Floor Statements

Mr. President, today I rise to introduce a bill to rename the Federal building in Memphis as the Clifford Davis and Odell Horton Federal Building. My colleague Senator Corker is a cosponsor. It is the same legislation that was introduced in the House of Representatives by our new Representative Steve Cohen, and it is cosponsored by the rest of the House delegation, both Republicans and Democrats.

Representative Cohen's bill, H.R. 753, was approved by the House Committee on Transportation and Infrastructure on March 1 and awaits further action by the full House.

Judge Horton has a remarkable legacy. He was the first African- American federal district court judge appointed in Tennessee since Reconstruction. He was recommended by former Senator Jim Sasser and appointed by President Carter on May 12, 1980.

I remember those days of transition very well. It was in that same year that I was Governor of Tennessee. I appointed the first African- American supreme court justice in Tennessee, Judge George Brown, who served with distinction.

At that time, there had not been an African-American chancellor, which is one of our lower court's State judges. I appointed Irwin Kilcrease to that position, and he served with a distinguished record and retired only within the last couple of years.

Judge Horton was a real pioneer who came at a time of transition in Memphis, where he lived, and in our State's history. He served as chief judge of the U.S. District Court for the Western District of Tennessee from January 1, 1987, until December 31, 1993.

Odell Horton was born in Bolivar, TN, just outside of Memphis, on May 13, 1929. He said he grew up in a ``typically rural Southern and typically segregated [environment], with all of the attendant consequences of that''.

At about the same time, growing up maybe 40 miles away was a young man named Alex Haley who would sit on the front porch of his grandparents' home and listen to his great-aunt tell stories of Kunta Kinte, which ultimately became the story of ``Roots.''

Odell Horton's father was a laborer. His mother took in laundry. His first job at the age of 6 was delivering laundry for his mom. He and his three siblings also picked cotton, stacked lumber, and took other odd jobs.

After high school, he enlisted in the Marine Corps. He enrolled in Morehouse College using the GI bill. He served with the Marines during the Korean war. He graduated from the U.S. Navy School of Journalism.

After the Marines, he earned a law degree from Howard University, and after graduating from Howard Law School in 1956, he moved to Memphis and rented a one-room office on Beale Street--the music street of Memphis--and opened his own law practice.

He did that for 5 years. He served as an assistant U.S. attorney after that.

In 1968, he was director of the city's hospitals, making him the only Black division director at city hall at that time.

He served as judge on the Shelby County Criminal Court. He was a commentator on a local television station. He ran for district attorney general in 1974, narrowly losing the primary, at that time considered a very strong showing by an African-American candidate in a county that today has an African-American mayor of Memphis and an African-American mayor of Shelby County.

He was a U.S. Bankruptcy Court judge before being appointed as a U.S. district judge by President Carter.

He was married to his wife Evie for 50 years, with two sons, Odell, Jr., and Christopher. He died on February 22, 2006.

I commend Representative Cohen for his bill to rename the Clifford Davis Federal Building to the Clifford Davis and Odell Horton Federal Building. Representative Davis was a Congressman who served in the House of Representatives from 1940 to 1965. He was one of those five Congressmen in the U.S. Capitol when four Puerto Rican nationalists opened fire from the visitors' balcony in the Chamber. He was shot in the leg at the time.

Keeping both names on the Federal building is symbolic of the transition that took place in Memphis and across the South during Odell's lifetime and my lifetime and reminds us that our country is committed to equal opportunity, but it has been and is and will be for a long time a work in progress.

Odell Horton is one of the finest examples of that work in progress. Having his name on a Federal building will remind all of us of that.

Madam President, I thank the Senator from Maine and I salute the Senator from Maine. She is paying close attention not just to the security of our country but the fact that we need strong States and cities in our country at the same time. She, obviously, is in tune with the people in Maine because they, like people in Tennessee and other States, have taken a look at the so-called REAL ID law and wondered what we are doing up here.

She has made a very thoughtful and sensible suggestion, which is that we delay for 2 years the implementation of the so-called REAL ID law, and let's make sure we know what we are doing.

Senator Collins, because she is ranking member of the committee that deals with homeland security and a former chairman, and because she served in State government, is more sensitive to this issue than perhaps some of our colleagues. But she understands it is very easy for those of us in Washington to stand up here and come up with a big idea and think it might be a good idea, and then turn it into a law and hold a press conference and take credit for it, and then send the bill to the Governor and the legislature and say: You pay for it.

Senator Collins is more polite about this than I might be. Nothing used to make me madder when I was Governor than for legislators and Congressmen to do just that: to pass a big bill, take credit for it, and send the bill to the State. Then that same Congressman would usually be back in Tennessee making a Lincoln Day speech or a Jefferson Day speech or a Jackson Day speech about local control and saying how we need strong States and strong cities, but they dumped a big unfunded mandate on top of us.

So let me see if I can be in support of Senator Collins, who has made a very reasonable, sensible amendment: First, to think about what we are doing with REAL ID and to make sure if we want to continue down this path, we do it in a way that respects the privacy of Americans. We are, after all, for the first time in our history actually creating a national identification card with all the ramifications of that. That is what the REAL ID law did. Second, to make sure that we don't create an unfunded mandate. The Republican Congress in 1994 was ushered in claiming no more unfunded mandates. The Congressmen stood on the steps over there in the House and said: If we break our promise, throw us out. Well, they threw us out this past election, so why would we persist with unfunded mandates?

This is an $11 billion unfunded mandate on State governments over the next 5 years. What does that mean? Higher property taxes, higher tuition costs, less funding for higher education so we can stay competitive with China and India, less money for lower classroom sizes, and less money for rewarding outstanding teachers. That is what unfunded mandates will mean, so we shouldn't do that.

Then the third thing that is unfortunate about this REAL ID law that passed is we didn't have the opportunity to say anything about it over here in the Senate. Now, we are not always the wisest people in Washington, DC, but we have half the say. The REAL ID Act came up in the House of Representatives. It was stuffed into the supplemental appropriations bill for Katrina and the troops in Iraq. So of course we had to vote for the bill. We had no chance to amend it, no debate, no hearings, and no consideration of other alternatives. Yet we impose on every State in this country a total of $11 billion worth of unfunded mandates, and we create for the first time in the history of a liberty- loving nation a national identification card. I would say we wouldn't be doing our job if we didn't stop and think about what we have done. Fortunately, we have time to stop and think about it, because while the law has been passed, it is not implemented yet.

Here is what Senator Collins has done, and I give her great credit for this. For her to introduce this amendment is especially useful because of her position as former chairman of the affected committee and now its ranking member. She has quickly attracted several cosponsors, Republicans and Democrats. She would extend the deadline for compliance with REAL ID to 2 years after final regulations are issued by the Department of Homeland Security.

Now, from the point of view of a Governor, that makes sense. If I were sitting back in Nashville, I would say: Well, now, Madam Congressman or Mr. Congressman, you are not going to expect me to take 3 or 4 million Tennesseans and run them through the State driver's license offices and find out if they are terrorists or if they are illegally here, or send them back home to grandma's attic and dig up their birth certificates, are you? I mean how many Tennesseans have their birth certificates handy? How many want to go back to the driver's license office and stand in line? That is a lot of people, 3 or 4 million people, and that is only Tennessee. There are over 196 million people with driver's licenses in the United States.

There is another section or two in Senator Collins' amendment. She gives a little more discretion to the Secretary of DHS to waive State deadlines. That is a reasonable approach. She reestablishes the negotiated rulemaking committee that was created as part of the National Intelligence Reform Act of 2004. That means in plain

English that States that have the job of implementing this law will have a chance to come to the Federal Government and say: Well, in Minnesota, we have longer lines during this part of the year because it snows and shorter lines during that part of the year because there is ice. And in other times of the year people are fishing on their lakes, and so we have some local conditions here. This gives more time to take into consideration the local conditions.

Also, it requires figuring out what a fair system of reimbursement is. Here are the figures I have seen: Apparently we have appropriated $40 million for this. The Senator from Maine is nodding her head. Yet, the Governors tell us it is going to cost $11 billion. We have appropriated $40 million. They say it is going to cost $11 billion. We have a 60-vote point of order against unfunded Federal mandates. We couldn't even raise that when this went through like a freight train in the middle of a Katrina and troops-in-Iraq bill. There would have to be 60 votes in order to impose on the States this kind of financial burden.

So that is basically it. This amendment says let's stop and think about this since this is the first national identification card we have ever had in this country. And since it is a massive unfunded mandate that would have the effect, if the Governors are right, of raising State taxes, raising tuition, cutting the amount of money available for colleges and competitiveness, cutting money for reducing classroom size, and cutting money for State health care plans.

Then the third thing is we had no discussion--I don't believe there was a single hearing anywhere in the Senate--about this bill. I am delighted to have a chance to be a cosponsor of this legislation that Senator Collins has introduced.

I will say one other thing about this idea of a national identification card. I have lived long enough to have changed my mind a few times on important issues. When I was Governor of Tennessee, I vetoed twice the photo identification card I now carry in my billfold because I thought it was an infringement on civil liberties and I didn't think it was anybody's business to have my picture on the identification card. Well, the retailers wanted it for check cashing, and law enforcement people wanted it so they could catch more criminals. So the legislature overrode me. Plus, when I tried to get into the White House one time as Governor, they wouldn't let me in because I didn't have a photo identification card and I said: Well, I vetoed it, and they didn't think that was a good reason. The Governor of Georgia had to vouch for me, and after that indignity, Tennessee finally got a photo identification card.

We have a right in America to be skeptical of national identification cards. We love liberty more than anything in this country, and that could infringe on our liberty. We have seen what happened in South Africa when people carried around passports and they were classified based on race, and their lives, their activities, everything about them was regulated that way. We can think back on Nazi Germany and other totalitarian countries where so much information was on a single card that it gave the Government a good chance to keep up with every single person.

I have changed my mind after 9/11. I believe we need a national identification card of some kind, and we, in fact, have one now. It is a de facto identification card. We call it the driver's license, but it is completely ineffective. It gets stolen. It gets copied. We show it when we go through the line at an airport. For a long time, mine said on the front that it expired in the year 2000, but if you turn it over, it said 2005. Well, at the airport they never turned it over so it is not a very effective identification card, and that is the impetus for the REAL ID. I understand that.

The first thought was let's take all of these 196 million driver's licenses and turn them into identification cards, but that might not be the best thought. There are other options. For example, we might need a work card in the United States. A lot of the impetus for this came from immigration problems. Since many of the immigration problems are the result of people wanting to come here and work, maybe one way to think about identity theft is to say: Let's have a Social Security card that is biometric and let people apply for that; let people who get new cards get that, and let's have a work card. Or maybe we need a travel card for people who want to travel on airplanes, and they would have a travel card. Maybe we need to expand the number of passports. Twenty- five percent of us have passports. I am not sure what the right answer is. My instinct is that probably a work card would be a good card to have. Maybe we ought to have two or three cards that meet certain Federal requirements, any of which could be used for other identification purposes. That way we would technically avoid having the national identification card, but for convenience, people could have a work card, a travel card, and a passport. All of those are just ideas. But I wouldn't suggest that the Senate wait until midnight and take Senator Alexander's ideas, ram them through, and send them to the House and tell them to pass them with the next Iraq supplemental bill just because we thought of it.

I think it would be better to let Senator Lieberman and Senator Collins and others consider all of these options very carefully. I think it might be best when we get to the immigration bill and we talk about having an employer identification system, because that is going to be an essential part of the comprehensive immigration bill. Well, if that is the case, then we are probably going to need some kind of work card. If that is the case, we might end up with a secure Social Security card. If that is the case, we might not need REAL ID at all.

So that is an even better reason to adopt the Collins amendment, because between now and the expiration of 2 years, we should pass a comprehensive immigration bill here in Congress. In fact, if we don't, we should all be severely criticized, because it is our job to do it. So I urge my colleagues respectfully to look at the Collins amendment and see it as a reasonable approach. It says: Let's delay 2 years. Let's hold some hearings. Let's ask the States to be more involved in what the cost is. Let's think about any privacy issues that might result from a de facto national identification card, and let's even make sure, if we are going to have an identification card, that the idea of using driver's licenses is the best way to do it.

