocacy, and judicial action. From a small group of determined citizens in the early 1900s to an organization with over a half-million members and supporters today, the NAACP has established itself throughout America and the world as a leading champion for civil and human rights.

I am proud to be a lifetime member of the NAACP. I share its desire to ensure economic fairness and social justice in this country, and I am pleased to congratulate the NAACP on the occasion of its 100th anniversary.

Madam President, I ask unanimous consent to set aside the pending amendment and call up amendment No. 58.

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

Madam President, I offered this amendment yesterday first by saying, and I would reiterate today, that I firmly support the legislation that is before us. I have a great sense of appreciation for the Senator from Montana for all the work he and his staff have done to bring this legislation to the floor. I offer this amendment in an attempt to resolve what I believe are two issues of fundamental fairness. They go to how this program is going to be paid for.

The first is that the offset being used right now, the 61-cent-per- pack increase on cigarette tax, I believe--as does the Senator from North Carolina, as well as other Members I have discussed this issue with on the floor--that this is unfairly singling out one industry that has already been heavily taxed. Right now, tobacco is federally taxed at 39 cents per pack for this program and all 50 States and the District of Columbia also impose an excise tax on top of that tax. In Virginia that is a 30-cent tax on top of it. Our States, which are also undergoing a lot of difficulty in their economies, are considering raising that tax as well.

My grandmother used to say you can't get blood out of a turnip. I think we are about at the point with this particular industry, that we are getting as much out of it as possible, in a way that is inequitable to the industry--and not just to the industry but, as I mentioned yesterday, according to the Congressional Research Service, cigarette taxes are especially likely to violate horizontal equity. They are among the most burdensome taxes on lower income individuals, and so we have something of an anomaly here where we are levying a tax on a large proportion of people who are economically challenged in order to assist, with this CHIP program, others who are economically challenged. That to me seems a little bit anomalous.

The second issue of fundamental fairness, the ``pay for'' that I proposed in this amendment, is to tax carried interest, which is compensation based on a percentage of the profits that hedge fund managers make. My legislation would tax their compensation as ordinary earned income rather than the capital gains tax they presently pay.

This idea is not my own. President Obama campaigned in favor of changing the carried interest tax rates during his campaign. Yesterday I read from a variety of editorials of major newspapers. I will not go through those in detail, but the Washington Post in a masthead editorial 2 years ago said:

This is a make or break issue for Democrats. If they can't

unite around this issue then they aren't real Democrats.

The New York Times, in a masthead editorial, said:

Congress will achieve a significant victory for fairness

and for fiscal responsibility if it ends the breaks that are

skewing the Tax Code in favor of our most advantaged

Americans.

USA Today and the Philadelphia Inquirer had masthead editorials. Even the Financial Times, which is a conservative newspaper, editorialized:

This repair should be done at once.

That was 2 years ago.

In my view, taking this particular tax break, which characterizes earned income and calls it a capital gains with a much reduced tax, is an imbalance in our system. I am all for people making money. The American system is founded on entrepreneurship. But I am also for people paying their fair share.

I proposed this amendment that would provide partial relief from the cigarette tax. I still believe it would be

a good amendment, but I also can count votes and I do not think this amendment has a chance of passing, frankly. I know the Senator from Montana has questions about it. I would appreciate very much if the Senator from Montana could tell me his hesitation on this so we might work it out.

I appreciate the Senator's comments. Again, I would like to emphasize my respect for the leadership that he has shown in our caucus on all of these issues. I would also say, in my view, in terms of the tobacco industry, this is a Virginia issue, but in terms of both of these issues I believe they are larger issues of equity.

I have a concern for people across the country on both of those issues, but I do take the Senator's point. There is a time and place for everything. I would like to have seen the pay-for on this bill mitigated in terms of people who use cigarettes. I am a reformed smoker, like a lot of people in this body. I do not encourage people to smoke. But it is a legal activity, and there are certain protections that all businesses deserve.

At the same time, I do take the Senator's point. I appreciate his comments and his earlier remarks about the issue of carried interest. Keeping strongly in mind that we need to bring this legislation to a prompt conclusion, I withdraw my amendment.

Mr. President, I thank the Senator from Rhode Island, and I am here to speak in favor of this legislation. This is a very important piece of legislation. It is long overdue. I also would like to point out that I have an amendment I will offer.

I am very concerned about the way this legislation is going to be funded. We all have our own issues with respect to whether tobacco should be used or not used, but to fund an entire program based on a tobacco tax, I think, is not the way to go for a number of reasons. So I am offering an amendment that will help offset this highly regressive, 61-cent-per-pack increase in the cigarette tax that is being used to fund this bill, and to add on to the bill a tax on carried interest, which is the compensation that is received by hedge fund managers. This proposal would generate $11.2 billion in revenue over 5 years. Tobacco taxes would thus be raised by a more reasonable 37 cents a pack to make up for the shortfall between the revenue being generated by this amendment and the costs of the CHIP reauthorization.