As my last comment, I would underscore the fact that there are a number of States already considering taking the action Maine has already taken, the Senator's State, in passing a resolution rejecting the REAL ID card. Those are Hawaii, Georgia, Massachusetts, New Mexico, Oklahoma, Vermont, and Washington State. If the REAL ID card were to go into effect in those States in May, next spring, and they didn't have the REAL ID card, according to the law they can't fly on a commercial airplane. Well, that is going to create a situation I don't think any Member of this Senate wants to see.

So I am here to salute the Senator from Maine for being diligent in protecting our liberty and in protecting the rights of State and local governments, and making sure that if we are going to have some kind of more secure card, whether it is a driver's license or a work card, a travel card, or even a passport, that we do it right after we have suitable hearings.

I am proud to be a cosponsor of the Collins amendment, and I thank the Senator for yielding time to me.

Madam President, I ask unanimous consent that Stanford Swinton of Senator Grassley's Finance Committee staff be given floor privileges for the remainder of the day.

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

Mr. President, are we now in morning business?

I ask unanimous consent to speak for up to 15 minutes.

Mr. President, if the Chair would please let me know when I have a minute left.

Mr. President, when we come back from the recess we are going to turn our attention to the 9/11 Commission recommendations which have been enacted by the House. I want to discuss an issue I hope will come up when we discuss the 9/11 Commission recommendations and that has to do with the so-called REAL ID card, the de facto national ID card.

This is a law that was enacted in early 2005. It was House-passed legislation that would require States to turn more than 190 million driver's licenses into de facto national identification cards, with State taxpayers paying most of the costs. I am not very much of a prognosticator. My predictions have never been all that accurate, but at the time of that passage, I objected to it.

The first thing wrong with the REAL ID law was that the House stuck the law into an appropriations bill that supported our troops in Iraq and sent it over to the Senate. None of us wanted to slow down support for our troops in Iraq while we debated ID cards, so it was stuck in there and we passed it. But the second and larger problem with what the House did 2 years ago, and which we agreed to and it became law, is that States not only got to create the ID cards, but they will likely end up paying the bill. I said to my colleagues, and at that time we had a Republican Congress: This is one more of the unfunded Federal mandates we Republicans promised to end.

Well, now we have moved ahead about 2 years, and I believe I have

turned out to be right about that. Just last month, the Maine Legislature became the first State to approve a resolution urging Congress to overturn the Real ID Act before it takes effect on the States in May of 2008. Only 4 of the 186 Maine lawmakers voted no. In the following other States there are bills, according to USA Today, that are considering asking us to overturn the law: Hawaii, Georgia, Massachusetts, New Mexico, Oklahoma, Vermont, and Washington.

One reason they are asking us to overturn it is that according to the National Governors Association, implementing the law will cost more than $11 billion over 5 years. We have provided $40 million of the $11 billion. That is an enormous unfunded Federal mandate.

The Presiding Officer is a former State official. I don't know if he had these same feelings when he was in his State of Colorado, but nothing used to make me madder when I was Governor of Tennessee than for some group of Congressmen to come up with a big idea, turn it into law, hold a big press conference, take credit for it, and send the bill to the States to pay for it. Then that same Congressman would usually be back home making a Lincoln Day speech, bragging about local control.

I am afraid that is what we have with REAL ID. It sounds pretty good maybe to say: Oh, we have a war against terrorism, and we have illegal immigration and other immigration issues. We need some sort of identification card that will make it possible to do a better job of fighting terrorists and impose the rule of law on our border. That sounds good, but there is a right way to do it and a wrong way to do it.

Here is what we should have done and what I hope we will do. I hope the week after next, when Senator Collins of Maine comes to the Senate, which I hope she will, and offers an amendment that will, in effect, set up a thoughtful process for, first, delaying the implementation of this bill and, second, give us a chance to consider all of its ramifications, I hope we will adopt that as part of the 9/11 Commission Report. In other words, give the idea of a national identification card the kind of thoughtful attention it deserves in the Senate.

No. 1, we should do it because it is a huge break with our tradition of liberty in this country. We do not have to look very far around the world--South Africa is the first place to look--to see the abuse a national identification card can cause. In South Africa, it was used to classify people according to race. Everybody had to have one. Everybody had to carry it around.

In this age of technology in a country that values liberty above everything else, there are a lot of questions about whether we should have a national ID card. Those ought to be explored in the Senate. We ought not push one through in a bill no one wants to vote against because it is primarily about supporting troops.

When I was Governor of Tennessee, I twice vetoed the photo driver's license which we all now carry around in our pockets. I did that, first, because I thought it was an infringement upon civil liberties; and, second, I did it because I thought what would happen was we would have lines around the block of people waiting to get their photo ID card--and that still happens sometimes--but I was gradually overruled by the State legislature and we got an ID card.

What helped getting overruled was when I showed up at the White House once to see the President at the National Governor's Conference and they asked to see my photo ID. I said: I don't have one. They asked: Why not? I said: Because I vetoed it. And I had to be vouched for by the Governor of Georgia. The push for this was law enforcement saying it would help with check cashing and other identification.

While as a liberty-loving country, we say we do not want a

national ID card, at the same time, we have allowed a de

facto national ID card. That is a State driver's license. We

have over 190 million of these. We all know the de facto

driver's license ID cards are very ineffective. They are

easily duplicated, they are often stolen, and we go around

not just using them to prove we can drive, but we use them to

get on airplanes, we use them to cash checks, and we use them

to get a passport. They are not an effective ID card.

I have reluctantly come to my conclusion. Despite the fact I vetoed those early ID cards, on September 11, one way our world has changed is we do need a national ID card. Maybe our discussion in committees would show we do not want one but that we want authorized two or three forms of identification cards which meet certain standards which can be used for different ways.

For example, there could be a travel card that one could use to get on an airplane. If you had that travel card that allowed you to get on the airplane, you might use it for other purposes, as we have come to use the driver's licenses in that way or we might use the passport. About a quarter of Americans have passports, 68 million Americans. That is one form of an ID card though not as common as 196 million driver's licenses. There is also the Social Security card. My initial instinct is that a Social Security card that had the proper technology attached to it would be the wisest, the most effective, and most useful ID card because most of the immigration problems we have are related to work, either as a student or as a worker. It would be natural to have an ID card, to have a Social Security card such as the card we carry around in our pockets that also serves as a de facto national ID card.

There was a case of the Swift Company, which was using, under our antiquated immigration laws, the basic pilot program, which is what we say to businesses to use if we want them to do everything they can to make sure they are only hiring people legally in the United States. Swift and other companies do that. Even if they do that, they cannot be assured that the people they are hiring are legally here because many of the Social Security numbers have been stolen, as it turns out, and it is against our laws to inquire too far into someone who applies for a job and presents evidence they are a citizen. Our laws say you cannot ask more questions to second-guess that.

We have some work to do. All of us who think about the immigration issue--which is what brought all this up, along with the September 11 disaster--we think of the immigration issue and we think of the need for employer verification. For employers in this country to verify that people they hire are legally here, we are going to have to supply those employers, in some way, with the ability to ask for a good identification card. Perhaps it is the Social Security card, perhaps it is a travel card, perhaps it is a passport, perhaps it is a bank card, maybe there are two or three of those. That might be a way to avoid having a single card and could diminish the concern about civil liberties. Or maybe the needed ID is the driver's license, but I doubt it is the driver's license.

Certainly, we should not expect the men and women in the Tennessee Department of Public Safety who are in charge of issuing a few million driver's licenses, to be turned into CIA agents whose job it is to catch terrorists. I don't think they are expected to do that. They are not prepared to do that.

What we will be requiring is the citizens of the various States to show up to get their driver's license or a renewal with different forms of identification, some of which they may not have. It will be a very expensive process and a big mess. My first impression is that the State driver's license system is not the best place to look if we want to create an identification card.

Here is my suggestion. My suggestion is we pay close attention to the Senator from Maine, Susan Collins, when we come back after the recess. She has a thoughtful recommendation to the Senate which suggests, over the next couple of years, we have time to look at this issue of whether we need a national identification card and what kind of identification card we might need. I hope the hearings would be held this year in the Homeland Security and Governmental Affairs Committee and the Judiciary Committee or whatever the appropriate committees might be, and then we might deal with this issue in the immigration bill which I hope we pass this year.

We need a comprehensive immigration bill. That bill needs to have an employer verification system. I don't see how we can have an employer verification system without a good form of identification card. I hope we will deal with this in the way the Senate normally deals with issues; that is, through its committees, considering all

of the options. In the meantime, we have the Real ID law in place with the estimate that it may cost up to $11 billion, a huge unfunded mandate. We have States saying we are going to opt out of that program. If they do, that means the citizens of Maine or Montana or some other State will not be allowed to fly on airplanes, for example, because they will not be from a State that has an approved ID card. That will create a lot more confusion and a lot more angry constituents.

I am here today to wave a yellow flag, to remind Members of the Real ID issue. It may not be part of the 9/11 Commission recommendation when they come to the floor, but it is relevant and certainly germane. I hope the Senator from Maine will provoke a discussion of it, and we will move to delay its implementation until we can think this through and do it right.

I ask unanimous consent to have printed in the Record an article I wrote for the Washington Post on Wednesday, March 30, 2005, about the Real ID and my views.

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

Mr. President, I ask unanimous consent that I be allowed to speak for up to 20 minutes on the continuing resolution.

Thank you, Mr. President.

A few days ago, I came to the floor deeply concerned because someone, someone over in the House of Representatives--first, let me ask the Chair, will you please give me a minute's notice when my 20 minutes is up?

Thank you very much.

Someone over in the House of Representatives, before they sent that continuing resolution or joint funding resolution over here, had taken the Teacher Incentive Fund, which was to be funded at $100 million a year, and reduced it to $200,000. In other words, they killed the funding. I couldn't imagine someone would do that on purpose, and so I came here to say so. I know it was a confusing time and there were lots of different priorities to be met. Perhaps, in the difficulty of putting together the joint funding resolution, it was just a slip-up. I said I

hoped it wasn't the signal of what the new Democratic majority's education policy would be because I couldn't imagine the new Democratic majority--or the old Democratic minority, for that matter--or any of us on either side being against the Teacher Incentive Fund.

What the Teacher Incentive Fund does is almost the most crucial thing we need to do in helping our schools succeed. It makes grants to States and cities that are doing the best work in trying to find fair ways to reward outstanding teaching and to reward good principals. Every education meeting I go to, and I have been going to them for years, that ends up being the No. 1 thing we need to do. First are parents, second are teachers and principals, and everything else is about 5 percent. In other words, a child who has a head start at home is a child who is going to get an education almost no matter what else happens. But if you add an outstanding teacher and an outstanding principal to whatever happens at home, the school is better and the classroom is better and the child succeeds. This is especially true for low-income children in America, which is exactly what the Teacher Incentive Fund is designed to meet.

Well, I wasn't disappointed because within 5 minutes after I began, the distinguished Senator from Illinois, Mr. Durbin, the assistant Democratic leader, came on the floor, and I think I am being fair in characterizing his remarks when he said: Whoa, wait a minute. This is a good program. In fact, I just received a call this afternoon, said Senator Durbin, from the superintendent of the Chicago schools, and he said we need this program. He said we have a lot of low-income, poor kids who aren't making it, whom we are leaving behind, we want to help them, and this helps us do that. He said we have a grant under the Teacher Incentive Fund to do it.

We heard further testimony at a roundtable in our Health, Education, Labor, and Pensions Committee that in the Chicago schools they closed some schools where children were not learning year after year after year. What did they do? They put in a new team--a new principal, a new set of teachers. And what did they do with the teachers? They paid them $10,000 a year more than they were otherwise making to make sure they would go there because they were the teachers known in Chicago to be able to help low- achieving students achieve.

We all know from our experience and research that virtually every child can learn. Some children just need a little extra help getting to the starting line. If you don't get it at home, you especially need it at school. And where you get it at school is from outstanding teachers and principals.

So it wasn't Senator Durbin, who is the assistant Democratic leader in the Senate, who was trying to kill the Teacher Incentive Fund. So I have been wondering for the last few days, well, then, who was it? Who was it? Well, now I know, Mr. President, because they have announced it.

Today comes a letter to me--``Dear Senator Alexander''--on behalf of the National Education Association, the NEA, with 3.2 million members, saying:

We urge your opposition to several ill-conceived amendments

to the continuing resolution. Specifically, we urge you to

vote ``no'' on an amendment to be offered by Senator

Alexander, Republican of Tennessee, that would provide $99

million for the teacher incentive fund.

So the NEA, in its brilliance, has written me a letter to ask me to vote against my own amendment.

I am astonished. That doesn't surprise me so much. Any of our offices can make a mistake. But what I want the President to know, and I want our colleagues to know--I want them to know who is against this, and I want the world to know what they are against. What they are against is helping find a fair way to pay good teachers more for teaching well and to train and help good principals lead schools, especially in big cities where we have a lot of low-income children who are falling behind.

This is not some abstract notion. The President had recommended $100 million for the Teacher Incentive Fund as part of the No Child Left Behind legislation. In a bipartisan way it passed several years ago, and we are in the midst of a remarkably bipartisan approach to see what we need to do about NCLB as we reauthorize it for 5 years, and part of it is the Teacher Incentive Fund.

In a very tight budget, President Bush has recommended not just $100 million for the next year, he has recommended $200 million.

I placed into the Record a few days ago Secretary of Education Spellings' letter saying this is very important. We have just started this program. We made a number of grants to cities all across America, 16 grants across the country, at least one State--in South Carolina. You have cut us off. You stopped us from making an evaluation and reporting back to the Senate, to the Congress, how this is working. You are disappointing these school districts who have stepped up to do this.

That is what has happened. Just to be very specific, here is the kind of thing that the Teacher Incentive Fund grant does. Memphis, our biggest city, has an unusually large number of our lowest performing schools. It is our poorest big city, one of the poorest big cities in America. It has a real solid school superintendent, she's excellent, and they are working hard to improve.

A lot of the Memphis citizens are putting together a special effort to say: One of the single best things we can do in Memphis is to take every single one of our school principals, put them through a training program for a year, hook up with New Leaders for New Schools to do that, continuing after the year, and then we will put them back in charge of their school. We will give them autonomy to make the changes they need to make, and we will see if these children can succeed because we know if they can succeed, if we help them the correct way-- we give them extra hours, as we have in our charter schools, give them extra training, we know they will succeed.

Memphis City Schools and New Leaders for New Schools were awarded a grant for $3.1 million in the year 2006, the first year after the 5- year grant totaling $18 million. Over the 5-year grant, Memphis plans to provide training and incentive grants to 83 principals serving almost one-third of the schools in the Memphis school system. Principals will receive incentive grants of at least $15,000 a year.

What is wrong with that? Why would the largest educational association in America oppose taking a city with low-performing students and saying we are going to kill the program that trains your principals and pay them $15,000 more a year to do a better job? Why would they do that?

The assistant Democratic leader doesn't agree with that. At least he said so on the floor of the Senate. I don't agree with it. I don't think the parents of the children agree with it. The school superintendent doesn't agree with it, nor does the mayor. Who is against this? We are trying to pay more money to the members of the association that is trying to kill the program. That is what we are trying to do.

It is not just Memphis. I think it is important that my colleagues in the Senate--if the snow and the ice has not caused them to flee to the suburbs. I think most of them are in their offices, maybe a few are even listening. I want them to know that the National Education Association wants to kill the program for the Northern New Mexico Network, the Northern New Mexico Network for Rural Education, a nonprofit organization, one of the 19 grantees of the Teacher Incentive Fund. It is partnering with four school districts. They serve a region with high levels of poverty, high concentrations of Native Americans and Hispanic students, extreme rural conditions, small schools. So the NEA wants to kill the program to help make those teachers and those principals better.

Here's another project, New Leaders for New Schools in the DC public schools. This is a coalition with DC public schools and several others, to provide direct compensation to teachers and principals who have demonstrated their ability to move student achievement.

What a terrible thing to reward--teachers who have demonstrated an ability to move student achievement. Let's kill that program right away. We don't want that happening in the District of Columbia, do we?

Let's go to the Chicago public schools. Chicago has taken a lot of steps in their public schools. The

mayor deserves a lot of credit for that. The school system deserves a lot of credit. They know these children can't wait 5 or 10 years to have a good education experience, so, as I mentioned earlier, in some cases they are not moving the school, they are just transforming it. How do you transform a school? There is only one way. You move in a new principal and you move in some really good teachers. There is only one way to transform a school, and that is it.

So the Chicago public schools in collaboration with the National Institute for Excellence in Teaching proposes the Recognizing Excellence in Academic Leadership. At the heart of that is multiple evaluations, opportunities for new roles and responsibilities, recruitment, development, retention of quality staff in 40 Chicago high schools that serve 24,000 students. The NEA wants to kill that program. That is the third grantee.

Let's go to Denver. The Denver public schools proposed a twofold district-wide expansion of its professional compensation system for teachers--that means we pay them more--to develop and implement and evaluate a performance-based compensation system for principals.

My goodness, Denver wants to pay its best principals more money so they might stay in the school? And how are they going to do that? They are going to think about it. They are going to work within the system. They are going to ask for outside help. They are not just imposing a one-time bonus, merit pay system. They are trying to lead the country in doing this. The National Education Association says: No, let's kill it.

The National Education Association not only said, no, let's kill it, they issued a threat to Members of the Senate. ``Votes associated with these issues may be included in the NEA legislative report card for the 110th Congress.'' That means if you vote against the Alexander amendment or anybody else's amendment supporting the Teacher Incentive Fund, what we, the National Education Association, will do is write all the teachers in Tennessee or Rhode Island or wherever we may be and say: Your Senator is anti-education.

Why is the Senator anti-education? Because he wants to support a program to find a fair way to reward outstanding principals and teachers who are teaching low-income children and helping them succeed.

California--my goodness. The Mare Island Technology Academy--here is another thing that NEA would like to stomp out. It proposes to extend a current project to award incentives to teachers and principals instrumental in increasing student achievement. We can't have that in California, at least under the NEA.

The Houston independent school district--maybe Senators Cornyn and Hutchison would like to know about this. It is the largest public school district in Texas, the seventh largest in the United States. It proposes an incentive plan for teachers that focuses on teacher effectiveness and growth in learning. We don't want that in any school, do we?

Guilford County, NC--maybe Senator Burr and Senator Dole would like to be aware of this because their schools proposed a financial recruitment project called Mission Possible and plans to extend the program to an additional seven schools, charter schools in various States.

Another project. Alaska--one school district there serves as the fiscal agent. They are working on the same sort of progress and expanding on a current program with the Re-Inventing Schools Coalition.

South Carolina Department of Education. A modified version of the existing teacher advancement program to implement a performance-based compensation system to address problems with recruitment and retention in 23 high-need schools in six districts. We wouldn't want 23 high-need schools in six South Carolina districts to have a program to pay good teachers more for teaching well, would we? We would like to kill that in the Congress because the National Education Association might put us on their list of not voting for the NEA legislative report card.

Dallas independent school district--they have a similar program. They want to identify and reward principals and teachers based on a combination of direct and value-added measures of student achievement. Can't have that.

The school district of Philadelphia, PA. Let's pay particular attention to this one. The overall purpose of Philadelphia's initiative is to pilot a performance-based staff development and compensation system that is teacher pay and principals, that provides teachers and principals with clear incentives that are directly tied to student achievement, growth and classroom observations conducted according to an objective standards-based rubric at multiple points during the school year. Twenty high-need urban elementary schools that have demonstrated high degrees of faculty buy-in--that means the teachers want it--will participate in the pilot.

Nobody is making them do it. They are volunteering to do it. The teachers want it. Leaders from the school district of Philadelphia's administration and from two unions, representing all Philadelphia teachers and principals, have designed the pilot and will oversee its implementation. So the National Education Association says kill the program in Philadelphia for a lot of high-need kids, even though the program involves the unions who work in those schools. That is a very arrogant attitude, it seems to me.

Ohio, State Department of Education, Eagle County, CO, and Weld County, CO--those are just the schools and school districts and the States where the Department has made 16 grants in the first year of its operation.

As you can see, the common thread running through here is, can we find a fair way to reward outstanding teachers and help in training and reward outstanding principals so they will stay in the classroom, so they will have an even better idea of what they are doing, so we can honor them, treat them in a more professional way? If we were to do that, wouldn't that be better?

Why wouldn't the largest educational association in America welcome this? I know in Chattanooga, TN, when the new Senator from Tennessee, Bob Corker, was mayor, he was more effective than I was in working with the local teachers association or union, and he did just this-- generally with their participation and agreement. And he helped, in a model school system in Chattanooga, TN, find a way to attract teachers to the schools where children were having trouble learning and needed extra help. These were teachers who had shown an ability to help these students achieve more. So they were paid more for that. They were paid more for that.

Let me conclude my remarks. I ask unanimous consent for another 5 minutes, if I may?

I will conclude my remarks with a little bit of history. If you sense, in my voice, a heavy amount of disappointment, it is because this goes back a long ways. In 1983, when I was Governor of Tennessee, I proposed what then was the first statewide program to pay teachers more for teaching well. We called it the Master Teacher Program.

I was astonished, after a term as Governor, to discover that not one State was paying one teacher one penny more for teaching well. I could not understand how we were going to keep outstanding men and women in the classrooms, particularly--this was 25 years ago, almost--now that women had many more employment opportunities. The math teacher was headed for IBM, the science teacher was going over here. One reason was because of the teacher pay scale. You could make more for staying around a long time, you could make more for getting another degree, but you couldn't make a penny more for being good.

I went around to try to find out how do we reward outstanding teaching, and everybody said you can't do that. Not quite everybody. One person who did not say that was Albert Shanker, who was the head of the American Federation of Teachers, which is the second largest teachers union. Mr. Shanker said if we have master plumbers we can have master teachers, and maybe we need to get busy trying to think of a fair way to do that. He invited me to go to Los Angeles and speak to the convention of the American Federation

of Teachers. They were very skeptical--which I understand, because professionals who are already working in their profession have a right to be skeptical of outsiders who would come in and say we are going to grade you. Even though these teachers are in the business of grading themselves.

I spoke to the American Federation of Teachers. I worked with Mr. Shanker. I even raised taxes in Tennessee. Guess who was against doing what we eventually did? The National Education Association. Their President said we are going to send whatever we need into Tennessee to defeat Alexander's silly ideas, and we fought for a year and a half and finally I won, temporarily, and Tennessee established a career ladder program which eventually attracted 10,000 teachers with 10- or 11-month contracts who volunteered to go up the career ladder to a second or third level. They were called master teachers.

We raised the pay for every teacher by $1,000, just if they took the basic teacher competency test. That was voluntary, too, but more than 90 percent did it. And 10,000 teachers did. That was quite a number. This was sort of the model T of the teacher compensation plans.

Since then, a lot has happened across the country. Governor Jim Hunt and others, with the support of the teachers unions, have developed the National Board of Professional Teaching Standards Certified Teacher Program, which is one way of certifying a biology teacher in the same way you would certify an orthopedic doctor. This is helpful if you are on the school board in Providence, you can say: I don't have the means to evaluate if this teacher is better than that teacher, but if you are a board certified teacher we will pay you $10,000 more a year. That has worked pretty well. Some places around the country have found ways to do that, but it is not possible for a school board in the town to take on the whole mixture of difficulties that go with a fair way to reward teachers.

We did it in 1983 and 1984, and we had to create a panel of teachers who were outside the district of the teacher who wanted to be a master teacher to avoid politics. We made sure one of those teachers was of that same subject. If it was an eighth grade U.S. history teacher, then somebody on the panel was an eighth grade U.S. history teacher. Principal evaluations were part of it and a teacher portfolio was part of it.

One thing we did not know how to do then and we are just beginning to understand in our country is how to measure student achievement. Our common sense says a teacher makes a big difference, but how do we measure it? The challenge, as we work on schools that need help, is how do we make sure they have the best teachers and the best school leaders? It is a big challenge, but it is not impossible.