Tobacco is already federally taxed at 39 cents per pack for the CHIP program. All 50 States and the District of Columbia also impose an excise tax on cigarettes above this tax. For instance, my State of Virginia adds 30 cents on top of the present tax. In these difficult times, many States, including Virginia, are considering an increase in their State excise tax.

So we would have, with the amendment I am going to offer, the 39-cent Federal tax that is already in place on a pack of cigarettes, an additional 37 cents--instead of an additional 61 cents--plus the State taxes on cigarettes; and a big proportion of this--all the Federal tax--going to fund a health program.

I would like to be clear that there is no question in my mind about the fact that we do need to reauthorize and expand this program. But I do not think it is a proper to fund this program on the backs of people who, for better or worse, smoke cigarettes. I am a reformed smoker. Many of my contemporaries in the Senate are reformed smokers. I am not encouraging anyone to smoke cigarettes. I hope you do not. I just believe although tobacco taxes are already a popular source of revenue, it does not change the reality that this tax is regressive.

We had a Congressional Research Service report brought to my office, and I am going to quote from it. It said:

Cigarette taxes are especially likely to violate horizontal

equity and are among the most burdensome taxes on lower-

income individuals. Only about a quarter of adults smoke, and

less than half of families have expenditures on tobacco.

Tobacco is more heavily used by lower-income families than

are other commodities, and is unusual in that actual dollars

(in addition to the percent of income) spent on tobacco

products decline in the highest income quintile.

My amendment will help soften the blow of the increase in the cigarette tax.

Let me provide some background on carried interest. A partner of a private equity or hedge fund receives two different types of compensation. First, hedge fund managers receive management fees that are linked to the assets they oversee. Second, they receive what is called ``carried interest,'' which is compensation based on the percentage of the profits generated by the assets they manage. Currently, carried interest is taxed at a capital gains tax rate. As noted by Peter Orszag, who is now a member of the Obama administration, in his 2007 testimony, many economists view carried interest as:

Performance-based compensation for management services

provided by the general partner rather than as a return on

financial capital invested by that partner.

Given that carried interest is performance-based compensation, it makes sense to tax it as ordinary income. This compensation has been earned by many of the same people who helped bring about the present financial crisis. The Financial Times stated these managers ``have made fabulous sums in recent years.'' Given the need to pay for children's health insurance, it makes more sense to have these persons, who are better positioned to pay for it, pay a greater percentage of the cost.

When it comes to taxing carried interest as ordinary income, there is a wide acceptance in support of this proposal among thinkers and editorial writers across the country. The Financial Times itself editorialized ``this repair should be done at once.'' They made that statement 2 years ago.

I have a string of editorials that support the idea of closing this carried interest loophole as a matter of fairness. I ask unanimous consent they be printed in the Record at the end of my statement.

They include editorials from the Washington Post, New York Times, USA Today, the Philadelphia Inquirer. In fact, the Washington Post in 2007, in talking about this particular tax break, said this:

The only mystery is why Senate Democrats don't have the

good sense to grab on to this as their centerpiece domestic

issue. It's hard to think of an issue that better taps into

the public anxiety about the markets and the economy, the

anger about income inequality, or the disgust with a

political system that bends to the will of powerful

interests.

The Washington Post continued:

This is a make-or-break issue for Democrats. If they can't

unite around this issue, then they aren't real Democrats and

they don't deserve to govern.

The New York Times in 2007 talked about this issue, mentioning:

With income inequality surging along with the need for tax

revenue, supporters rightly conclude that it is untenable for

the most highly paid Americans to enjoy tax rates that are

lower than those of all but the lowest income workers.

Congress will achieve a significant victory, for fairness

and for fiscal responsibility, if it ends the breaks that are

skewing the tax code in favor of the most advantaged

Americans.

There are others and, as I mentioned, I will insert the full text of these editorials at the end of my comments.

I also should point out that our new President, President Obama, has supported throughout his campaign the idea of taxing carried interest as ordinary income.

So the choice is this: Do we help fund this program, which we all agree is critically necessary, with a well-deserved tax adjustment for some of those who are the most capable of absorbing a new tax, or do we take money exclusively from tobacco, causing people who in large part are in the same economic circumstances as the beneficiaries of this health insurance program to foot the bill?

Let's think for a moment about the irony of that. We are taxing a practice that we deem unhealthy in order to fund a health program, and we supposedly want this practice to go away, but if it goes away, we are not going to be able to fund our health program.

So we need to find a way to fund health care needs that is sustainable and fair, and a declining revenue source is not sustainable. I hope my colleagues will join me in supporting this measure, which will partially offset the cigarette tax that is a part of the bill. I again wish to express my strong appreciation to Chairman Baucus and to others, such as my colleague from Rhode Island, who have worked so hard on this bill and who work to help those in our system who are most in need of medical care.

With that, I yield the floor.

Exhibit 1

Editorials Supporting Closing Private Equity/Carried Interest Loophole

as Matter of Fairness

[From the Washington Post, Sept. 9, 2007]

Private-Equity Tax Breaks, a Call To Be Up in Arms

Even by Washington standards, the private-equity industry

certainly went over the

top in conjuring up the economic woes that would befall the

United States if their cherished tax breaks were taken away.