We are learning, after 4 years of No Child Left Behind, that 80 percent of our schools I would call high-achieving schools are meeting all the adequate yearly progress requirements for No Child Left Behind. That means we have about 20 percent of our schools that aren't. In 5 percent of the schools, they are only behind in one category. So it is only 15 percent of the schools where children are chronically not learning and being left behind. The ugly fact was, before No Child Left Behind, we let that happen.

Now we put the spotlight on it, and we have to do something about it. The best way to do something about it is what? Get a terrific school leader and help him or her be a good principal, move in some tremendous teachers or reward those who are there and keep them teaching. And the National Education Association says kill the program that is the most important Federal program to do that? I don't understand that; I don't understand.

I say to my colleagues in the Senate of both parties, I hope this approach will have unanimous opposition in the Senate. I hope we say we want to reward efforts in Memphis, in New Mexico, DC, Chicago, Denver, Dallas, Houston, Philadelphia, Chattanooga, where they tackle the problem. No, we are not talking about a one-time bonus pay for people, or teacher of the year, who the principal might like. We are talking about a more professional system where we can say talented men and women who are teachers, we like to honor you. We want to work with you in your district to form a way to honor you and raise your pay.

There is one reason I regret having to make this speech, I had a wonderful visit the other day. It came from six or seven members of the Tennessee Education Association. Earl Wiman, Guy Stanley, Paula Brown, Nita Jones, and Kristen Allen came to my office. We visited for a while. I am about to write a handwritten note to Earl Wiman to say how much I appreciated the visit. He was a career ladder teacher, making $75,000 extra dollars over his tenure. He said ``I want to thank you for that.'' We acknowledged there were problems with the master teacher program we had in Tennessee as there always are when you start up something new. It was a terrific visit from people I greatly respect.

It reminded me, wherever I go in Tennessee, retired teachers or current teachers come up to me and say, thank you for the master teacher program. It paid for my child's education. It honored my work. It raised my retirement pay. It kept me teaching. You would be surprised how many times this happened, so I know this can be done.

But it cannot be done if the largest educational association in America sends out letters such as this threatening Senators with, in effect, writing every teacher in their district, and saying you are a bad Senator because you voted against the NEA legislative report card.

I would give them an F on a letter for another reason. They said that the Teacher Incentive Fund restricts the use of funds to only two possible uses: merit pay and tenure reform. That is not true, at least not according to the Department of Education. We called over there today. This is what they told me: The Department of Education says the words ``tenure'' or ``merit pay'' do not even appear in the application forms. The specific goals of the teacher incentive fund include: one, improving student achievement by increasing teacher and principal effectiveness; two, reforming teacher and principal compensation systems so that teachers and principals are rewarded for increases in student achievement; three, increasing the number of effective teachers teaching minority, poor, and disadvantaged students in hard-to-staff subjects; and finally, creating sustainable, performance-based compensation systems.

Applicants must outline how they will utilize classroom evaluations that are conducted multiple times throughout the school year and provide incentives for educators to take on additional responsibilities and easy leadership roles.

The Department also gives extra points to applications that demonstrate they have support from a significant proportion of teachers, the principal, and community. As I mentioned, in Philadelphia or Denver, that means the teachers' union.

I know in this joint funding resolution it looks as though we are not going to have a chance to amend that. That is why I voted against cloture. I understand that. Both sides of our aisle did not get our work done so we have had to clean it up too quickly this year. The Teacher Incentive Fund took a big hit.

I say earnestly to my colleagues in the Senate, I hope Senators will look at the Teacher Incentive Fund carefully. I hope you will think about what your ideas are for improving schools with low-performing students. I hope you will ask yourself whether what they are doing in Chicago, for example, to move in a new principal and to move in a team of teachers and to train them more and to pay them more might not be one way to do it. If Denver wants to do it this way, and Dallas wants to do it that way, and Philadelphia wants to do it that way, and Mayor Corker helped Chattanooga do it, why shouldn't we help them?

We don't want the Federal Government to take over the local schools, but clearly one of the appropriate things for the Federal Government to do in support of elementary and secondary education and high school education is to help solve this tough problem of how do we fairly and effectively reward outstanding teaching and outstanding school leadership.

If we don't do this in our current system, we are not going to be able to keep the best men and women in our classrooms, especially in the most difficult classrooms, which is where our

spotlight is going. We know that 80 percent of our schools in America are high-achieving schools, they are making the advanced yearly progress under No Child Left Behind. Five percent more are just missing it, and in the 15 percent, don't we want to ignore this letter from the National Education Association?

I will answer their letter from here. I am not going to vote against the Alexander amendment.

I hope they will write me often. I hope it is not this kind of letter again. I say to my friends from Tennessee who were good enough to travel all the way up here and visit with me, I am going to work a little harder in communicating with them. I know there will be issues upon which we disagree--the Tennessee Education Association and I have proved in the past we can disagree.

What I want to prove to them in the future is there are lots of ways we can agree. I know they are dedicated professionals, they are working hard every day under difficult circumstances--many with children whose parents don't feed them well, don't teach them before they come to school, and don't take care of them in the afternoon. I want to be sensitive to that.

In my remarks today I want to send a clear message to the National Education Association: I am disappointed in their letter, I am disappointed in their attitude. I hope the Senate rejects their attitude. But I want to be as clear to my friends in the Tennessee Education Association that I greatly appreciate their visit.

I look forward to redoubling my efforts to work with them. I look forward to talking with them over time about support. I encourage their ways to honor their professionals, including development of a compensation program that rewards outstanding teaching and schools.

I ask unanimous consent the letter from the National Education Association be printed in the Record.

I suggest the absence of a quorum.

Mr. President, I ask unanimous consent to speak for up to 15 minutes in morning business.

Mr. President, later this afternoon, several of us will be introducing legislation to reauthorize Head Start. Senator Kennedy, Senator Enzi, Senator Dodd, and myself will be the cosponsors of the legislation. We have been working on it for a long time, all through the last Congress. We have heard from lots of parents, children, and Head Start operators. I wish to talk about that.

The Head Start program is an enormously popular and successful Federal initiative. It began in the 1960s when Lyndon Johnson was President of the United States. In fact, I have always thought it was a part of the story of the American dream that President Johnson went back to Cotulla, TX, near the Mexican border, where he taught first grade, to announce the Head Start program. It exemplifies one of the great principles of what it means to be an American--that we believe in equal opportunity. For that President of the United States to go back to where he was a first grade teacher reminds us that other children could succeed, as he did, in becoming President.

Today, Head Start has grown to a nearly $7 billion Federal program. That amount was spent last year. It served 900,000 children. In my State of Tennessee, 20,000 students or so were served. The funding was $118 million for Tennessee. This is a program that touches a lot of people. It deserves the Senate's attention, and it has had the Senate's attention.

During the last Congress, I made clear, as did several other Senators, that we want to see Head Start serve more children. But first, we wanted to make sure the program is accountable, financially solvent, and meeting the purpose for which it was formed. President Bush, in his message to Congress, said much the same thing 2 years ago. ``Great program,'' he said. ``But let's make it more accountable. Let's recognize that now we expect children to learn more and be able to do more before they arrive at school.'' The President said we want to get the States more involved, which was a good suggestion because when Head Start was founded, it was almost the only program to help preschool children. Today, while it is a large $7 billion program, there are $21 billion more in Federal dollars being spent to help preschool children in one way or the other, and there are a great many State and local programs that are Head Start or preschool programs.

The President's objective, as was ours, was to find a way to make all of these programs work well together. We listened carefully and I believe, as Senators Kennedy, Enzi, and Dodd believe, we have made significant improvements to the bill.

For example, the bill will establish 200 new Centers of Excellence that will serve as model Head Start programs across the country. The Governors will be involved in this. Hopefully, we can learn over the next 5 years from the States how, from these models, we can put together State efforts, local efforts, Federal efforts, and Federal Head Start efforts in a more efficient way to help children who are of preschool age.

Second, our legislation requires grant recipients to recompete for new grants every 5 years to help ensure a constant high level of quality.

Third, we clearly define what we mean by deficiency. We don't aim to catch people doing things wrong; we would rather catch them doing things right. When there are things that are wrong, the Head Start providers deserve to know what the standards are so they can make sure they meet them.

Fourth, this legislation provides clear authority to the governing boards to administer, and be held accountable for, local Head Start programs while ensuring that policy councils on which parents sit continue to play a crucial and important role.

Finally, as I mentioned earlier, this legislation continues to encourage State standards especially that cause there to be more cognitive learning, more emphasis on what children should be able to know and be able to do before they get to first grade--make sure they are ready to learn.

Americans uniquely believe that each of us has the right to begin at the same starting line and that, if we do, anything is possible for any one of us. We also understand that some of us need help getting to that starting line. Most Federal funding for social programs is based upon an understanding of equal opportunity in that way.

Again, Head Start began in 1965 to make it more likely that disadvantaged children would successfully arrive at one of the most important of our starting lines--the beginning of school. Head Start, over the years, has served hundreds of thousands of our most at-risk children. The program has grown and changed, been subjected to debate; but it has stood the test of

time because it is very important. We have made a lot of progress. Only a few professionals had studied early childhood education when it began. Even fewer had designed programs specifically for children in poverty with the many challenges.

The origins of Head Start come from an understanding that success for these children wasn't only about their education. The program was designed to be certain that these children were healthy, got their immunizations, were fed hot meals and of crucial importance--that their parents were deeply involved in the program.

From the beginning, comprehensive services, including medical, dental, and nutritional services--and parent and community involvement were a part of Head Start programs, and that is still true today. In the early days, teacher training and curriculum were seen as less important. Now we know a lot more about brain development and how children learn from birth, and we understand that even for these very young children, teacher training and curriculum are very important.

Today, young children are expected to learn more and be able to do more in order to succeed in school. Many public schools now offer kindergarten. When this program started, Tennessee didn't have a public school kindergarten program. Now 40 States offer early childhood programs.

As Congress prepares to reauthorize Head Start, it is important that we recognize the program's importance and work to make it stronger. But we need to recognize also that today it is not fulfilling its promise as well as we would like. It is not meeting the purpose of serving our children who are most at risk as well as we would hope. I am not satisfied with the current practices, which fall short of the standards the taxpayers should expect, and that is why there are some changes in the bill.

We address this issue, first, by holding up successful local programs as models so others may follow their example, and by clarifying lines of accountability so any corrupt practices may be rooted out. The bill creates ways for States to help strengthen and coordinate Head Start, but would continue to send Federal funds directly to the nearly 1,700 grantees that provide services in over 29,000 Head Start centers that serve just over 900,000 disadvantaged children.

Let me talk about the Centers of Excellence first, because this is one of the most hotly debated parts of the bill--or it was. I think it is pretty well accepted now. The bill authorizes the Secretary of Health and Human Services to create a nationwide network of 200 Centers of Excellence in early childhood built around exemplary Head Start programs. These Centers of Excellence would be nominated by the Governors. Each Center of Excellence would receive a Federal bonus grant of at least $200,000 in each of 5 years, in addition to base funding.

The Centers' bonus grants could be used for some of the following:

One, to work in their community to demonstrate the best of what Head Start can do for at-risk children and families, including getting the children ready for school and ready for academic success.

Two, it can coordinate all early childhood services in the community. As I mentioned earlier, we are spending $21 billion in Federal dollars for these children. Many States and local governments are spending money. We need to spend it together.

Three, we can offer training and support to all professionals working with at-risk children.

Next, we can track Head Start families and ensure that their services are provided seamlessly to children, from prenatal to age 8.

Next, they can be models of excellence held accountable for helping our most disadvantaged children.

Finally, to have the flexibility to serve additional Head Start, or early Head Start children, or provide more full-day services to better meet the needs of working parents.

Head Start centers are uneven in performance, but usually they excel in two areas critical to success for caring and educating children: No. 1, developing community support and, No. 2, encouraging parental involvement. Alex Haley, one of my closest friends, and the author of ``Roots,'' lived by these words:

Find the good and praise it.

For me, that was an invaluable lesson. My hope is these Centers of Excellence will find the good and praise what is best about Head Start and show it to the rest of us.

It also helps to get the Governors involved. The President had suggested that we turn more of the funding over directly to the States. I and others are not willing to do that, at least at this stage.

One of the beauties of Head Start is that it is very decentralized and for a long time it has worked well that way. So our compromise was that the Centers of Excellence, which will get the Governors involved, will help coordinate the programs more effectively and maybe we can learn something over the next 5 years that we can put then in the next reauthorization of Head Start.

Also, this bill goes a long way to help make the spending of that $7 billion of taxpayers' money more accountable. First, it requires recipients to recompete for grants every 5 years. This ensures that after 5 years, each program is still meeting its standards.

I recognize there are concerns about this recompete requirement. Some people say we need continuity and it will create anxiety among children, among teachers if they are afraid they may lose their right to continue serving after 5 years.

Many Head Start grant recipients are doing a very good job, and rather than causing a disruption every 5 years, I hope this recompete process will highlight their success. To help streamline the process for successful programs, grant recipients that are neither deficient nor have been found to have an area of noncompliance left unresolved for more than 120 days will receive a priority designation during the recompetition process.

Second, the bill defines what makes a local program deficient. Right now, the deficiency standard is very general and inconsistent across the Nation. But if an action threatens the health, safety, or civil rights of children and staff, denies the parents the exercise of their full roles and responsibilities, misuses funds, loses its legal status or financial viability, or violates other standards specified in the bill, those are the more specific standards that are now a part of the bill. It will help make it possible for grantees to have a clearer idea of what they are expected to do.

Finally, the bill makes clear that the governing board shall be the body that is charged with running local programs and which will be held accountable for those programs. This may seem like a little bit of inside baseball, but it is actually not. It goes straight to the heart of several of the problems we have had in some Head Start grantees around the country.

Perhaps the most effective witness I heard in any of our hearings was the mayor of Shelby County, TN--that is around Memphis--A.C. Wharton. A.C. Wharton testified, as did other witnesses, that the dual governance structure between the governing board and the policy council was inadequate and neither body had adequate decisionmaking authority. Here is what he told the committee:

What we're faced with is not merely a benign situation in

which an errant agency through no bad intent runs afoul of

the guidelines. In many instances the wrongdoings and

shortfalls are calculated to bring about the political

empowerment or financial enrichment of those who profit from

the wrongdoing.

I believe we fix that problem based on the advice we received from Mayor Wharton and other witnesses. This bill gives governing boards direct authority and holds them accountable. That is an important element of the bill, and I think it is a necessary step. But Mayor Wharton and others reminded us that we need to be careful about how we handle this issue. Mayor Wharton said the governing body should not ``be allowed to ride roughshod over the dignity that should be accorded all participants in Head Start programs whether they are grantees, policy councils, policy committees, or certainly children and parents.''

I appreciate the mayor's concern, and I appreciate that note of caution. I thank him for his straightforward testimony. Perhaps he will know that long trip from Memphis to Washington was not in vain because his concerns are right in the middle of the bill that we will introduce later today.

We all understand the importance of parental involvement and parental responsibility over the operation of the Head Start Program. We want to preserve that parental responsibility, but we also want to make sure we preserve fiscal accountability of the program at the same time, and we believe we have done that. We have crafted a careful balance. We give the governing board fiscal and legal responsibility, while ensuring policy councils on which parents sit continue to play an important role in the running and operation of local Head Start Programs within the framework the governing board sets. It is a fair compromise and one that will strengthen the program.

I learned about the importance of preschool education in a very personal way. When I was growing up in Maryville, TN, at the edge of the Great Smokey Mountains, my mother operated the only preschool education program in our town--well, there may have been one other. I think Mrs. Pesterfield also had one. But she operated this program in a converted garage in our backyard. She had 25 3- and 4-year-olds in the morning and 25 5-year-olds in the afternoon. I think she charged $25 a month for this care for these children.

This was before Head Start. This was before we understood very much about preschool education and the early development of the brain. But parents instinctively knew that was a good place for their children. When Alcoa moved executives to our little town, they usually would find a way to get their children into Mrs. Alexander's nursery school and kindergarten before they looked for a home because those parents knew then that preschool education was important to their children's success.

We all understand that for all of our children. We understand that the earlier this starts--at home first--and then with all the extra help we can give that home, these children will be ready to get to the starting point.

I am the only U.S. Secretary of Education, I think, Mr. President, who spent 5 years in kindergarten. The reason I did was that my mother had no other place to put me than the kindergarten she operated in our backyard. Looking back, there probably wasn't a better place for me to have been than that 5 years of intensive preschool education. It is something we should hope for virtually every child growing up in this country. We believe anything is possible. We believe in free enterprise, we believe in competition, and we believe in the starting line. But there is no Federal program that exists that does a better job of helping disadvantaged children get to the starting line than Head Start.

I congratulate Senator Kennedy, Senator Enzi, and Senator Dodd, and the other Senators who have worked on this legislation. We look forward to introducing the legislation this afternoon. I thank all those who have taken time to come to the hearings, and I especially thank the mayor of Shelby County, Mayor Wharton, for his testimony because it has made its way directly into the legislation to help make sure Head Start not only helps children but that there is accountability to the taxpayers.

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

Mr. President, I ask unanimous consent to speak as in morning business.

Mr. President, no Member of the Senate has more experience in various levels of government than the Senator from Ohio, Senator Voinovich, who just spoke. He was a commissioner, a mayor, a lieutenant Governor, a Governor, and a Senator. Since he has come here, no Senator has spent more time on the drudgery--some Senators would say--of understanding the operations of government, how the budget decisions we make affect different parts of the Federal Government, different parts of society, the State and local governments, and how the civil service system works, how employees are fairly treated. I salute the Senator for his work.

I think we ought to hear him carefully when he reminds us of one of the most obvious solutions to that problem, the 2-year budget. That idea has broad support in this Chamber, and it is a very simple idea. It says we will make our budget every 2 years. If we have to make adjustments in the odd year, we can do that. We already do that from time to time, but then in the intervening year, we would have plenty of time to look over our programs, make sure they work, and perhaps repeal some of them and add some better ones and check the stacks of regulations. If you look at all of the regulations that small colleges in Ohio and Tennessee have to wade through every year, that stack is very high. I brought them down on the floor one time. Surely, we can get rid of those. On both sides of the aisle we would like to do that. Our process doesn't appear that way. As our Republican whip sometimes says, process is often substance in the Senate, and a 2-year budget would be a force for orderliness, a force for review of programs; it would cause us to repeal and change and revise laws.

We have plenty of forces for adding laws or spending more money. We need forces for review and repeal. The people around America who elect us and depend upon us to provide the funds we provide in an orderly flow could then make their plans and spend the money more wisely. The example the Senator from Ohio gave is a good one, about the Nuclear Regulatory Commission. On this floor, what do we hear more often than anything else now? We hear let's stop the dependence upon foreign oil or at least let's reduce it, and let's deal with global warming.

How do we do that? There are lots of different ways to try to do that, but in a country such as ours that produces and uses 25 percent of all of the energy in the world, we don't have many ways to produce large amounts of carbon-free energy; 70 percent of our carbon-free energy comes from nuclear power in the United States. So when we slow down the processing applications for new nuclear power plants--a process we invented, which our Navy used without incident since the 1950s, a process

which France uses to produce 80 percent of its power--so when we slow ourselves down, we are delaying urgent action on global warming and on dealing with our dependence upon foreign oil.

That was a very good example the Senator used. I salute his interest and his call for a biennial budget, a 2-year budget, and his focus on the practical problems our failure to deal with appropriations bills on time cause, and it can be shared all around the room.

Mr. President, I wish to speak about a casualty of the budget process. It is a very disheartening development, and I hope it is an oversight, not the first symbol of the new Democratic Congress's education agenda because I don't think it should be, and I cannot believe that it would be. I don't believe that the Senator from Massachusetts, the Senator from Iowa, the Senator from Rhode Island, and others who care about education would agree that killing the Teacher Incentive Fund should be held up and said here is the way the Democrats plan to approach education. But, in fact, that is what came over from the House of Representatives. What they did was kill a Federal program, passed in a bipartisan way in No Child Left Behind called the Teacher Incentive Fund. They reduced the Teacher Incentive Fund from $100 million a year to $200,000 in this current year. What does the program do? It helps reward outstanding teachers and principals of children who attend low-income, poor-performing schools. That is what it does. This cut threatens a crucial effort to improve the Memphis schools and also other schools all across our country in 16 major cities and States.

It is a disheartening development and one I hope will change. The loudest criticism I hear of the No Child Left Behind bill is it is not properly funded. What kind of response is it to say we are going to knock $100 million out of the most important program that helps to train teachers and principals to help low-income children in poor- performing schools succeed? That doesn't make much sense to me.

So I have submitted an amendment--it is on file--which would increase the teacher incentive fund from $200,000 this year to $99 million, which is the level that was approved in the appropriations bill. It is also the level President Bush requested for the current year. The funding comes out of funds available under the education title of the Labor, HHS, Education section of the joint funding resolution. Unlike a traditional appropriations bill, the resolution doesn't fully allocate all of the dollars under the education title. So as a result, I have been advised by the Legislative Counsel's Office that our amendment doesn't need an offset.

I will add that President Bush, in the budget we received this week, has asked for $200 million for next year. So this would permit us to do what was intended to be done by the No Child Left Behind bill.

I ask unanimous consent that my amendment be printed in the Record at the end of my remarks.

Mr. President, let me mention a few of the details of the Teacher Incentive Fund, so that we can understand what happened in the House of Representatives. The Democratic majority in the House reduced the teacher incentive fund from $99 million to $200,000. The proposed cut jeopardizes 5-year grants that were made to 16 grantees, largely serving big-city schools and low-income students with low academic achievement. The cut will take away funds from Chicago, Denver, Memphis, Houston, Dallas, and Philadelphia. The proposed cut will take away funds from State programs in New Mexico and South Carolina. Many of these programs were developed in full consultation with teachers and principals and with their unions. As an example, Philadelphia's grant application was written and endorsed by the local teachers union. So I am trying to figure out who is against this? It would not be the teachers, principals, or the districts. Neither Democrats nor Republicans. So how did it get cut from $100 million to $200,000?

One of the most critical problems we have to solve today is how to retain outstanding teachers and principals. The more we understand about low-performing schools, the more we understand that, except for the parent, the most important people in that child's ability to succeed are the teacher and the principal. The quality of the teacher and the quality of the school leaders are the most important factors. The elimination of funding, as has been done by the joint funding resolution, could have a significant impact upon the Teacher Incentive Fund. As a result, for example, of the joint funding resolution, the Department of Education has already decided that they will have to delay the national evaluation of the Teacher Incentive Fund until 2008. So we have delayed, for a year, helping these children be exposed to teachers and principals who have more capacity, and we won't learn anything from that evaluation for another extra year.

The proposed cut in funding in the current year will undermine the current grant competition that is going on. Applications are due on February 12, 2007. So say you are sitting in Providence, Knoxville or San Francisco, and you are in the midst of an application to bring in New Leaders for New Schools or some other group, they say to the school district: OK, we will train all your teachers, send them to the Wharton School in the summer and work with them for a year, and on a continuing basis we will help these principals and teachers; we will help the principals become better school leaders. But then the New Leaders for New Schools will say you have to give the principal some autonomy, let them hire and fire the best teachers, let them make decisions. So there is this alliance. In many cases, the teachers union is involved, as in the Philadelphia case. They make concessions. So everybody is working together to try to say: What can we do to help these low-performing schools succeed?

Today, in a roundtable we had about No Child Left Behind, I suggested we are not talking about No Child Left Behind in the correct way. We are catching people doing things wrong instead of catching people doing things right. The truth of the matter is that across our country we have about 100,000 schools, more or less, and in about 75 percent of those schools, they are succeeding in what we call adequate yearly progress. Those schools are succeeding in adequate yearly progress. Now, those schools, I would say, are high-achieving schools. What we find is most of the schools I would call achieving schools. Any school that has succeeded in No Child Left Behind for a couple of years I would call a highest achieving school. One which has succeeded for 1 year would be a high-achieving school. One with only one subgroup of children who don't quite make the standards, I would call that an achieving school. So we have mainly 15, 20 percent of our schools where we need to go to work and do things differently.