Pensioners would be destitute. Wall Street would pack up

and move to Dubai. The hedge fund industry would disappear.

Federal revenue would plummet. Entrepreneurial risk-taking

would grind to a halt. And the urban underclass would slip

even deeper into poverty.

And all that just because some of the richest people in the

world would have to pay the same 35 percent tax rate on their

income as dentists, lawyers and baseball players.

There is no mystery as to why the industry bothers to make

these ridiculous and contradictory arguments--billions of

dollars in tax windfalls are at stake.

The only mystery is why Senate Democrats don't have the

good sense to grab onto this as their centerpiece domestic

issue as they head into the 2008 campaign. It's hard to think

of an issue that better taps into the public anxiety about

the markets and the economy, the anger about income

inequality, or the disgust with a political system that bends

to the will of powerful interests. And if Republicans go

through with their threats of a filibuster and a presidential

veto, Democrats ought to put aside all other business and

call their bluff.

This is a make-or-break issue for Democrats. If they can't

unite around this issue, then they aren't real Democrats and

they don't deserve to govern.

Mr. President, I would like to spend a few minutes today also addressing this very troublesome issue of the next tranche of $350 billion that is being asked for by the incoming administration. I, like many people who supported the initial request on October 1, was very disappointed with the differences in the current administration's implementation of TARP as opposed to the logic that was presented to us asking for our support.

I would also say if there were a new proposal coming to us from the current administration, given this experience, I would probably not support it. Given the administration's conduct since October, I would not support it. There is, however, an incoming administration that is in a situation that was created by Congress's initial vote. It is in the middle of this $700 billion proposal.

I have received concrete guarantees from the President-elect regarding TARP. I spoke to him at great length yesterday. I am going to support releasing this next tranche. I would like to take a few minutes to explain my support. I was one of the first people to originally question Secretary Paulson's request last September. I came to the Senate floor the Monday after the request was made. I laid out five different points of concern we had with the proposal itself.

I worked with other Members of this body. We had nine Senators join in a letter to the majority leader saying that any proposal like this had to, first of all, guarantee that it was not one individual in the executive branch who was able to make these kinds of decisions; that ideally, from our perspective, there should have been a three-person panel of honest brokers; that the American taxpayer should be invested in the upside of a program like this; that there should be re- regulation of the financial markets; and that there should be concrete limits on executive compensation. We had some movement on those issues during the negotiating process led by the senior Senator from Connecticut. We did not get all of them, but we did get enough. Coupled with the predictions of the catastrophic effect that might occur in the world markets without action, I decided to vote for the program. Then Secretary Paulson went off and spent the money in a totally different way than he told us he was going to.

The situation now, in my view, is different. I spoke with the President-elect. He indicated he was totally comfortable with my coming to the Senate floor and saying that he personally guarantees closure on all of those issues: that there will be more than

one person in the administration, at least three people in the administration, working together to find out the best place to put these funds; that American taxpayers are invested; that there will be limits on executive compensation; and that there clearly are going to be strong proposals, to re-regulate the financial markets.

We are in a very difficult situation in this body because we cannot amend this document. We cannot put these proposals into legislative language. We can only vote up or down as to whether this money is made available, and I am going to vote to release those funds.

The distinction for me is that, in the first instance, we had an administration that was ending its tenure. It was on its way out the door as it implemented the first tranche in, I think, not a fully responsible way.

In this instance, we have a new administration coming in. They are ready to be held accountable. The President-elect indicated to me that he wanted me to inform this body of the specific guarantees he is giving. With respect to the valid concerns that were just laid out by the Senator from Missouri, we have plenty of time for debate available to us for the larger stimulus package where we can truly sort out what type of financial rescue plan we are going to put into place for the country.

So I have struggled with this like so many of my colleagues. I am very comfortable with the guarantees that were given by the President- elect. I am going to vote in favor of this program.

Mr. President, I rise to talk about our foreign policy. Before doing so, I wish to point out that I have spent the last 2 hours presiding and listening to a number of very strong statements with respect to the automobile bailout and also the proposal that there be some action to limit the next tranche of $300 billion to come on the TARP program. I associate myself with the remarks of the Senator from North Dakota on those issues. We had a pretty hard vote on October 1 with respect to the TARP program. I was among the overwhelming majority of people in the Senate who voted to go ahead with this program, after the assurances of this administration and the people who had been negotiating on our behalf about the danger that the world economy was in, the prospect of a cataclysmic effect if we did not do something.

I am going to look very hard at this next tranche. We should all recall that the program that was voted to go forward was a program that was going to address the situation of toxic assets. The concern that I and many others had about giving one individual the authority in the executive branch to use these funds in a way that did not have a substantial oversight was borne out over what has happened. There is a very high bar that will go forward before I personally would vote in favor of continuing to allow the Secretary of the Treasury in an outgoing administration to be dispensing these types of funds so close to the approach of a new administration.