These children can succeed. Memphis has a large number of low- performing schools, as we call them, but it is not because the children cannot learn. I was there during spring break last year at one of the new public charter schools in Memphis. They go to school early in the morning and leave at 5 in the afternoon. They were in AP biology courses in the 10th grade. They can all learn. They needed extra help in a different way, and the difference it has made there starts with a good school leader and an excellent teacher. Memphis plans to take this money from the Teacher Incentive Fund and take every single one of its principals through this year-long training, the summer programs, the continuing education, and then Memphis decided to give those teachers autonomy.

So that is what we are killing when we kill this program, not just in Memphis, but in many other school districts. The northern New Mexico network, the DC public schools, the Chicago public schools, Denver, Mare Island Technology Academy in California, Houston, Guilford County, NC, Alaska, the whole State of South Carolina, a couple of districts in Texas--they are all in the middle of this. They are making applications for more. They expect these to be 5-year grants. They are doing what we asked them to do, and then we come along and kill the program right in the middle of the year.

I ask unanimous consent to print after my remarks a list of the current grantees and programs.

Mr. President, following that, I ask unanimous consent to print in the Record a letter from Secretary Margaret Spellings of the Department of Education pointing out what difficulty this decision by the House of Representatives will cause to the teacher incentive fund.

Mr. President, finally, let me make this observation. I was visited today by representatives of the Tennessee Education Association. I have not always gotten along well with the Tennessee Education Association because of the subject we are discussing today. In 1983, I proposed the first master teacher program in the country, the first attempt by a State to pay teachers more for teaching well and to reward principals in the same way. The National Education Association went apoplectic for over a year. We had a brawl for a year and a half. We finally passed a program and our Career Ladder Program lasted for several years, until I got out of office is really what happened, and then it gradually went away. Mr. President, 10,000 teachers were rewarded, paid more, their retirement pay was more, and we talked about that today. I appreciated very much their visit because this includes some teachers who were part of that Career Ladder Program. They are the leadership of the teachers' union, the teachers' association in Tennessee. They came to see me about it, and they were very honest.

They said any program that picks one teacher out and rewards outstanding teaching or rewards an outstanding principal is difficult to do because it is hard to make it fair. But we must do it. Almost everyone agrees that if we make any progress in education, especially with low-income children in poor performing schools, we have to find a way to pay good teachers more and good principals more and keep them in those schools. We have to do it.

So this teacher incentive fund is a real casualty here, and I hope the majority whip, the assistant Democratic leader--he is here--I know he cares deeply about education, about the program in Chicago which is part of this.

Maybe it is an oversight. Maybe it is a casualty that both Republicans and Democrats have had to deal with over the past 2 months. What I hope is, if there are any amendments allowed to this joint funding resolution, this amendment will be one of them. If it is not, I hope we can work together in the Senate, as well as in the House, and do what President Bush has asked us to do, not only put $200 million in for next year, but send a signal to the big city school districts across America: Don't give up, we want to help you train and hire outstanding teachers and outstanding principals.

Exhibit 1

(Purpose: To provide additional funds for the Teacher Incentive Fund)

On page 72, line 20, strike ``of which not to exceed

$200,000'' and insert ``of which $99,000,000''.

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

Madam President, I ask unanimous consent that I may be permitted to speak for 60 seconds.

Madam President, I compliment Senator Kyl for his work. I expect a vote for the minimum wage with the small business tax adjustments that are with it. As I said on the floor of the Senate the other day, it is not the most efficient way for the Government to intervene help for the poorest people who are working. I think that would be an increase in the earned-income tax credit. It would be less expensive, more efficient, and all of us would pay the bill for that, not just small businesspeople.

If we are going to raise the minimum wage, we ought to not impose the whole burden on just that small segment of society. I agree that extending these small business depreciation and expensing benefits would help small business men and women who are trying to compete in the world to be able to compete. And it gives all of us who pay taxes a chance to pay for this idea that we have called the minimum wage, which tries to help working people have more.

I support the amendment of the Senator from Arizona, Mr. Kyl because it will do more to offset the increased costs imposed on small businesses through raising the minimum wage by making it easier for many small business owners to take advantage of the tax relief contained in this bill. In addition, the amendment will help create jobs by encouraging small business owners to grow their businesses and hire new employees.

Under current tax law, small businesses can expense up to $100,000 of certain new property the year it is put in service. That figure is indexed to inflation, so small businesses will be able to expense up to $108,000 in 2006. After 2009, this expensing level will drop back down to $25,000 a year for these small businesses. The tax relief package included in the minimum wage bill would extend the $100,000 expensing limit--indexed for inflation--through the end of 2010. The Kyl amendment would add 2 years to that extension. In other words, the Kyl amendment would allow small businesses to expense the higher amount through the end of 2012.

Last week, I spoke on the Senate floor about the burden imposed on the small business community by raising the minimum wage. Small businesses will bear the brunt of approximately 60 percent of the costs of a minimum wage increase. I applaud the Finance Committee including Chairman Baucus and Ranking Member Grassley for approving a tax relief package to help offset these costs. In particular, I am glad that tax relief package includes the expensing provision that we are talking about on the Senate floor today.

The Kyl amendment would make the expensing provision even stronger by allowing for higher expensing limits through the end of 2012. This is important because continuing the higher expensing limits for an additional 2 years would give small businesses more time to plan and fully use this benefit. If small business owners can take greater advantage of the tax relief in this bill, that means more help in offsetting the added costs imposed on small business owners through a minimum wage increase.

Not only does this particular tax provision help offset the costs of an increased minimum wage, but it will help create grow the economy and create jobs. Allowing small business owners to immediately expense critical investments encourages the purchase of new equipment, which helps to spur economic growth. New equipment for small businesses also usually leads to greater efficiency. And putting more money back into the hands of small business owners allows them to hire new workers.

During this minimum wage debate, a lot of my colleagues have talked about the economic challenges facing working families. I can't think of a better way to help low-income Americans than passing legislation that helps grow the economy and create new jobs, and that's what this amendment would do. I applaud my colleague from Arizona for offering this amendment and urge my colleagues to support it.

Of course.

Mr. President, sometimes we like to say something so often and so vigorously that we believe it actually does what we say it will do, and I am afraid that is the case of the minimum wage arguments that have gone on since 1939. Perhaps it did in 1939, but I would suggest today that it doesn't do what we say it will do. I expect to vote for the minimum wage proposal the Senate produces if it includes the tax incentives and other measures that will help small business men and women pay the bill so they don't have to cut jobs as they compete with companies around the world, in China and in India and other places.

I will talk for a few minutes this morning about whether the raising minimum wage does what we say it does. We are doing a fairly extraordinary thing here. The Government is intervening in the marketplace. We don't ordinarily do that. We are fixing prices. We are fixing the cost of labor. Let's say we were in a class at the University of Massachusetts, University of Wyoming, or University of Tennessee in economics 101, and the professor walked in and said, Good morning, students. We have an interesting problem here. Let's pose this: The Government wants to intervene in the marketplace to fix the price of labor--something it doesn't ordinarily do. So the problem for the students to solve would be this: The reason for the intervention is to help, as the Senator from Massachusetts said, those who are on the lowest rungs of poverty. Working people on the lowest rungs of poverty will be our target. We want to help them have more money in their pockets.

Second, obviously we would like to do this in a way that most efficiently gets whatever money we have for this to them and doesn't miss the mark. Next, we want to do it at the lowest possible cost. We have lots of needs in the Government and in this country. Finally, we want to find the fairest way to pay the bill. If we are going to come up with this grand social objective that is presumably an objective for

the whole country, then who pays the bill? All of us? Some of us? A few of us? The richest of us? Who pays the bill?

So the challenge to the students is this: The Government is going to intervene. We are going to help, according to the Senator from Massachusetts, the lowest on the rungs of the economic ladder--people who are poor--people who are working. We want to do it in an efficient way. We want to make sure the money gets to the people we want to help, and we want to send the bill for all of this--hopefully as low as possible--to the fairest group of people who ought to pay for it.

I think if the answer came back to that question that what we ought to do was raise the minimum wage, the professor would give it a D or an F, or he might even send it back to the students who sent him that answer and say, Maybe you didn't hear my question. My question was: How do we intervene in the marketplace to help the people who are on the lowest rungs of the economic ladder? How do we do that in the least expensive, most efficient way, and with the fairest way to pay the bill?

Let's begin to critique the answer I posed that a student might have given to the professor in economics class 101. First, I think the professor might say, If you come back with a minimum wage idea, it is a very expensive way to go about it. A new study released by the Congressional Budget Office, which I ask unanimous consent to be included in the Record following my remarks--

A new study by CBO estimated that raising the minimum wage to $7.25, which is the proposal here, would cost $11 billion. A study done by the Employment Policies Institute put the cost at $18 billion. I ask unanimous consent that this study by Professors Burkhauser of Cornell and Sabia of the University of Georgia be included in the Record following my remarks.

So the student who suggested the minimum wage came up with a pretty expensive idea, an $11 billion price tag, or $18 billion, according to another study. But those estimates are about raising the cost of everyone's wages to $7.25 an hour. That is not how it works, because many workers are already paid a certain amount above the minimum wage and they will continue to earn more than the new minimum wage. So in effect, we are also legislating that a number of workers will receive a wage higher than $7.25, which means the cost is much higher than $11 billion or $18 billion. That is a lot of money. That is the first critique of the student's answer.

The second one: How well does this money hit the mark? We heard Senator Kennedy say repeatedly: Those on the lowest rung of the economic ladder. We have visions of women and children who are poor, particularly single mothers. Senator Kennedy has great passion for this issue. I have heard him many times over the last 4 years talking about how this is a women's issue; this is a children's issue; this is an issue for Americans on the lowest rung of the ladder who are in poverty. Well, let's see if that is true.

The studies show it is not true. Raising the minimum wage doesn't efficiently target the poor. Only one in five minimum wage workers live in households at or below the poverty line. So most of that $11 billion or $18 billion won't be going to the people who need it the most. It is more likely to be going, for example, to raise the salary of a teenager from a well-off family who has a part-time job at the mall. The Employment Policies Institute, the study I mentioned a little earlier by the professors from Cornell and the University of Georgia, said in their calculations that even less of the money would go to the workers in poor families--13 percent. Even if you look at households earning twice the rate of poverty, which was just under $40,000 in 2005, the Employment Policy Institute study found that less than half--43 percent of the minimum wage increase--would go to those families.

Let me go directly to the professors' study of the minimum wage. They say:

While the minimum wage is often promoted as a policy

designed to help the poor, minorities, and single mothers,

this analysis reveals that only 3.7 percent of the benefits

from a $7.25 hour Federal minimum wage would go to poor

African-American families.

So 3.7 percent of the benefit of this $18 billion-plus cost will go to poor African-American families. Only 3.8 percent would go to poor single mother families. What we are about to do, if we do it, is spend $11 billion, $18 billion--more than that, probably--with the stated objective of helping the poor, especially single women, especially mothers with children, especially minorities, and what the professors' study shows is that only 3.8 percent goes to poor single mother households.

Even more troubling, they go on:

The majority of working poor families, families who are

working but remain in poverty, receive no benefit from an

increase to $7.25 an hour.

The majority of families who are working but in poverty get no benefit from what we are about to do. These families don't benefit because they already earn more than the new Federal minimum wage and remain in poverty either because of a low number of hours worked or a large family size. Many of these individuals would benefit far more from an increase from the generous Federal and State earned-income tax programs.

A couple more statements from the professor from Cornell and the professor from Georgia:

Only 3.8 percent of the benefits from an increase to $7.25

an hour accrue to poor single mothers. One of the factors

causing this low percentage of benefits is the fact that the

majority of poor single mothers have hourly wages above this

level. In addition, only 18.5 percent of the benefits going

to single mothers will go to those in poverty, the majority

of benefits going to single mothers will go to those earning

more than twice the poverty line.

So the authors conclude that only 12.7 percent, or 2.3 billion of their estimated $18 billion cost of this increase will go to poor families, and only 3.7 percent goes to poor African-American families.

The authors say that the ability of the minimum wage to target poor families is weaker and decreasing over time. Contrary to the statements of its advocates, fewer and fewer low-wage employees are supporting a family on minimum wage, with only 9 percent of low-wage employees actually supporting a poor family.

I think the professor so far, in grading the paper of the student who suggested an increase in the minimum wage, would say, well, you came up with something that is hugely expensive, $18 billion-plus. And second, you came up with something that almost entirely that misses its target, only 3 or 4 percent to poor African-American families out of this huge amount of money? So far that paper is not doing very well at the University of Massachusetts, Wyoming, or Tennessee.

Then there would be another question that ought to be answered. Who pays the bill? The people who are to pay the bill under the proposal of the Senator from Massachusetts are the small businesspeople of America. They were described by the Senator from Wyoming because he used to own a shoe store. We stand in the Senate almost every day and talk about small business men and women and how they have health care costs, how they have taxes to pay, they have OSHA requirements to meet, they have Federal regulations added every year, and we say if we do not do something about this, more of these jobs are going to India and China, and we have a big outsourcing of jobs around the world.

Even if we, as a Senate, were to decide that we wanted to take the most expensive and perhaps the most inefficient way to help the people lowest on the economic ladder, why would we send the bill to the small businesspeople of America? Why wouldn't we send it to Wall Street? Why wouldn't we send it to the big corporations? Why wouldn't we send it to the taxpayers at large? Why couldn't all of us pay the bill?

We are very good in Washington, DC--I used to notice this as Governor of a State--some Senator or Congressman would come up with a good- sounding idea, pass it, hold a press conference, take credit for it, and come back down and make a statement at the Lincoln Day or Jefferson Day dinner about local control. What we do here all the time is come up with good ideas, take credit for them, and send

the bill to someone else. That is what we are doing here: we are not paying for this. We are not saying: That is going to cost $18 billion so let's raise taxes on Americans to pay for it. We are saying it will cost $18 billion-plus, but, no worries, we will just send that on to the small businesspeople of America, not the big businesspeople.

According to the National Federation of Independent Businesses, small businesses employ 61 percent of all minimum wage workers. That is a lot of mom-and-pop shops, family-owned businesses. Why should they pay the bill for this idea? One reason it might have been better to take this legislation through the committee that the Senator from Massachusetts and the Senator from Wyoming so ably lead is, we could have discussed this and there might have been a better way to reach this goal of taking whatever money we have--maybe a generous amount, maybe $18 billion--and sending it directly to people on the lowest rung of the economic ladder.

We might have talked about the earned-income tax credit. The earned- income tax credit isn't always popular on this side of the aisle because it has had some fraud in it, but the idea is a good idea. I first heard about it when Pat Moynihan was in the Nixon White House in the early 1970s. He suggested instead of welfare programs we ought to have a negative income tax. He said rather than set up a lot of Government programs that tend to break down the family and spend money in bureaucracies, if people are working in America, and they are not making much money, let's give them some money. We are a rich country. We have 25 percent of all the money in the world every year for just 5 percent of the people in the world. And some people are really well off. They have more than one house. They have big incomes. We all know that. And so it tugs at us to think we are so wealthy and we still have people who are not just sitting on a bench, but we have people who are working every day, sometimes two jobs, and they are not making enough to help their families. That is what this debate is about. Pat Moynihan said in the early 1970s, and this Congress has said before: Let's try the earned-income tax credit. In other words, if you are working, and you are poor and you qualify, we will send you a check. The check comes from all of us. It doesn't come from this segment of society or that segment or just the small businesspeople. We all step up to the plate. The taxpayer pays the bill for earned-income tax credit.

Why didn't we have a hearing to talk about that? The tax credit is targeted to help low-income workers. It is only available for families making up to between 175 to 200 percent of poverty. For example, in 2006, a single parent with two or more children could not receive the earned-income tax credit if he or she earned more than $36,000. That is not a lot of money when you are trying to raise two children.

In comparison, according to the Congressional Budget Office, nearly 60 percent of a minimum wage increase would go to individuals living in families earning more than $36,000. So 60 percent of what we propose to do here goes to families earning more than $36,000, but an earned- income tax credit recipient could not receive money if they made more than $36,000.

The CBO study released this month also looked at the potential impact of increasing the minimum wage to $7.25 as well as possible increases to the earned-income tax credit. I put that in the Record a few minutes ago.

If we increase the minimum wage as has been proposed, CBO says it would cost $11 billion, the smaller number, but only $1.6 billion of that $11 billion would go to working families living below the poverty line. CBO is bipartisan, and works for all of us. They went on to say that to send nearly the same amount of money to working poor families, $1.4 billion in assistance, we would only need to increase the earned- income tax credit by $2.4 billion. So instead of a $11 billion or $18 billion pricetag for the minimum wage, we could have done the same thing through the earned-income tax credit by spending $2.4 billion.

Increasing the earned-income tax credit would target the same amount of money to poor families as raising the minimum wage at one-fifth the cost.

I have used my example of asking a professor at the University of Massachusetts or Wyoming or Tennessee, saying to his class: We have a large goal. We want to help people who are working and who are at the lowest rung of the economic ladder, as Senator Kennedy describes. What would be the best way to do it? Tell me, the professor would say, tell me how to get the largest amount of money to that group of people, how to do it at a reasonable cost, and tell me who should pay the bill.

I think if the answer came back that we should spend $18 billion or more, and it costs five times as much to do it through the minimum wage as it would through the earned-income tax credit, and in addition to that, doing it through the minimum wage sends the bill to a struggling group of people disproportionately, the small businesspeople of America, and lets off all the rest of us, I think that person would get an F. And I think we ought to, as well.

I am sure what is going to happen in this Congress is we are going to pass a minimum wage bill because we are a wealthy country and we want people who are working and who do not have as much to have more. That is our impulse. And I don't believe that bill will get out of this Senate without substantial assistance for the small businesspeople who are paying the bill, or disproportionately the bill.

My hope is that Senator Kennedy and Senator Enzi, some time before we bring up this minimum wage idea again, will say: Let's give ourselves the same kind of examination that I just suggested for those college students. Let's ask ourselves how to do this in an efficient, fair way that gets the money to the right people, instead of going around the country saying ``minimum wage, minimum wage, minimum wage,'' only to find out some time later that we have a lot of disappointed, poor, working families around America who aren't helped by what we convinced ourselves was the right thing to do.

Exhibit 1

Congressional Budget Office,

U.S.Congress,

Washington, DC, January 9, 2007.

Hon. Charles E. Grassley,

Chairman, Committee on Finance,

U.S. Senate, Washington, DC.

Dear Mr. Chairman: In response to your request, the

Congressional Budget Office (CBO) analyzed some of the

potential consequences of a hypothetical increase in the

federal minimum wage rate from $5.15 per hour to $7.25 per

hour and of several hypothetical expansions in the earned

income tax credit (EITC). To provide the information, as

requested, about the potential impacts on workers whose

family income was below the federal poverty threshold, the

analysis used data from the March 2005 Current Population

Survey (CPS).

The analysis is subject to a number of limitations and

should not be interpreted as a cost estimate of the effects

of implementing changes in the federal minimum wage or the

EITC in future years. CBO simulated the impacts of those

policy options as if they were in effect in 2004 and did not

incorporate any effect on employment levels or the number of

hours worked. Since that time, the number of workers with

wage rates in the $5.15 to $7.25 range has fallen by almost

30 percent and is expected to continue to decline as

increases in state minimum wage rates and other changes in

the labor market occur. For simplicity, CBO assumed that an

increase in the minimum wage rate would have affected only

the wage rates of workers earning between the old and the new

minimum rates. Some workers with wage rates outside that

range might also be affected by an increase in the minimum

wage. For example, employers are permitted to pay certain

tipped workers as little as $2.13 per hour if their tips

bring their total hourly earnings up to the federal minimum

wage; thus, an increase in the federal minimum wage could

cause some of those employers to raise their wage rates.

Also, some employers of workers already paid at or just above

the new minimum wage rate might increase those workers' wage

rates as well.

In addition, the CPS does not contain all of the

information needed to compute the EITC, limiting the accuracy

of those estimates. Based on the CPS, the estimated amount of

EITC payments in 2004 was about 25 percent below the actual

amount that year. CBO does not have a basis to infer whether

that discrepancy would lead to an underestimate or an

overestimate of the share of additional payments resulting

from the hypothetical expansions of the EITC that would go to

poor families. Moreover, the Joint Committee on Taxation

produces the official estimates for any change in the EITC;

its estimates may be different.

As discussed more fully in the attachment to this letter,

the major findings of the analysis are these:

On the basis of data from the March 2005 CPS, about 18

percent of the 12 million workers who were paid an hourly

wage rate between the federal minimum wage of $5.l5 and $7.24

were in families that had a total cash income below the

federal poverty threshold in 2004. Had all of the workers in

that wage range, instead, received $7.25 per hour, they would

have gotten about $11 billion in additional wages in that

year. About 15 percent of those additional wages ($1.6

billion) would have been received by workers in poor

families.

As requested, CBO examined the potential effects of

hypothetical expansions in the EITC that would have provided

additional payments to workers in poor families similar to

the amount of additional earnings poor workers would have

received by increasing the minimum wage rate to $7.25 per

hour. One option was to increase the subsidy rate for

childless workers by 50 percent. Another option was to

increase the subsidy rate for workers with three or more

children by 25 percent. On the basis of data from the CPS,

combining those options would have increased total EITC

payments by roughly $2.4 billion in 2004, with workers in

poor families receiving $1.4 billion of that total.

The analysis was prepared by Molly Dahl, Tom DeLeire, and

Ralph Smith of CBO's Health and Human Resources Division and

Ed Harris of CBO's Tax Analysis Division. If you or your

staff have any questions or would like further details,

please feel free to call me at (202) 226-2700 or Ralph Smith

at (202) 226-2659.

Sincerely,

Donald B. Marron,

Acting Director.

Attachment.

Response to a Request by Senator Grassley About the Effects of Increasing the Federal Minimum Wage Versus Expanding the Earned Income

Tax Credit

In response to a request from Senator Grassley, the

Congressional Budget Office (CBO) used data from the Current

Population Survey (CPS) to analyze the distributional effects

of a hypothetical increase in the federal minimum wage rate

and of several hypothetical expansions in the earned income

tax credit (EITC). Although use of the CPS allows the

production of results consistent with official poverty

measures, the CPS is known to be inaccurate for measuring the

EITC. CBO's estimates for a particular policy change could

either understate or overstate the true cost of an expansion

of the EITC, depending on how information available in the

CPS differs from what taxpayers reported on their tax forms.

CBO simulated the impacts of the hypothetical policy options

as if they were in effect in 2004 and did not incorporate any

effect on employment levels or the number of hours worked.

The results are not estimates of the effects of implementing

those options in future years.

Furthermore, this analysis is not a cost estimate. For

proposals that would amend the Internal Revenue Code,

including changes in the EITC, official cost estimates are

provided by the Joint Committee on Taxation; its estimates

may differ from those presented here.

Methodology

CBO identified workers who would have been affected by a

hypothetical increase in the federal minimum wage rate from

$5.15 per hour to $7.25 per hour in 2004 as those who

reported in the March 2005 CPS that they were paid on an

hourly basis and whose wage rate was between $5.15 and $7.24

at the time of the survey. Also included were workers who

reported that they were paid $5.00 per hour, under the

assumption that most of them were actually paid $5.15 but had

rounded their survey response.

To estimate the impact of the hypothetical wage rate

increase on the family income of workers, CBO assumed that

all hourly workers whose wage rate was between $5.15 and

$7.24 per hour would have been paid exactly $7.25 per hour

had the hypothetical minimum wage rate been in effect. CBO

further assumed that workers whose wage rate was $7.25 or

higher would have been unaffected by the hypothetical

increase in the minimum wage. For this tabulation, CBO

assumed that no changes in employment or hours would have

resulted from the higher minimum wage rate. The earnings gain

attributed to the hypothetical increase in the minimum wage

was calculated simply by multiplying the increase in the wage

rate by the total number of hours that CBO estimated the

affected people worked in 2004.

A limitation of this analysis is that the estimates are

based on wage rates reported for March 2005 and income

reported for 2004 and, therefore, do not reflect changes that

have occurred since then or that will occur before future

changes in the federal minimum wage, if enacted, would be

implemented. For example, increases in state minimum wage

rates and other changes in the labor market have already

lessened the potential impact of raising the federal minimum

wage rate.

CBO used information on family size and both before-tax

cash family income and after-tax income, including certain

noncash sources of income, in 2004 to place the affected

workers into income categories relative to the poverty

thresholds.

As requested, CBO also examined different ways of expanding

the EITC to achieve similar income gains for workers in

otherwise-poor families. Note that the CPS does not contain

all of the information necessary to compute the EITC,

limiting the accuracy of CBO's estimates. For example, using

the CPS, CBO estimates that taxpayers received about $29

billion in EITC in 2004, when they actually received about

$40 billion.

Estimates of the Effects of a Hypothetical Increase in the Minimum Wage

in 2004

Table 1 provides CBO's estimates of the number of workers

paid on an hourly basis in March 2005 who received a wage

rate below $5.00, between that rate and $7.24, and at or

above $7.25. It shows that 11.6 million workers reported that

they received a wage rate in the affected range. Table 1 also

provides a cross-tabulation by income-to-poverty ratio, based

on the family cash income of those workers in 2004, as

reported by the Census Bureau. It shows that 18.5 percent

(2.1 million) of the workers who received a wage rate in

the relevant range in March 2005 were living in families

that were poor in 2004.

Table 2 repeats the information from Table 1 but uses an

after-tax measure of income that also includes the value of

certain noncash sources of income. In the placement of people

into income-to-poverty categories, the poverty thresholds

themselves remain unchanged. On the basis of this alternative

measure of income, a smaller portion of the workers in the

relevant wage range were counted as poor (14.4 percent,

rather than 18.5 percent).

Tables 3 provides CBO's estimates of the income gains that

would have resulted from raising the wage rates of everyone

who reported that they were paid between $5.00 and $7.24 per

hour up to an hourly rate of $7.25. For those figures, CBO

simply added its estimates of the gains in earnings from the

wage rate increase to estimates of families' cash income. CBO

estimates that $1.6 billion (15 percent) of the $11 billion

in increased earnings that resulted from the higher wage rate

would have been received by workers who were in families with

money income below the official poverty threshold in 2004.

Estimates of the Effects of Hypothetical Increases in the EITC in 2004

Table 4 provides CBO's estimates of the distributional

income effects of the changes in the EITC specified in the

request. Again, the estimates are based on the CPS, not tax

statistics, and do not take into account the many intricacies

of actual tax provisions or the ways that people might alter

their behavior in response to changes in the EITC. The Joint

Committee on Taxation provides the official estimates of the

potential effects of changes in the EITC.

In 2004, eligible taxpayers with one qualifying child could

claim a credit of 34 percent of their earnings up to $7,660,

resulting in a maximum credit of $2,604; the credit phased

down at a rate of 15.98 percent of earnings above $14,040 for

nonjoint filers and $15,040 for joint filers. For eligible

taxpayers with two or more qualifying children, the credit

was 40 percent of their earnings up to $10,750, with a

maximum credit of $4,300; the phase-out rate was 21.06

percent, beginning at earnings above $14,040 for nonjoint

filers and $15,040 for joint filers. Taxpayers between the

ages of 25 and 64 with no qualifying children could claim a

credit of 7.65 percent of their earnings up to $5,100,

resulting in a maximum credit of $390; beginning at earnings

above $6,390 for nonjoint filers and $7,390 for joint filers,

the credit phased out at a rate of 7.65 percent. All

thresholds are higher now. Not only are they indexed for

inflation, but the plateau for joint filers was increased by

$1,000 in 2005 and is scheduled to increase again in 2008.

The first column of Table 4 shows that, of the estimated

$29 billion in EITC received in 2004, about 40 percent ($11

billion) was received by workers in poor families. (As

explained, that CPS-based estimate of the total amount of

EITC received is much lower than the actual amount that year,

$40 billion.)

The second column reports CBO's estimates of the effects of

a hypothetical expansion in the EITC in which workers in

families with three or more children would be eligible for an

additional credit. The subsidy rate for that group was

increased from 40 percent to 50 percent, the maximum credit

available was increased from $4,300 to $5,375, and the phase-

out rate was increased from 21.06 to 26.325 percent,

representing a 25 percent increase over the credit available

in 2004 to those in families with two or more children. (The

difference between the maximum credit available to those in

families with three children and those in families with two

children is $1,075, as compared with the $1,696 difference in

the maximum credit available to those in families with two

children and those in families with one child.) Using CPS

data, CBO estimates that this expansion would have increased

EITC payments to poor families by $1.1 billion.

The third column examines what the results of a

hypothetical expansion of the EITC to childless individuals

might have been. As requested, the subsidy rate, the maximum

credit, and the phase-out rate to workers without children

were increased by 50 percent. Under the hypothetical

expansion, the maximum credit available to those workers

would have been $585, and the subsidy and phase-out rates

would have been 11.475 percent. This expansion would have

increased EITC payments to poor families by an estimated $0.3

billion.

The fourth column examines the effects of a hypothetical

expansion of the EITC in which both the expansion for those

in families with three or more children and the ex-

pansion for childless individuals discussed above were

implemented. Using CPS data, CBO estimates that the

combination of the two would have resulted in increasing EITC

payments to the poor by $1.4 billion, about 60 percent of the

overall increase of $2.4 billion that CBO estimates would

have occurred in 2004 if those expansions had been in place

at the time.

Mr. President, I compliment the Senator from Alabama and ask unanimous consent to be added as a cosponsor to his legislation.

Mr. President, I ask unanimous consent to be allowed to speak for 10 minutes in morning business.

Will the Chair please let me know when I have a minute remaining?

Mr. President, I wish to talk about two things this morning: No. 1, the President's State of the Union Address last night, and No. 2, Senator Gregg's proposal to reduce wasteful spending.

I appreciate the comments of the Senator from Colorado, who has been a leader on renewable energy and energy independence. I want to point this out. The President last night did his job. It was a truly Presidential speech, in my opinion. I used to work in the White House, and a wise man there told me: Lamar, our job here on the White House staff is to consider everything that comes to the White House as important. We need to push those things out and reserve for the President those things which are truly Presidential.

The President talked about truly Presidential issues last night, and he did what Presidents are supposed to do. He did not give us a laundry list. He talked about Iraq, terrorism, energy independence, and health care costs. He said: Pick up immigration and deal with it. He said reduce the budget in 5 years. He gave us a strategy in each case, he tried to persuade us that he is right, and then he handed the ball to us.

We are independent of the President. We have a Democratic Congress, closely divided, and a Republican President, so I don't think we can criticize the President. I think we should applaud the President and say: Mr. President, you did your job. You identified the issues, you gave us a strategy, and you handed the ball to us.

The biggest news last night, it seemed to me, was on energy independence and health care costs. Starting with energy independence, the President said let's set a goal to reduce our use of gasoline 20 percent in 10 years. That is a big, serious proposal. This country uses 25 percent of all the energy in the world. If we reduce our use of gasoline by 20 percent in 10 years, it will help clean the air, it will help reduce dependence on foreign oil, it will create a big market for agricultural products in this country to help create biodiesel alternative fuels, and it will force innovation in such things as electric batteries.

The President's proposals will require a change in the so-called fuel efficiency CAFE standards. It will require these new technologies. It is a big step, and it is the kind of thing that Democrats as well as Republicans can take, improve, and pass. We don't need to be saying to the President: Mr. President, you walk the walk. He talked. Now it is up to us to act.

The same with health care. His proposal on health care is a big, serious proposal. There is probably no subject Tennesseans talk to me about more in their daily lives than: How do I pay for my health care costs? The President had an answer last night. He said: For 80 percent of working Americans, I will give you an average of $3,600 in savings from your taxes which you can spend to buy yourself health care insurance. That means if you are a family of four, making $60,000 a year, you might have $4,000 or $5,000 in tax savings to use to pay for health care costs.

Now, 20 percent of us would pay a little more for health care. Mine would go up. But 80 percent of all of us who work would get significant savings to pay for health care insurance. This would help us afford it. This would help more people who do not have it pay for it. This would help hospitals whose emergency rooms fill up with people who cannot pay for health care. It is a big, serious proposal.

The President has done his job. It is up to us now to have a hearing, improve it, and enact it.

I salute the President for doing his job last night with what I felt was a truly Presidential speech. Much of it was about Iraq. Iraq is being talked about today in many different bodies, but much of it is about what is happening at home. If we take up immigration and don't stop until we are finished, if we balance the budget in 5 years, if we reduce the amount of oil we are using by 20 percent in 10 years, if we give 80 percent of working Americans several thousand dollars to help pay for health care insurance, that will be a great big step forward. So it is up to us, now, to pick up the ball and run with it. He has handed it to us. Let's go. Let's talk about it. Let's do it. If we have a better idea, fine; if not, let's just pass his proposal.

Second, I wish to speak for just a moment about the proposal of Senator Gregg that would give the President a new tool for cutting wasteful spending. I believe it should have been enacted with our reforms last week on lobby reform because it would help rein in wasteful spending and earmark abuse. But I commend Senator McConnell and Senator Gregg, and I thank Senator Reid for working it out so we can have a vote on this important amendment.

We need to get our fiscal house in order. Yesterday, 25 of us attended a breakfast. The Chair and I were there. It wasn't a breakfast where we talked about how Democrats could beat Republicans and vice versa; we talked about how we can put our fiscal house in order. The Presiding Officer had some very good ideas to express, but the whole 40 minutes was about the unsustainable growth of Federal spending here, especially in the entitlement area. There are several things we need to do about it, but this amendment by Senator Gregg is one. It is not the same thing as a line-item veto, but it goes in that direction.

I would support amending the Constitution to give the President a line-item veto. I don't think that is in derogation of our authority to appropriate. The Supreme Court thinks it does that, so we have to respect that. But this is a little different way to let the President have a way of letting us take a second look at appropriations we passed which may not have been wise.

Under current law, the President has the power, for example, to propose cuts in spending after appropriations bills have been passed by Congress. Then we can pass those cuts in the same form and send them back or we can ignore them. So the idea would be, under the Gregg amendment, that the President could submit four packages of rescission proposals each year. We couldn't ignore the proposals. We would have to vote on them in a short period of time, if any Member wanted us to. If the majority of the Senate and the House agreed with the President's recommendations for cutting spending, then the spending or targeted tax breaks would get cut and the money would be used to reduce the deficit. But if a simple majority of either House disagreed, then the cuts would not go into effect.

It is pretty much the same amendment Senator Daschle and Senator Byrd offered in 1995, which was supported by 21 of my Democratic colleagues who are still serving in the Senate. It is not the same thing as the traditional line-item veto, but it is an opportunity to put the spotlight on wasteful spending.

Senator Gregg went one step further to make his amendment more closely reflect the Daschle-Byrd proposal. Senator Gregg's amendment allows us in the Congress, if the President makes a rescission proposal, to strike out an individual part of his proposal. There are plenty of forces here in this city for increasing spending. There are not enough forces that push to reduce spending. The Gregg proposal would be one tool the President and the Congress can use to reduce spending.

I know when I was Governor I had this authority and 43 Governors currently have the line-item veto. In Tennessee, it is not much of a line-item veto because the Governor's veto can be overridden by a majority of the legislature. But just because I had the veto and the fact that I might have used it, and occasionally did use it, helped me put the spotlight on wasteful spending and gave the legislature a

chance to reconsider or think twice about what they might do.

As a new member of the Senate Appropriations Committee, I can assure my colleagues, I don't take lightly proposals to alter the Congress's power of the purse. For Congress to appropriate is as natural as for Johnny Cash to sing or for the President to nominate Supreme Court Justices. But I don't think this interferes with that because both the Senate and House must vote to adopt the President's proposed cuts; second, we can strike portions of his proposed cuts; and third, the power to do all this would sunset after 4 years, giving us in the Congress a chance to evaluate how well it is working.

There are some other things I think we can do. A biennial budget would help. Passing a 2-year budget, so we can focus all of the first year on the budget and all the next year on oversight over programs to help them work better, avoid duplication, and get rid of some programs--all of that would help control spending. We also ought to have a commission on accountability and review of Federal agencies, which would help reorganize duplicative and unnecessary programs.

I am honored to sponsor the Gregg second look at waste amendment because it gives the President and the Congress one tool to reduce wasteful spending at a time when we urgently need to do that and the country knows that.

Mr. President, I yield the floor.